12th February 2004
Farmers braced for subsidy reform | |
|  | | Tractor ploughing a field. |
| | A new system of farming subsidies has been unveiled by the government - with some farmers fearing it will make them worse off. It follows EU reforms meant to break the link between subsidies and the volume of production. |
|  | | The link between subsidies paid to English farmers and the level of production is to be fully broken from 2005, Environment Secretary Margaret Beckett announced today.
Mrs Beckett has told the Commons that a single farm payment will replace the current raft of subsidies.
But to give farmers time to adjust to the changes, the flat rate payments will be phased in between 2005 and 2012.
Different rates will apply to land in certain severely disadvantaged or less favoured areas to the rest of the country.
Mrs Beckett has hailed the move as a decisive and irreversible shift which offers huge opportunities to the farming industry.
EU states agreed last June to radical reform of the Common Agricultural Policy (CAP) in a bid to break the link between subsidy and production, which critics claim was costly and encouraged overproduction.
 | | Margaret Beckett has announced sweeping reforms. |
Mrs Beckett said ending the link would free farmers to produce what the market wanted and benefit the environment.
"I have decided that in England we should fully de-couple all direct payments in 2005, including the new payments for milk producers," said Mrs Beckett.
"A single farm payment will replace the plethora of existing ones and simplify the bureaucracy associated with them."
The payment will be based on a flat rate per hectare, rather than on past subsidy-linked production.
Mrs Beckett acknowledged that to introduce a flat rate system next year would be too destabilising. Because of this the scheme would be phased in over eight years.
But shadow environment secretary Theresa May warned the Government that it had merely replaced one complexity with another.
Mrs May said the Tories backed the need for CAP reform but added: "You've managed to come up with the one scheme that absolutely nobody recommended."
She pointed out that Wales, Northern Ireland and Scotland planned to adopt three different systems.
"This will mean four different systems for farmers in the UK and four different systems will mean four different sets of rules, with four different armies of civil servants implementing them on our shell-shocked farming industry.
"It is hard to see how this is likely to cut red tape or do away with bureaucracy," she added.
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