Out go the guaranteed high prices for the food farmers grow. European cereal prices are being lowered rapidly towards world market levels. To compensate, in come direct payments for each acre planted with cereal crops, plus further payment (pounds 126 an acre) for the area set aside. These support payments averaged pounds 13,400 per English farm last year.
CAP reform is intended to prevent crop surpluses, which end up being dumped on international markets depressing cereal prices and infuriating other cereal exporters like the United States.
Subsidised exports also damage the prospects of Third World farmers who find their prices undercut. Charities such as Oxfam have long argued that growing excess food in the North contributes to hunger and poverty in the South.
The fallow 15 per cent has to be shifted around the farm each year, so farmers cannot put only their least productive land into set-aside.
Farmers also have the option of earning pounds 126 an acre by putting between 18 and 50 per cent of their land into long-term set-aside with fields lying fallow for years on end. The minority of farmers like Bill Loyd who set aside their entire arable acreage under the original voluntary scheme are allowed to carry on growing nothing in return for pounds 88 an acre.
The Ministry of Agriculture wants this permanent set-aside to be a boon to wildlife so it has laid down conditions and options which are meant to encourage flora and fauna. But one of the most environmentally-friendly options, growing broadleaved trees, is not permitted under European rules.
Most pundits believe set-aside will fail and the CAP will soon have to be redrawn to comply with the Gatt agreement.Reuse content