What are we paying for?

So it seems that having successfully killed off the valiant attempts to get the Common Agricultural Policy reformed so it provides Public Goods for Public Money, The National Farmers Union is now campaigning to to ensure that the UK government modulates as little as possible of the CAP pot back into Rural Development, part of which is for the Agri-Environment Schemes.

This is how it works. The UK gets a pot of money from Europe (paid for by Europe’s taxpayers and no-one else) to pay farmers – the biggest surviving public subsidy of industry left in Britain. Though I suppose Shale Gas might be a competitor for this dubious crown before too long.  The pot is over £3 Billion pounds a year. That would pay for a lot of nurses or teachers.

The pot of money is basically divided into two – the main bit (say 75%) is just given to farmers as Single Payment, with effectively no strings attached  – indeed some of the strings actively work against provision of Public Goods (see GAEC 12 below).

The other bit is for “Rural development” which includes Agri-Environment Schemes. Most of the AE money went into the Entry Level Scheme in the last CAP. This was generally agreed to have been money for old rope and provided remarkably little public goods return.

The Single Payment money is handed to landowners who have farmland. Mind you only some farmland is eligible. Farmland that is really valuable for nature for example may well find itself excluded from being eligible for CAP money – because it’s not productive enough. Yes the CAP pot pays out preferentially for intensive farmland management. Land with scrub for example is not eligible – the scrub areas have to be individually mapped and excluded. If your hedges are too wide – you get a cut in your single payment – even a fine.  GAEC 12 requires farmers to cut scrub and top vegetation – the aim is actually to prevent flowers from flowering. It really is true.

New rules will make it more difficult for landowners farming with nature in mind to claim it – these rules are still being sorted out, but include a definition of Active Farmer, which may exclude part-time farmers, and even charities like Wildlife Trusts, RSPB and the National Trust. Another rule will place a minimum area threshold for CAP payments, so small parcels of land will not be eligible. This will remove a vital funding source to help support the costs of managing small fields that will otherwise be abandoned.

Then there is Greening – this was going to be the way that Single Payment was going to deliver some environmental benefits. The idea was that a proportion of the single payment Sadly, thanks to organisations like the NFU, the greening element has been watered down to such an extent that it is literally greenwash, only there’s no green at all, so it’s just whitewash. Thanks to the threat of greening though, hundreds of hectares of permanent grassland, some of it with wildlife value, all of it containing around 100 tonnes of carbon per hectare, has been ploughed.

Which brings me back to Modulation. This allows EU member states to recycle up to 20% of the Single Payment pot back into Rural Development, and actially provide some Public goods back to the public who is paying for the Farmers subsidy. Uncontroversial you might think – not a bit of it.

The National Farmers Union is waging another of its highly effective campaigns touring the country whipping up a frenzy amongst the farming community, getting its members to lobby their MPs (they are very good at doing that) to reduce the amount of Single Payment to be modulated back into Rural Development, including Agri-Environment Schemes. Their argument is that CAP money should only be spent on things which are good for the rural economy. The NFU mantra is that only farmers know best how to spend CAP money. It’s almost as though they have a divine right to the money (even though we pay out to them). Entitlement is the watchword.

The NFU complain that Rural Development payments don’t flow directly into the Rural Economy in the way that Single Payment does. As if cashflow was a public good in itself.

Defra is launching a consultation in the Autumn to garner views about how much of the CAP pot should be modulated to provide Public Goods. I have no doubt that there will be many submissions from farmers, decrying the waste of their money. It behoves on the rest of us to do the same – and ask why taxpayers money is being spent to support private profit.

About Miles King

UK conservation professional, writing about nature, politics, life. All views are my own and not my employers. I don't write on behalf of anybody else.
This entry was posted in agriculture, biodiversity, carbon storage, Common Agricultural Policy, ecosystem services, environmental policy, Owen Paterson, public goods and tagged , . Bookmark the permalink.

14 Responses to What are we paying for?

  1. The best summary of the situation I’ve read in a long time, Miles.

  2. Good stuff Miles but not much mention of food (notwithstanding the fine beasts headlining your blog!) for which basis of subsidy reduces price volatility & guarantees supply. An Arab spring might be closer than we think. Or just do away with subsidy, food prices drop, only efficient farmers to the wall & the enviro suffers in the open market desire for affordable food (bit like New Zealand)
    Beware hectoring farmers (many are non NFU) into a corner; yes they need to change, wise up to public goods, deliver better agri-enviro but too much finger jabbing makes turns them away.
    There are big land share:spare discussions to be had in the future.
    We must engage, find the common ground – OK, cheeky of me, but as a contrarian like you, my take on similar stuff – http://www.scribd.com/doc/162214979/Farming-Food-Birds-by-Rob-Yorke-for-RICS-Land-Journal
    Yours aye Rob

    • milesking10 says:

      Thanks Rob.

      Production of food in and of itself is not a Public Good (see my previous blog “For the Greater Good”) since the farmer can sell it to who they like, or more likely, to the highest bidder.

      As we saw last year, subsidy has little effect on price volatility or supply guarantee – however big a subsidy is it cannot stop the rain raining.

      I would say do away with single payment and provide financial support for the provision of public goods.

      I understand farming. My point was that the NFU are actively campaigning against provision of public goods from agricultural subsidies. I am sure many farmers would not agree with their position. Whether they do or not, we all have a responsibility to put our views to our elected representatives, even if we do not all have the opportunity to dine with the minister at his club.

      In my experience of working with and talking to farmers, there is plenty of finger jabbing on all sides, and as long as it is done in good heart (and humour), there isn’t a problem with it. Healthy debate is what I would call it. I somehow doubt that land share/spare will really be a prospect – at least not in England. There are far too many competing land-uses already. Scotland, Wales and Northern Ireland may be different.

  3. Ah yes, do away with pillar 1 & keep pillar 2. Let’s sneak that past the EU b’crats.
    Have a finger wagging good bank holiday Miles!

  4. Mark Fisher says:

    Farmers have never liked modulation, as they believe it takes money out of their pockets. I got this from the first NFU branch meeting I went to, and when it was early days for the Rural Development Regulation. The thing was, there was an element of truth in it, because Pillar 1 used to be based on production, and then not all types of farming production was subsidised. However, Pillar II payments were not tied to those in receipt of Pillar I. When Pillar I was decoupled from production, it was based on receipts for the previous three years, and so while it wasn’t necessarily tied to a farming activity, it was still the same people who got it, as it was tied to a geographical/farm location. I well remember a number of agricultural advisory services telling their clients to take the money but not actively farm as the associated costs would reduce their overall income! Anyway, Pillar II continued to reach those parts which Pillar I never reached, but with a sinister turn. It started with the changeover first from Countryside Stewardship Scheme to Entry Level and Higher Level Scheme, and then the death of the Rural Development Service, leaving it in the hands of Natural England England. The latter have, since 2006, used especially HLS as a tool for their dogmatic conservation agenda, driving it further away from being an agr-environment subsidy aiming to mitigate the effects of farming, and paradoxically using it as a means to maintain and in many places re-instate a farming pressure, and in locations where food production was no longer a primary aim. The fake farming of the heather farmers is but one example. I wonder if it is this studied misuse of agri-environment scheme money that provoked the new requirement of being an Active Farmer. i just wonder how Brighton Council, for instance, can claim to be an active farmer when it has enforced sheep grazing on a public amenity space and then asks the general public to be the shepherds – or “lookers” as they are comically called, and yet they get HLS for this bit of dogmatic nonsense. It also begs the question of why “statutory providers” like local authorities and the MOD can be in receipt of EU money.

    Pillar I is probably bomb proof, but I think there is the potential for the increasing moral corruptness of Pillar II to blow up in the face of the ideologues in the conservation industry. You may not have noticed it, but there was a comment under the NFU article on modulation you pointed to:
    “I believe there is a hidden scandal here, briefly alluded to in this article, as to how DEFRA is spending our money from Pillar 2 on non-farming projects. I would welcome some investigative journalism to discover the actual extent of this to better inform us farmers as to what is being done with our money”

    While I would say it is our money (and not the farmers!) I would agree that there does need to be an investigation of a scheme that can have a capital outlay of over £400,000 for one recipient on equipment and infrastructure that had nothing to do with farming. I would also like to know why £50,000 was spent clearing ground for a heathland restoration that resulted in the death of at least 30 adders, a snake protected under the WACA, and no prosecutions were brought. There is an endless list of these.

  5. milesking10 says:

    Thanks for your comments Mark – inciteful as ever.

    While there are valid criticisms of HLS, it’s worth bearing in mind that 75% of all CAP subsidies go on Pillar One. And 75% of all Pillar 2 subsidies go on ELS. So the HLS budget is piffling compared with the other two.

    ELS is generally agreed to have been an almost complete waste of public money, “money for old rope” has been a common refrain over the last 8 years, in discussions about it. The fact that Owen Paterson holds it up as a shining example of CAP environmental delivery speaks volumes in itself. Watch this space for how similar the new Greening measures look like ELS.

    Even though ELS has been a monumental waste of time and effort, it and HLS at least started out with the intention of providing public goods. That ELS failed is partly down to scheme design and implementation, but overwhelmingly due to the power of the agribusiness lobby who successfully strangled any real environmental benefit within ELS at birth.

    But the real issue here is Pillar One payments and the fact that the public, who pays for them, receives practically no return in the form of public goods, on their investment. It’s not actually an investment – it’s a gift, from the taxpaying public, to landowners, to the tune of £200/ha/annum, for running a farming business.

  6. Mark Fisher says:

    I absolutely agree about Pillar I. No one ever asked me whether I wanted to give money to farmers in return for nothing!

    The farming press has speculated that it is Paterson’s intention to get rid of ELS, which means that HLS will probably suck up most of that money, as well as increasing anyway because of a potential increase in the percentage of modulation to 15%. So what that means is that there will be a year on year increase in the amount that Natural England gets to throw around through HLS, as ELS agreements come to an end. So £140 million a year and counting!!! I find that really frightening, given the track record of Natural England so far.

  7. milesking10 says:

    Thanks Mark. The indications are that there will be much less money available to fund new HLS (or whatever the equivalent measure is) in the new CAP compared with the one just finishing now. Most of what is available will go on funding continuation of agreements already signed, plus legal commitments like N2K and WFD.

  8. Ian Hoare says:

    The problem with the CAP is that it’s COMMON. It’s a typically European “one cap fits all” solution, originally designed to keep farming viable in Europe, faced with more efficient production elsewhere. The thrust of your discussion so far has been Brit-centric, naturally enough.
    I don’t want to sound too pessimistic a note, but when Jean Bové allows himself to get distracted into headline grabbing gestures, instead of representing small French farmers at Brussels, and there’s virtually no one in the rest of Europe prepared to take up cudgels for
    small farmers either, it’s hardly surprising that the CAP being misused in this way.

    • milesking10 says:

      Thanks Ian. Yes I tend to write from an Anglocentric perspective (we have devolution here now so I am not going to tread on any Celtic toes, apart from Cornish ones).

      The CAP is most definitely working against small farmers and has been doing so for many years. They are either given proportionately less support, or excluded altoghether, thanks to arcane Brussels rule sets. Time to give up and start again?

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