New twist for an old theory
- April 2004
This Opinion was featured in the April 2004 issue of the the Anglia Farmer and Contractor
The politicians hope the STP is the answer to all their agricultural troubles. David Walker is not so sure.
The European Union's move to decoupled Single Farm Payments (SFP) appears troubled, at least in the UK. That decoupling, which was never a politically popular concept, entered by the backdoor is making its debut that more challenging.
Theories concerning decoupling, or cutting any link between farm payments and the marketplace, have been bouncing about university campuses, particularly those in the US, for more than 50 years. But bouncing was about all they did until quite recently. Elegant, as they might seem from an ivory tower perspective, they lacked a critical ingredient, political acceptability.
The theory was that you just paid farmers what was needed to raise their incomes to a politically acceptable level without making production or marketing a condition for payment. This way you avoided encouraging increased output which in turn depresses prices and widened the income gap which the payments were designed to close.
Farmers' response everywhere was that they did not need charity. They simply wanted a fair return for their labour and resources. This is so deeply embedded in US legislation that the US Department of Agriculture still calculates "parity prices" monthly for well over a 100 US farm commodities. The parity price for a commodity is one that provides farmers with an income on a par with other industries and, therefore, a fair one.
We have, of course, arrived at the Single Farm Payment not by resolving this challenge, but by using the back door and dodging it. This started with the coloured boxes of World Trade Organization negotiations of the early 1990's.
Governments were clearly more comfortable amongst themselves about condemning trade distorting programmes, which were the programmes that farmers favoured, than they were discussing them with their farm constituents.
Under the cover of the confusion of the coloured boxes, the MacSharry reforms in 1992 took the first steps towards decoupling. These were extended under Agenda 2000 and with the current iteration and its SFP, of course, being "the mid term review" of Agenda 2000. The major justification for the two Agenda 2000 revamps was to meet anticipated requirements of a further round of world trade negotiation with more coloured box sorting anticipated and justified for the greater good.
This has not materialized. But the changes in method of payment have been put to "good" use in terms of adapting the CAP for the expansion of the EU, introducing conservation programmes and, some would claim, creating dissension within the farming community.
When it came to deciding on how to divi up the dosh for SFP's, it is no surprise agreement was impossible. The market, not the most friendly but nevertheless generally a respected arbitrator, had been decoupled. Scotland and Wales went one way, that of the historic basis for calculating individual farm payments, and England started to go another with phased in average payments.
But this divergence was just the beginning. The ink was hardly dry on the English decision before concerns were being expressed on the impact of the arrangement on certain sectors of farming and hence by implication the future character of the sacred countryside, something more critical than farmers' welfare.
The government appears to have been successful in manoeuvring farmers into virtual political non existence. But awkwardly the countryside has and will continue to be shaped through the activities of farmers which are influenced in turn by economic reality.
When farm support programmes were linked or coupled to the market, they tended not only to stabilize farm income but also the behaviour of the most critical of countryside species, the working farmer, towards its habitat.
With that stabilizing influence gone, the government is not only faced with micro management of the countryside in terms of beetle banks, field boundaries, stubble management and such, but macro managements of whole geographic areas. Providing a suitable environment for the reestablishment of bitterns, twites or sky larks, is likely to less troubling than that for the working farmer, once it has decided to stop working.
As the SFP's will surely generate more challenges outside Brussels, than the collective intelligence within Brussels can handle, European agriculture is in for some very uncertain times.
April 2004
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