Andrew Arbuckle: Big winners and big losers in proposal to switch to area-based support

Not just a phrase, more a clichd phrase. "There will be big winners and big losers" was used to describe the after-effects of the proposed changeover to an area-based support system.

Throughout the country there will be 25,000 current recipients of Single Farm Payments working out on which side of the line they will be if the Pack proposals make their way into CAP reality.

The first loser will be Scotland and, indeed, other parts of the UK and member states in western Europe. For despite the warm reception the new EU Commissioner Dacian Ciolos has received, there are two big problems in reforming the CAP.

There is the economic pressure to reduce the overall size of the CAP. Countries such as Greece, Spain and Ireland are financially crippled. Others less so but almost all want to reduce the CAP cash.

Then there is the redistribution of monies so new member states in eastern Europe will increase their share of support. You can bet their MEPs, who for the first time have a say in the final package, will support such a move.

At home, the losers will include those cattle and sheep producers who kept fairly intensive enterprises. The rolling together of Sheep Annual Premium, Suckler Cow Premium and Beef Special Premium to make the Single Farm Payment is now being unrolled into fields and it provides a pretty thin layer of cash.

Pack suggested two-thirds of existing money, say 300 million, into the area pot. He also mentioned it would now have to cover roughly five million hectares. Even if differentially spread across five different land grades that will not produce a great deal of cash.

Winners? Well, if the decision is to include forestry ground, then that sector will win. So will all those who currently receive no SFP, those who own so-called "naked acres". But the biggest winners of all will be civil servants, advisors and consultants because the proposal as it stands is very complex to implement and equally so to audit.

A few examples of this complexity: one part of the area payment proposal suggests there will be an element of payment based on stocking density. This figure rises and falls on most farms as stock are born and stock go off to market. An arable farm that finishes cattle will have a high stocking density in the winter months and possibly none in the summer. When will be stocking density be checked and who will carry this out? One farmer who was thinking this through said: "We are back to counting sheep again."

The area payment is suggested to be based on the dominant soil type per field. There are about 40,000 holdings in Scotland and if they have a dozen fields per farm, there will be half a million fields to designate. So some preparatory work is needed.

The area system has to be dynamic so that checks and changes will be made on an annual basis. Thus, a farm that received payment last with the livestock density bonus might slip below that the following year.

Then there is the Top Up Fund into which all farmers can bid in return for achieving set targets. One example given is for livestock producers to have an animal health plan. This is very laudable but can we get an efficient, workable, easily checked scheme? Does it mean the local vet drawing up a plan of action for the farmer and then coming back to see if these have been achieved? If so, who checks the vet?

It might be part of the plan on eradicating Bovine Viral Diarrhoea but this will need a programme leading towards it, along with penalties if targets are not met.

The Pack inquiry also suggested that improved efficiency of nitrogen might be a public benefit which farmers could include in their bid to the Top Up Fund. Will this be based on maximum levels of application and, if so, who will decide these and will this be on a farm-to-farm and crop-to-crop basis? Again, who will check?

The report also suggested water management might also be included in the Top Up Fund. Does this mean no leaking water troughs or does it mean no spray irrigation on sunny and windy days when up to half the water evaporates before it hits the crop? Again, I suppose we need lots of inspectors to ensure compliance.

I apologise to Brian Pack and his team. I do not want to place hurdles in any move from the present position where so much money is going out of farming.

But I am left to the conclusion that the big winners will not be those directly involved in producing any more beef, lamb, cereals, potatoes or other food.

The winners will be those who will write policy papers and those who will tick boxes.