CAP 'health check' may impact on subsidy levels for larger farms

The European Commission has today (19th November 2008) started a review of the Common Agricultural Policy (CAP) by way of a 'health check'.

This could lead to restrictions in the amount of financial support the Eastern region's larger farms receive.

Any changes to the CAP will be implemented in theory by 1st January 2009. The proposed changes could include reducing subsidy payment levels, as well as the possibility of modulation and capping.

Jeanette Dennis, a partner in our Rural Group, said: "The current regime needs improvement but member states would be better looking forward to revisiting the whole scheme when the current Single Farm Payment (SFP) system comes to an end in 2012, rather than waste time now on a few tweaks here and there, which would only be in effect for three cropping years."

Defra Secretary of State Hilary Benn will negotiate the CAP 'health check' on behalf of British farmers, and NFU President Peter Kendall will also be in Brussels.

The CAP provides financial support to farmers for a range of farming, environmental and rural development activities, as well as controlling EU agricultural markets.

Jeanette, who ran her family's Norfolk farm for seven years, added: "Those most likely to be affected are the larger East Anglian farming enterprises which may see restrictions in the amount of money they can receive. And we will probably see more questions being asked by Defra on who is the true SFP applicant, and farmers should take care when answering those important questions."

Hewitsons has a wealth of knowledge in agriculture and rural business and is currently a member of the NFU's official legal panel. Partner Deborah Sharples recently held a series of seminars for NFU members on environmental issues and the new Nitrate Vulnerable Zones.

• Hewitsons will be holding a series of briefing sessions for clients on the CAP reform, and anyone interested should contact Jeanette on 01799 582314.