17 May 2000
MPs call for 20% subsidy cuts

By FWi staff

MPs have urged ministers to set out a timetable for a possible 20% reduction in farm subsidies as part of the governments forthcoming Rural White Paper.

Ministers should make a more determined effort to switch subsidies away from food production, concludes a report by the environment select committee.

The government announced last December that it intended to modulate payments starting with a 2.5% cut in 2001 and rising to a 4.5% cut by 2005.

Its long-awaited Rural White Paper, expected to be published in either July or October, will outline the governments vision for the countryside.

MPs recommend that ministers should use the document to make it clear their intention to switch subsidies to agri-environment and rural development schemes.

The government “should set out a timetable for introducing at least 10% modulation over the period of the next Comprehensive Spending Review”.

The spending review, due after the next General Election, will examine how government money is spent during the lifetime of the next parliament.

If ministers adopted the recommendations made in the MPs report, farmers would face a 10% subsidy cut by about 2003-4.

Furthermore, the report calls for ministers to eventually achieve “the full percentage [reduction in subsidies] allowed under CAP (currently 20%).”

Ministers should use cross-compliance mechanisms to ensure high environmental standards are maintained in return for subsidies, say the MPs.

The report, released on Wednesday (17 May), urges the Treasury to consider pooling budgets to boost environmental and rural development schemes.

“The Comprehensive Spending Review provides a timely opportunity to improve the effectiveness of spending in rural areas,” it says.