NFU in final bid to reverse CAP payment cuts

The NFU has written to every MP in a desperate final bid to urge the government not to cut farming subsidies by 15% and transfer the money into green schemes.

DEFRA secretary Owen Paterson is proposing to transfer the maximum allowable 15% of funding for direct support payments (Pillar 1) into rural development schemes (Pillar 2) from 2014.

Green groups, including the RSPB, have welcomed the plans to redirect £600m of payments into the Pillar 2 pot to support “wildlife-friendly farming”.

But the plans have drawn stinging criticism from the NFU and farmers who have described them as “totally unfair” and “anti-competitive” compared to farmers in other neighbouring EU countries.

In the letter sent to MPs, NFU president Peter Kendall urges DEFRA to rethink its plans and keep the transfer rate at 9% and adopt a “phased-in” approach to modulation.

“There has been no attempt to explain to farmers how increasing the transfer rate beyond 9% will deliver “worthwhile and valuable outcomes” for their businesses (set out in DEFRA consultation),” writes Mr Kendall.

“Farmers remain at a complete loss to understand what government intends to use this money on, and how it can be used effectively for the benefit of their businesses.”

Mr Kendall said the NFU, the CLA and Tenant Farmers’ Association (TFA) were all in agreement that a phased introduction to inter-pillar transfers would be appropriate.

In a recent report on the CAP, the House of Commons’ EFRA committee “wholeheartedly agreed” the transfer rate should be retained at existing level of 9% and reviewed in 2017, he added.

Mr Kendall continued: “It is profoundly disappointing and infuriating that this government appears committed to increasing the modulation rate with no idea of how the money will be spent.

“Ministers have totally failed to deliver on their pledge to farmers that such a decision would deliver worthwhile and valuable outcomes and appear willing to disregard the opportunity for reviewing the rate upwards in the future if the need is demonstrated.”

He said the threat of disproportionate reductions in their direct payments to English farmers, especially in relation to farmers in neighbouring countries, was making them “angry and frustrated” with this government.

“The Scottish government recently announced that it intends to modulate at 9.5%, whilst the German government has gone for 4.5% – well below the maximum of 15% that DEFRA appears wedded to,” he added.

“Our counter-proposal of a phased introduction – starting at 9% with a review in 2017– is pragmatic and politically sensible.”

A DEFRA spokesman said: “We have said we are minded to move to 15%. We have listened to the consultation. We are looking at that as part of our announcement. We want to make sure it is a good deal for taxpayers, farmers, rural businesses and environmental groups.”

DEFRA is due to announce its decision soon so that it can be communicated to the European Commission before the end of the year.

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