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New farm payment scheme 'ambitious and forward-looking' - Beckett

Ministers today unveiled the future shape of support for farmers in England under reforms of the Common Agricultural Policy (CAP).

Last year's deal by European agriculture ministers saw the most radical reform of the CAP since its inception by breaking the link between subsidies and production ('decoupling').

Now Margaret Beckett, Secretary of State for Environment, Food and Rural Affairs has unveiled 'a decisive irreversible and forward-looking shift consistent with the direction that we've already set in the Sustainable Farming and Food Strategy and in the CAP reform negotiations last June.'

The reforms put into effect a central part of the Curry Commission recommendations.

Today's decision means that:

  • England will decouple fully in 2005 and move towards a flat rate Single Farm Payment to farmers.
  • Only farmers active in 2005 will qualify for payment.
  • There will be an eight-year transition period to the flat rate.
  • England will be split into two regions - land in the severely disadvantaged areas of the less favoured areas and all other land in England. Different flat rates will apply in these regions.
  • No use of 'national envelopes' in England.
  • Payments will depend on farmers meeting 'cross-compliance' conditions - government will consult on these standards soon and work to ensure they are implemented effectively with minimum bureaucracy.

Margaret Beckett said in an Oral statement to Parliament:

'I have been guided by several key principles, namely: coherence with the Curry Commission report and our own Sustainable Farming and Food Strategy launched in 2002, in particular with the emphasis in both on bringing the industry closer to the market and on the increasing importance of environmentally-sensitive farming; consistency with our wider objectives for the CAP, including greater simplicity, transparency, minimal bureaucracy and as few deductions as possible from the basic payment available; and the need to attract the widest possible support of the stakeholder community, for ongoing payments to farming which, we believe, requires us to move towards a system in which public money is delivering public goods.'

'Farmers' activities will no longer be dictated by what the subsidy regime requires them to produce with all the costs and bureaucracy entailed, but frees them to farm for what the market wants.'

'I have concluded that we should aim to avoid a situation in which subsidy was allocated solely on the basis of past activities themselves undertaken in the context of production-linked support policies. For England I do not believe that it would be right to adopt a purely historic approach. I do not believe we can justify to our public a situation in which at the end of this decade or later farmers would continue to receive aid wholly based on business decisions taken ten years or more earlier, in a very different policy context.'

'I and my Department will work with the industry over coming months to implement these decisions in the best way possible and in the spirit of partnership and cooperation with all stakeholders.'

Further information

For further information on today's announcement please see the Defra news release.

To see the Secretary of State's Parliamentary statement in full please see the following Defra pages.

For information on the Curry Commission report as mentioned above please see Defra news release.

For information and advice on CAP reform and its implementation please see Defra's CAP pages which contain a summary, background information, Questions and Answers and useful contacts

Big livestock farmers suffer in £2bn subsidy shake-up

by Michael McCarthy, Environment Editor

English farmers are to have their various EU subsidies rolled up into a single payment based on the area that they farm, rather than on what they produce, the Government announced yesterday.

The change, which will be brought in over eight years, is intended to break the link between subsidy and overproduction, which has long been the major criticism of the common agricultural policy (CAP).

In future, England's 75,000 farmers will still be paid their £2bn EU kitty, but it will not be based on how much milk or beef they produce or how much wheat or barley they grow.

It will be the same per-hectare rate for all of them, large or small, based on the size of their farms - and to claim it, they will have to comply with a series of rules intended to keep the countryside in an environmentally healthy state.

CAP subsidies based directly on how much a farmer could produce led in the past to huge and wasteful surpluses - such as the so-called butter mountain and wine lake - which were not only economically wasteful and distorted international trade, but resulted in a system of intensive agriculture gravely harmful to countryside wildlife. Britain, for example, has seen some of its farmland bird populations drop by more than 90 per cent in the three decades.

EU farming ministers, including Margaret Beckett, agreed last June after marathon talks to "decouple" subsidy from production, in what was seen as the biggest change to CAP in a generation.

Yesterday Mrs Beckett announced how the new subsidy regime would be applied in England, saying it was "a decisive and irreversible shift which offers huge opportunities to the industry".

She rejected calls from some farmers for it to be based on the subsidies they received in the past, in favour of the flat-rate area payment system.

But because some farmers will be losers under the new regime - such as intensive livestock farmers, who have a lot of animals on not a lot of land, and will be paid much less by the hectare than they were by head of cattle - it is to be phased in over eight years from 2005. By then most English farmers will receive an annual subsidy of about £220 per hectare no matter what they produce (although hill farmers, with very large tracts of grazing land, will probably receive about £70).

Some farmers will be gainers - particularly those such as vegetable growers whose produce was not previously subsidised.

The system will free farmers to produce what the market wants, rather than being led by the nose by subsidy, and the new flexibility is welcomed by many of them.

But some people believe the greatest advantage of "decoupling" is the environmental benefits it may bring to the countryside.

Farmers will be subject to "cross-compliance" to claim their payments - meaning they will have to adhere strictly to environmental and animal welfare legislation, or their payments can be withheld. The full details have yet to be worked out - especially of a rule that specifies that land will have to be kept in "good agricultural and environmental condition" - and much will depend on how tough they are.

"This is a fantastic signal in the right direction," said Sue Armstrong-Brown, head of agricultural policy at the Royal Society for the Protection of Birds. "The big challenge is to make it meaningful for the environment.

"We're still going to have £2bn worth of taxpayers' money being spent every year, and we're moving towards a more rational way of distributing it, and that's great. But for it to mean something, cross-compliance will have to have teeth."


Arable farmer

Roger Welberry runs one of the biggest family-owned vegetable farms in Lincolnshire, producing thousands of tons of cabbages, sprouts and broccoli - which, unlike livestock or cereal crops, have never attracted a penny in EU subsidy. But as the EU funding gradually moves over to flat-rate area payments for everyone, annual subsidy cheques will start to pop through the letterbox of Holme Farm at Kirton Holme, near Boston.

The 600 hectares he directly owns or rents will, he thinks, initially attract about £21 per hectare, an annual total of £12,600; between now and 2012, when area payments will have become the norm, the total will rise to ten times that figure. Mr Welberry, 60, whose family has run the farm for four generations, welcomes the new income although he says it will not make a great deal of difference to a business with an annual turnover of about £12m. In fact, he says, most of it will probably be spent on the environmental improvements that will eventually be necessary to qualify for the payment.

"We've never had subsidy, we've never expected it, and we've managed to survive and do reasonably well without it," he said. "I do think decoupling subsidy from production is a good thing. We've been overproducing."

Mixed farmer

Anthony Rew, who runs a traditional mixed farm near Newton Abbott in Devon, says big livestock farmers will be the losers under the new scheme. But Mr Rew, with a moderate number of livestock, thinks he too will be a loser - albeit on a small scale - or just about break even. His 140 hectares of winter wheat, barley and beef and dairy cattle (230 animals in all) at present attract three separate EU subsidies, but by 2012, under the new scheme, he will be receiving a single annual area payment of about £30,800, which is not very different from what he receives now.

However, some intensive livestock farmers he knows with larger numbers of animals will be down when they are paid by the hectare and not by the head of cattle.

Mr Rew, 44, believes the new scheme offers farmers the flexibility to produce what the market wants. "For too long we've been marshalled by the subsidy regime," he said. "Farmers are looking for a change, although we must have a fair share of the supermarket price.

"If you have an intensive beef unit, this could be bad for you in the long term, but the fact that it is being brought in over eight years means farmers will be able to plan for the future and adjust to it. ",,174-999886,00.html

State cash flows to 'green' farmers

By Valerie Elliott, Countryside Editor

THE Government has moved to prevent the country’s biggest landowners gaining cash windfalls under a new payment system after reform of the Common Agriculture Policy.

Beef and dairy farmers who run intensive farm businesses will also lose out from the change as ministers order a radical redistribution of the £1.7 billion a year paid to English farmers in state handouts.

Under the scheme to be phased in over eight years a new flat-rate payment is to be made to farmers based on the amount of land they farm. By 2012 this is likely to be worth some £220 per hectare (£89 per acre.) But a cap has been imposed in upland areas such as the Yorkshire Moors, the Lake District, the Peak District, Dartmoor and Exmoor.

Institutional landlords such as the Prince of Wales’s Duchy of Cornwall, the Dukes of Westminster and Devonshire, the National Trust and many other owners of large estates, shoots and grouse moors, land categorised as severely disadvantaged areas, will be paid a lower rate.

This is likely to be £70 to £90 per hectare (£28 to £36 per acre) in 2012. A number of Labour MPs last night welcomed the reforms but were concerned that wealthy landowners would still be propped up by massive cash handouts for largely unproductive land.

The new system breaks the system of state handouts to farmers for food production and instead they will be rewarded for greener farming practices. To be eligible for cash, farmers must keep their land in good agricultural or environmental condition.

The terms are likely to include strict animal welfare standards, maintenance of hedgerows and wildlife habitats, and opening up rights of way and public footpaths.

Beef and dairy farmers were particularly shocked that they appear to have been chosen to carry the brunt of cuts. Their enterprises do not require large areas of land as cattle are generally kept in sheds. From next year to 2012 their annual payments could be halved.,2763,1147079,00.html

Guardian Leader

Friday February 13, 2004
The Guardian

A day away from the smoke remains one of the urban nation's favourite pastimes. Millions are drawn to long walks and cream teas in England's unique countryside, the product of a thousand years of farming. So, when Margaret Beckett, secretary of state for environment, food and the regions, declared yesterday that she was announcing the biggest shake-up in English agriculture for at least a generation, it was a claim worth examining. Was she influenced, perhaps, by the ineffable tedium of hours and hours spent round the negotiating table?

After all, Mrs Beckett is not ending all farm subsidies. She is not slashing the amount of cash that goes to farmers. The UK's pot from the EU remains set at £3bn, with England taking the lion's share, £1.7bn. The developing world will continue to be hamstrung by being denied access to European markets and undermined by the dumping of surpluses in their markets. Instead, Mrs Beckett's bold claim was based on her decision to consign to the political abattoir the most criticised European subsidy of all - the billions that underwrite much agricultural production. This is the EU subsidy that years ago led to the uprooting of hedges and the creation of the great grain plains of eastern England. It was the cause of the obscene mountains of unwanted surpluses. Its worst excesses have been moderated, but it still keeps farmers in an artificial world.

In their place, Mrs Beckett announced yesterday, there is to be a new system of subsidy based on the amount of land farmed. So, when the system is fully implemented - at a rate of about £220 a hectare - it will not make much difference to the current situation in which the Duke of Bedford and the 223 other largest landowners take as much subsidy between them as the 15,000 smallest get altogether. For the non-farmer, the only visible sign of change may be the end of the virulent patchwork of lurid yellow across the landscape that indicates a year when Brussels money has underwritten the planting of thousands of hectares of oilseed rape.

But Mrs Beckett was right to underline the announcement's significance. First, it reconnects the farmer with the market. That was one of the principal recommendations made by Sir Don Curry in his report two years ago advocating an end to all subsidies not directly linked to public benefits. And, while it does not address the constant downward pressure on food prices and the big supermarkets' "armlock" on the market, identified by the prime minister at the time of the foot and mouth crisis, direct contact with the market can be expected to spur farmers on to cooperative ventures to enable them to meet the supermarkets on better - if hardly even - terms. Because decisions about what crops to grow and what livestock to raise will be taken in the light of the market and local farming conditions, ministers believe it will encourage less intensive farming, more diversity and better farming practice - further encouraged by a degree of linkage between subsidy and soil quality.

That is the essence of the importance of the change announced yesterday. To pay farmers what amounts to a grant according to how much land they farm puts the relationship between them and us, the taxpayers who subsidise their incomes, on a new footing. Good farmers have always considered themselves custodians of a national asset. Now - or at least by 2012, when the new system is fully implemented - all farmers will, like it or not, become managers of the nation's land. There will be noisy protests about the urbanisation of the countryside, dismayed cries against "theme-park Britain". But the first furrow has been ploughed. This is the basis for a new relationship that could rebalance food production and farm profits with the aspirations of an urban society.;$sessionid$0DP3ABIF1K3A3QFIQMGSFGGAVCBQWIV0?xml=/news/2004/02/13/nfarm13.xml&sSheet=/news/2004/02/13/ixhome.html

Farmers to get £100 an acre in subsidies shake-up

By Robert Uhlig, Farming Correspondent (Filed: 13/02/2004) Farmers and landowners will be paid an agriculture subsidy of around £100 an acre from January, even if they produce no food, the Government said yesterday as it unveiled the biggest shake-up of farming subsidies in living memory.

The most radical change in farming support in the 50-year history of the Common Agricultural Policy will see £1.7 billion of European money allocated to England, detached from food production and linked entirely to land ownership.

Margaret Beckett, the Environment Secretary, said her decision to "decouple" payments from production with a single farm payment was designed to "simplify the bureaucracy" associated with the "plethora of existing" subsidies.

She said that after studying many options, the Government would phase in a "flat-rate per hectare" payment system from 2005 so that by 2013 all payments would be based on how much land a farmer owned, not the volume of crops or livestock produced.

The decision has divided farmers, landowners, tenants and environmentalists.

The National Farmers' Union had campaigned for payments to be based on historic subsidy receipts, a situation that Wales and Scotland chose earlier this week, but which Mrs Beckett said was hard to justify.

Robert Foster, chief executive of the National Beef Association, said it would kill off the beef finishing industry in England and also hit dairy herdsmen hard.

George Dunn, chief executive of the Tenant Farmers' Association, said he would be challenging the Government's decision in Brussels. He said it would mean soaring rents and escalating land prices.

Ben Gill, president of the NFU, said there would be "winners and losers amongst the farming community" and vowed to "pursue further measures to mitigate these problems".