MEP Lyon dismisses likelihood of sudden change in subsidies

THE perception that EU farm support will undergo a radical change in 2013 was brought into question yesterday by one of the politicians at the core of the proposed change.

Liberal Democrat MEP George Lyon said he expected the current system of historic farm payments to continue well beyond the changeover date.

Speaking to the annual meeting of the Scottish Beef Cattle Association in Edinburgh, he said any change to an area-based system could be achieved only over a long period of time.

He pointed out that only two EU countries, England and Germany, had gone for an area based system at the last Common Agricultural Policy (CAP) reform. Both had had to phase in the changes over several years.

If such an area-based system was introduced, it was likely to bring a fair bit of financial change for many farmers, creating big winners and losers. As such, it was unlikely that politicians would "jump over the cliff edge" and go for a quick shift in policy.

Although elected as an MEP only last June, Lyon, a former president of NFU Scotland, has placed himself in a central role in deciding the future role of the CAP as he will bring forward the report from the European Parliament.

He also ruled out any possibility of support being directly linked to production. That was a big "no-no" as far at the World Trade Organisation was concerned. The United States is facing a challenge to its support system based on production, as this is seen as distorting trade.

There is a small option that would allow 5 per cent of the total Single Farm Payment to be linked to production but, as Lyon pointed out to the beef producers, the sums involved were so small this was unlikely to halt the decline in cattle numbers in Scotland.

The answer to the shape of future support seemed to him to lie with delivering non-production measures such as benefits for environmental projects or climate-change challenges.

"There is real scope for supporting livestock production in Scotland through land management schemes with farmers being paid to deliver agreed objectives," he said. The big problem for the agricultural community may not be how future support is delivered but the overall size of the CAP budget because there is now great pressure to reduce this part of EU expenditure.

Part of this comes from countries such as Ireland, Greece and Spain who are close to defaulting on their financial commitments to the EU and who, ironically, have been major beneficiaries of the CAP in the past.

He added that the next UK government would face a major task in dealing with its current structural deficit of 14 per cent of GDP. All of this creates a pretty bleak background to negotiations on the future of the CAP.

One of the big pluses was the increasing importance of food security in future as governments are beginning to realise that home-produced food is politically attractive.

The climate-change issue was another where farmers would be expected to play a bigger role in helping reduce greenhouse gas emissions.