Government reiterates call to abolish direct payments

THE UK Government has reiterated its determination to phase out direct payments, which it describes ‘undesirable and unnecessary’ in the long-term. 

But in its response to a heavily critical report by MPs on its stance on the post-2013 CAP reform process, Defra stresses that it is ‘unrealistic’ to expect this to happen by the end of the next term of the CAP.

In a report published earlier this year, the Environment, Food and Rural Affairs (EFRA) Committee said Defra’s of the CAP debate ‘has not impressed us thus far’.

They said Ministers were in danger of alienating the UK within Europe CAP reform and that the Government had failed to adopt ‘a coherent and effective negotiating position’ that reflected views across the UK.

They were particularly scathing of Defra Secretary Caroline Spelman’s, stance on the future of direct payments, which they said ‘lacks clarity’. They said they were ‘not convinced’ by Defra’s arguments on how reducing reliance on direct payments would lead to a more competitive farming industry, and urged it to ‘develop its position more clearly’.

In its response, published this week, the Government said it ‘accepts that there is more for us to do in this area’ but continued to voice its desire to get rid of direct payments.

“The UK Government does not believe that, in the longer term, direct payments in the form of income support subsidies are either desirable or necessary,” it said.

“However, we have made it clear that phasing out such payments by 2020 is unrealistic, in both practical and negotiating terms. As stated in the UK Government’s response to the Commission’s CAP consultation, there should be a clear downward trajectory and a programme of managed transition planning for their abolition, over that time period.”

The Government stressed that it recognises the importance of subsidy to farm businesses now but said there is a need for ‘much more rapid progress towards a genuinely competitive and successful industry that is able to stand on its own feet’. “Many farmers themselves do not want rely on income support from the EU and we, like the Committee, want to see a sector that is increasingly rewarded by the market for the produce it grows,” the report said.

It said the Commission’s current proposals for CAP reform ‘lack drive and ambition’ and that the UK Government had proposed instead a ‘more strategic and far sighted’ approach based on ‘genuine moves to build competitiveness while phasing out the remaining market and trade distorting subsidies’.

“We see long term support focussing on rewards for delivering public goods and we will continue to argue for trade reform, alongside reform of the wider international market itself, which will help farmers embrace business opportunities in order to make decent returns from the market,” it said. 

The report also voiced the UK Government’s opposition to the proposed ‘greening’ of Pillar One of the CAP and capping of direct payments.   

It said greening would hamper the competitiveness of EU agriculture and would necessarily deliver increased environmental benefits beyond those currently delivered by the UK’s agri-environment schemes and voluntary initiatives.

“The CAP should continue to deliver payment for environmental public goods through the second pillar, which should represent a greater proportion of a reduced overall CAP budget,” the report said.

It said capping could ‘add another layer of administrative complexity with the costs significantly outweighing any purported benefits’.

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