Dear Prime Minister,

It was a great pleasure to get you both to Birkhall for tea last weekend and to discuss various issues. I thought it might be helpful if, as usual, I put them in writing ...
 The main issue that we talked about was agriculture. I mentioned to you the anxieties which are developing, particularly amongst beef farmers and to a lesser degree sheep farmers, of the consequences of the Mid Term Review. There is no doubt that decoupling support from production provides many opportunities, but it is also creating some real fears amongst the livestock sector. As you know, beef farmers were particularly heavily subsidized and the worry is that the removal of specific livestock support may mean that farmers will decide it is simply not rearing animals. If this happened the large areas of the dependent on beef and sheep farming will change beyond all recognition. As with all these things, a balance has to be struck. You know that I have been an advocate of the principles behind the Mid Term Review, but as we agreed right at the start, the method of implementation of the new regime is what will make all the difference. I discussed with you some relatively simple steps which I think could be t
aken to ameliorate the situation and ensure that help is given to ease the transition to the new world. If I may, I shall list them:

a) Every support must be given to beef farmers so that they can seize the new opportunities and cope with the reduction in support in other words they must be encouraged to co-operate and learn about marketing. The English Farming and Food Partnerships is working hard in this area, but I wondered if it would be possible for the Government to channel funds specifically to help the beef sector through the existing Agricultural Development Scheme? As I Understand it, through this mechanism the Government can grant-assist groups of farmers to start marketing or other initiatives. Inevitably, such help needs to be advertized widely so 6 that the maximum number of farmers are encouraged to benefit from the funding and advice available.

b) Sufficient support needs to be provided to hill farmers who play a particularly crucial role in maintaining the beauty and the communities of the uplands. The dry stone walls, the unique livestock management practices, such as hefting of sheep, and the social fabric of these areas are utterly dependent upon these farmers. If they are to care for the land in the way that the public would wish and improve their own competitiveness and marketing, the Hill Farming Allowance, which currently exists alongside the new Single Farm Payment, must remain. There is a growing sense of anxiety that the Treasury will try to stop it once the S.F.P. is in place and I cannot overemphasize just how important it is that this support remains in place.

c) Essential to livestock farmers is access to a sufficient infrastructure of livestock markets, abattoirs and cutting facilities, particularly if they are to respond as we would want to the growing opportunities for direct selling and collaborative marketing. Indeed, this was one of the recommendations in Don Curry’s original report. I am sure that Regional Development Agencies could do more in this area, and any encouragement which they could be given by central Government would be much appreciated by the livestock sector.

 d) So much depends on the consumer demanding British produce and I only wish that more could be done to encourage people to buy British and to understand that it is only with their support that British agriculture and the will survive. I know that European Rules preclude the Government from running a campaign to promote, solely, British produce but, for all that, it would be splendid if the Government could find innovative ways to give the necessary lead.

 e) Public procurement of beef is an obvious area in which the Government could make a substantial difference to the beef sector. For instance, I understand that the Ministry of Defence is now sourcing a proportion of beef from British suppliers, but no doubt more could be done.

 f) I have-raised with you on a number of occasions the importance of reducing the bureaucratic and administrative burden on farmers, and you have been most reassuring in your replies. Suffice it to say that any pressure which you can bring to bear on D.E.F.R.A. through the Panel for Regulatory Accountability, which you told me you are chairing, would be much appreciated. Vigilance is essential to help officials resist returning to type!

 I also mentioned to you the increasing problems affecting the dairy sector. I have been speaking to a number of different people about what could be done to ameliorate the situation and there is no doubt that one major problem appears to be the Office of Fair Trading. As you know, the dairy sector is going through a major rationalization and many existing farmer-owned co-operatives are expanding as farmers increasingly understand that by working together they have more power to deal with processors and retailers. Unfortunately, I am told that the Office of Fair Trading is becoming a serious obstacle to developing dairy co-operatives of the necessary size and in?uence. As I understand it, it sees the United Kingdom as ring-fenced the Channel acting as a barrier to imports, which is, of course, ridiculous. The O.F.T’s view is that it will oppose any company which looks like exceeding twenty-five per cent of the UK. market share. Meanwhile, in Europe, particularly Denmark and Germany where co-operatives are m
re established, competition law is being interpreted entirely differently and there is one co-operative in Denmark that has a ninety percent market share! This may be somewhat excessive, but unless United Kingdom co-operatives can grow sufficiently the processors and retailers will continue to have the farmers in an arm lock and we will continue to shoot ourselves in the foot! You did kindly say that you would look at this and see if there was anything which could be done to help the O.F.T. to take a wider view.

 Finally, I did raise an entirely different subject to do with the resources available for our Armed Forces. I mentioned to you that during a recent visit to Northern Ireland I was able to see the hugely impressive airborne surveillance capability provided by the Armed Forces in the Province and, increasingly, in support of British Forces in Iraq. In particular, I saw the Army Air Corps’s “Oxbow” equipment, which is a major advance in surveillance technology. The aim of the Ministry of Defence and the Army Air Corps to deploy this equipment globally is, however, being frustrated by the poor performance of the existing aircraft in high. temperatures. Despite this, the procurement of a new aircraft to replace the is subject to delays and uncertainty due to the significant pressure on the Defence Budget. I fear that this is just one more example of where our Armed Forces are being asked to do an extremely challenging job (particularly in Iraq) without the necessary resources.

I do apologize for writing at such length. Meanwhile, I cannot tell you how grateful I am to you for agreeing to give my Business and the Environment Programme’s Tenth Anniversary Lecture next Tuesday, and I am particularly pleased that Mrs. Blair will also be coming to Clarence House for the reception and dinner afterwards, although I do understand that you both have to slip off after my speech which I will now be giving before dinner.

Yours ever

Charles