You might have thought the dark days when agricultural subsidies drove the wholesale destruction of Britain’s wildlife, landscape and history, were behind us. You would be wrong.

A set of rules laid down by the European Commission govern which farmers can claim the Single Farm Payment (SFP), the foundation of the Common Agricultural Policy (CAP) and how those farmers must manage their farmland in order to be eligible for the payment.

This payment is not peanuts – many farming organisations, eg NFU claim that without single payment farmers would not be able to survive. SFP varies hugely but can be over £200 per hectare per annum. For an average size farm in England (around 60ha) this equals £12000 just to do farming. Bizarrely, SFP is more generous the larger (and more intensive) your farm is.

The EC has been stung by criticism that the CAP is hugely wasteful and they are tightening the rules on what farmland is eligible for single payment. As I have already blogged we have produced a report showing how Single Payment is being refused to farmers who are grazing highly valuable semi-natural grasslands and other habitats across Europe, because of these rules. The rules are biased in favour of farmers who have intensively managed highly productive grasslands.

The big stick that the EC can wave around has two prongs. Firstly inspectors visit farms to assess whether the farmers have correctly filled in their Single Payment forms. Even an accidental error can mean the farmer loses part or all of the SFP. If the inspectors find a systemic problem with the way SFP is being paid in a country, they can threaten that country with massive fines.

This is happening now in Ireland (both parts) and Scotland. As I mentioned last week, farmers are being forced to damage valuable wildlife habitats for fear that they will lose their Single Payment. I’ve just been sent this picture showing what is happening,

Now there are rules within “Cross Compliance” which are supposed to ensure that farmers who receive SFP keep their farmland in “Good Agricultural and Environmental Condition”. In the UK these rules include EIA for Agriculture (GAEC 5), and a requirement to protect landscape features (GAEC 140. Of course the ability to remove single payment from a farmer is a far great incentive than any set of rules for environmental protection, most of which are hardly ever enforced.

We, along with our colleagues in other wildlife organisations believe that Single Farm Payment is an anachronism, left over from the days when Governments paid farmers to increase food production at all costs (mostly environmental, but also historic and social), that does more harm than good. But it appears almost certain that SFP will survive into the next CAP after 2014.

At the very least we need to ensure that the SFP rules do not actively encourage environmental despolation, such as is going on in Northern Ireland, Scotland and elsewhere in Europe, right now.

Fast forward 10 years to the Sustainable Farming Incentive Scheme – a few things jumped out at me. The SFI

“will recognise the value of some of the natural assets that were dubbed ‘ineligible features’ by the CAP.”

This may seem a bit niche but it’s fundamental to the change in philosophy we have all been hoping for, now we have left the CAP. As I described 10 years ago, farmers could be fined or have their subsidies with-held if there was a bit of scrub, or in one notorious case a single stem of wild rose, on their land. So they cleared it away, destroying valuable wildlife habitat and historical features, in the process. The Rural Payments Agency spent millions hounding farmers for claiming subsidy on ineligible features, based on looking at aerial photos, where shadows can be interpreted as ineligible features. So this is a really important step towards paying landowners for their public goods, rather than some bone-headed bureaucratic system. I have to say I met with similar responses from those at Defra 10 years ago, when raising this problem, so this is also a welcome change.

The way the SFI is being rolled out, slowly, with lots of piloting and trials, working with farmers and experts, is also welcome – and reflects the fact that the UK is no longer just one voice (albeit an influential one) among 28, plus those at the Commission trying to act as referee (albeit with their own preconceptions), inevitably producing a dog’s breakfast of an agricultural support system that pleases nobody. All well and good so far.

The SFI breaks down into a series of standards – arable, grassland, woodland etc which can be mixed and matched. Each standard has 3 tiers so a farmer can choose how deep they want to go into public goods delivery. I was surprised to see the top payment rate for wildlife-rich grassland was £110/ha (though this increases to £149/ha for floodplain grassland). In comparison under the old Entry Level Scheme the top rate for wildlife-rich grassland was £150/ha, so £110 seems more than a bit meagre.

Tom Lancaster, farm policy expert at the RSPB, made a series of very cogent points on twitter yesterday, regarding the regulatory baseline. Under the CAP, the Cross Compliance system of regulation applied to landowners receiving Single (2005-2014), then Basic Payment (2015-2024). Now the SFI is paying for things that were previously part of the regulatory baseline, which means that the baseline has dropped substantially.  It reminds me of when Defra tried to pay farmers for things like manure management plans, via the Entry Level Scheme. Brussels slapped them down telling them that this was part of the regulatory baseline for CAP payments and they had to remove that option. As Tom says, isn’t this a return of pay the polluter, rather than the polluter pays.

Coincidentally (or not) the Government also released yesterday, their proposals for Environmental Principles to be enshrined in the stalled Environment Bill. These point to serious weakening of things like the Polluter Pays principle.

I want to give the SFI a chance to show it can work, but I also worry that by lowering the regulatory baseline a message is being sent out to farmers – we won’t pay you so much, but you can do what you like. As we saw with the Lugg last year, this can be catastrophic for what’s left of our farmland wildlife.