On the complexity of defining active farmers

According to the latest proposals of the European Commission, applicants whose CAP direct payments equal less than 5% of their total receipts obtained from non-agricultural income or failing to provide the minimum land cultivation will be excluded from the provision of direct payments.

This might appear a good definition at first sight but the devil, as always, lies in detail. First of all, it is pretty sure that such a proposal would increase bureaucracy, which is totally against the ‘cutting the red-tape’ principle of the Commission. Just imagine how this system would be implemented for each and every farm in Europe. Second, some argue that this definition would exclude part-time farmers but this is not entirely true. As the definition would not apply to small farmers (receiving less than €5000), the latter argument only holds for those part-time farmers not participating in the small farmers scheme, the number of which is limited for sure. Third, the proposal links income to agricultural activity and it is doubtful whether we can appropriately define what a ‘non-agricultural income’ is, especially considering the fact that the provision of public goods now seems to become an agricultural activity. From this aspect, the definition above might exclude those who manage land and provide public goods but do not necessarily produce food at the same time.

In response to these problems, a group of countries suggests that a new definition should be created where a certain percentage of agricultural income (i.e. income from selling agricultural produce) would serve as a criterion for being an active farmer. However, such a proposal would (1) not solve the problem of defining agricultural income, (2) be against the provision of public goods and (3) be hard to implement. Another group of stakeholders stresses that it is hard to find a common definition valid for all members so the solution is to leave this definition to individual Member States. It is clear that there are just a few companies per country which should be excluded (airports, golf clubs, etc.) and this can be done easily at MS level without a common definition. The problem here is that such a solution would create inequality throughout Europe and it might occur that a farmer working under the same circumstances is excluded from direct payments in a member state while not excluded in another.

On the whole it seems we are faced with many problems in defining who an active farmer is. The entire issue is just on table because of what I call the ‘cosmetics’ of direct payments. The EC tries to save this ineffective policy instrument again and in doing so, it creates artificial problems as well as diverts attraction from more important questions. Let’s phase-out direct payments and we will solve a number of dilemmas, including this one.

This post was written by Attila Jambor.

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2 Responses to “On the complexity of defining active farmers”

  1. Simon Ward
    March 29, 2012 at 07:25 #

    The current legislation allows payments to be restricted (Article 28) by member states to exclude those claimants where agriculture is an insignificant part of the of claimant’s activity or where agriculture is not the exercising of agricultural activity. As far as I know no member state has adopted this. In the UK several of our most productive farmers also have other activities and exclusion would mean that these businesses ceased activity. If we are serious about ending subsidy it is important that we encourage diverse multi-skilled businesses to take part in agriculture rather than exclude them. It is always possible to put a qualifying tenant in place to transfer the the subsidy as rent to a non qualifying business but this is no guarantee that the vigour of the industry is improved or reliance on subsidy reduced.

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    [...] in the debate on the nitty-gritty of specific proposals for CAP reform. Attila Jambor in his recent post on the definition of active farmers illustrates the point well. He concludes that the need for this definition would not arise if basic [...]