The NFU is steeling itself for battle with the government over farming subsidies, following the publication of a government-commissioned report on the future of agriculture.

The Policy Commission on the Future of Farming and Food's report, which was handed over to Defra secretary of state Margaret Beckett by commission chairman Sir Donald Curry on Wednesday, said that subsidies to farmers for food production under Europe's common agricultural policy (CAP) were unsustainable.

It recommended that CAP in its present form be scrapped, but that for the foreseeable future, the £3 billion a year in subsidies should be redirected into environmental and rural development schemes. It proposed money be redirected via a 'modulation' funding mechanism, whereby 10 per cent of farmers' direct EU support grants are switched into green schemes by 2004.

The NFU categorically rejected the commission's economic proposals. President Ben Gill said: 'I am fundamentally opposed to this scheme. With the industry in its current dire state, it is hardly surprising that we oppose suggestions of taking money from farmers in this way. It equates to taking away the cash that farmers simply do not have.' Gill took great pains to stress that the NFU was not opposed to rural development and environmental spending, but was opposed to it being paid for in this way.

NFU vice-president Michael Paske and environment minister Michael Meacher promised each other a hard fight over the issue at the Soil Association conference last weekend.

However, the NFU conceded that the report contained many positive points – including enhancement of the little red tractor logo, a review of the supermarket code of practice and the Agricultural Wages Board and better checks on imported food.

But the union added that the commission had overlooked certain important issues, such as the cultivation of non-food crops to increase farming profitability.

The Policy Commission's report, which covered every stage of the food chain, also proposed that organic farming be encouraged – pleasing the Soil Association – and retailers given tax breaks for stocking locally produced food.

It said there should be better labelling on food, less use of pesticides and more schemes to encourage healthy eating.

Prime minister Tony Blair and Margaret Beckett both praised the commission's report, and pledged their commitment to farmers when acting on the commission's recommendations.

Blair set up the Farming Food and Policy Commission in August 2001 during the foot and mouth crisis. Its remit was to advise the government on ways to create a sustainable, competitive and diverse food and farming sector in England. l

Topics