Veena Zacharias spoke to the following experts to get to the truth behind all the allegations, controversies and the misconceptions concerning the Common Agricultural Policy.

Let’s talk money

Around 40 per cent of the EU budget is spent on agriculture which accounts for about 1.6 percent of the Gross Domestic Product and employs 5 percent of the working population. Doesn’t the expense seem a little excessive?

Mr. Parish: CAP is the only policy funded totally from the EU budget. As a result, the European spending replaces national spending. That is why it accounts for such a large proportion of the EU budget. Other policies cost much more, but are paid for out of national treasuries.

Official figures of the European Union show that 0.43 per cent of the EU’s GDP goes to farmers. Ten years ago the figure was 0.61 per cent and ten years from now, it will be down to around 0.33 per cent.

Without CAP, individual Member States would still subsidise their farmers. This could lead to subsidy competition. Certain countries would not be able to support the farming industry as well as the other and this could potentially result in higher overall spending.

So what are the flaws in the CAP?

Does UK have any particular complaints about the CAP?

Mr. Stevenson: UK farmers have had to deal with the voluntary modulation system which is geared towards taking more and more out of the Single Farm Payment and diverting it to rural development but the other countries haven’t followed suit.

The European Commission in the CAP health check aims to exact stiffer modulation penalties on bigger farms. The UK has the biggest average holdings in the EU at 67 ha, so this is quite simply a tax on efficiency and one which we have fought strongly to avoid.

The CAP embodies the law of diminishing returns. In such a situation I wonder how the farmers will survive.

Do some countries benefit more from the CAP?

Mr. Parish: Each member state has interpreted CAP in its own way. As a result, it’s not a common agricultural policy. For example, England is totally decoupled but France still provides some production support so the situation of the farmer in either country is different. We would like to see all the countries follow in England’s footsteps in spreading more of the payments into rural development and the environment.

Does the CAP reward extensive production systems and large farms?

Mr. Lawrence: With the advent of decoupling, farm payments are no longer linked to production but on the adherence to Cross Compliance rules. The farmer has to guarantee strict environmental, animal welfare and food quality standards. If he does not, his aid is reduced.

Mr. Lobley: The payment isn’t presented as an income support or a welfare payment for people who are suffering from low incomes in farming; it’s presented very much as connected to the land. And if you have a system where you’re paying somebody so many pounds per hectare then it’s inevitable that the people who get the lion’s share are the largest farmers.

Now, the large majority of farmers have very small farms but they account to a very small proportion of the total farmed area. On the other hand, we have a relatively small number of very large farms and they account for most of the large farmed areas. So, if your interest is in the land and the management of the land you are better off targeting and influencing the behaviour of a relatively small group of large farmers.

Does most CAP money go to non-farmers?

Mr. Lawrence: Only persons carrying out an agricultural activity have access to the Single Payment Scheme. And only agricultural land can be used to activate payments. Although the SPS does not insist upon agricultural production, the land must be maintained in good agricultural and environmental condition.

Under current rules, it is possible that golf courses, railway companies or other businesses may also own adjoining or nearby land which is used for farming. On this land, the subsidies could of course be paid as long as the conditions were met.

Why is France advocating continued production support for agriculture?

Is it time to scrap the CAP?

Mr. Lawrence: It would be really reckless to simply get rid of the CAP tomorrow. Markets have evolved with structures put in place developed by past agricultural policy. They play a critical role in supporting the agricultural and rural industries as well as rural communities. The Common Agricultural Policy’s biggest strength is its adaptability and its openness to change.

If subsidies were removed, farmers in the most competitive areas would adapt by intensifying their production whereas in less competitive areas, farming would cease and with it the many environment and landscape-related features associated with land use.