GOVERNMENT SHOULD BE FAIR TO TENANTS IN IMPLEMENTING FARM REFORM

2.12.23pm UTC (GMT +0000) Tue 25th May 2004

Chris Huhne MEP with Hampshire Farmers

Hampshire MEP Chris Huhne said today that the Government should be more careful of the interests of tenant farmers - particularly intensive dairy and livestock producers - in the way it implements the reforms of the Common Agricultural Policy.

Mr Huhne met with leading Hampshire tenant farmers to discuss issues of concern. Hosted by Roger Bazeley, other farmers included Joss Cleeve, Andrew Malyon, Andrew Humphrey, Richard Windebank, and National Farmers' Union secretary Jim Twiney.

Mr Huhne said that he welcomed the break in the link between subsidy and production, so that subsidies would in future be paid as a single payment for the farmer's commitment to act as a countryside custodian. However, a key issue was the basis of calculation of future payments to farmers. If, as the Government proposes, they are based ultimately on the amount of land farmed as opposed to the size of subsidy received at present, this would particularly disadvantage dairy and livestock producers on intensive farms.

Mr Huhne heard that in one typical case, a local milk producer could see his payment reduced from £28,000 a year to £19,000 because of the basis of calculation.

Mr Huhne also said that he sympathised with tenant farmers who found the obstacles to diversification being erected not only by local authorities, but also by their own landlords. In some cases, landlords insist on taking a cut of the profits of a business run from farm premises for which they already receive rent. He said that he hoped model tenancy agreements might allow for and encourage diversification as a way of underpinning vibrant rural communities.

A further major issue of concern to all the farmers was the very substantial difference between the price received by the farmer - for example 18.6 pence per litre of milk currently - and a selling price in local supermarkets of more than double that figure. Mr Huhne discussed ways of reducing the margin, notably by encouraging direct sales from farm shops and farmers' markets. He also said that supermarket competition should be kept constantly under review given the evidence that in many cases, supermarkets are an effective monopoly in their own area.

ENDS