Significant redistribution of support with winners and losers'

1
Significant redistribution of support with
winners and losers.!
2
Chart 1 Distribution of winners and losers from
a uniform flat rate area payment (219/ha)
(Source Defra)
winners
losers
3
Some initial farmer feedback..

• I will convert my 1200 acres of arable to grass
  and establish an extensive beef system
  large, well established Kent farmer,
  April 2003
• I will sell most of my sucklers and just ranch
  and outwinter the few needed to keep receiving
  the decoupled payment
  well briefed Essex Coast ESA
  farmer, April 2003
• These proposals will drive down rentals values -
  arable land without entitlements will fall to 20
  per acre
  dairy/ arable
  farmer in East Mids, May 2003
• I will retire to the Bahamas
  intensive (overstocked) Dartmoor
  farmer, June 2003

4
Conclusions...Defra research findings

• Decoupling is expected to
• Reduce the levels of production bringing about a
  closer market orientation of agriculture
• improve farm incomes (reduced supply, increased
  prices)
• release resources (labour and capital) for
  agriculture to other less supported sectors

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And for the environment?POSITIVE aspects of
decoupling..(GFA-RASE/ IEEP Research)

• reduction of inputs
• increase in fallow land (but management
  important)
• removal of incentive to overgraze, and
• greater incentive to enter agri-environment
  schemes

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And for the environment?NEGATIVE aspects of
decoupling..(GFA-RASE/ IEEP Research)

• undergrazing or cessation of grazing
• reduction in suckler cow numbers and an increase
  in sheep (in mixed grazing systems)
• intensification and specialisation in some
  sectors
• reductions in labour force re. environmental work

Many farmers are attracted to the concept of a
single farm payment. but who will get what ?
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From a Rural Development perspective..

• More funds to Pillar 2 via compulsory modulation
  starting in 2005
• greater allocation to UK (9.8 cf 3.5)
• transitional arrangements will enable UK to roll
  out ELS and may allow regional variation to
  modulation (i.e. different rates in England)
• farmers with no production incentive may be
  more receptive toward non-farming options..

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From an Agri-environment perspective..

• What might cross-compliance deliver in relation
  to birds, habitats and wild flora and fauna ?
• Where does ELS and HTS fit in relation to a
  decoupled world with cross-compliance ?
• What is Annex IV all about ?
• Where does the Farm Advisory System fit ?

9
From a Commodity Market perspective..

• The French will probably go for partial
  decoupling in 2007 retaining
• 25 of AAPS
• 40 of BSP
• 100 of SCP
• What impact will this have on EU supply
  domestic farm-gate prices in the UK ?

J aime le PAC..
10
From a Land Market Management perspective..

• How will SFP trading work ?
• How will Landlords and Tenants react ?
• What will cross-compliance involve ?
• How will good agricultural and environmental
  condition be defined and monitored ?