Single farm payments must reflect dairy farmers past investment

The new Single Farm Payment must be based on historical entitlement and applied UK-wide if dairy farmers are to be fairly compensated and offered a sustainable future beyond the latest phase of CAP reform, according to the Royal Association of British Dairy Farmers.

Adopting the alternative of a broad-brush area payment would penalise businesses that have invested in their futures and would be disastrous for the sector, forcing many more dairy farms out of milk production, the organisation says.

"The RABDF has made strong representations to DEFRA as part of the latest consultation on CAP reform and this is the most crucial issue in our submission," explained the organisation's chairman Tim Brigstocke.

"We are also supporting the earliest possible decoupling of the dairy premia

- in January 2005 - but only if the Single Farm Payment is linked to farmers' historical entitlement.

"This link is vitally important. If an area payment system were to be introduced, we would be strongly opposed to early decoupling. In this event, we would seek the latest possible decoupling and believe it would be essential for DEFRA to conduct a special consultation with the dairy sector in order to minimise the damage which would inevitably result from such a scenario.

"There's no doubt that this latest phase of CAP reform is going to present considerable financial challenges to the dairy sector, in whatever form the measures are implemented. However, if we can ensure that the Single Farm Payment reflects dairy farmers' historical commitments - and this is linked to early decoupling - we believe this will give dairy farmers the best opportunity to develop competitive businesses for the future.

"Dairy farmers in this country have made great strides in recent years to increase their competitiveness and reconnect with real markets, and this momentum must be sustained and encouraged. A Single Farm Payment based on an indiscriminate area payment - and worse still applied regionally - will fly in the face of this progress by encouraging inefficiency and penalising the more technically proficient businesses."