Government: 'We can't crack down on subsidy aristocrats'
The Government risks being powerless to crack down on rich landowners, big business and royalty claiming EU farming subsidies despite wanting to reform hand-outs, the farming minister has conceded to the Western Morning News.
The Department of the Environment, Food and Rural Affairs (Defra) is determining how it carves up around 3.5 billion euros (£3 billion) a year of grants under the newly agreed Common Agricultural Policy (CAP).
But David Heath, the minister in charge, has warned it is "very easy" for large landowners to avoid curbs despite public outrage that wealthy aristocrats, Prince Charles's personal estate and non-farming industries get taxpayers' cash.
Mr Heath, a Somerset MP, dismissed concerns over asking farmers to carry out more environmental measures to get the money as "misplaced".
He said reversing reform would mean returning to over-production that fuelled wine lakes and butter mountains in the 1980s.
Last month, Westcountry MP Andrew George urged the Government to cap the EU single farm payment at 300,000 euros.
In the UK last year 35 landowners claimed more than 1 million euros a year – dubbed "subsidy millionaires" – and hundreds were getting more than 300,000 euros.
Mr George, Liberal Democrat MP for St Ives, said the British government is resisting a £300,000 cap proposed by Brussels.
Mr Heath, also a Liberal Democrat MP, played down hopes well-off claimants could be stopped claiming at the expense of struggling smaller farmers.
He said: "This is something we will be looking at with the options that are available in terms of capping. I would exercise a little bit of caution there.
"My concern would be it's very easy to get round any rules that are applied in this respect by simply disaggregating big holdings – giving different nominal ownership but retaining the same route for subsidy. Sometimes it's not as easy as people imagine."
But the minister said ending the principle of giving out cash regardless of what farmers did with the money could help tackle the controversy, saying payments based on "outcomes" was a better way of ensuring the "taxpayer is getting their money's worth".
He said: "If you are simply giving a single farm payment on the size of the landholding rather than what it is achieving, I think actually you are feeding the view that the big landowners pocket a large amount of money rather than focussing it on places where it will do the most good."
Mr George, a former Lib Dem rural affairs spokesman, said the minister’s comments were “very welcome and a much more encouraging and conciliatory line than I've heard from his predecessor”.
He added: “If we resisted the introduction of a rule or law because we feared that the unscrupulous would find it ‘easy to get around’, then there are many other laws we would never have introduced - from significant road traffic to litter louting and tax rules.
“If the numbers in receipt of single farm payment over 300,000 euros is in the ‘hundreds’ then any alteration in the aggregation of their claim after the introduction of the new threshold would be very conspicuous and easily subject to a potential ‘name and shame' sanction.”
There is concern among farmers about the way the government plans to implement CAP reform in England, possibly transferring up to 15% of direct farm payments (known as pillar 1) to environmental and rural development measures (pillar 2), such as creating wildlife habitats.
The National Farmers' Unions argues English farmers will be at a disadvantage compared to other European rivals, and the South West branch has claimed the industry is "facing catastrophe". Talks are ongoing about how the reform is implemented from 2015 in this country.
Mr Heath said: "Some of the concerns are misplaced. I think pillar 2 is absolutely a crucial element of CAP, because it enables us to target most effectively public goods provided by farmers in the context of somewhere like the Westcountry.
"Take uplands farming on the moors. If we are going to do something effective to support farmers who are farming some of the most marginal areas, then we need to do that through the sort of support we can provide through pillar 2."
Mr Heath renewed a pledge made by David Cameron at the North Devon show last week that British farmers would not lose out.
The Farming Minister said: "People make a mistake is thinking that the transfer of money from pillar one to pillar two means that money is lost from the agricultural industry. It absolutely isn't."
He made clear there would be no turning back from the "trajectory of reform" that will eventually end direct subsidies to farmers altogether.
He said: "We are moving in the right direction, away from the sort of subsidy systems that produced huge distortions in the past. The wine lakes. The butter mountains. We don't want to go back to that sort of thing.
"There was even people saying we should give direct subsidy support for growing tobacco. What sort of nonsense is that?"