It’s your money

I’m picking up very worrying rumours that there are cuts afoot in the funding for farming, and the impacts of these cuts could dramatically affect how much wildlife you see on your walks in the countryside.

The way that farming is funded, by you, the taxpayer, is not completely straight forward and varies across the European Union as far as the details are concerned, even though the mechanism is called the Common Agricultural Policy (see here, here, here, here for more detail on this complex subject).  And the details vary a bit across the UK too – as England, Northern Ireland, Scotland and Wales all have slightly different systems. But the essence of the system is as follows.

Farmers get money from everyone else for being farmers.  Most of the billions spent across the EU through the CAP can be regarded as income support for farmers in that they are available to almost all farmers (the exceptions include some areas such as horticulture and pig production), are not income-related (they go to the rich and the poor of the farming community) and are not related to how you go about farming (provided you fill in the forms and don’t break the law then you’ll get the money automatically (although the payment system has not been administratively the smoothest in recent years)).

These payments, the Single Farm Payments, are going to English farmers, Irish farmers, French farmers, Italian farmers and farmers right across the EU.  They derive from the old system of subsidies so that your payments as a farmer relate to how much money your land was paid about a decade ago under a previous subsidy system.  But whereas, for good or ill (and there were arguments both ways) your subsidy payment used to be based on how much food you produced, your current payments are based on those historic payments not on your current productivity or farming method.

It’s as though we have singled out farmers as a particularly deserving sector of Society, such as teachers or nurses, and then decided to channel money into top-ups to their salaries just because we like them a lot.  And how much we like them is not based on how well they farm (in terms of environmental standards or food production) nor how much they need the money.  It’s a strange system but everyone has got used to it.  Certainly farmers have become very accustomed to it and the farming unions will fight tooth and nail to keep this income support in place.  Other unions are thinking of striking over changes to their public sector pensions but we won’t see striking farmers as we can always buy our food from elsewhere in the world if we are prepared to pay for it.

What I have described so far is the bulk of the money that goes from you, the taxpayer, to farmers through the CAP and is sometimes called Pillar 1 of the CAP.  And that suggests that there might be at least a Pillar 2 – and there is, but the Pillars are of very different sizes.

If Pillar 1 can be described as income support, and it most certainly can, then Pillar 2 can be described as ‘good works support’ as it goes (not exclusively, but mostly, in the UK at least) to pay for more ‘wildlife-friendly’ farming.  This rewards or compensates farmers for stepping a little outside of the most profitable farming systems, and the damage that they can cause to wildlife, soils, water quality in the name of short-term food production, and providing more space for wildlife on their farms.  Pillar 2 is an entirely voluntary approach which you can enter or not as a farmer, but if you do then the taxpayer gives you some more money in return for you producing thicker hedgerows or flower-rich field edges or even the famous RSPB-developed skylark patches.

Pillar 2 does a huge amount of good for wildlife in the UK – which is why wildlife NGOs, led by the RSPB, and supported by the public, campaigned hard for this budget to be protected in the UK in last year’s Comprehensive Spending Review.

Whereas almost every farmer, the Good, the Bad and the Ugly, gets Pillar 1 payments, only those who wish to commit to ‘doing good’ get the Pillar 2 payments.

But at a time of tightening belts, when Greece may go bust if the rest of the Eurozone doesn’t cough up some money, farming payments are bound to come under threat.  Last year, I remember well that Pillar 1 payments were sacrosanct as they are Eu-wide payments and Defra could not (even if they wanted – and remember that all the current Defra Ministers have a farming background (or foreground! (or most of them, just ground!))) cut them without EU-wide agreement, whereas Pillar 2 payments have much more national decision-making attached to them.

It is probably inevitable, and fair, that taxpayers’ contribution to farming should decrease at a time of financial stringency.  But where would you make the cuts?  To the large budget for income support or the small budget for good works?

Unfortunately it looks as though the hard-working, effective Pillar 2 payments are in line to be cut rather than the across-the-board, deserve it or not, everybody gets some, Pillar 1 payments.  How crazy is that?  And do you remember being asked if this is what you want?  And have you heard the UK government telling you what its stance is in these discussions in the EU?  No, you haven’t missed it, the answer to both questions is No.

If there are cuts, and it would be a bit odd if there are none (ask any teacher about that),  then they should fall on Pillar 1 rather than Pillar 2.

The RSPB has, I’m glad to see, brought this matter to the public attention – after all, it is your money.  I wonder what the NFU, CLA and Defra will say on the subject – we’ll see.

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8 Replies to “It’s your money”

  1. CAP made easy - an excellent piece, Mark. I think the NFU's reaction will be predictably retrograde, though clothed in their new mantra (food security) - calls for recoupling and a focus on food production rather than the fluffy-wuffy Pillar 2 nonsense. Skylarks? Pah! Who needs 'em?!

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  2. Couldn't agree with you more, Mark. I've been arguing that CAP payments should be making agriculture more competitive (and that can mean in bio-diversity as well as production). The one point that you miss is that P1 payments also have an inflationary effect on farming costs and are, thus, worse that just ineffective.

    I've been saying this in farming circles for about 15 years (it still goes down like a lead fart in space suit)

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  3. What concerns me about the food security argument is exactly what impact subsidised farming in the EU and US is having on the rest of the world ? the unfair competition from the worlds ricj=hest countries may well be doing its greatest harm undermining farmers in some of the world's poorest countries. This combined with the near monopoly power of global corporations, buying cheaper and cheaper, selling higher and higher in 1st world cities (think coffee chains) may well be a far greater threat to food stability than the physical factors we all focus on. We've seen it at work closer to home - the near collapse of British dairying thanks to a fresh milk price war between the big supermarkets. What happens within CAP is vital - but it really is time to start pushing some much bigger questions.

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  4. Well Mark you certainly gave yourself lots of journalistic licence there lots of it biased comments hardly too much truth in them or at best extremely exaggerated.How I would love you and your supporters on your comments on this blog to have a go at farming,absolutely nothing stopping you as you lot consider you can rake in lots of taxpayers money,some hope.You all conveniently forget you all really well paid people much better than average farmer that farmers are primarily paid to produce food and you ungrateful b*****s work far less minutes to put food on your tables than your parents had to.You just twist all the facts to suit yourselves,there is much more of your taxes go on far worse causes than putting cheap food on your less than appreciative tables.
    Mark knows full well that the reurn on capital on farmers fortunate enough to have large businesses is very very low and no other business would do it.Mark if you do not consider this farmer bashing then what is,I am not sure that you have not shot wildlife in the UK in the foot because your constant griping about the measly amount of your tax going from a very well paid conservationist to a very average paid farmer has made the E U think seriously about cuts at the end of June.As a retired very average paid farmer can tell you that the amount I could claim each year was very low hundreds.All this talk about millions means absolutely nothing unless you divide it by the millions of acres that are farmed.Worse still you were always quite happy to grab those subsidy's for RSPB even though you could hardly be called food producers and you could on principle not claimed and so none of my hard earned money that was taxed would have gone in your fat wallet.
    It beggars belief that when you write like this that you then wonder why your relationship with farmers in general is pretty poor.Most of these so called subsidy's are to keep food cheap.Please all of you Mark and comments who support him explain why seeing as it is easy money you do not get farming immediately.

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    1. Dennis - good evening! I don't actually see how this is farmer-bashing as it is an accurate description of the system. And my income is zero just at the moment! The piece says that I would rather the cuts fell on Pillar 1 - which is income support for all farmers - rather than Pillar 2 which is life-support for wildlife. That's my view, and this is my blog, so that's what I'll write. And I don't buy the argument that income support keeps food prices low - I'd rather keep the money and hand it over directly to a nice farmer at the local farmers' market.

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  5. Mark, Dennis - that's the real irony - I've watched farming incomes rise (gently) and now start to fall, The food industry line keeps blasting upwards and the gap between farm gate and consumer prices widens and widens. I'm afraid, Dennis, that the idea these taxes are keeping food cheap look increasingly dubious- and, as I said earlier, just what impact are our outdated supports doing to people much poorer even than retired English farmers ?

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