Far from being the "level playing field” some enthusiasts claim, EU subsidies often work to undermine UK farm prices. When the cheque from the RPA arrives (or should arrive) each December, many farmers forget their that direct competitors in other EU counties also get a subsidy cheque, and it’s often much larger. This pushes down the value of our products and in some cases directly subsidises food imports into the UK, undermining our own farmers. How can other countries afford to pay more? The single biggest reason is that the UK foots the bill.
The Common Agricultural Policy (CAP) costs around £44bn per year. The UK’s gross contribution to the EU is over £14.3bn a year- equivalent to a quarter of the entire CAP budget. Of this we receive around £3bn back in farm subsidies. Contrast this with Ireland. Our Celtic neighbours farm just 3% of EU farmland yet claim 4% of the CAP. Put that another way and Irish farmers, our principal competitors in the vitally important dairy and beef markets, receive roughly 33% more subsidy per hectare farmed than we do. And how much more do the Irish contribute to the overall EU budget to justify this higher payment? Nothing- they are net recipients of EU funds. Now you know why our leading supermarkets so cunningly stock “British and Irish” beef and cheese.
In the medium term the writing is on the wall for the CAP (the EU just can’t afford it), but the best way of getting a level playing field is for the British farmer and taxpayer is to stop subsidising the competition as soon as possible!
I can already hear EU enthusiasts cry: “But they’ll cut off our trade in retaliation!” Really? The UK runs a trade deficit with the EU and has done so for years. Put simply, we buy more from them than they buy from us. Are they really going to stop trading with their biggest customer?
I'm busy working on my blog posts. Watch this space!