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Wednesday, January 07, 2004

Farmers urged to take advantage of subsidy reform
In a speech to the Oxford Farming Conference the UK's Food + Farming Minister Lord Whitty has called on farmers to "take advantage of 'revolutionary' agricultural reforms which pave the way to a profitable + sustainable future for the countryside."

He suggests that they do this by responding to the needs of the market rather than continuing to farm in ways that have traditionally attracted subsidy support under the Common Agricultural Policy.

The process of weaning farmers away from areas supported by subsidies - that have historically been allocated on the basis of the quantity of produce a farm produces and not the needs of the market - is called decoupling.

Unfortunately, powerful lobbies have repeatedly diluted or resisted meaningful reform and the level of decoupling achieved, as a proportion of overall CAP spending, is much less complete or assured than is really necessary or usually suggested by ministers (who are understandably keen to emphasize their effectiveness within the EU).

There are also difficulties associated with calculating how much money farmers should be given if the amount they receive is not decided on the basis of the quantity of food they produce...

At the moment, the preferred option is to give farmers a one-off historic payment based on the average amount of support they have received over the past three years...

Such a funding regime penalises farmers who have not claimed in each of the past three years (or ever) as well as farmers in agricultural sectors that have never received generous subsidies, such as horticulture. It is also feared by Birdlife International that one-off payments will not lead to reversals in the recent intensification of agriculture, and that improvements in desirable "public goods", such as better nature conservation, will not assured under such a scheme... even if modest decoupling is a step in the right direction.

Note: The CAP will amount to approx. €50 billion in 2004... or put another way, the equivalent of 45% of the EU budget. Of this sum the amount decoupled or to be allocated according to economically or environmentally sustainable priorities is still depressingly small.

See The Guardian's KickAAS weblog and Wyn Grant's Common Agriculture Policy page for regular updates on developments in the world of agicultural subsidies.