Stories today based on a Greenpeace report about EU Common Agricultural Policy (CAP) subsidies to large landowners cover a matter which has been widely debated over many years and are mostly accurate, as far as they go. But not all of them give quite the full picture.
EU rules allow Member States to cut substantially so-called “basic payments” under the CAP to large landowners, such as most of those cited in the Greenpeace report, by applying an upper limit (ceiling). Nine Member States do so.
In the UK, such a ceiling is applied in Northern Ireland, Scotland and Wales – with the resulting funds generated remaining in those regions for rural development projects.
The UK chooses not to apply a ceiling in England.
The European Commission’s repeated proposals for more radical reform have been watered down by national Ministers.
Only active farms are eligible for CAP funding as long as the farmer keeps his land in a state suitable for agricultural production. The business of breeding racehorses is not supported, though the land on which horses graze might qualify if it meets the criteria.
Basic payments account for in the UK and most Member States for around 70% of all CAP payments made to farmers.
In 2010, the European Commission proposed extensive reforms to the CAP, including to place a compulsory ceiling on payments to large landowners under the CAP’s basic payment scheme, thus putting an end to payments at the levels referred to in today’s reports.
A number of Member States combined to oppose these proposals.
As no EU law can be adopted without approval from both Member States and MEPs, this meant the extensive reform package implemented from 2014 did not include any compulsory ceilings, only a reduction of 5% on all amounts over €150 000.
However, an option was left open for individual Member States to apply a ceiling at national level.
Similar proposals to limit the amount of payment per individual farm were made by the Commission in successive CAP reform exercises since 1992 – but were always blocked by Member States.
In the UK, ceilings are now applied in Northern Ireland (€150 000), Wales (€300 000) and Scotland (€600 000).
In Wales, for example, they apply an absolute ceiling of €300 000 per farm, but they also reduce amounts above €250 000 by 55%, amounts above €200 000 by 30% and amounts above €150 000 by 15%.
There are no caps on “greening” payments introduced under the reformed CAP, which amount to about 30% of the total direct payments in each MS and are calculated by hectare as a payment for an ecological service provided: for example, carbon sequestration through maintaining permanent pasture.
Of the 7.5 million farm businesses across the EU that received CAP Direct Payments in 2014, 10 210 got more than €100 000 = 1.2%.
In the UK 4 250 out of 175 700 farm business got more than this amount = 2.4% i.e. twice as many as in the EU average. This is because farms in the UK tend to be much larger than in the rest of the EU. (Average farm size in the UK in 2013 was 93.6 hectares, relative to 16.1 ha for the rest of the EU.)
This does not include greening payments.
For more on the breakdown of direct payments per individual farm, see http://ec.europa.eu/agriculture/cap-funding/beneficiaries/direct-aid/pdf/annex1-2014_en.pdf