England: Farmers’ leaders welcome Government announcement on less severe cut to direct farm subsidy

Owen Paterson

Owen Paterson - Credit: Archant � 2005

Farmers’ leaders have breathed a sigh of relief after a Government announcement that it would not cut their direct subsidies by as much as they had feared.

Meurig Raymond, NFU

Meurig Raymond, NFU - Credit: Archant

Farming bodies including the National Farmers’ Union (NFU), the Country Land and Business Association (CLA) and the Tenant Farmers’ Association (TFA) have lobbied hard to get Environment Secretary Owen Paterson to back away from cutting the 15% from farmers’ direct Common Agricultural Policy (CAP) support in England, putting it out of step with some other European Union countries.

Today he announced that he would be transferring 12%, rather than the maximum 15% from farmers’ direct payments under the CAP’s ‘Pillar One’ to ‘Pillar Two’, which supports rural development. The money in Pillar Two will be used to improve the environment, grow the rural economy and create jobs.

Mr Paterson was outlining the Government’s response to the recent public consultation on the implementation of the CAP in England, which looked at how the Government should distribute £15billion of funds over the next CAP period. At least £3.5bn will be spent on rural development schemes, of which over £3bn will be spent on improving the environment, he said.

NFU deputy pPresident Meurig Raymond said: “I am delighted that Owen Paterson has decided to keep the rate of modulation below the maximum for the next four years along with a Government review to be launched in 2016 to consider the transfer rate from payments in 2018. I appreciate this was not any easy decision for the Secretary of State to make but we are pleased that he has listened to our arguments.

“I would like to thank the Enviroment, Food and Rural Affairs (EFRA) Select Committee and many rural MPs who have supported us in recent days.

“The reduced rate of transfer to the Rural Development budget will mean that £224million will be retained in the farming sector over the next four years.

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“This issue has falsely been presented as a fight between farming and the environment. It is not. Even at 9% transfer the NFU has demonstrated that we could continue to meet all our on-going commitments to agri-environment programmes and have a surplus to spend on other measures. At 12% there will be additional funds available and we will play our full part in determining how these might best be spent.

“The decision to review the rate from 2018 onwards is the right one, and one we have consistently pressed for. If by then there are valuable programmes in the rural development programme, including the new Environmental Land Management Scheme, and there is clear evidence of demand, the NFU would certainly not oppose an increase in the modulation rate.”

He expressed “deep disappointment” at the decision by the Welsh Assembly Government to introduce a 15% rate.

“The NFU strongly believes that voluntary action by farmers is generally a more effective way of meeting specific challenges. For this reason we have committed to promoting action that will encourage pollinators and improve water quality. We have pledged ourselves to ensuring these initiatives produce positive results.

“The NFU is well aware that there was strong pressure from other parts of government to transferring some of the CAP budget outside the farming sector to the so called “growth agenda”. This would have been wrong on many levels and we are pleased that Owen Paterson has largely resisted this move,” he said.

“The NFU remains convinced that the CAP Reform agreed in Europe this year was a missed opportunity and a step in the wrong direction. I am, however, pleased to state that Owen Paterson has made a number of decisions which have made the best of what was otherwise a bad job.”

CLA President Henry Robinson said he was “pleased” Mr Paterson has listened to the industry and moved 12% from Pillar One to Pillar Two rather than choosing the maximum figure allowable.

“He has struck a reasonable balance between supporting the environment and rural development and ensuring that farmers in England get a fair deal.”

The CLA President said it was right the Government is continuing to recognise - through investing in agri-environment schemes - the great contribution that farmers make to the environment,” he said.

TFA national chairman Jeremy Walker said: “Today’s announcement shows the benefit of industry lobbying and also shows that DEFRA Ministers are willing to listen to reasoned argument.”