Cereals 2013: Government pursuing 'flawed right wing ideology' on CAP

NFU president Peter Kendall has accused the Government of pursuing a flawed ‘right wing ideology’ on Common Agricultural Policy (CAP) reform in the belief that less money will make farmers more competitive.

In a fiery session at the HSBC stand on the first day of Cereals 2013, Mr Kendall repeatedly clashed with Farming Minister David Heath over the Government’s stance on CAP reform that he suggested would see English farmers significantly disadvantaged against their main EU competitors.

Mr Kendall highlighted figures from Brussels showing the budget deal recently negotiated by the UK will see our rural development allocation cut by 16 per cent in the first year of the new programme, rising 27 per cent in the final year.

This represents the lowest rural development allocation of all member states, while France, for example, received an extra €1 billion and Italy €1.5billion.

Yet the UK Government, driven by the Treasury, according to Mr Kendall, is determined to focus future CAP spending on Pillar Two rural development measures. To make up for the shortfall in England’s rural development budget, Defra has negotiated the ability to transfer up 15 per cent of its Pillar One direct payment budget into Pillar Two in national modulation, which, unlike the current system, will not be co-financed by member states.

Mr Kendall said Defra Ministers’ ‘persistence in their determination to disadvantage English farmers’ in this way will ‘greatly exacerbate the difference in payment levels between us and our competitors’.

“A Somerset or Shropshire dairy farmer is already disadvantaged to the tune of €235/ha compared to a Dutch dairy farmer.”

Entry Level Stewardship is unlikely to be available in Pillar Two in future as it will form the basis of the new greening scheme.

Asked why Defra therefore needs 15 per cent modulation, Mr Heath said he wanted to use future rural development funding to reinforce a version of Higher Level Stewardship, to support ‘vulnerable’ upland farmers and boost agricultural technology.

He said: “We need to use Pillar Two to support what is best about what we already have. Our Higher Level Stewardship schemes are some of the best agri-environmental schemes anywhere in the world and I am not going to lose that because it would be a huge disbenefit. HLS is important and I would anticipate HLS or something similar to continue in Pillar Two.

He added that upland farming is ‘very marginal’ and performs ‘enormously valuable function’ in terms of food production and protection of the countryside.

“That is a public good which needs support and therefore I want to makre sure I have got the scope to do something effective for upland areas.

“I want to use support for investment in the future into providing the sort of new technologies which maintain the competitiveness of British agriculture. These are all areas where we can use Pillar Two more effectively than other options.”

But he refrained from commenting on suggestion that transferring money from Pillar One to Pillar Two will disadvantage English farmers against their competitors in other countries.

But Mr Kendall seized on Mr Heath’s comments, insisting his claims to support food production and calls for the country to ‘dig for survival’ did not tally with his desire to shift more money into Pillar Two.

Mr Kendall pointed out that all the biggest ‘millionaire’ HLS claimants were not farmers, but large organisations like the RSPB, the National Trust and county councils.

“Someone stopped me at the gate today who was losing 30 acres of land because his landowner was handed half-a-million in HLS grants to take that out of production and re-wild it. How does that help farmers become more efficient?”

He told Mr Heath: “This feels like – and Owen Paterson does it much more stridently than you do - a sort of right wing ideology where the less money we have the stronger we become. Farmers are starting to say: What do you mean by it because we can’t see the joined-up bit in it.”

Readers' comments (1)

  • 15% modulation and a new version of higher level stewardship to boost technology? I suspect David Heath has not been to france and the netherlands to see what technology is in place and working, clear to see the results of thier CAP deal, will take us years to catch up

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