Belfast Telegraph

Thursday 17 April 2014

Union still smiling over Single Farm Payment

Farming is a funny old game. On the one hand producers are held at the mercy of world markets which can be viciously volatile but on the other they're supported by one of the most generous payment systems any industry could hope for.

And on occasion the two factors interact.

The Ulster Farmers Union (UFU) stopped short yesterday of complaining about the fact Single Farm Payments (SFP) to Northern Ireland's farmers will fall by some £22 an acre this year, but it had to be seen to be at least slightly irked.

The meltdown in the eurozone economy is to blame for the payment slide as the eroding confidence in the European banking system knocks the stuffing out of the value of the single currency, hence the amount of money paid to our farmers when it's translated into pounds falls.

But the UFU and farmers have, over the last few years, been quietly smiling at this time of year as they watched the pound fall against the euro and the value of their payments rise. This year's backstep is annoying but farmers know they're on the right side of the exchange rate.

And while the UFU wants to change the way the payment is worked out so as to avoid being at the mercy of the currency markets, that's unlikely to happen unless we join the euro and, well, that won't happen.

Of course, there will be many people reading this who will be asking themselves why farmers still get paid a subsidy, one which accounts for nearly 50% of the European Union's budget.

That, as far as the EU is concerned, is the €1bn question and one which stretches back to post-war days when farmers were paid per unit of produce to up production.

Nowadays that payment, based on acreage, is not designed to drive up supply, rather to supplement farm incomes, manage the environment and maintain a level of domestic food security.

How well it achieves these aims and whether subsidies put the world's poorest farmers at a disadvantage are topics for another day but there's no doubt farmers here need to be ready for change.

Upcoming reforms of the Common Agricultural Policy are expected to focus more on the environmental angle and although many in the industry expect EU payments to fall, it looks likely that they won't disappear anytime soon.