Direct payments to arable farms could be reduced by CAP reform in 2013, although no detail has been agreed at this early stage, warned Robert Gooch of Smiths Gore.

An EU discussion document outlines three options, with most Member States expected to opt for the gradual reform contained in the second of these.

“In a nutshell, the second option proposes to average out the payments currently received by EU countries, to make it fairer, and to increase the commitment to cross-compliance,” he said at the recent AICC conference.

Other ideas in the second option include setting new criteria for defining active farmers – to ensure the single farm payment gets to the people doing the work – and a strengthening of risk management tools together with the introduction of an income stabilisation mechanism.

“The need for new criteria for calculating direct payments is considered urgent, as there is huge variation now,” pointed out Mr Gooch. “Greece, for example, receives €406/ha (£339/ha), while Latvia gets just €21/ha (£18/ha). The UK is close to the average, receiving €210/ha (£175/ha).”

New payment levels could be based on an EU average, plus different tiers of cross-compliance, aimed at helping areas with specific constraints.

“That means that in the UK, we could see a movement of payments from the lowlands to the hills,” he suggested.

DEFRA-style budget cuts won’t be imposed, said Mr Gooch. “But the effects of averaging of EU payments and more support going to less favoured areas are likely to reduce direct payments to arable farms.”