CAP support payment reform could disadvantage organic farmers

Reviewing the proposed system

Initially, the payment will be a mixture of two calculations: the first is based on how much a farm has historically received in subsidies (individual historic entitlement; IHE). The second is a flat rate based on the amount of hectares farmed (regionalized area payment; RAP).

By 2012, historic payments will be completely replaced by regionalized area payments.

2005
2006
2007
2008
2009
2010
2011
2012
RAP
10%
15%
30%
45%
60%
75%
90%
100%
IHE
90%
85%
70%
55%
40%
25%
10%
0%


February 20, 2004, organic-research.com/Soil Assoication: The UK’s Department for Environment, Food and Rural Affairs (Defra) has announced plans to restructure agricultural support in England through the Common Agricultural Policy. While the news of a restructuring has been a welcome announcement for the organic community, the Soil Association, the UK’s largest organic certifier, is concerned that the proposed support payment structure will do little to propagate organic farming in the UK.

Under the initial proposal organic farmers will have to wait eight years before feeling the full benefit of the payments. In Scotland and Wales, where payments will be based solely on historic payments, organic farmers will permanently be at a disadvantage.

Basing future support on historic payments will leave organic farmers at a disadvantage, the Soil Association argues, because organic farmers have historically received up to a third fewer subsidies then conventional farmers. While regionalized payments would provide a more equal basis for determining allocations, the Soil Association worries that the systems eight-year payout plan will continue to leave organic farmers at a disadvantage.

"Regionalized payments will benefit organic producers who had low payments in the past or who have not previously received any support, such as those involved in horticulture. We are concerned that it will take several years before this payment makes any real contribution to their businesses," says Phil Stocker, Head of Agriculture at the Soil Association

However the system still gathers more support then the one chosen by Scotland and Wales, who have opted for payments based solely on historic payments. Since payouts to organic farmers have historically been less than those received by conventional farmers, opponents of the proposal worry that current organic farmers will be at a permanent disadvantage to transitioning growers. The Soil Association cautions that unless an effective appeals procedure is introduced this method of payment could well lead to non-organic producers with high historic payments, converting to organic production and being able to undercut their existing organic neighbors who may receive much smaller payments.