Monday, September 26, 2022

New government may row back on farm subsidies

The Truss government is reviewing farm policy and may delay the phase out of the domestic version of the CAP Basic Payment due in 2027.

The NFU has been banging the food security drum, but the Government seems to be more concerned about breaches in the blue wall after two rural constituencies were lost to the Liberal Democrats in by-elections.

The Treasury has always been opposed to the extent of farm subsidies, both because of their cost and the weak relationship with desired policy outcomes.   Delaying their phasing out would cost money, but with the Treasury under new management, fiscal prudence has been effectively abandoned by what is a new Government.

The Government is also reviewing plans to make environmental payments for 'public goods' under the ELMS scheme.  The roll out of this has been slow, but farmers taking part in the pilot were angered by a press report that it could be scrapped.

Conservation groups had already made clear their anger at the threat to environmental rules in the investment zones announced in last Friday's 'mini' budget.  The National Trust commented that scrapping environmental payments would 'squander one of the biggest Brexit opportunities for nature.'

Farmers are also concerned that a reversion to payments based on land area rather than public goods would be more vulnerable to being reversed under a future government.

No final decisions have been taken, but kites are being flown.

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