British farmers are being used as guinea pigs to test CAP reform, NFU president Tim Bennett told this week’s Oxford Farming Conference.

In a hard-hitting assault on government policy, Mr Bennett said the 2003 reforms had opened the way for renationalisation of the CAP by allowing different degrees of decoupling and different ways of implementing the agreement.

But of greater concern was the EU budget deal struck by Tony Blair in Brussels just before Christmas, which threatened to cause serious competitive distortions by introducing voluntary national modulation with no match-funding.

“The adoption of voluntary national modulation will risk putting us at a disadvantage with respect to other EU countries,” said Mr Bennett.

“And if our government refuses to match-fund, it will be a betrayal of previous assurances of their financial commitment to rural development.”

The NFU has estimated that 36% of British farmers’ single farm payments could be lost through a combination of 20% voluntary modulation, 5% compulsory EU modulation, 3% for the national reserve and 8% cuts to help pay for the accession of Romania and Bulgaria.

“We are increasingly running the risk of one of the most forward-looking, most environmentally aware, most quality-led and market-focused agricultural sectors in Europe being put at a disadvantage by its own politicians,” said Mr Bennett.

But junior DEFRA minister Lord Bach said he welcomed the heads-of-state decision to allow voluntary national modulation because this would ensure the continued transfer of funds from direct farmer support to rural development spending.

“It’s very much still our policy to make sure spending under Pillar 2 is appropriate for farming, biodiversity and environmental needs,” he said.

But he would not be drawn on whether the full 20% would be applied or whether the government would put in any of its own money to match-fund farmers’ contributions.

However, Lord Bach did promise to continue fighting for a larger share of the EU rural development fund than the 3.5% that the UK currently gets.

Mr Bennett also attacked the idea of further reform of the CAP from 2008, which was included in the recent EU budget deal at the insistence of the UK government.

“It is appalling that the same government that welcomed the radical reform in 2003 is not willing to recognise that businesses need a stable environment to allow them to plan,” he said.

Lord Bach said he could not guarantee there would be no further CAP reform before 2013.

Indeed, the 2003 reforms were just a start. “We should not be fooled into thinking change is still a long way off,” he added.

philip.clarke@rbi.co.uk