Originally from: PoppaC
                        
http://icteesside.icnetwork.co.uk/0400business/northernfarming/content_objectid=13970077_method=full_siteid=50081_headline=-CLA-adds-to-warnings-name_page.html

CLA adds to warnings
Feb 20 2004

By Jennifer Mackenzie, The Journal

The Country Land and Business Association is adding its voice to the warnings that Margaret Beckett's "progressive hybrid" system of farm payments will potentially threaten the environment.

The Secretary of State for Environment, Food and Rural Affairs, announced that England is to adopt the progressive hybrid system, despite both Scotland and Wales adopting a system based on historic subsidy payments which means that farmers will, over time, receive subsidies for the amount of land they farm, rather than the food they produce.

Inevitably there will be winners and losers in such a scheme, but the CLA is now warning of a potential threat to the environment, as farmers in upland areas designated as Severely Disadvantaged Areas will receive considerably less subsidy than other areas; effectively losing any incentive to continue farming at their present rate of activity.

This, the CLA believes, may result in depopulation of upland farms, with the landscape being left to look after itself.

Douglas Chalmers, CLA regional director North, said: "We have always been worried that farmers in marginal areas may simply accept the Single Farm Payment and reduce their farming activities, especially where the operations themselves are unprofitable.

"While we accept that there has to be a differentiation between highly productive lowland land and more upland areas, I am concerned that the combination of using SDA designation as the break point and the large difference between payment levels may lead to some farming families being unable to remain on the land.

"Facing lower incomes and potentially lower land values than their next door neighbours and others further down the valley, some families will be unable to continue living where they do.

"Although we welcome decoupling of payments from production, we were worried that marginal farmers might scale back, leading to social and economic repercussions elsewhere in their communities and in industries dependent on agriculture.

"It may actually be worse now. Any well-run farm business which has been investing recently, yet finds itself in an area where the RAP is almost £150 per hectare less than other farmers may not be able to continue. These payments are now for farmers to provide farming's `public goods'. If farmers and their families leave the uplands, taking their experience and expertise with them, who will maintain the countryside we all place such store on? These skills are irreplaceable and the risk that decoupling farm support in the uplands will create exactly the opposite effect as was intended should be taken seriously."

Dairy incomes on smaller units are likely to drop by around £14,000 following the Government's decision to phase out historic payments and move to regional payments by 2012, says William Waterfield of the Farm Consultancy Group. "These businesses are typically family run and represent more than 45pc of our dairy holdings, making them the life blood of the industry."

Tenant farmers in this group, which on average will have 80 cows, will be hit even worse, as they have more limited opportunities for expansion or diversification. "But how the milk price reacts will be critical," says Mr Waterfield. "The Milk Development Council estimates that prices could fall by more than 4ppl as intervention prices and quantities are reduced." Another major issue is the value of the quota derived from the decoupled payments. "Under historic payments, the possible income to be derived from the dairy cow premium was 20ppl of quota owned spread over 12 years. Instead, we are looking at just under 10ppl of quota owned over eight years.