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Last Updated: Friday, 18 January 2008, 09:02 GMT
Farmers' 40m foot-and-mouth bill
The outbreak resulted in restrictions on movement and trade of animals
The foot-and-mouth outbreak in 2007 may have cost Welsh farmers more than 40m, a Welsh assembly committee has found.

The finance committee also highlighted an ongoing dispute between the governments in Cardiff and London over who should pay any compensation.

A separate assembly report concluded the UK Treasury should compensate Welsh farmers.

The foot-and-mouth outbreak was discovered in Surrey in August, but there were no cases in Wales.

However, the outbreak had an impact on the rural economy across the whole of the UK.

Restrictions were placed on the movement and trade of animals following the August outbreak and a second one in September.

Farmers in Wales did not automatically receive compensation because no animals were slaughtered due to the disease, but the Welsh assembly's finance committee said "the effect on the Welsh farming industry was immediate and severe".

The restrictions meant animals could not be sent to the abattoir which lead to a loss of income and the additional cost of feed.

Hill farmers are facing a winter having lost half their income
Dai Davies, NFU Wales president

The National Farmers' Union (NFU) Wales put the cost "in excess of 40m".

The finance committee, which is made up of AMs from all parties, pointed to evidence the outbreak came from a research facility at Pirbright that was licensed by the UK government.

The assembly government has already agreed extra funding for aid schemes including one to promote red meat.

But the AMs noted that just over half of the 7m allocated to the schemes had actually been spent.

The finance committee recommended the assembly government undertake a "full and detailed assessment of the costs of the outbreak" and that ministers make "significant additional funding available".

The AMs were concerned the level of support being offered to Welsh farmers seemed to be far less than their counterparts in Scotland.

Compensation package

The Scottish government made payments to farmers that, if copied in Wales, would amount to the equivalent of 27m, almost 20m more than the assembly government has pledged.

Ministers in Edinburgh are now trying to reclaim that money from the UK Treasury.

The assembly's rural development committee also released a report that echoed much of what had been concluded by their colleagues.

It said the assembly government should consider providing a compensation package to farmers in the short-term, funded from its cash reserves as Scottish ministers had done.

The report then recommends the assembly government continues to pursue the UK Treasury for the costs of the outbreak.

Dai Davies, president of NFU Wales, said they were asking for similar compensation for farmers as in Scotland.

"Farmers in Wales have received just under 2m from the Welsh assembly. Farmers in Scotland will be receiving 27m," he said.

"The sheep industry in Wales is a far bigger industry than it is in Scotland. We face the same problems.

"Hill farmers are facing a winter having lost half their income, why should we be treated any differently?"

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