23 February 1996

Big grain men could face cuts in support cash

By Tony McDougal

and Liz Mason

EU OFFICIALS may consider policies to limit payments to large cereal farmers in the near future.

Such a move would endorse calls by UK opposition farm spokesmen for a cut in the substantial arable aid package.

EU farm commissioner Franz Fischler told an Agra Europe conference in London that modulation would be discussed in Brussels if cereal prices continued to remain strong in the next marketing year.

Mr Fischler did not elaborate on the forms of modulation – which include capping payments, or tapering support in favour of smaller farmers.

Minister determined

Speaking at the conference, UK farm minister Douglas Hogg, signalled his determination to oppose any such move.

He said cuts in support should be fair and nondiscriminatory between farmers. "There can be no place in a reformed CAP for policies which arbitrarily favour one group of farmers over another."

His comments come at a time when Labours agriculture spokesman, Dr Gavin Strang, revealed that the party is exploring policy options to bring down the cost of CAP arable area payments to the UK taxpayer.

He said Labour had set up a group which was looking at the CAP. It is expected to produce a policy statement "before the summer," Dr Strang added.

Labour believes the size of combined arable payments and set-aside payments to cereal growers is "quite indefensible against a background of current high prices."

Both payments currently cost the CAP over £13bn out of a total £36bn.

He called for both the commission and member states to see if there was any way of justifying payments on this scale. But Labour has not yet adopted a position on modulation.

Lib Dem demand

Meanwhile the Liberal Democrats this week called for the modulation issue to be raised at the forthcoming inter-governmental conference in Italy.

Paul Tyler, rural affairs spokesman said it was important EU farm ministers began a transitional move to phase out top payments to the larger arable holdings. He called for individual member states to introduce modulation policies, claiming the present system was unsustainable.

"Our MEP colleagues have been trying to get the issue on the IGC agenda, and unless it is discussed now, it probably will not be taken up until 1998. Farmers could then face a rapid U-turn in policy which could prove disastrous."

The results of a Liberal Democrat review into arable area payments and modulation will be released this summer.