CAP reform leads to furious activity in the EU Commission

The reform of the Common Agricultural Policy has led to furious activity in the EU Commission, and in Whitehall, Edinburgh, Cardiff and Belfast

A farmer harvests barley
A farmer harvests barley

The reform of the Common Agricultural Policy has led to furious activity in the EU Commission, which has to write the new regulations, and in Whitehall, Edinburgh, Cardiff and Belfast, where ministers have to decide how to parcel out the funds, a process which encompasses the dynamic hybrid and the Olympic option and has led to outrage in Edinburgh.

The agriculture commissioner, Dacian Ciolos, said in the summer that the main regulations would be published in November, but they will not be ready until December. The full range of regulations will not apparently be in place for one or two years, but surely priority will be given to the new elements in the policy such as the greening conditions.

In 2005, Scotland and Wales opted to leave the allocation of entitlements to subsidy linked to historic production, which meant that land ineligible for entitlements when they were introduced remained ineligible.

England opted to move from the historic basis to the regional average basis over a period (10% per year over 10 years) – a dynamic hybrid, as farmers started entirely on one basis and ended entirely on the other. Farmers in Scotland and Wales will now do the same, over a shorter period.

A contentious issue in Edinburgh and Cardiff is whether to divide the countries into regions attracting different levels of subsidy reflecting differing productive capacity, and, if so, how to strike a balance between fairness between arable, lowland and upland stock farms and administrative nightmare.

A case has been made in each for three regions, but the Welsh Government is likely to settle for two. The Scottish Government favoured three, based on past land use, with the highest payments going to permanent pasture, the Olympic option (highest in the middle), but it appears that the EU Commission has raised objections, so Scotland may settle for two too, rough grazing and all other land.

Because the allocation of EU funds is made to member states, it falls to UK ministers to divide them between England and the devolved administrations in Scotland, Wales and Northern Ireland. The allocation included an extra €220m (£182m) convergence uplift because of Scotland’s low payments per hectare which are close to the smallest among EU member states.

All member states’ allocation are due to reduce by 12.6% over the period 2014-2020. The Scottish Government argued that the convergence uplift should be given exclusively to farmers in Scotland to cushion the effect of the annual reductions. Defra decided otherwise – an outrage, according to the SNP Government.

The uplift and the effect of the reductions are to be shared equally by all UK farmers – there are, after all, areas with low productive capacity in England, Wales and Northern Ireland too, and, because of the size of their holdings, farmers in Scotland receive the second highest Single Payments in the EU, five times the EU average.

by Hume Hargreave

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