Andreas Whittam Smith: Let every country subsidise its own farmers

The time has now come to dismantle the Common Agricultural Policy

So great was the seismic power of the French refusal to approve the European constitution, followed by the Dutch rejection a week later, that the aftershocks of this earthquake are now shaking even the Common Agricultural Policy (CAP). First came the turn of the euro, which was rendered unsafe. Then, a few days later, the Prime Minister, Tony Blair, questioned the cost of sustaining subsidies to Europe's farmers.

So great was the seismic power of the French refusal to approve the European constitution, followed by the Dutch rejection a week later, that the aftershocks of this earthquake are now shaking even the Common Agricultural Policy (CAP). First came the turn of the euro, which was rendered unsafe. Then, a few days later, the Prime Minister, Tony Blair, questioned the cost of sustaining subsidies to Europe's farmers.

Britain has been much helped by the misjudgements of the French President, Jacques Chirac, who has been reeling around as if concussed. On his own domestic front, he appoints a Prime Minister, Dominique de Villepin, who is unelected and whose high intellectual background represents all that French voters had just said that they dislike in their country's so-called elites. Then the French President urges the rest of Europe to get on with holding referendums, even though France has effectively vetoed the European constitution as it stands. Finally, he foolishly raises the question of the British rebate.

Nothing could better suit our interests. For Mr Chirac's intervention has turned the rebate into something with which we can bargain. We will give it up in return for reforms elsewhere. And what better place to start than with the CAP. Ouch! For probably the only policy which Mr Chirac has consistently followed throughout his long political career has been blind support for French farmers. On everything else, he has changed his mind, but not on this. The French farming community is part of his electoral base. He never fails, for instance, to spend a long time at the big farm show, the Salon de l'Agriculture, held in Paris every spring.

Paradoxically, although the CAP has always been at the heart of the European Union, agriculture is not like environmental problems, or defence, or international terrorism, where cross frontier co-operation brings obvious advantages. The CAP is solely a financial mechanism for supporting farm incomes. It can be carried out as easily, country by country, as it can be in a European setting. Indeed, before we entered the Common Market, we did it on our own anyway.

To support her farmers, France made two brilliant bargains. Fifty years ago, she said to the Germans that, in return for eternal friendship, they must pay into a system that subsidises French agriculture. And 20 years later, France presented Britain with a similar demand - if you want free trade within Europe, you must subscribe to the CAP.

For Britain, the price has been high. It arises in two ways. The first is the maintenance of high tariff barriers around Europe to keep out cheap food imports (other than vegetables, which are not part of the CAP). The second comprises substantial contributions to the European budget. The result is to add £9 on to the weekly food bill of a family of four. Or, to put it another way, the annual income of a European dairy cow exceeds that of half the world's human population.

There is a second paradox. As systems for supporting farm incomes go, the EU is now switching to a good one. It is separating payments from output. This means that farmers will still receive income, at a level based on their past grants, but it will be in a form that encourages them to produce for the market as it is rather than in response to varying subsidies for this or that activity. Payments will be made so long as minimum standards for animal welfare, the environment and food safety have been met. Farmers are being rewarded for maintaining rural landscapes.

I approve of this way of going about things. I am also in favour of supporting farm incomes out of the taxes I pay. Some 70 per cent of Britain is farmed. It produces the countryside we love. It is an important part of the fabric of our lives. I want to see it productive and well cared for. But not through the mechanism of the CAP. Here is an important distinction. Hostility to the CAP is no more anti-farmer than objections to the euro monetary system show lack of commitment to a European common market in goods and services. I have no problems with European co-operation per se. I willingly, for instance, do without Britain's ability to decide her own tariff policy in return for enjoying the benefits of a large free trade area. I would, too, relinquish a bit of sovereignty in order to tackle certain environmental problems at a European level rather than nationally.

But now the time has come to dismantle the CAP. While Britain cannot force this through on her own, we are suddenly strong enough to obtain substantial changes. Let the principle be this: how individual countries wish to support the incomes of their farmers is a matter solely for their electorates and their governments and for nobody else. There is literally no need for a Common Agricultural Policy.