The recently leaked Commission Green paper sets the scene for the upcoming health check. What emerges at the moment is a very cautious and minimalist approach, in line with what the Commissioner has been promising for a while. Two things seem striking. The first is the choice to ignore the budget review debate. The second is the lack of courage in confronting the CAP’s failings.… Read the rest
Who benefits from farm subsidies: farmers or landowners?
One of the most contentious issues surrounding farm subsidies is how much of what is paid out actually finds its way into the pocket of the farmer, and how much leaks out into rents paid to landlords, prices charged by the companies selling seed, feed, machines, chemical fertilizers, pesticides and other inputs. … Read the rest
More on capping direct payments
Much initial reaction to the Commission’s leaked Health Check proposals has focused on its renewed attempt to introduce a cap on the Single Farm Payment amount which an individual farmer can receive. In fact, the proposal does not amount to a cap in the sense of an absolute ceiling, but takes of the form of a tapered payment Farmers receiving between €100,000 and €200,000 would face a 10% cut, those receiving between €200,000 and €300,000, a 25% cut and those receiving over €300,000, a 45% cut. Jack Thurston’s post yesterday highlights the limited impact the measure will have.
It might be useful to put the Commission’s proposal in some historical perspective. Capping was part of the Commission’s initial reform proposals in each of the past three CAP reforms – the 1992 MacSharry reform, the 1999 Agenda 2000 reform and the 2003 Mid-Term Review. In this post I review the evolution of this concept and corroborate the implications of the Commission’s Health Check proposals.… Read the rest
Leaked proposals on subsidy payment limits: first analysis
Analysis of the Commission’s leaked proposals for the CAP Health Check show that the payment limitations proposal is significantly less ambitious than the proposal made during the Agenda 2000 (1999) and Mid-Term Review (2003) reforms of the CAP.… Read the rest
Capping farm subsidies is on the agenda again
Leaks from Brussels suggest that capping Single Farm Payments is on the agenda for the forthcoming Health Check. This was mooted at the time of the last reform and defeated by opposition from Britain and Germany who would have lost out the most.… Read the rest
Irish farmers now totally dependent on direct payments for their income
The dependence of Irish farm incomes on the Single Farm Payment and other direct payments was starkly revealed by the publication of the 2006 results of the annual National Farm Survey (NFS) this week. Fully 98% of Family Farm Income (FFI) on Irish farms in 2006 was derived from the Single Farm Payment and other direct payments; only 2% represented the return from the market, the lowest recorded since the Survey commenced. Market FFI per farm in 2006 was only €334. In 2004, 86% of Family Farm Income came from direct payments and subsidies, and 14% from the market place.… Read the rest
Less likelihood of cuts in Single Farm Payment
The Irish Farmers’ Journal reports that the value of the Single Farm Payment (SFP) is not likely to be greatly eroded by “financial discipline” cuts in order to accommodate the payments to new Member States within the European Union. This is because more buoyant farm prices mean that there will be huge cuts in the cost of traditional market support measures, such as intervention and export subsidies, leaving sufficient money in the CAP budget to fund the SFP. Agra Europe forecasts that the cost of traditional support measures will fall by half by 2013, and that budget-related cuts in the SFP of no more than 2% will be necessary by 2013 to stay within the CAP budget ceiling. Of course, the real value of these payments continually falls with inflation, and may also be reduced by further compulsory modulation. Nonetheless, the pro-cyclical effect of the Single Farm Payment is stark. When farm prices and thus farm incomes are high, farmers can expect even higher SFP payments than when farm prices and incomes are low!… Read the rest
Set aside: act now, think later…
Following a Swedish proposal and widespread support in the Agriculture Council, the Commission announced the intention to set the level of compulsory set aside at 0% for the 2008 harvest. This is bad news for Europe’s wildlife and suggests a disappointing level of commitment to environmental sustainability on the side of the EU and its Member States. It also seems like a textbook case of ill conceived decision making. … Read the rest
Horse paddocks get SFP
In the long run it is going to be difficult to justify a Single Farm Payment (SFP) model that is based on historical receipts. This model originated in the generous compensation given to cereal farmers for cuts in intervention payments in the 1992 MacSharry reforms. There will be a shift to a regional model with a flat rate payment per hectare in each region. This is already under way in England, Finland and Germany and all the new member states have a flat rate payment system.… Read the rest
UK data on distribution of farm payments
The UK Department for Environment, Food and Rural Affairs (DEFRA) Agricultural Change and Environment Observatory recently published a statistical analysis of the breakdown of the Single Farm Payment (SFP) in England, one of the four regions for the purposes of administering the SFP scheme in the UK. The report analyses 2005 payments, with some historical comparison with the distibution of payments in previous years. One of the findings is that average payment rates per hectare are related more to farm type than to farm size. Apart from the very smallest farm size group (holdings with between 0 and 0.5 Standard Labour Requirements), the average payment per hectare for all remaining farm sizes varies minimally between £187 and £197/hectare.… Read the rest