"“We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.” "

Chinese premier Wen Jiabao 12th March 2009

""We have a financial system that is run by private shareholders, managed by private institutions, and we'd like to do our best to preserve that system."

Timothy Geithner US Secretary of the Treasury, previously President of the Federal Reserve Bank of New York.1/3/2009

Wednesday, January 30, 2008

EU set aside zero subsidy policy produces a rapid response by English farmers.

Set-aside was first introduced in 1988 as part of the EU Common Agricultural Policy (CAP) as a simple way (the MacSharry reforms) of dealing with over-production and controlling the supply (and price) of cereals by requiring farmers to leave a proportion of their land out of production - for which they would still receive a subsidy. In the UK a target of a reduction of 10% of agricultural land was to be taken out of production and loud were the cries from tax-payers about farmers being paid for doing nothing - at the rate of 406 euros per hectare last year.

In November the European Commissioner for Agriculture and Rural Development, Danish sprightly 65 year old Mariann Fischer Boel, slammed this policy into reverse gear and announced zero set-aside rate for the 2007-08 cropping season (i.e so far for one year only) . She forecast that this would enable the EU farmers to provide a further 17 million tons of grain for hungry world markets, currently paying record prices for food grains for humans and their animals.

At the same time caps have been introduced on the size of subsidies, - for example the Queen's estates, which received £465,000 in CAP subsidy in 2005, will drop by £140,000 under the new rules. Quelle horreur !!

She also proposes proposes to increase the amount of land a farmer has to own before qualifying for EU aid, from the current 0.3 hectares, to ensure that only genuine farmers receive subsidies.This far sighted lady , who has 3 farms in Denmark also wants to abolish milk quotas by 2015 and eventually all farm subsidies. ****

What glamorous Mrs Fischer Boel (pic) did overlook however is that most of that set-aside land is already being used, (for a different EU program - the production of bio-fuels, not food) quite legally, to grow non-food crops, such as rape and even wheat, most of it for biofuels as well as willow coppice . The EU wearing it's eco-hat is so keen on planet-saving biofuels that it has decided that by 2020 they must supply 10 per cent of our transport fuel, replacing petrol and diesel.

Despite this total and complete contradiction of policies, it also meant that precious environmental benefits would shrink along with the area of fieldside strips, and fallow land.

The increasingly inept and confused Hilary Benn has revealed today in a remarkably swift report produced by DeFRA that the amount of farm land left uncropped in England is likely to fall by more than 50% in 2008.

CHANGE IN THE AREA AND DISTRIBUTION OF SET-ASIDE IN ENGLAND: JANUARY 2008 UPDATE Defra Agricultural Change and Environment Observatory January 2008

Areas in area in margins and corners of fields (which can be only 10 metres wide) is only expected to reduce by 13% but
non-rotational area - out of production > 1 year will fall by 35% and rotational area - land left out of production for one year only - will fall by 85%.

Which shows that Johnny Farmer is extremely sensitive to changes in CAP subsidies and can react with remarkable speed when his income is threatened.

**** Mrs Boel also has her eyes on the 500 Euros spent (wasted) by the EU every year distilling ethanol from surplus wine stocks (usually that stuff indistinguishable from battery acid from Greece) and wants to institute a vine pulling program ( removing 13% of EU vineyards at a one off cost of 2.4bn euros) to reduce wine production and to spend the money saved, on marketing and promoting the decent EU wines to compete with New World and South American wines.

Wine accounts for 5.4% of EU agricultural output and employs about 1.5m (mainly seasonal) people. Average production over the past five years was about 178hl, worth about 16bn euros.

EU wine imports have grown 10% a year exceeding growth in exports In 2005, exports of 13m hectolitres only narrowly exceeded imports (12m hl).

Wine produced but not sold has been steadily growing. It could reach 15% of the EU's total output by 2010/11. The EU wine lake currently exceeds one year's production.

**** Just remember that due to huge incompetence under Ma Beckett the United Kingdom government has been fined as much as £305 million for its failings in implementing the new Single Payment Scheme of the Common Agricultural Policy = 20 % of the £1.5 billion paid out under the Single Farm Payment Scheme in the EU budget year 2004-05.

Not that you would disentangle this easily from the Parliamentary Statement ... "In a written statement to Parliament, junior Defra Minister Barry Gardiner explained there would be "a claim on the Reserve of £305,000,000 of non-cash programme resources to cover provision for disallowance arising from Common Agricultural Policy schemes, most notably the Single Payment Scheme." Full and nasty details in National Audit Office report.

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