British Farm Minister George Eustice wants to slash lavish payments to large landowners after Brexit in a sharp departure from the way EU policy works now.
Eustice’s position, set out in an interview with POLITICO, is a signal that Prime Minister Theresa May’s ruling Conservatives are trying to cast off their reputation as the party of money and privilege. Under the EU’s bumper €58-billion-per-year farm subsidy scheme, Britain’s royal family and a host of wealthy aristocrats are prime beneficiaries of largesse from the Brussels budget.
Reducing subsidies to those kinds of large estates would constitute a revolutionary shift from the principles of the EU’s Common Agricultural Policy, under which the lion’s share of direct payments is based on acreage. Of special contention: 80 percent of European funds go to only 20 percent of farms.
Eustice said that the distribution of payments is unfair and that the system should change, although it would probably take until 2025 to fully phase in a new model.
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“I don’t think many people could defend the notion of an area-based subsidy system staying in place for perpetuity,” said Eustice, minister of state at the Department for Environment, Food and Rural Affairs (DEFRA). “It’s a little bit upside down because it means the largest payments go to the largest landowners who arguably need it the least.”
The CAP is widely criticized for sidelining small holdings whose farmers desperately need to boost their incomes. Such inequality, critics say, is contributing to a growing number of farms going out of business.
Eustice said a new program in the U.K. would reverse the trend by focusing on smaller farms. “The farms that are most reliant on it [subsidies] tend to be some of your smaller family farms, particularly in the upland areas, particularly those in beef and sheep.”
Speaking on the phone from Cornwall, where he is campaigning in his constituency of Camborne and Redruth ahead of next week’s general election, Eustice explained that implementing a new agricultural subsidy system after Brexit would initially entail reducing payments “for the very, very large landowners and holdings.”
“The evidence is that they are best able to withstand it and certainly if you look at the big agri-businesses, particularly those in the veg sector. The truth is that although they receive quite large single farm payments, it’s largely irrelevant to their business model,” he said.
He added that there would be little impact on the bottom line for “intense operations turning over £50 million a year.”
Going green
Senior agriculture officials in the U.K. such as Andrea Leadsom, secretary of state at the ministry, have strongly hinted that the viability of some farms will not be possible after Brexit unless they can be run in a more environmentally friendly way.
That would push farmers in Britain to radically alter their working methods or rely less on state handouts, which account for approximately 55 percent of U.K. farmers’ income, or some £2.7 billion per year.
Britain’s new line of thinking comes amid a lively debate in the EU about how the agriculture sector can contribute to the Paris climate agreement by reducing greenhouse gas emissions. It also marks a clear opportunity to overhaul the Common Agricultural Policy, which Conservative party members have long complained disproportionately benefits the French and Italians.
The British government also has been hostile to some rules imposed under the CAP, with farmers complaining about mandatory requirements such as the three-crop rule. This requires farms of over 30 hectares in size to grow at least three crops — with the main one covering at most 75 percent of the land — to get paid.
To help farmers transition into a new system, direct payments will be gradually phased out — likely by 2025 — with capped payments and simpler rules than those for the program administered by Brussels.
“We’re looking at everything from futures’ markets to U.S.-style insurance regimes — and gradually changing the emphasis of the policy so that it is better targeted and supporting farmers to be profitable but also to farm sustainably,” Eustice said. “But you’re not going to withdraw the single farm payment overnight,” he added.
In the Conservative Party manifesto released last week, the party pledged to commit the same cash for farm support until the end of the next parliament in 2022. But after that date, “a new agri-environment system” will be introduced to “set up new frameworks for supporting food production and stewardship of the countryside.”
“Those who need [subsidies] most tend only to get enough to keep their nose above the water,” he said. “What we really need to be doing is thinking about how we can use that budget … to switch the emphasis of it so that it is improving the profitability of farms.”