NFU defends direct payments in CAP paper

THE NFU launched a staunch defence of the CAP and warned against moving too much money from direct payments into environmental schemes as it delivered its CAP vision paper to politicians in Brussels today (Tuesday, May 4).

The union presented its vision for a strong farm policy after 2013 to EU policy makers and urged them to resist any temptation to dramatically cut direct payments – which are essential to farm incomes. It also called for an end to modulation.

Over the past two years approximately 90 per cent of net farm income was derived from CAP support and Peter Kendall, NFU president, said farmers needed the support to deal with market volatility and fluctuating prices.

Until the EU could guarantee farmers a fair and sustainable reward for their produce, he said cuts in direct payments should be resisted.   

“As farmers, we’d all like to get to a place where we can be much less reliant on CAP support but to achieve this requires a number of conditions to be met,” he said.

“Until then, direct support payments to farmers will remain a crucial component of the policy, helping farmers to deal with market shocks as well as supporting them in meeting the higher standards of production that are expected of European farmers,” he added.  

Mr Kendall said the reform of the CAP should focus on five key principles.

  • maintaining productive capacity in Europe
  • providing a buffer against the threat posed to farmers by volatile markets
  • supporting efforts by farmers to become more competitive
  • providing incentives to improve environmental performance
  • addressing the market so farmers stand a better chance of making a profit

The farm leader also called for an end to modulation – where money is siphoned out of direct payments and pushed into Pillar Two (environmental) schemes.  

“The Second Pillar of the CAP needs to be simplified and made more coherent. Above all, it’s funding has to change to a more sustainable and fair basis for all EU farmers. This means modulation has to go,” said Mr Kendall.

With the CAP budget under increasing strain, the NFU also warned against a re-nationalisation of farm policy through co-financing of support payments. The idea, which emerged in a leaked and hastily withdrawn budget review document last year, would allow member states to dip into their own funds to support farmers and take pressure off central EU funds.

But it is thought Britain would be much less likely to use its own funds than countries with a strong farm lobby, most notably France.

“Our biggest fear is not so much the pressure on the budget as a whole but the threat of a renationalised policy through ever more flexibility to member states or worse, more co-financing of support.

“This would be a disaster for European agriculture and totally negate the many positives that the CAP has brought to EU farmers and society,” said Mr Kendall.

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