DIRECT PAYMENTS to farmers should be phased out from 2013 with EU funds targeted towards improving the environment and helping the new member states, according to a House of Lords report out this week.
“The stark reality is that the current CAP doesn’t meet the needs of the EU-25,” said Lord Renton of Mount Harry, who chaired the inquiry into the future financing of the CAP.
“Farmers in the new member states need help modernising and restructuring their antiquated farms.”
The report insists that the current agricultural budget, as agreed by heads of state in 2002, should not be reopened, despite this week’s comments by prime minister Tony Blair.
“To reopen the ceiling now would be to create further instability in an already complex negotiation.”
But it predicts that farmers’ single farm payments will dwindle over the next seven years anyway, as Romania and Bulgaria are integrated into the CAP.
This should help prepare farmers for the phasing out of SFPs altogether from 2013, the report suggests.
In their place a separate environmental fund should be established to reward farmers for the non-production benefits they bring to society. “We are not convinced that the SFP achieves this objective in the most efficient manner.”
On rural development, the report says EU money should not be used as a continuing subsidy for farmers, but should be used increasingly for revitalising rural areas in the new member states.
If EU-15 countries suffer a loss of funds as a result, these should be replaced from national coffers.
The NFU said it welcomed the House of Lords’ support in resisting Tony Blair’s moves to reopen CAP funding. “To do so would destroy any trust the farming community has in Brussels,” said NFU economist Carmen Suarez.
The NFU also accepted that the introduction of SFPs was not the end of the reform process.
But Ms Suarez insisted that any increase in rural development funding should be targeted at farmers to reward them properly for the provision of public goods, while money to bolster the new member states should come from other EU funds.