Fear of cut to payments in EU shake-up of CAP

Four regulations which make up the new Common Agricultural Policy (CAP) form a mandate which will be put before the full European Parliament to secure a deal.

Through CAP, farmers in the EU are provided with subsidies. The policy reforms are the first in 10 years.

A contentious issue is discretionary powers for countries to transfer funds from their CAP allocation which are set aside for direct payments, known as Pillar One, into the rural development budget, Pillar Two. Environment Secretary Owen Paterson has been keen to secure this flexibility.

After months of negotiations between the European Agriculture Council, the European Commission and the European Parliament, Mr Paterson said: “We fought hard to secure the freedom to green direct payments in a way that reflects our national circumstances. UK Governments can now transfer extra funds to their rural development budgets which represents the best use of public money whilst delivering the best environmental outcomes.”

Harry Cotterell, president of the Country Land and Business Association, wants Mr Paterson to reconsider, saying: “We’re concerned that Mr Paterson will put English farmers at a competitive disadvantage to our Continental neighbours by insisting on moving 15 per cent of Pillar One funds into Pillar Two when other European governments will not be doing this.”

Peter Kendall, president of the National Farmers’ Union, said for most elements of the new CAP, Defra will have flexibilities to select from, including power to opt out of European rules on greening and implement a certification scheme with higher environmental demands on farmers.

He said: “UK Government is alone in Europe by thinking that doggedly following the free market ideology of cutting payments and ratcheting up environmental standards will help our farmers compete and produce more food.

“The Prime Minister hit the nail on the head when he addressed the NFU Conference during his time as opposition leader. Back then his view was that “our government often imposes far more onerous standards on British agriculture than exist elsewhere in the EU.

“This can have perverse consequences. Instead of driving standards up, they just drive farmers out of business. Our aim must surely be to take our EU partners with us wherever possible at first so we have a truly level playing field on which British farmers can compete.”