Thursday, August 18, 2016

It looks like a no brainer, but is it?

The latest phase in the debate about the future of agricultural policy in England is the call for a diversion of subsidies from large estates to smaller firms. It is easy to make both an intellectual and a populist case, but one also needs to consider countervailing arguments.

The Campaign to Protect Rural England (CPRE) argues that it is wrong to pay people more subsidy simply because they own more land: CPRE report It proposes that all farmers should receive a higher amount per hectare for the first 50 hectares they own but payments should reduce for the next 100 hectares and then continue to taper.

The CPRE argues, 'Good, resilient farming means cleaner water, less flooding and more carbon storage. It means abundant wildlife and rich soils that underpin beautiful countryside and assist efforts to tackle climate change. And it means a mix of farms more strongly connected to the local community.'

The countryside is, of course, more than an aesthetic asset to be enjoyed by urban populations, it is also a means of food production, although that food production needs to take into account environmental impacts. Particularly valued areas of countryside are designated as national parks, although even here farming contributes to their appearance.

The CPRE says that it is not engaging in 'big farm bashing', but size of farm is not necessarily related to how well farming is undertaken, although there is some evidence that larger farms tend to have higher animal welfare standards. Big estates can be well integrated into their local communities, not least as a significant source of employment.

Some of the payouts to big farms can be substantial, Last year, Farmcare Trading, the former Co-op farms bought by Wellcome Trust in 2014, received £1.7m. Beeswax Farming, owned by Sir James Dyson of bagless vacuum cleaner fame, received £1.4m. Blankney Estates in Lincolnshire got £1.1m. Lilburn Estates in Northumberland, owned by Duncan Davidson, founder of the house builder Persimmon, received £915,000. The Elveden Farms in Suffolk, owned the Earl of Iveagh and the Guinness family, received £915,000.

A recent report from Exeter University, commissioned by the Prince's Countryside Trust, argues that small family farms employ more people per acre (i.e., are less capital intensive), help sustain rural services and provide a wider variety of locally produced food. The number of such farms has fallen from 84,000 in 2000 to fewer than 67,000 in 2013.

What does one consider is how far competitiveness objectives should form part of any future policy. Large farms in countries such as France and Germany will continue to receive CAP subsidies, leaving English farms at a competitive disadvantage. The result could be more food requirements being met by imports and hence a decline in domestic food security.

What is clear is that the present level of subsidy to larger farms will not be affordable. However, a debate is needed about the priority given to different policy objectives, something that never really occurred with the CAP.

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