Wealthy farmers fear impact of reforms

Common Agricultural Policy: Plans for direct payments to replace subsidies on produce will send tremors across Europe's farms

Reform of the Common Agricultural Policy could hit the country's bigger and wealthier farmers hard, Britain's largest farming union warns.

But the National Farmers Union (NFU) is broadly supportive of the thrust of the proposed reforms which the European Commission will unveil next week, as reported yesterday in The Independent, which had access to a leaked copy of the commission's proposals.

Tony Blair welcomed the proposals and said in Parliament that if they went ahead the plans would form one of the most important reforms that Europe could make.

"If that is happening it is a big change of heart, both on the part of the European Community and the European Parliament, and is greatly to be welcomed," the Prime Minister said.

Jack Cunningham, the Agriculture minister, said: ``The CAP's flaws are manifest. It drives up prices for the consumer, it burdens farmers with bureaucracy, it imposes false production controls and is open to fraud. Quite simply it has got to change if we are to compete in the global marketplace. It is very good news to know that the commission is thinking along similar lines.''

The European Union wants to switch subsidies, from guaranteed, above- market prices, into direct payments to farmers. The cheques the farmers get will depend on how much livestock they have and how many acres they grow cereals on, but there will be a cut-off beyond which they will be given no more money.

British farms are much larger than most farms on the Continent. The average dairy herd in the United Kingdom consists of 70 cattle, while the EU average is slightly more than 20. The average cereal holding in Britain is 46 hectares, while in the EU, as a whole, the figure is 10.

Thus, if the cut-off point is set fairly low, a very large proportion of UK farmers could see their subsidies fall.

The NFU will not respond officially until the proposals are published next week.

But the president of the union, Sir David Naish, told BBC Radio 4: ``I am concerned if there are constraints on the more efficient - British agriculture is among the more efficient, the more competitive - to benefit the less efficient.''

The NFU is also worried at the proposal for a large chunk of the subsidies to be made at the discretion of national governments.

With a Labour government in power with a hefty majority, UK farmers fear they will have far less influence on ministers in winning national subsidy than will their counterparts in France and Germany.

``Overall, however, we support the direction of these reforms and have been arguing for them for the past five years,'' said another NFU official.

The union believes farmers should get the world-market price for what they grow, with subsidies in the form of direct payments. It also supports the end to "set-aside" - paying farmers to leave crop fields idle - for which the commission is calling.

The question which such a switch to direct payments raises is, what should farmers actually have to do, if anything, to qualify for them?

The argument for farm subsidies across Europe is that they are needed to prevent the countryside from becoming depopulated and run-down, and to conserve treasured rural landscapes.

Without them, it is said, farmland will either be deserted or converted to monotonous, prairie-style landscapes. Thus the aim of the reforms is to slow down agricultural intensification, if not to halt it.

Yet the European Commission is not, as yet, envisaging any specific requirements for farmers to conserve a particular landscape or habitat, or to employ a certain number of people, in order to qualify for the direct payments.