FARM WOODLAND SCHEME AND FARM WOODLAND PREMIUM SCHEME

 

REPORT TO PARLIAMENT

 

1.  Section 2(3) of the Farm Land and Rural Development Act 1988 (“the Act”) requires the Secretary of State for Environment, Food and Rural Affairs[1] to review the rates at which grants are payable under the Act for farm woodlands in England and to lay a report before Parliament at least once every five years.   The last such report was laid on 16 July 2001.  A further review having now been carried out, the present report is laid before Parliament in accordance with the Act. 

 

2.  Separate reviews are being carried out in Scotland and Wales and the related reports will be laid before the Scottish Parliament and the National Assembly for Wales.

 

The current grants

 

3.   Annual grant payments under section 2 of the Act are still being made in England under the following schemes:

 

the Farm Woodland Scheme;

the Farm Woodland Premium Scheme 1992;  and

the Farm Woodland Premium Scheme 1997.

 

The payments are aimed at helping compensate woodland owners for loss of income as a result of converting agricultural land to woodland.  They vary  according to the category of land concerned (including the nature of its agricultural use prior to conversion) and are payable only in respect of woodland that has been created with support under the Forestry Commission’s Woodland Grant Scheme.

 

4.  The pilot Farm Woodland Scheme (FWS) 1988 (SI 1988/1291) was introduced in October 1988 and closed to new applicants on 1 April 1992.   It provided for ongoing annual payments for up to 40 years, depending upon the type of woodland planted.  The current rates of grant payable are set out in Schedule 1 of The Farm Woodland (Amendment) Scheme 1997 (SI 1997/828).

 

5.  On 1 April 1992 the FWS was replaced by the Farm Woodland Premium Scheme (FWPS) 1992 which provided for ongoing annual payments for 10 years (in the case of predominantly conifer woodland) and 15 years (in the case of predominantly broadleaved woodland), with ongoing commitments by grant recipients to maintain the woodlands for 20 and 30 years respectively.   The FWPS 1992 was replaced on 1 April 1997 by the FWPS 1997, which again provided for ongoing annual payments for up to 15 years and maintenance commitments for up to 30 years.  The current rates of grant payable under the FWPS 1992 and the FWPS 1997 are set out in Schedules 3 and 1 respectively to The Farm Woodland Premium Scheme 1997 (SI 1997/829).   The FWPS 1997 closed to new applicants in England on 14 December 2005[2].

 

6.  Current payment rates in England are listed in the Annex to this report.  FWS payment rates are lower than FWPS payment rates because FWS payments are made annually for a longer period.  

 

Review of Existing Grant Rates

 

7.  FWS and FWPS payment rates have remained unchanged since 1997.  The 2001 report to Parliament said experience indicated that the rates provided a fair incentive to farmers wishing to diversify into woodland creation and that it continued to be appropriate for rates to be differentiated according to the category of land used.  No changes were therefore proposed at that time. The conclusions of the 2001 payment rate review were subsequently revisited as part of a wider policy review of woodland creation grants in England carried out in 2002 but again no changes were considered necessary[3]. 

 

8.   Since both the FWS and the FWPS are now closed to new entrants in England, the key question is whether the present rates continue to provide those already in the schemes with a fair – but not excessive - contribution to offsetting income lost as a result of converting agricultural land to woodland.   Our conclusion is that they do.   The introduction of the Single Payment Scheme with effect from 2005 will, in the case of England, see a progressive shift in Common Agricultural Policy (CAP) support from arable land to non-arable land and from improved to unimproved land.  This in turn will result in a levelling out of the traditional differences between income lost as a result of converting different types of agricultural land to woodland.  However,  people’s decisions to plant new woodland will have been taken on the basis of FWS and FWPS payment rates applying when they joined the Schemes.  It would not be appropriate to adjust payment rates for existing FWS and FWPS agreement holders in order to take account of a major change in CAP support arrangements that could not reasonably have been foreseen at the time most of them will have joined the Schemes.

 

9.  Therefore we are not proposing to make any change to current FWS and FWPS payment rates in England at the present time.  We will, however, continue to keep the rates under regular review.

 

Further reports to Parliament

 

10.  A further report to Parliament under the Act will be made not later than July 2011.

 

 

Department for Environment, Food and Rural Affairs

12 July 2006

 

 

 

                                                                                                            ANNEX

 

FARM WOODLAND SCHEME PAYMENT RATES IN ENGLAND 

 

Categories of land converted to woodland

Amount of grant payable

(£ per hectare)

Converted land formerly arable land-

  • if severely disadvantaged land before conversion
  • if disadvantaged land before conversion
  • if neither severely disadvantaged nor disadvantaged land before conversion

 

120

180

230

Converted land formerly improved grassland-

  • if severely disadvantaged land before conversion
  • if disadvantaged land before conversion
  • if neither severely disadvantaged nor disadvantaged land before conversion

 

110

160

200

Converted land formerly unimproved land

30


FARM WOODLAND PREMIUM SCHEME 1992 AND FARM WOODLAND PREMIUM SCHEME 1997 PAYMENT RATES IN ENGLAND

 

Categories of land converted to woodland

Amount of grant payable

(£ per hectare)

Converted land formerly arable land-

  • if severely disadvantaged land before conversion
  • if disadvantaged land before conversion
  • if neither severely disadvantaged nor disadvantaged land before conversion

 

160

230

300

Converted land formerly improved land-

  • if severely disadvantaged land before conversion
  • if disadvantaged land before conversion
  • if neither severely disadvantaged nor disadvantaged land before conversion

 

140

200

260

 

Converted land formerly unimproved land

60

 

 

 


[1] The functions of the Minister of Agriculture, Fisheries and Food (which related only to England) were transferred to the Secretary of State by virtue of article 2(2) of the Ministry of Agriculture, Fisheries and Food (Dissolution) Order 2002 (SI 2002/794).

[2] The Farm Woodland Premium Schemes (Amendment) (England) Scheme 2005 (SI 2005/3473).

[3] Page 19 paragraph 53 of “Policy Review of Woodland Creation in England under the Woodland Grant Scheme and the Farm Woodland Premium Scheme: Response of the Forestry Commission and the Department for Environment, Food and Rural Affairs to the Report of the Review Steering Group”, April 2003    http://www.defra.gov.uk/erdp/pdfs/fwps/woodlandcreation.pdf