Following discussions with the European Commission, I was pleased in March 2000 to announce significant increases, averaging 30%, in the rates of annual forest premium. For example, in the case of farmers planting broadleaves – oak and beech – in severely handicapped areas the annual premium increased from £265 to £373 per hectare. For farmers planting 20% diverse coni fers, the premium increased from £210 to £308 per hectare.
As I have previously indicated, the application of the increased premiums to pre-2000 planting was an essential element of the case submitted to the European Commission in August 1999. From the beginning, however, the Commission indicated that this aspect would be problematic and the increased rates agreed in March 2000 did not apply to such planting.
My Department made a further detailed submission to the Commission in April 2000 in support of such increases. I vigorously pursued this case at a number of meetings with the Commission in the latter half of last year. The question of applying the increase to those who had planted in the period 1993-99 was the subject of protracted discussions at all levels with the Commission. In spite of cogent arguments, the Commission remained steadfast in its refusal to co-fund the increases.
Careful consideration has been given in the meantime to the question of the Exchequer bearing the full cost of the increases. However, in view of other calls on the Exchequer, it is not possible for the Government to do so in the current year. The matter can be reviewed in the context of the next budget.