Split opens up over future of support for Europe's hard-pressed farmers

UK Rural Affairs Secretary Caroline Spelman made the case for phasing out support for food production but appeared to backtrack speaking to journalists after delivering her prepared paper.

Discussing proposals from the European Commission for reforms of the Common Agricultural Policy, Spelman said it was astonishing that the commission's views barely acknowledged the hard times facing Europe.

"There's a need for a reality check," she said. "The proposals do little to create the dynamic strategy required to take the industry forward. Now is the time to make very significant progress towards reducing our reliance on direct payments. Rising global demand for food and rising food prices make it possible to reduce subsidies and plan for their abolition."

Speaking later, Spelman refused to speculate on how quickly the withdrawal of direct support could be achieved but suggested it could be years away.

"It will come in time as food prices rise," she insisted. "Our job in the interim is to provide the resources to allow the industry to adapt," she said.

Her paper welcomed the commission's proposals for further moves towards market orientation and international competitiveness but suggested a much more ambitious approach was required.

She said she was particularly wary of proposals to "green" payments to farmers under the Pillar 1 payments to farmers for agricultural production and called for a great share of limited resources to be allocated to Pillar 2 support for rural development.

But Scottish MEP George Lyon argued this would amount to the nationalisation of support as the allocation of Pillar 2 payments was decided by individual states while Pillar 1 was a common policy throughout the EU.

Speaking from Aberdeenshire last night, Brian Pack, who produced the Pack Inquiry report into future agricultural policy in Scotland on behalf of the Scottish Government, described Spelman's view as "flawed".

He said: "Direct support can be fully justified as it compensates EU farmers for the far higher production costs they face for operating in Europe and far higher demands for animal welfare and food safety."

Pack said he was "gravely concerned" about the suggestion that Pillar 1 funding should be switched to Pillar 2 which indicated the UK government would be far happier to pay farmers for the public benefits they deliver rather than producing food.

"Spelman seems to have forgotten that, without a vibrant agricultural industry, there is no means of delivering public benefits," said Pack. "Her position is impossible and a very expensive road to go down."

Scotland's Cabinet secretary for rural affairs, Richard Lochhead, said last night that Spelman's speech would set alarm bells ringing in Scotland. Most farmers would struggle to tell the difference between her vision and that of her predecessors in the previous (Labour) government.

"The UK is continuing its fixation about ceasing direct support and cutting the CAP budget rather than paying attention to the needs of our farmers, many of whom are asked by the EU to meet higher standards than the producers Spelman wants them to compete against," said Lochhead.

Direct payments, he said, were the key to the continuation of the success of Scottish agriculture.