Some thoughts on CAP modulation

Anyone who keeps up to date with farming news will be well aware that the figures for the extent of modulation from Pillar 1 to Pillar 2 payments under the reformed Common Agricultural Policy have been published. I have listened, as a relative bystander, with some interest, to the various opinions voiced on this matter, the majority being angry farming organisations, principally the NFU, concerned about the inability for farmers to properly invest in their businesses. England has opted for a 12% modulation to environmental and rural development payments (pillar 2) from direct payments (pillar 1). Scotland has opted for 9.5% and Wales the full 15% which has significantly angered farmers.

Personally I believe that Owen Paterson has made the best decision here, with a 12% standing. This will enable sufficient investment in environmental and development schemes to ensure a continuity in interest in environmental measures. Unfortunately cashflow tends to govern policy for individual farms and payments therefore have to be provided for these schemes for many farmers to take any heed at all. The RSPB have been particularly vocal of late as to the dangerous situation we face with the decline of many species of farmland birds, something that must be addressed. I have my personal views as to why this may be but that is irrelevant to this post. 15% modulation may indeed be too much, taking too much support away from Welsh farmers, many of whom struggle to balance the books as it is. 9.5% similarly may not be enough, although Scottish farmers on the whole tend to be better at managing their landscapes than many large southern arable farms.

Critically, the modulation is taking place under a review period and the figures are not set in stone. Nonetheless, many farmers will remain adamant that UK countries should be following the example of EU member states such as France who have opted for just 3% modulation from Pillar 1 to 2, a measure they say will support the ‘modernisation’ of farms. I argue however that this could be devastating for agrarian environmental policy and welcome a higher stress on the environmental element. Farmers should be given freedom to manage the land as they choose I agree. However, they must be incentivised to manage that land in a sustainable way that complements the ecosystems within the farmed environment. Unfortunately, until the market decides to pay a fair price to food producers this monetary incentive will have to come int eh form of subsidy. I look forward to the day when subsidies can be removed but the pessimist within me says that this is unlikely to happen in the near future. The alternative being immediate withdrawal of subsidies  would change our rural landscape significantly. Small farmers would go out of business with large scale, ‘efficient’ farms, epitomized by monocultures and large factory herds  spreading across the landscape. Ecosystems would become sterile. It would be a world where the joy of biodiversity is replaced with a factory system to sustain a world population at a size that is not beneficial for anyone. I applaud all those who sustain a belief that we needn’t go down this path and we can indeed form solutions for a food production system that works with nature and brings communities together, not one that kills both.

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