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Lyon to make speech to Lothian and Borders NFU
January 24, 2010 12:00 AM
In his speech to the Lothian and Borders NFU George Lyon, Liberal Democrat MEP for Scotland, will explain how Scotland can learn lessons from Germany and England on how to move from historic SFP systems to Area based ones.
Last week, Mr Lyon spent two days in Germany meeting Agriculture Ministers, leaders of the German Farmers Association and the Chairman and Members of the Agriculture Committee of the German Parliament to discuss CAP reform.
In his speech, Mr Lyon will say:
"There is no doubt that if Member States agree in the CAP reform to move to area based SFP payment systems they will insist on a long transition period as a fundamental part of the agreement.
"It will then be for individual Governments and their farmers to decide on a voluntary basis whether to take advantage of that flexibility or not.
"If we look closely at how both England and Germany made the transition we can see two different approaches.
"In England the changeover was an administrative disaster.
"In year one they divided England into three regions and the SFP payment was made up of 90% historic and 10% area.
"In year two the SFP was 80% historic and 20% area.
"By year seven of the evolutionary process the historic element is down to 30% with the goal of the payments being area only by 2012.
"Historic payments will have lasted for 9 years in the phase in of area payments in England.
"The UK Government made a huge mistake by failing to exclude golf courses, horse paddocks and big gardens which resulted in approximately seventy thousand extra claimants in 2003.
"That mistake led to huge administrative costs and a watering down of payments to genuine farmers and massive delays each year in calculating the amounts and getting them paid out on time.
"In Germany they chose a slightly different route.
"In 2005 as a first step they took all their beef payments, mostly BSPS payments, which accounted for about 30% of their total SFP and they converted it into a flat rate hectare payment across the whole country.
"German farmers SFP payments in 2005 were therefore 30% area and 70% historic.
"That ratio is changing by 10% each year and by 2012 the historic element will have been phased out.
"Two different approaches - one a nine year phase in, the other a seven year. Neither of them are pain free for farmers.
"In Germany the perceived winners were livestock and milk producers. In England I suspect the same is true although there are big individual winners and losers within each sectors.
"It is widely accepted that Scotland is heading down the area payment route.
There are lessons to be learned from both Germany and the England.
"In Germany according to the German Farmers Association there appears to have been fewer administrative problems or the delays which has so bedevilled the English system.
"Just financial pain for the winners and losers.
"This may be down to Germanic efficiency rather than any other factor.
"Scotland would do well to examine how they went about it before any final decisions are taken on the right way forward.
"The English system can also teach us all the pitfalls to avoid and is worth examining to make sure we avoid the mistakes they made.
"In Scotland we have an estimated 1.7million hectares without SFP attached.
"In moving to an area based payment system there is potential for many new claimants, a dilution of payments and a huge bonanza for anyone who happens to own large tracts of naked acres.
"The Pack Inquiry interim report highlights these fundamental issues and puts forward some tentative solutions.
"We need to hear loud and clear from the industry what it thinks before final decisions are taken.
"I look forward to hearing that debate."
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