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CAP Reforms Sideline Small Farmers

EU commissioner Dacian Cioloş did a good job of placating nearly everyone in the December round of reforms to the Common Agricultural Policy (CAP). Environmental groups claim victory with the inclusion of their “greening” provision that ties 30 percent of the CAP budget to environmental actions over the next five years. The subsidy barons are more than happy that a proposed cap on individual payments has been commuted to sliding reductions in claims of over €150,000.

EU commissioner Dacian Cioloş did a good job of placating nearly everyone in the December round of reforms to the Common Agricultural Policy (CAP). Environmental groups claim victory with the inclusion of their “greening” provision that ties 30 percent of the CAP budget to environmental actions over the next five years. The subsidy barons are more than happy that a proposed cap on individual payments has been commuted to sliding reductions in claims of over €150,000.

However buried down at the bottom of page three of the Europa press release is a four line paragraph headed “Minimum Claims”. Here the Commission offers Member States the option of raising the minimum size eligible for subsidy from a historic baseline of one hectare to anything up to five hectares. The objective is to reduce bureaucracy and to prevent non-farmers from claiming public money.

The UK Government was quick to set out its stall with Owen Paterson announcing, in contrast to the majority of EU Members, that we would “apply the minimum reduction on basic payments over €150,000” and “keep the rules on the new active farmer test to a minimum”. Regarding the minimum claim area: “The Government has decided to set the threshold at the highest possible level of five hectares [because] the vast majority of those claimants with less than five hectares are not economic units. They are, in lay parlance, hobby farms”.

According to DEFRA, the new threshold will exclude 16,650 holdings across England alone from claiming the single farm payment in 2014. Many of those holdings may indeed be hobby farms where a £100 per acre subsidy is keeping a flock of rare breed sheep in luxury. On the other hand some will be home to producers who have made a conscious decision to stay small and supply locally and for whom £1,200 a year might be the difference between breaking even and going under.

The new minimum claim size will save an estimated £16 million each year which is 0.5 per cent of the total UK CAP budget of £3.4 billion. It is equal to the amount earned by the three highest grossing individual UK recipients of CAP subsidy in 2012. There is no denying that action must be taken to prevent non-farmers from exploiting the single farm payment. However there is more than a hint of hypocrisy in carving off several thousand legitimate claims while actively protecting the largesse accorded to the few.

Since taking office in 2012 Owen Paterson has made no mistake about where his loyalties lie. This is another example of his bias towards agribusiness and the landed gentry.