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TLIO LAND ESSAYS 3 TLIO
European Agricultural Subsidies and Rural Employment
Richard Moyse

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'In 1995 the Commission itself has made a significant effort aimed at simplifying its own regulations . . .'

The Agricultural Situation in the European Union, 1995 Report, European Commission.

'The value of the ecu in the currencies of Member States and non-member countries is determined each quotation day. It is based on the dollar parity at the 2.15 p.m. fixing for the currencies of the Member States.'

CAP Working Notes, The Agrimonetary System in the Single Market, European Commission.

One person's simplification is another's gobble-de-gook. I have been trying to make some sense out of a pile of EC publications, in order to find out if the payment of any EC agricultural subsidies is linked to the number of people working the land. In other words, is there any element within the Common Agricultural Policy which is aimed directly at keeping farm workers working on farms?

The publications which from which I have been attempting to extract this information include the European Commission's 1995 report on "The Agricultural Situation in the European Union", and a number of issues of CAP Working Notes, each of which deals with a different facet of the agricultural economy. A feature of these documents is their fine blend of huge numbers in tiny type, and agro-economic jargon. Deciphering it was not easy, and what is set out below is as much as I was confidently able to extract from it all. I'm glad I'm not a farmer, because it must be a bloody nightmare.

'The net value added at factor cost per annual work unit rose by 17.3% [between 1981 and 1993]. This result is largely due to the considerable reduction in the farming labour force since the early 1980s . . . and consequently to inc reased labour productivity.'

The Agricultural Situation in the European Union.

'Net value added' is Euro-speak for the amount which farms earn. Between 1990 and 1995, the amount of earnings which each farm worker brought to the farm increased by nearly 20% across the whole of the EU. There is huge variation between countries, with the UK, Ireland, Spain and Germany showing the greatest rises, while Italy, Portugal and The Netherlands show a drop.

This increase in income (for the farm) per worker is simply because there are less workers, who are using more machinery, and, presumably, working harder. In the UK in 1981, there were some 370,000 workers in agriculture, forestry and fishing; in 1994, there were just 280,000, a drop of 24%. Meanwhile, between 1981, and 1993, UK farms acquired an additional £179,000,000 worth of plant and machinery, and £83,000,000 worth of vehicles. Across the EU, the number of people employed in farming has dropped by nearly 3% every year since the early Eighties.

It can, of course, be argued that, because the European Commission guarantees a certain level of income to farmers, then it must be supporting agricultural employment, so that without the CAP, there would be more farm workers on the dole. But even this assertion is questionable: the CAP is both complex and highly interventionist, and who could really say how the agricultural economy would look without all the economic manipulation, grant payments and aid?

The truth is that the CAP supports agricultural production, not farmers. Only where the farming of economically marginal land is the basis of the local economy is any money aimed directly at keeping farmers on the land, and then it is a small sum when compared to the billions put into mainstream agriculture.

'Aid for skimmed milk used in animal feed: this aid is granted in respect of skimmed milk processed into compound feedingstuffs and skimmed-milk powder intended as feed for calves. It makes it possible to dispose of most of the skimmed-milk powder produced in the community.'

CAP Working Notes, Milk and Milk Products.

CAP, in the meantime, is preoccupied with trying to match the amount of food produced with the amount consumed and exported, without causing too many big ripples in the agricultural economy. The EC keeps coughing up to support the farming industry (for instance, by paying compensation to exporters if world prices are lower than EU prices, or by buying surpluses at a set price), and they keep trying to find new ways to 'dispose' (their word) of produce. Hence the apparent madness of using excess skimmed milk powder to raise more calves. Money is also available to finance schemes to encourage the consumption of apples, citrus fruit, and olive oil within the European Community.

'. . . flight from the land may depopulate certain rural areas and compromise the harmonious and balanced development of the European Union as a whole.'

The Agricultural Situation in the European Union.

In 1994, the EC supported the production of arable crops, meat, fruit, vegetables, tobacco, wine, olive oil, and other agricultural produce to the tune of over £28 billion. Realising that the farming of marginal land is becoming less and less viable, although perhaps not making the link with its own support for intensive agriculture, the EC also put around a tenth of this amount (£2.6 billion) into support for 'less-favoured rural areas'. These are areas where the rural economy is 'lagging behind' the rest of Europe, or where farming is less economically viable. It covers some 56% of the EU's farmland, including all of Ireland, Portugal, Spain, East Germany and Greece, much of Scotland, Wales and Italy, and, frankly, an awful lot of the rest of Europe, particularly in the uplands.

In 1994, 'compensatory' p ayments were made to more than 1.1 million holdings within less favoured areas in the EU. The primary aim of these payments was to offset the higher costs of farming upland areas and other marginal land, and thereby to reduce rural unemployment and depopulation. This appears to be the only part of the CAP which is aimed directly at keeping farmers in work. Payments averaged about £270 for each farm in the scheme. Compare this with the average of over £3,500 in price support paid to each agricultural holding in the EU in the same year.

Apart from this, rural development aid is aimed at modernising farming in areas 'lagging behind' (which includes encouraging farmers to retire early, so that land can be passed to young farmers 'who are more adaptable to the new situation of agriculture'), and, most significantly, at the diversification of the rural economy. The Agricultural Situation report states that people should be encouraged to stay in the countryside 'as far as possible by creating new jobs outside agriculture in sectors like tourism, craft trades, small businesses, relief services, village renovation, and building maintenance to ensure the upkeep of housing or of the many buildings that make up the historic heritage it is so important to safeguard.' It is a statement that carries the incomfortable feel of the countryside as a (barely) living museu m.

'The common agricultural policy is on a satisfactory path.'

Franz Fischler in The Agricultural Situation in the European Union.

Fewer and fewer people make a living from the land, and yet there is no recognition by the CAP that the loss of farming jobs is really a bad thing in itself. Yes, some £300 million is going into direct support for farms on marginal land, but only because the alternative would be the total collapse of the rural economy in those areas. Where intensification and modernisation is possible, then that is the what the EC will pay for. It remains to be seen whether this is good news for rural labourers in Ireland, Northern Scotland, Spain, Greece and other areas where the rural economy is 'lagging behind'.

The 'satisfactory' CAP is being reformed again, just five years after its last shake-up. This time the new buzz-word is 'cross-compliance', a sort of institutional back-scratching exercise aimed at mitigating the worst environmental effects of intensive agriculture. Whether its devastating social effects will also be addressed remains to be seen.


I'm glad I'm not a farmer, because it must be a bloody nightmare. Fewer and fewer people make a living from the land, and yet there is no recognition by the CAP that the loss of farming jobs is really a bad thing in itself.

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