Tuesday 4 December 2012

Common Agricultural Policy (CAP) to be delayed

Following failure to reach agreement last week on the overall EU Budget for 2014 to 2020 it seems almost inevitable that this will result in the reform of the Common Agricultural Policy (CAP) being further delayed. This is because it seems difficult to see how the latter can be agreed in detail until it is known how much money there is to spend.

The current form of the CAP was meant to come to an end at the end of this year but with talks still at an early stage the timetable has already slipped a year and it seems now that 1st January 2015 is the most likely date for the reforms to come in to place.

Indeed Owen Patterson, our DEFRA secretary spoke at the European Ministers meeting in Brussels last week and urged ministers not to rush in to the reforms. He explained that the last CAP reform had seen the UK rush into an agreement only to be hit months later by £550m in EU "disallowance" fines. Whether this was the EU’s fault or that of our own Rural Payment Agency (RPA) who were tasked with administering the system, I am not certain.

Whoever was to blame, the introduction of the “Single Payment Scheme” back in 2005 caused chaos, particularly in England and we do not want this to happen again. The problems experienced were a symptom of the fact we carried out some very major reforms in a very short timescale and certainly the RPA did not have time to set up robust computer systems to cope with the complexity of what the politicians had agreed.

Therefore I think Patterson’s call not to rush the reforms this time around is sensible because I am sorting out one or two problematic cases where clients of mine are still arguing over the claims they made going back to 2005. This level of confusion and incompetence must not be allowed to happen again and so if the reforms are to be delayed to 1st January 2015 I hope this will give the politicians time to agree a workable package going forward.

However, farmers must appreciate that whatever is agreed it is likely that the level of support they will receive from the EU will fall in real terms over the coming years and with many livestock farmers still relying on these payments to make a profit, farmers must look to get their businesses in good shape now while market conditions are generally favourable.


James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells

T: 01749 683381
E: james.stephen@carterjonas.co.uk

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