Farming subsidies: this is the most blatant transfer of cash to the rich

As the British government cut benefits for the poor at home, in Europe it fought to keep millions in subsidies for wealthy farmers

• 
• • George Monbiot
  • The Guardian, Monday 1 July 2013 20.30 BST

‘Most of the land in Britain is owned by very rich people, including millionaires from abroad who pay no UK taxes.' Illustration by Daniel Pudles

It's the silence that puzzles me. Last week the chancellor stood up in parliament to announce that benefits for the very poor would be cut yet again. On the same day, in Luxembourg, the British government battled to maintain benefits for the very rich. It won. As a result, some of the richest people in the country will each continue to receive millions of pounds in income support from taxpayers.

There has been not a whimper of protest. The Guardian hasn't mentioned it. UK Uncut is silent. So, at the other end of the spectrum, is the UK Independence party.

I'm talking about the most blatant transfer of money from the poor to the rich that has occurred in the era of universal suffrage. Farm subsidies. The main subsidy, the single farm payment, is doled out by the hectare. The more land you own or rent, the more money you receive.

Since 1999, more progressive European nations have been trying to limit the amount of public money a farmer can capture under the common agricultural policy. It looked as if, this year, they might at last succeed. But throughout the negotiations that ended last week, two governments in particular resisted: those resolute champions of the free market, Germany and the UK. Thanks to their lobbying, any decision has yet again been deferred.

There were two proposals for limiting handouts to the super-rich, known as capping and degressivity. Capping means that no one should receive more than a certain amount: the proposed limit was €300,000 (£250,000) a year. Degressivity means that beyond a certain point the rate received per hectare begins to fall. This was supposed to have kicked in at €150,000. The UK's environment secretary, Owen Paterson, knocked both proposals down.

When our government says "we must help the farmers", it means "we must help the 0.1%". Most of the land here is owned by exceedingly wealthy people. Some of them are millionaires from elsewhere: sheikhs, oligarchs and mining magnates who own vast estates in this country. Although they might pay no taxes in the UK, they receive millions in farm subsidies. They are the world's most successful benefit tourists. Yet, amid the manufactured terror of immigrants living off British welfare payments, we scarcely hear a word said against them.

The minister responsible for cutting income support for the poor, Iain Duncan Smith, lives on an estate owned by his wife's family. During the last 10 years it has received €1.5m in income support from taxpayers. How much more obvious do these double standards have to be before we begin to notice?

Thanks in large part to subsidies, the value of farmland in the UK has tripled in 10 years: it has risen faster than almost any other speculative asset. Farmers are exempted from inheritance tax and capital gains tax. They can build, without planning permission, structures which lesser mortals would be forbidden to erect, boosting both their capital and income. And they have a guaranteed income from the state. Yet all we hear from their leaders is one long whinge.

I have yet to detect a word of gratitude from the National Farmers' Union to the hard-pressed taxpayers who keep its members in such style. The NFU, dominated by the biggest landowners, has a peculiar genius for bringing out the violins. It pushes forward small, struggling hill farmers. The real beneficiaries of its policies are the arable barons hiding behind them.

An uncapped subsidy system damages the interests of small farmers. It reinforces the economies of scale enjoyed by the biggest landlords, helping them to drive the small producers out of business. A fair cap (say of €30,000) would help small farmers compete with the big ones.

So here's the question: why do we keep deferring to Big Farmer? Why do its sob stories go unchallenged? Why is this spectacular feudal boondoggle tolerated in the 21st century?

Here are three possible explanations. A high proportion of the books aimed at very young children are about farm animals. There is usually one family of every kind of animal, and they live in harmony with each other and the rosy-cheeked farmer. Understandably, slaughter, butchery, castration, separation, crates and cages, pesticides and slurry never feature. The petting farms that have sprung up around Britain reify and reinforce this fantasy. Perhaps these books unintentionally implant – at the very onset of consciousness – a deep, unquestioned faith in the virtues of the farm economy.

Perhaps too, after being brutally evicted from the land through centuries of enclosure, we have learned not to go there – even in our minds. To engage in this question feels like trespass, though we have handed over so much of our money that we could have bought all the land in Britain several times over.

Perhaps we also suffer from a cultural cringe towards people who make their living from the land and the sea, seeing their lives, however rich and cossetted they are, as somehow authentic, while ours feel artificial.

Whatever the reason, it's time we overcame these inhibitions and confronted this unembarrassed robbery of the poor by the rich. The current structure of farm subsidies epitomises the British government's defining project: capitalism for the poor and socialism for the rich.

Europe's €50bn subsidy that enriches landowners and kills wildlife

The EU's farm subsidies are a modern equivalent of feudal aid. As Europe suffers under austerity, it's right to call for reform

• 
• • George Monbiot
  • The Guardian, Monday 26 November 2012 20.30 GMT

'Not long ago, farm payments were justified on the grounds that world demand was low. Now they are justified on the grounds that world demand is high.' Photograph: Andrew Matthews/PA

There's a neat symmetry in the numbers that helped to sink the European summit. The proposed budget was €50bn higher than the UK government could accept. This is the amount of money that European farmers are given every year. Britain's contentiousbudget rebate is worth €3.6bn a year: a fraction less than our contribution to Europe's farm subsidies.

Squatting at the heart of last week's summit, poisoning all negotiations, is a vast, wobbling lump of pork fat called the common agricultural policy. The talks collapsed partly because the president of the European council, pressed by François Hollande, proposed inflating the great blob by a further €8bn over six years. I don't often find myself on their side, but the British and Dutch governments were right to say no.

It is a source of perpetual wonder that the people of Europe tolerate this robbery. Farm subsidies are the 21st century equivalent of feudal aid: the taxes medieval vassals were forced to pay their lords for the privilege of being sat upon. The single payment scheme, which accounts for most of the money, is an award for owning land. The more you own, the more you receive.

By astonishing coincidence, the biggest landowners happen to be among the richest people in Europe. Every taxpayer in the EU, including the poorest, subsidises the lords of the land: not once, as we did during the bank bailouts, but in perpetuity. Every household in the UK pays an average of £245 a year to keep millionaires in the style to which they are accustomed. No more regressive form of taxation has been devised on this continent since the old autocracies were overthrown. Never mind French farmers dumping manure in the streets: we should be dumping manure on French farmers.

It would be unfair to stop there. There are plenty of people in the UK who deserve the same treatment. Last year the House of Commons environment, food and rural affairs committee, in a bizarrely unbalanced report, maintained that the farm subsidy system does not go far enough. It wants to supplement payments for owning land with a resumption of headage payments: money for every animal farmers cram into their fields.

This nonsense outfrenches the French. There were excellent reasons for phasing out headage payments in 2003. They provided an incentive to load the hills with as many animals (mostly sheep) as possible, regardless of the impact on the natural world and the welfare of the sheep. The extra sheep flooded the market, bankrupting the farmers whom the payments were supposed to protect. The committee's proposal accords with a longstanding and idiotic European principle: the less suitable a region is for farming, the more money is spent to ensure that farming persists there. This is the rationale for such extra subsidies as less favoured area payments.

This approach is justified by a groundless claim: that farming, particularly in the uplands, is required to protect the environment. The European commission maintains that farming is essential to "combat biodiversity loss" and reduce emissions of greenhouse gases. The parliamentary committee claims that fewer cattle and sheep in the hills has led to "undergrazing", causing such horrors as the growth of bracken. How nature managed to survive for the 3 billion years before humans arrived to look after it is anyone's guess.

These statements are seldom accompanied by anything resembling a scientific reference. They reflect a biblical view of human stewardship. It would be lovely to believe that hill farmers, the landholders with whom it is easiest to sympathise, are delivering only blessings, but this is pure wish fulfilment.

Flooding of the kind now blighting the UK is exacerbated by grazing in the hills, which prevents trees and scrub from growing. The sparser the vegetation with which the hills are clothed, the faster the water runs off. Woodland and scrub preserve more carbon – both above and below ground – than pasture does. There has been a catastrophic decline in farm wildlife in the past few decades, as a result of grazing, drainage, sheep dip residues poisoning the streams and farmers' clearance of habitats. Last week's shocking report on the state of the UK's birds shows that while 20% of all birds have been lost since 1966, on farmland the rate is over 50%.

The subsidy system doesn't just encourage this destruction: it demands it. A European rule insists that to receive their main payment farmers must prevent "the encroachment of unwanted vegetation on agricultural land". In other words, they must stop trees and bushes from growing. They don't have to grow crops or keep animals on the land to get their money, but they do have to keep it mown. All over Europe essential wildlife habitats are destroyed – often on agriculturally worthless land – simply to expand the area eligible for subsidies.

The European commission maintains that subsidies are required to help farmers "contribute to growing world food demand, expected … to increase by 70% by 2050". But if world food demand is expected to grow by 70%, why do we need subsidies? Not long ago, farm payments were justified on the grounds that world demand was low. Now they are justified on the grounds that world demand is high. The policy comes first, the justifications later.

While David Cameron is right to press for major cuts, he is simultaneously seeking to goldplate the injustice by opposing the only vaguely progressive measure in the commission's proposals for reform: capping the money farms can receive, at a maximum of €300,000. This, our government complains, would discourage the "consolidation" of land. Britain already has one of the highest concentrations of land ownership on earth. How much more "consolidation" do we need? And how much more brazenly could Cameron favour the interests of his aristocratic chums?

Europe is in crisis. It is in crisis because the money has run out. Essential public services are being cut (often unjustly and unnecessarily), but at the same time €50bn a year is being paid to landowners. This spending is so gross, so nakedly indefensible, that it's hard to understand why it does not obsess activists across the political spectrum: from UK Uncut to the TaxPayers' Alliance. Seldom in the field of human conflict was so much given by so many to so few.

Big Farmer The poorest taxpayers are subsidising the richest people in Europe: and this spending will remain uncut until at least 2020.

by  George Monbiot

What would you do with £245? Would you (a) use it to buy food for the next five weeks?, (b) put it towards a family holiday?, (c) use it to double your annual savings?, or (d) give it to the Duke of Westminster?

Let me make the case for option (d). This year he was plunged into relative poverty. Relative, that is, to the three parvenus who have displaced him from the top of the UK rich list(1). (Admittedly he’s not so badly off in absolute terms: the value of his properties rose last year, to £7bn). He’s the highest ranked of the British-born people on the list, and we surely have a patriotic duty to keep him there. And he’s a splendid example of British enterprise, being enterprising enough to have inherited his land and income from his father.

Well there must be a reason, mustn’t there? Why else would households be paying this money – equivalent to five weeks’ average spending on food and almost their average annual savings (£296)(2) – to some of the richest men and women in the UK? Why else would this 21st Century tithe, this back-to-front Robin Hood tax, be levied?

I’m talking about the payments we make to Big Farmer through the Common Agricultural Policy. They swallow €55bn (£47bn) a year, or 43% of the European budget(3). Despite the spending crisis raging through Europe, the policy remains intact. Worse, governments intend to sustain this level of spending throughout the next budget period, from 2014-2020(4).

Of all perverse public spending in the rich nations, farm subsidies must be among the most regressive. In the European Union you are paid according to the size of your lands: the greater the area, the more you get. Except in Spain, nowhere is the subsidy system more injust than in the United Kingdom. According to Kevin Cahill, author of Who Owns Britain, 69% of the land here is owned by 0.6% of the population(5). It is this group which takes the major pay-outs. The entire budget, according to the government’s database, is shared between just 16,000 people or businesses(6)*. Let me give you some examples, beginning with a few old friends.

As chairman of Northern Rock, Matt Ridley oversaw the first run on a British bank since 1878, and helped precipitate the economic crisis which has impoverished so many. This champion of free market economics and his family received £205,000 from the taxpayer last year for owning their appropriately-named Blagdon Estate(7). That falls a little shy of the public beneficence extended to Prince Bandar, the Saudi Arabian fixer at the centre of the Al-Yamamah corruption scandal. In 2007 the Guardian discovered that he had received a payment of up to £1bn from the weapons manufacturer BAE(8). He used his hard-earned wealth to buy the Glympton Estate in Oxfordshire(9). For this public service we pay him £270,000 a year(10). Much obliged to you guv’nor, I’m sure.

But it’s the true captains of British enterprise – the aristocrats and the utility companies, equally deserving of their good fortune – who really clean up. The Duke of Devonshire gets £390,000(11), the Duke of Buucleuch £405,000(12), the Earl of Plymouth £560,000(13), the Earl of Moray £770,000(14), the Duke of Westminster £820,000(15). The Vestey family takes £1.2m(16). You’ll be pleased to hear that the previous owner of their Thurlow estate, Edmund Vestey, who died in 2008, managed his tax affairs so efficiently that in one year his businesses paid just £10. Asked to comment on his contribution to the public good, he explained, “we’re all tax dodgers, aren’t we?”(17).

British households, who try so hard to keep the water companies in the style to which they’re accustomed, have been blessed with another means of supporting this deserving cause. Yorkshire water takes £290,000 in farm subsidies, Welsh Water £330,000, Severn Trent, £650,000, United Utilities, £1.3m. Serco, one of the largest recipients of another form of corporate welfare – the private finance initiative – gets a further £2m for owning farmland(18).

Among the top blaggers are some voluntary bodies. The RSPB gets £4.8m, the National Trust £8m, the various wildlife trusts a total of £8.5m(19). I don’t have a problem with these bodies receiving public money. I do have a problem with their receipt of public money through a channel as undemocratic and unaccountable as this. I have an even bigger problem with their use of money with these strings attached. For the past year, while researching my book about rewilding, I’ve been puzzling over why these bodies fetishise degraded farmland ecosystems and are so reluctant to allow their estates to revert to nature. Now it seems obvious. To receive these subsidies, you must farm the land(20).

As for the biggest beneficiary, it is shrouded in mystery. It’s a company based in France called Syral UK Ltd. Its website describes it as a producer of industrial starch, alcohol and proteins, but says nothing about owning or farming any land(21). Yet it receives £18.7m from the taxpayer. It has not yet answered my questions about how this has happened, but my guess is that the money might take the form of export subsidies: the kind of payments which have done so much to damage the livelihoods of poor farmers in the developing world.

In one respect the government of this country has got it right. It has lobbied the European Commission, so far unsuccessfully, for “a very substantial cut to the CAP budget”(22). But hold the enthusiasm. It has also demanded that the EC drop the only sensible proposal in the draft now being negotiated by member states: that there should be a limit to the amount that a landowner can receive(23). Our government warns that capping the payments “would impede consolidation” of landholdings(24). It seems that 0.6% of the population owning 69% of the land isn’t inequitable enough.

If subsidies have any remaining purpose it is surely to protect the smallest, most vulnerable farmers. The UK government’s proposals would ensure that the budget continues to be hogged by the biggest landlords. As for payments for protecting the environment, this looks to me like the option you’re left with when you refuse to regulate. The rest of us don’t get paid for not mugging old ladies. Why should farmers be paid for not trashing the biosphere? Why should they not be legally bound to protect it, as other businesses are?

In the midst of economic crisis, European governments intend to keep the ultra-rich in vintage port and racehorses at least until 2020. While inflicting the harshest of free market economics upon everyone else, they will oblige us to support a parasitic class of tax avoiders and hedgerow-grubbers, who engorge themselves on the benefactions of the poor.

www.monbiot.com

*UPDATE: It’s just dawned on me that the government’s list must be incomplete. It says it covers all “legal persons”, but it seems that legal persons excludes actual persons, as opposed to companies, partnerships, trusts etc. It would be fascinating to discover whose subsidies have not being listed.

References:

1. http://www.therichest.org/nation/sunday-times-rich-list-2011/

2. The average UK household contribution to the CAP is £245 (DEFRA, by email). Average household weekly expenditure on food and drink is £52.20. Average household weekly savings and investments is £5.70.
Office of National Statistics, 2010. Family Spending 2010 Edition. Table A1: Components of Household Expenditure 2009. http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-225698

3. DEFRA, by email.

4. European Commission, 19th October 2011. Regulation Establishing Rules for Direct Payments to Farmers Under Support Schemes Within the Framework of the Common Agricultural Policy. COM(2011) 625 final/2 2011/0280 (COD). http://ec.europa.eu/agriculture/cap-post-2013/legal-proposals/com625/625_en.pdf

5. I wanted to go to source on this, but the copies available online are amazingly expensive (there’s an irony here, but I can’t quite put my finger on it). So I’ve relied on a report of the contents of his book: http://www.newstatesman.com/society/2010/10/land-tax-labour-britain

6. The database is here: http://www.cap-payments.defra.gov.uk/Download.aspx DEFRA’s database search facility isn’t working – http://www.cap-payments.defra.gov.uk/Search.aspx – so you’ll have to go through the spreadsheets yourself.

7. The entry in the database is for Blagdon Farming Ltd. I checked online: this is one of the properties of the Blagdon Estate. http://www.blagdonestate.co.uk/theblagdonhomefarm.htm , http://www.192.com/atoz/business/newcastle-upon-tyne-ne13/farming-mixed/blagdon-farming-ltd/292e5a6d3883fe2f4a207c94d6c41e61747a8b50/ml/ and http://www.misterwhat.co.uk/company/384132-blagdon-farming-ltd-newcastle-upon-tyne

8. http://www.guardian.co.uk/world/2007/jun/07/bae1

http://www.guardian.co.uk/world/2007/jun/09/bae.foreignpolicy

9. http://www.guardian.co.uk/baefiles/page/0,,2095831,00.html

10. The payment is listed as Glympton Farms Ltd. I rang them – they confirmed that Glympton Farms belongs to the estate.

11. Listed as Chatsworth Settlement Trustees. This page identifies the owners: http://www.boltonabbey.com/welcome_trustees.htm

12. Listed as Buccleuch Estates Ltd

13. Listed as Earl of Plymouth Estates Ltd.

14. Listed as Moray Estates Development Co.

15. Listed as Grosvenor Farms Limited. See http://www.grosvenorestate.com/Business/Grosvenor+Farms.htm

16. Listed as Thurlow Estate Farms Ltd. See http://www.telegraph.co.uk/news/obituaries/1570710/Edmund-Vestey.html and http://www.independent.co.uk/news/uk/home-news/fat-cats-benefit-from-eu-farming-subsidies-780192.html

17. http://www.guardian.co.uk/business/2008/dec/07/edmund-vestey-tax-will

18. All these utility companies are listed under their own names.

19. I stopped adding the wildlife trust payments shortly after getting down to the £100,000 level, so it is probably a little more than this.

20. The CAP’s Good Agricultural and Environmental Condition rules (an Orwellian term if ever there was one) forbid what they disparagingly call “land abandonment”.

21. http://www.tereos-syral.com/web/syral_web.nsf/Home/index.htm

22. DEFRA, January 2011. UK response to the Commission communication and consultation:
“The CAP towards 2020: Meeting the food, natural resources and territorial challenges of the future”. http://archive.defra.gov.uk/foodfarm/policy/capreform/documents/110128-uk-cap-response.pdf

23. European Commission, 19th October 2011, as above.

24. DEFRA, January 2011, as above.