Deep cuts forecast for single farm payment

Pressure to reduce the amount of money spent on EU agriculture, and to shift more resource to rural development, could see the single farm payment squeezed to just £85/ha (£34/acre) over the next decade.

That was the prediction of Francis Mordaunt of farm business consultants Andersons at the company’s recent spring seminar.

“Big reductions are possible, and farmers have to prepare for this,” he said.

In 2013, when the next CAP reform kicks in, he speculated that the SFP for lowland arable farmers could be worth just £200/ha (£80/acre) compared with this year’s £225/ha (£90/acre), as more money was transferred to upland support and rural development.

But over the next seven years, larger cuts would be phased in and there could be other deductions to help increase the funding for new member states, taking English lowland payments down to an estimated £110/ha (£45/acre).

Combined with a strengthening of the pound to 65p against the euro, compared with today’s 90p/euro, and that rate of payment would shrink further to just £85/ha (£34/acre).

“There is also the possibility that capping could be extended,” said Mr Mordaunt. “The precedent for capping was set in the 2008 CAP health check, though it was set high (€300,000) and has not really affected the UK (because it is offset by cuts in voluntary modulation).

“My gut feeling is that we’ve resisted it well in the past and, with support from the new member states, we could do so again. But the threat is there.”

* For more on this story, see Phil Clarke’s Business Blog. And why not try the acronym test?