I have, at last, found the time to watch Roger Harrabin's Newsnight special on the Common Agricultural Policy.

The overall message came through loud and clear: the policy is a huge taxpayer investment (some £400 p/year per family) but there are serious questions over what this money is actually buying.

The CAP has a dark past: grotesque over-production driven by production related payments and profound negative impacts on the environment and developing countries.

But the CAP has changed a lot in the last 20 years. A series of reforms has established a clear (if somewhat slow moving) trajectory towards reducing negative impacts (environmental and social). The policy now also uses a small proportion of its vast budget to reward land managers who produce environmental public goods, things like wildlife, healthy soils and water.

But as Newsnight revealed, attempts to further ‘green’ the CAP look set to be scuppered. And who’s responsible? Perhaps those pesky (and deep pocketed) vested interests who’d like the policy to stay largely as it is – lots of [public] money doled out with virtually no strings attached?

One key issue that Newsnight didn’t cover is that of modulation. This mechanism allows Member States to move money from Pillar I, which funds direct payments, into Pillar II, which funds things like agri-environment schemes and wider rural development measures. It has been part of the CAP for over 10 years.

The good news is that this flexibility will remain a part of the next CAP. Member States will be allowed to move up to 15% of their Pillar I budget into Pillar II and each of the UK’s agriculture Ministers will decide how much they want to move later this year.

But modulation is a hot political topic now and one which has raised the ire of a number of farming unions, here and across the EU (see here and here) who claim that it would put UK farmers at a competiveness disadvantage. Their latest contribution is to argue that modulation should be subject to mandatory co-financing by national treasuries – put simply governments would have to put their own money in too.

Now I’m all for extra money in Pillar II but co-financing is just not an option for most countries, including our own – we just don’t have the money. Perhaps the NFU and others have not noticed the economic downturn?  So in straitened financial times, I’d much rather have modulation without co-financing than no modulation at all. As would many farmers.

The fact of the matter is that without modulation Defra, and the devolved administrations, will not be able to invest properly in Pillar II schemes – schemes which not only reward farmers for producing environmental public goods but also help farmers to modernise, diversify, in other words become more competitive and market orientated – something Pillar I payments just don’t help them to do.  And without a well funded agri-environment programme, it is widely accepted that Defra will fall woefully short of meeting its ambitions in the Natural Environment White Paper and its own biodiversity strategy for England.

To a logical mind the modulation issues should be a no-brainer. It’s therefore extremely reassuring that Owen Paterson, Defra’s Secretary of State, is continuing to maintain such a firm position on the importance of moving money into Pillar II.

But rather than espouse the RSPB position, I think it would be more apt to quote one of the many farmers we work with – evidence that the big farming unions’ position on modulation is out of touch with what many farmers think.

As an arable farmer in Suffolk and receiving high prices for wheat and other commodities I can afford to rely less upon direct payments from the CAP, of course I have always taken the view as a farm business I should not rely upon my single farm payment. I have many poor yielding areas of the farm that I have placed into arable stewardship options, making the best of this land for wildlife means I not only provide benefits for wildlife but also demonstrate I am good value for the public investment I receive. Therefore, I can only view a transfer of funds from pillar one at 15% to agri-environment budget as a good and sensible way forward. Taking out these less productive areas has little impact on yield, little impact on my ability to feed people but big impact on my farm sustainability. My agri-environment options produce a range of benefits but without or with reduced agri-environment funding I as well as other arable farmers have no market for this, which is quite different to how my single farm payment works.”

James Bucher, Hall Farm, Suffolk Arable Farmer

  • Latest. Utterly depressing. Not much democracy on show from our farm ministers, who are supporting large (rich) land downers at the expense of small farmers and our environment www.bbc.co.uk/.../science-environment-23025973. I know who I'll reflect this in my shopping basket. Absolute disgrace by this government. Can the RSPB start a petition about this?

  • This BBC article seems to indicate things staying much the same in Europe with big, rich landowners getting bulk of money with barely a nod to environment. www.bbc.co.uk/.../world-europe-22986953 What is RSPB current position?

    BTW Tried for ages to comment on your previous posts on CAP reform but no comment box appeared? Do you block threads from comment after a certain time?

  • Nightjar,you make out the best case ever for Pillar 1 to be the main gain of schemes for farmers.

    Majority of city folk will never pay for wildlife probably about 3% will be in wildlife organisations which the other 97% will not join and pay their share.

    You have it completely wrong about the 70s being glory days.I was farming then and that was one of the worst times in the last century.Surprising how wrong people outside the industry can be.Do you really think all these dairying people are losing money,if they were they would soon take the easier option and go into beef(I was a dairy farmer and relatives and friends are dairy farmers).

    Farmers always buy from cheapest source just like supermarkets,there is absolutely no reason why supermarkets should not buy at the best price they can,farmers do not have to sell to them by law it is simply their choice.It is actually a complete fallacy about supermarkets making big profits,their margins are minute simply the amount they sell is where their profits come from,most businesses making such small margins would simply go bust.

    Farmers staying farming in the uplands like my brother-in-law is by far the best way of keeping wildlife in the uplands,of course with the exception of Grouse moors which is a different thing altogether.

  • Actually, Sooty, it isn't working and the longer farmers keep arguing it is the harder the landing will eventually be. I realised maybe a decade ago that the farmers making the running - the farmers enjoying a gin at the Farmers Clucb - had all lived through the glory days of the 60s and 70s and didn't seem to realise the wind had changed - many of their sons are struggling to make a living - grain is fine now, it wasn't not so long ago, but dairying is still in terminal trouble and it isn't badgers to blame - the figures show profit & value fleeing up the supply chain - away from farmers towards the processing industry and the supermarkets, with no holds barred in winning the share price war - horsemeat included. And in the meantime the environment we all have to live in continues to suffer - and one of CAP's key aims, keeping people in remote & agriculturally less favoured areas, is failing completely - which, in many of our EU partners, means deserted villages. We have got to rebalance the values we ascribe to the many different assets the countryside delivers for all of us - which is what ecosystem services should be, not a ghetto of the nature conservation sector - and pay farmers for all the services we in the cities need, not just maximum food production.

  • No serious questions needed about what that £400 per family provides.It provides good quality food to your family and every family in the U K.The really serious question would be how much does your mobile phone cost the RSPB each year.My guess is it is more than £400 so which is more necessary food or your phone.

    End of serious question.However conservationists plough a narrow furrow wanting things from C A P just for a small minority of people the fact is except for small over production problems in the early days it has done a good job for all family's and indeed as soon as a small shortage appears of wheat just look at what that does to the price of Bread,Flour and other products that can replace Flour.It all probably increases in price by 33% a sure sign for all UK family's to think that £400 is money well invested.