Andrew Arbuckle: Complexity of CAP after latest reform brings joy to the advisers

Europe’s moves to get more young people into farming – vital for the industry’s future – are tied up in complexity

AGRICULTURAL journalists live a varied life. One day we can be at a livestock sale full of animal smells and sounds; the next can be in some conference hall in the rarefied atmosphere of high political thinking.

On those days, the latter generally concentrates on the latest machinations on the Common Agricultural Policy (CAP). I attended one of these meetings last week and, as I scanned the room, I reckoned most of the bankers, consultants, advisors or lawyers there would charge £100 per hour for their advice, so I was in the midst of pretty high-powered thinking or charging.

CAP reform is not the subject of choice for many on a Mastermind-type competition but it is one where big bucks can be made by those who master the fine detail. I know of several individuals in the farming community who are millionaires as a result of spotting loopholes in previous reforms of the CAP structures, and I am sure there will be scope for money-making in this changeover.

Even more so as Richard King of Andersons, who was presenting the information, stressed that far from simplifying the CAP, the latest proposals would make it far more complex.

I swear I could almost hear hands rubbing together at the sheer joy this news brought to the consultants in the room. In their terms, complexity means experts will be needed to untangle the morass to best advantage. In short, CAP complexity means cash to industry experts.

After admitting that he had read all 1,200 or so different proposals within the reform package, King dived deeper into its murky depths. My mind wandered a little as I wondered how it could have become so complicated. The answer is pretty straightforward. The politicians start with an idea, say that more young farmers should come into the industry, and then pass it to their civil servants to come up with a policy.

The policy has to cover some 27 member states, each with differing cultures and farming structures, so by the time the civil servants are finished with the proposals the whole situation is hedged with conditions.

The current young farmer proposal is that up to 2 per cent of the total cash coming to a member state can go into a young farmers’ scheme. They have to be “natural persons” – it’s the first time I have heard them so described, but apparently all it means is they should not be running limited companies or possibly even in business partnerships. So there is a bit of fun there if anyone wants a limited duration tenancy.

One of the easier conditions is they must be aged under 40, but another limits the acreage for which the “young farmer” may receive help to 54 hectares, which will not cover much of a Scottish hill farm. At the end of all this, the support will be in the form of a top-up of 25 per cent of the farmer’s entitlements. And that is only a brief and incomplete summary of a single part of the whole package.

By now I had mentally drifted back to King, who had turned his focus on who will be entitled to get the cash in the reform package. At this point his audience leaned forward and copious notes were taken.

The decision seems to have already been taken, with those who have applied for Single Farm Payment (SFP) this year being the lucky “ticket” holders; an entry if you like into the new Basic Payment Scheme, which will replace the SFP.

King continued to use the word “ticket” in his address and it is a useful concept, especially when he stated that without such a pass, there would be no money; thus giving a particular problem for new, not young farmer, entrants. To avoid inflexibility, it appears those “tickets” can be sold; they cannot be subdivided, which might make it more difficult to pass them on. However, I am pretty sure that some of those present thought, “now here is a little business opportunity for us”.

Elsewhere in his talk, King mentioned that only direct labour costs could be subtracted from the total subsidy payments. Again, this will lead to changes in businesses as farmers and family return to the workforce.

I do not for one minute decry the intentions of any professional adviser or farmer in adapting to the forthcoming changes. My regret is that so many brain cells are being used up in trying to deal with layers of artificial conditions and so few in producing more food, more sustainably and more economically.