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Last Updated: Wednesday, 1 September, 2004, 11:56 GMT 12:56 UK
The return of the countryside
By Tim Hirsch
BBC environment correspondent

If you want an illustration of the changing face of European agricultural policy, take a trip to Otmoor in Oxfordshire.

This low-lying fenland fed by the River Ray, a tributary of the Cherwell, once made up a large system of water meadows which flooded in winter, providing an important habitat for wading birds such as lapwing and snipe, as well as a range of rare marshland plants.

Otmoor RSPB
Otmoor is being reflooded under reworked EU policy (Picture: RSPB)
In the 1970s, farmers took advantage of generous grants from the European Economic Community, as it was then, to "improve" the land by draining the water away and converting it to cultivation of arable crops such as wheat and barley.

At the time, the Common Agricultural Policy was all about maximising food production, encouraging farmers to grow as much as possible, with a guaranteed minimum price to ensure that they did not have to worry about the surpluses built up by this system.

Or about the impact on wildlife from the conversion of natural spaces to intensive agriculture - a process now widely recognised as disastrous for a wide range of native British species.

Thirty years on, the same farms in Otmoor are once again benefiting from EU grants. This time, Brussels is helping to fund the re-flooding of the land and the restoration of reedbed habitats to encourage the wildlife to return.

Single subsidy

Some of the same contractors who carried out the original drainage work have even been taken on to reverse the process - and part of the moor is now a nature reserve managed by the Royal Society for the Protection of Birds.

This is a particularly striking example of a change in the direction of EU farming policy which could have a profound impact on the British rural landscape in the coming years. But contrary to the impression sometimes given, it does not mean that the bill for the European taxpayer will be any lower for the foreseeable future.

Otmoor RSPB
Wildlife is being encouraged back to Otmoor (Picture: RSPB)
Just how radical that change will be should start to become clearer from next year, when a major reform of the Common Agricultural Policy (CAP) starts to take effect.

Agreed last year at a series of fiercely-contested negotiations between EU farm ministers, the reform is designed to break the link between the 44bn euro (30bn) annual payments made to farmers and the amount of food they bring to market.

The eye-wateringly complex series of subsidies ranging from the suckler cow premium to arable area payments are to be phased out, and replaced by a single subsidy allocated to each farm regardless of what is produced from the land.

The idea behind the change is to remove the perverse incentives which have encouraged farmers to rear more livestock and grow more crops than the market demands, leading both to environmental damage and to surplus food which is then "dumped" on international markets - threatening the livelihoods of poor farmers in developing countries.

It is also supposed to simplify the system. But simplicity and EU agriculture are rarely to be found in the same sentence.

The idea behind the change is to remove the perverse incentives which have encouraged farmers to rear more livestock and grow more crops than the market demands

So followers of the reform process now have to contend with a whole new lexicon of jargon to navigate through the changes - a brave new world of cross-compliance, modulation and degressivity.

One complication is that although the broad principle of "decoupling" was agreed last year, the price for getting countries such as France on board was to allow individual member states to choose a gradual or more rapid move away from production-based subsidies.

Also, the reform has for now left out important sectors of European agriculture, including the heavily-supported sugar beet industry which provokes some of the strongest criticism from aid groups such as Oxfam looking at the impact of subsidised exports on poor countries.

Fewer livestock

But in England at least, the environment secretary Margaret Beckett has made it clear that she wants to move as quickly as possible towards a full break from the old regime, rewarding farmers who do most to help the environment rather than those most expert at playing the subsidy system.

Sheep graze in the Lake District
The relationship between farming and environment is complex
Even within the UK, farmers in England, Scotland and Wales will be facing different sets of rules by which the new payments will be calculated, and it will be some time before it is clear exactly how the changes will affect the landscape.

One concern expressed by the Country Land and Business Association is that with the removal of specific livestock subsidies, many farmers will feel it is simply not worth their while rearing animals, and large parts of the countryside could become empty of cattle and sheep.

Environmental groups argue that if this means a reduction in the damage caused by over-grazing in the past, it will be no bad thing.

One thing is for sure - farmers are not being left high and dry by this reform, and if anything, new criticisms could emerge that instead of being paid to produce food, they will in future be paid for not doing very much at all.

But if it works in the way it should - a big if, perhaps - the money we continue to put into the countryside will at least be used to create the landscape and environment society wants, rather than food we can do without.

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