Reducing Water Pollution from Agricultural Sources: The Farm Nutrient Management Scheme

Mr Kieran Donnelly, the Comptroller and Auditor General, today issued his report to the Assembly on ‘Reducing Water Pollution from Agricultural Sources – The Farm Nutrient Management Scheme’.

Background

The Farm Nutrient Management Scheme (FNMS) provided 60% capital support,up to a maximum grant of £51,000, to farmers for investment in slurry and manure storage facilities. It was a key support measure to help farmers improve water quality and comply with the 1991 EC Nitrates Directive. This requires farmers to observe rules to reduce and prevent nitrate pollution, including measures on storing manure and periods when spreading manure to land is prohibited.

DARD was responsible for administering the scheme between January 2005 and December 2009 and made total payments of £121 million to some 4,000 farmers. It is the largest capital grant scheme ever run by the Department. The report makes clear that it may take up to ten years for the restrictions placed on the storage and spreading of manure to result in significant and measurable improvements in water quality.

The scheme was originally intended to be run on a ‘first come, first served basis’ with a budget of £45 million, but the Department
subsequently obtained approval from the Department of Finance and Personnel (DFP) to fund all applicants. DARD put forward the potential sale of its property at Crossnacreevy in the context of seeking funding for the expanded FNMS scheme. When DFP gave approval to fund all FNMS applications, it pointed out that the key outstanding issue was affordability. DARD’s initial informal valuation of Crossnacreevy suggested that, with appropriate planning permission, the site could yield a significant receipt in the region of £200 million.

In DFP’s view, this potential receipt was an important and, in the final analysis the persuasive, point and obtained Ministerial approval to
provide DARD with the necessary capital cover. However, due to the absence of residential planning permission, subsequent professional advice was that there were a number of disposal options for the site which would only produce potential market values ranging from £2.28 million to £5.87 million.

Key Recommendations

The Audit Office report makes a number of key recommendations,including:

The Department should implement all EU Directives in a timely manner -

implementation of the 1991 Nitrates Directive in Northern Ireland was very late. Designation of Nitrate Vulnerable Zones should have been complete by 1993 and an Action Programme of measures in place by 1995. Slow implementation of the Directive brought an increased risk of non-compliance by farmers and, consequently, continuing environmental damage. It also exposes the Department to the risk of infraction proceedings if the European Commission does not see evidence of rapid and full compliance with its Directive.

The Department should establish relevant and meaningful performance measures for grant schemes -

it is important to agree at least an initial batch of input, output and impact performance measures for any grant scheme. For example,in FNMS an output measure might have been the additional storage capacity created. As the current performance
management system is more about activity-based reporting, it is difficult to measure scheme performance and state whether it hasbeen a success.

The Department should obtain accurate and up-to-date base information before the introduction of any grant scheme –

the Department’s estimate of storage under-capacity in Northern Ireland was based on a survey of farms undertaken in 1997-98. Establishing a more accurate baseline would have enabled the Department to have a better understanding of the existing storage needs and to provide an accurate standard against which future progress could be measured. Failure to obtain accurate and timely data undermines the quality of decision making.

The Department should take steps to obtain details of the slurry/manure storage capacity on all livestock farms in Northern Ireland –

apart from the 4,000 farms which availed of the scheme, the Department has no record of the capacity or condition of slurry and manure storage facilities in the remaining 22,000 livestock farms in Northern Ireland. Given the risks that inadequate storage poses for compliance with the Nitrates Action Programme and, consequently, realisation of improved water quality, action should be taken to obtain this data.