17 January 1996

Support cap not good for UK

MODULATION, or capping support payments, is against the interests of British farmers, Sir David Naish told union council this week. And farmers in this country should not submit to the idea that modulation was inevitable.

After hearing the arguments for and against from Martin Haworth, the NFUs head of international economics and strategic affairs, Sir David said small-scale farmers saw modulation as their saviour, while those with large farms saw it as a threat. Many believed that taking from the top and putting it on the bottom was a good idea.

But one of the pressures on future EU farm support was the overall agriculture budget Sir David added. "And simply adding to the bottom what you take off the top will not provide any budgetary saving," he warned. More likely was an overall reduction in support which would leave the small-scale farmers no better off.

Although EU farm commissioner Franz Fischler talked about modulation at every opportunity, it was not a topic under active consideration by most member states. Even in Germany, with many small producers, only Bavaria favoured it. The national government and the farmers union were strongly opposed to the policy. Mr Haworth said that if cereal support was modulated, with an 80ha (32-acre) cut-off point, then 40% of UK farmers would be penalised compared with 7% in the whole EU. What must be remembered was that a small UK farm was big in terms of European farm size.

The decision facing policy makers, and the NFU, was whether future agricultural support should be in the form of social payments, or based on economics. Mr Haworth said support should be used to help farmers move to a more market-oriented, freer trading world. The need was to improve competitiveness, not to opt for social payments, he suggested.