Falling farm profits ‘put food supplies under threat’

Falling profit levels for Britain’s farmers are threatening the country’s ability to feed itself, an influential committee of MPs warns today.

Producers are also set to be burdened with more regulation from Europe, the Environment, Food and Rural Affairs (Efra) Committee says. It warned that plans to revamp Europe’s Common Agricultural Policy will result in more red tape for farmers, including a new subsidy system even more complicated and bureaucratic than the current scheme.

Among the changes being discussed in Brussels is a new tier of environmental conditions which farmers have to meet in order to qualify for their subsidy, with penalties for those that do not comply.

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Fines will also be levied on those who fail to meet new criteria for “active” farmers, farm size and number of employees.

The committee said more than half of UK farm businesses would be unprofitable without the support they receive from taxpayers, through schemes such as the Single Farm Payments and support grants to livestock farmers in the uplands.

The Department of the Environment, Food and Rural Affairs (Defra) believes that direct payments should be gradually phased out but the committee said they will be necessary for as long as business conditions in agriculture fail to deliver a thriving and profitable industry.

The committee concluded that direct payments still have a place within the CAP and will do until at least until 2020. Thirsk and Malton Tory MP Anne McIntosh, the Efra committee chairwoman, said: “Farmers are seeing their incomes fall while hard-pressed families have to swallow rising food prices.

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“Neither the EU nor Defra have faced up to these twin challenges.

“While we broadly support the Government’s desire to reduce reliance on subsidies we do not believe that cuts to direct payments are the best way to achieve this.

“Ministers need to set out exactly how UK farmers will become self-supporting, against a backdrop of rising fuel, fertiliser and feed prices and in the face of greater competition from countries that do not operate to EU standards of environmental protection or animal welfare.

“A future CAP should place greater emphasis on sustainable farming, but it should do so through a system of incentives and not through additional regulation.”

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Ms McIntosh said proposals for more mandatory environmental measures would make the Common Agricultural Policy (CAP) more complex without delivering tangible benefits.

Recent months have seen pig and dairy farmers taking to the streets to protest about the low prices they are receiving from retailers, some activists staging blockades outside supermarket depots in response to the crisis.

The Efra Committee has challenged the UK Government to fight for a series of “key principles” in its negotiations for reform of the CAP after 2013, including that the EU works towards an increase its capacity to produce food, achieve a significant degree of self sufficiency and, in the long term, be less reliant on income support from the taxpayer.

It also urged the coalition Government to clarify its food security strategy, taking into account the recommendations of the Foresight Food and Farming Futures report which warned that the planet needed to produce 40 per cent more food over the next 20 years.

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The findings were welcomed by CLA president and Yorkshire landowner William Worsley.

He said: “The committee’s recognition of the importance of the CAP in the production of safe, high quality food is welcome and we are pleased the report questions Defra’s rush to scrap direct payments in the short term.”

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