FARMERS and village shop owners across Worcestershire have given a cautious welcome to news their rates' bills could be cut in half.

A five-year rate relief scheme to encourage farmers to diversify into non-agricultural activities under the Rating Act 2001 was announced earlier this week.

The Act also extends the village shop mandatory rate relief to all food shops in designated villages.

The scheme gives 50 per cent rate relief to all new, small-scale non-agricultural businesses on farms. Worcestershire County Council could double this if it saw fit.

Shops in villages with less than 3,000 residents, with rateable values below £6,000, will be given a mandatory 50 per cent rate relief.

In addition, the county council would be able to extend 100 per cent relief to those with rateable values below £12,000.

"It's good as far as it goes," said Richard Jordan, Worcestershire's NFU chairman. "It's a good incentive, but you've still got to find the rest of the cash to finance the business.

"But it is a good way of encouraging farmers to find another source of income."

Rosemary Kennedy, who runs the post office in Inkberrow, near Pershore, said the move was "a step in the right direction".

"It is going to make a difference because it's going to mean a bit more cash that you don't have to find at the end of the month or end of the year," she added.

"But I wonder whether the Government could help in other ways too."

Local Government Minister Alan Whitehead said: "The rate relief will help farmers and village communities to protect local services and to build a broader economic base.

"Farmers will be able to diversify at a lower cost and vital support will be given to village businesses providing essential services to their communities."

He said the provisions - which also give a rate relief increase to stud farms - had been brought in as a result of demand from rural communities.

Rural Affairs Minister Alan Michael welcomed the move.

"They will help villages breathe new life into the heart of rural communities," he said.