Capping plan dropped

Capping payments to large farmers - which would have particularly hit the UK, Germany and the Czech Republic - appears to have been dropped from the latest version of the CAP 'health check' circulating in Brussels.

Farm commissioner Mariann Fischer Boel originally intended to make large, progressive cuts to farmer' single farm payments when she launched her health check last November. Her plan was to start with a 10 per cent cut on payments of more than €100,000 (£76,000) increasing to 45 per cent off for payments more than €300,000(£228,000).

The plan would have hit more than 6000 British farmers, including some of the most influential ones such as the Duke of Westminster and others such as Oliver Walston (who is one of the few farmers who opposes subsidies to the ire of the rest of them).

The money was to be retained by each member state and used for so-called 'Article 69' measures - Pillar 1 subsidies targeted at specific sectors. But the lobbyists (including no doubt UK PermRep in Brussels) have been at work and the plan is for additional rates of modulation for larger farmers instead of capping. These would range from 3 per cent modulation for payments in excess of €100,000 to 9 per cent for payments in excess of €300,000.

Of course all this is a sideshow to the need to get rid of subsidies. I was taken to task for this yesterday by someone who argued, quite reasonably, that the battered livestock subsidy could not survive without subsidy. That may be so. It is supposed to be a commercial activity, but the argument then is that we need subsidies for food security reasons.

Even Gordon Brown has bought into this discourse following the recent (good) Cabinet Office Strategy Unit report on food policy. The prime minister is an intelligent man who is justly proud of his academic origins. He should know better.

No one believes that subsidies should disappear overnight. Farmers have to be weaned off them. That is why I think a farmers' bond scheme is a good mechanism for getting rid of them once and for all.