From handouts to the super-rich to a hand-up for small-scale farmers

January 2017

Towards a more democratic, ecological and globally fairer agricultural subsidy policy

In the wake of Brexit our agricultural policy is suddenly up for grabs. Since 1973, the UK farming sector has been shaped by the EU’s Common Agricultural Policy (CAP) and its subsidies. 
 

What is CAP?

CAP originated in the late 1950s following a decade of postwar food shortages. The UK joined CAP in 1973. The current CAP funds are split into two pillars. Over three quarters of it, £2.4 billion, goes into the first pillar where payments are tied to the area of land above a minimum threshold and so this has the perverse effect of rewarding wealthy individuals with millions of pounds from public funds. The remaining quarter goes to a second pillar funds activities that are classified as rural development. At least 30% of pillar two should be spent on the environment but this is too small to genuinely tackle the huge threats to our environment.
 

The problem with CAP

 
CAP’s original postwar purpose has long since been played out and there is a broad consensus that it has become a disaster on many fronts.
 
One of the biggest criticisms is that it hands wealthy landowners millions of pounds from public funds, while smaller farmers receive little or nothing. There have been attempts to bring environmental factors into CAP, but they have been grossly inadequate. As a result, a system of large-scale industrial agriculture is rewarded while small-scale agroecological1 methods are largely ignored.
 
Chancellor Phillip Hammond has promised to maintain the current level of subsides set by the CAP until 2020. But what will they look like after 2020? Given that vested interests and the agribusiness lobby have the ear of government it is likely to lean to the status quo – or perhaps worse, removing all support for farming that’s already very hard to sustain on a small scale.
Coming out of the CAP presents the opportunity to consider what a truly progressive subsidy system could look like. Instead of subsidising rich landowners, subsidies could be used to encourage public goods like environmental practices, local markets or community supported agriculture schemes in our food system – while saving £1.1 bn.
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