EU CAP Health Check good but should go further says NFU
20 May 2008
EU proposals for the "Health Check" take the Common Agricultural Policy (CAP) in the right direction, but do not go far enough in eliminating the potential for different treatment for farmers across Europe.
NFU President Peter Kendall said: "The Health Check is intended to be an adjustment to the CAP, not another radical reform. The problem with the last reform in 2005 is that it made the CAP more complicated and less common. The Health Check is an opportunity to correct those mistakes and we welcome the move towards a more level-playing field, but this does not go far enough."
"Some of the measures are welcome, most notably the abolition of set-aside. We support the elimination of dairy quotas by 2015. The introduction of a new minimum claim threshold of €250 or 1 hectare will reduce the administrative burden and hopefully, result in a more efficient delivery; while the review of the cross-compliance requirements can provide the opportunity to exclude provisions that are not directly relevant to farming.
"We also welcome the elimination of partially coupled payments in the arable sector but remain disappointed at the lack of ambition of the proposals for the livestock sector. The proposed continuation of coupled payments for suckler cows and ewes in some other EU countries betrays the spirit of the 2005 reform and distorts our domestic markets."
As part of the Health Check, it is proposed to increase standard EU modulation rates by 2 per cent on an annual basis, from 5 per cent to 13 per cent, and to add an additional progressive element according to the following rules: a further 3 per cent reduction for any payment amount above 100,000 Euros, 6 per cent for the part of the payment above 200,000 Euros and 9 per cent to any payment amount above 300,000 Euros.
The NFU remains opposed to the principle of progressive modulation. However, it welcomes the fact that any additional monies raised through these increases in EU modulation are to remain in the country where they originate and highlights that any increase in EU modulation must be accompanied by a corresponding decrease in national modulation at the farmer level.
Mr Kendall added: "We have fought long and hard to ensure that the discrepancy in the modulation rates faced by British farmers when compared with their EU counterparts was reduced or eliminated and have received reassurances from the Commission that the Health Check would contribute to address this issue."
While the Commission proposals on partially coupled payments and modulation will make the CAP more common, the possibility for member states (under a reformed article 69) to use up to 10 per cent of their CAP budget for specific measures is viewed with real concern by the NFU.
"I am deeply suspicious of a measure that in some countries might result in 'modulation through the back door' while in others might lead to trade-distorting forms of coupled support. This is not the level playing field that British farmers deserve," said Mr Kendall.
Summarising the NFU's view, Peter Kendall stated: "The Health Check proposals will take the CAP in the right direction, but do not go far enough in eliminating the potential for different treatment for farmers across Europe. The NFU will continue to work to ensure that the principles of decoupling, commonality and simplicity become the drivers of the reform."
Notes to editors:
The 2005 reforms to the CAP broke the link between what a farmer produces and the support received from the CAP. This is known as "decoupling". It replaced a whole raft of production-related payments with a single annual payments, based (in England) partly on a farmer's historic subsidy receipts and partly (and increasingly so) on the area of land farmed, conditional on meeting a range of environmental and agricultural standards.
However, some member states went further and faster than others in applying "decoupling" while further inconsistencies have arisen as a result of the method chosen for the calculation of annual payments.
Further competitive distortions have been introduced as a result of the introduction of national modulation, a provision allowing member states to choose to top-slice the single payment in order to generate funds for rural development programmes. This national modulation (used only by the UK and Portugal) means, together with the anomalies referred to above, that the amount of support received by farmers with identical enterprises can vary widely from one region or member state to another.
It is these inconsistencies and anomalies that the NFU is most concerned to see removed as a result of the Health Check.
