Professor Peter Midmore calls for more investment

He says the depressed rural economy depends on outside help as farmers and tourist operators have little or no money to invest in their own businesses.

The report - commissioned by BBC Wales - was published on the anniversary of the first suspected foot-and-mouth case coming to light in Essex on 19 February, 2001.

Lagging behind

Professor Midmore estimates the cost of foot-and-mouth disease (FMD) to the rural Wales economy to be �120m in lost tourism, �62m in agriculture and �19m in other sectors.

The report says that in the wake of the crisis, the rural Welsh economy grew by less than 1% last year, compared to the assembly's target of around 6.7%.

Tourist destinations like Snowdon have suffered

He notes that as rural Wales already lags behind the rest of Wales economically, the gap is significant and requires much more investment.

The report also warns that rural Wales is lagging behind the tourism sector across the UK.

It points to high levels of investment in the hotel and catering industry which Welsh operators have to match or exceed to stay competitive.

Recovery plan

The assembly's Rural Recovery Plan was announced in July 2001 by Welsh Rural Affairs Minister Carwyn Jones.

It provides a total of �65m to help regenerate rural businesses, including �37m in the present financial year.

Carwyn Jones unveiled the Rural Recovery Plan

But Professor Midmore has called for a policy rethink, criticising the overall package as being inadequate.

After taking account of emergency aid for agricultural activities directly affected by FMD, he claims there is little more than �8m available for investment support in activities like tourism marketing.

He describes this sum as "insignificant", adding that less than half the money has been spent.

The report concludes: "Despite the fact that the FMD outbreak has subsided, it may be concluded that there is an urgent need for a re-examination policy effort, specifically in the farming and tourism sectors but also for the rural economy as a whole."