Want to donate 10p on your milk to farmers? Read 'Farming subsidies: this is the most blatant transfer of cash to the rich' by George Monbiot first.
Or Revealed: how we pay our richest landowners millions in subsidies. (New Statesman)
"With the exception of Spain, there is no European country in which land is more unequally distributed than Britain, with 70 per cent of acreage held by just 0.28 per cent of the population, or 158,000 families."
By Brian Gardner
Published: 25 November 2014 03:10 PM
The victory for the anti-EU UK Independence Party (UKIP) in a UK by-election last week has made it more likely that the UK is on course for a referendum which could force whichever political party in power after the May 2015 general election to take the country out of the European Union.
Former UK agriculture secretary Owen Paterson also yesterday (November 24) urged Prime Minister David Cameron to give a commitment to invoking article 50 of the Lisbon Treaty giving formal notice of Britain’s intention to quit the EU before any negotiations on its continued membership begin.
Paterson wants the UK to withdraw politically from the EU and forge a trade deal giving access to the single market, like Norway has.
But what effect would such a move (or ‘Brexit’) have on the UK’s farming industry? The objective view would be that farmers will inevitably be worse off, although consumers will benefit.
The shape of UK agriculture policy in the aftermath of an EU exit is of course unclear, but it does seem likely that direct subsidisation, which currently forms a large part of average farm income, would be scaled back significantly and may even largely disappear.
British agriculture would also be subject to fiercer competition from imports than at present, and as a result it is likely that consumers (or the food industry) will gain from lower food prices.
EU subsidy effect
Under the 2007-2013 version of the CAP, EU subsidies to UK farmers totalled around €3.2 billion a year.
For individual farmers, these subsidies, amounting to around €200 per hectare, generally represent around 35-50% of total gross income. For a majority of farms, these subsidies represent the difference between profit and loss. Only super-efficient farmers ranking in the top 10% could survive without them.
The basic problem for the industry is that its costs are predicated on the assumption of this high level of subsidisation. This is most obviously true of land prices and rents – overblown by the promise of the EU subsidies attached to them.
The dire straits into which the UK farm industry would be plunged by removal of the direct aid payments which now form the backbone of the CAP can be judged by most recent farm income figures.
According to DEFRA’s latest Farm Business Accounts report, over a fifth of mixed and grazing livestock did not make a profit in 2013/14, while more than 20% of dairy farms had a net income of less than £25 000 (€31 738). Approximately 20% of cereal growing farms failed to make a profit in 2013/14 - compared with 9% in the previous year. In both cases, the SFP formed a major part of the farms’ gross income.
Cash income (average £ per farm at current prices)
|Cereals||104 600||87 200|
|General cropping||111 600||102 200|
|Dairy||88 400||113 100|
|Grazing livestock (Lowland)||27 800||25 700|
|Grazing livestock (LFA)||28 800||27 100|
|Specialist pigs||72 400||88 100|
|Specialist poultry||127 600||198 100|
|Mixed||62 400||58 500|
|Horticulture||44 100||48 200|
|All types||69 000||67 200|
Detailed farm income figures from DEFRA indicate the vulnerability of the majority of farms in a post EU farm policy, set by a national government.