Reforms 'a turning point' for agriculture

THE outcome of the historic deal to reform the Common Agriculture Policy is likely to mean fewer cattle and sheep in the countryside, and fields normally used for growing wheat or barley could return to grassland.

Margaret Beckett, the Rural Affairs Secretary, said yesterday that the new package ending the "blank cheque" to farmers would speed up the move towards "greener" farming in Britain, the growth in demand for local food and the development of regional speciality brands. The Government is convinced that many farmers will open their land to members of the public and show off the improvements they have made on the land for wildlife.

Reaction to the deal, however, is mixed. The change is unlikely to mean a drop in food prices, and taxpayers will still be funding the new payment scheme. Farmers were pleased to be liberated from Brussels regulations, but environmental campaigners were concerned that a patchwork farming policy in Europe would be detrimental to the environment and to wildlife habitats.

It will be several months before the exact plan for Britain is revealed. Mrs Beckett is to consult on the issue this summer and make a decision by October. It is also possible that farming ministers in Scotland, Wales and Northern Ireland could make different arrangements for their farmers.

The Consumers' Association said that the agreement offered "little or nothing" to taxpayers and that the CAP would continue to devour #30 billion a year, half the EU budget. Sheila McKechnie, its director, said: "I fail to see the purpose of a reform which allows payments to continue more or less as they are, with the same amounts of money going to the same people irrespective of need, forcing poorer families to subsidise better-off farmers."

The National Consumer Council said that the reforms were in the right direction but criticised the "snail's pace" of change. English Nature, the Government's main adviser on the countryside, feared there would still be too much intensive farming on the Continent and in Britain. It called for payments to be linked to minimum environmental standards.

Oxfam was also scathing and said that the changes would not alter the EU culture of "dumping" unwanted farm produce on poor countries, risking disaster in world trade talks starting in September.

However, Sir Ben Gill, president of the National Farmers' Union, hailed the deal as "a turning point" for agriculture. "It gives farmers, for the first time in 50 years, the option of focusing exclusively on customer needs and the marketplace."

He said that he was keen for a complete break between payments and numbers of animals kept by farmers, but was concerned there could be market distortions. The deal allows member states to pick and choose reforms and many will still make payments to farmers based on production.

Sir Ben said that Britain and the European Commission had to be vigilant in policing the reforms. "If not the reformers will be the losers. UK farming must be allowed to be competitive."

There are also concerns about the land market. Land values have fallen by 10 to 15 per cent this year following concerns over the CAP reforms with payments tied to farmers and not to the land. This gives tenants the chance to walk away with the money. Uncertainty has paralysed the land sale and rental market and caused a slump in business for agents and solicitors.

Sir Edward Greenwell, president of the Country, Land and Business Association, said: "The short-term position of both tenants and landlords remains deeply uncertain and this uncertainty may not be removed until 2006."

He is concerned about plans to allow farmers and tenants the right to sell their new cash entitlements. "The decision to allow payments to be marketed separately from the land may sow discord in landlord-tenant relations in coming years."

Many farmers are concerned that the new payments are based on average subsidies received during the three years from 2000 to 2002. This period coincided with the foot-and-mouth outbreak in Britain, when payments for many farms were lower than normal, while other farmers may have rented out land during this period for family reasons.

Ministers are still working out an appeals system. Individuals will then be able to apply to a national reserve, funded by up to 3 per cent of payments made to British farmers, to give hand-outs in certain circumstances.