23 February 1996


Big and small farms both have a role to play in the UK farming industry. New light on how many will survive to fulfil that role was shed by two recent reports. Both highlighted the problems of reconciling the needs of small-scale producers and those who farm in disadvantaged areas with the drive towards a more market-orientated agriculture.

Consultants Produce Studies predicted that a new US Farm Bill, with far-reaching implications for EU farmers, will almost certainly be in place by the end of next month. Radical legislation, covering US farm policy over the next five years, would be aimed at slashing deficiency payments, export subsidies and set-aside to win a greater share of world markets.

Meanwhile the report from the pressure group Safe Alliance highlighted the need for special help for the UKs small-scale family farms. Its figures claim that in 1993/94 a quarter of English farms achieved a farming income of less than £5000. After reading the reports some commentators will recommend a simple solution. Lets follow Uncle Sam; cut support payments and redirect subsidies away from the larger units to the smaller-scale businesses. Why not cap or, to use the jargon, modulate subsidy payments to large-scale units, the argument runs?

Although superficially attractive that theory fails to take into account the need to guarantee continuous, adequate supplies of high quality food in a far-from-certain world. And it would penalise a well structured UK agriculture.

But that is not to argue that special help should be denied to small-scale producers and those who farm in disadvantaged areas. Whether those should include direct income payments, preferential credit terms or special subsidies is open to debate.

Also clear is the need to avoid over-compensating large-scale arable farmers. One solution could be to index-link continuously subsidy payments to grain prices and exchange rates. That would ensure that payments were appropriate to farmers needs and not perceived greed.