Farm ministers look to subsidy cuts

17 July 2001

Farm ministers look to subsidy cuts

By Philip Clarke, Europe editor

DIRECT payments to EU farmers are expected to be cut from 2003, as ministers seek to transfer money to rural development under the Common Agricultural Policy.

Speaking at an RSPB conference in London on Tuesday (17 July), UK and German farm ministers Margaret Beckett and Renate Künast said the time for fundamental change had come.

Mrs Beckett said that the CAP had failed UK farming, driving in the opposite direction to that demanded by society.

Farm incomes had already suffered and foot-and-mouth disease had accelerated the need for change.

Market supports and direct income aids were blunt, ineffective and outdated instruments, she said.

Instead farmers should be rewarded via the rural development package for delivering environmental and welfare benefits.

The key was to reduce direct income aids progressively over time and put more money into the “second pillar” of the CAP.

Next years mid-term review gave an early chance to make this change.

This view was shared by Ms Künast who said Germany was already poised to go down this route.

She outlined plans to modulate German direct aids by 2% in 2003 as a first step towards rebalancing the policy.

Germany together with France would be pushing hard for compulsory modulation in next years mid-term review, added Ms Künast.

Re-orienting the CAP towards rural development would also ease the process of EU enlargement, she claimed.

Northern Foods chairman Chris Haskins also criticised the CAP for rewarding inappropriate farming methods.

Chasing ewe premium by moving sheep around was partly to blame for the foot-and-mouth crisis, claimed the influential government adviser.

However, Lord Haskins, the head of the Better Regulation Task Force, accepted that farmers were only responding to political incentives.


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