Agricultural subsidies. CAP

20160112_131453
Most payments in my farm come from vineyard rights

I earn a living as an employee outside the agriculture industry. However, I make a profit out of my small farm. I started by growing grapes in 2007, with a 1.3 hectares vineyard. I bought arable land and other vineyards from that on. I planted my first almond orchard in 2013. Lately, I have bought more fields and turn them into almond orchards. I have never pretended to get subsidies, but they have made my project more profitable.

In 2007 most agricultural support was not linked to production. The European Union Common Agricultural Policy (CAP) had a Single Payment Scheme in place based in the historical subsidies recieved by the farmer. I had no subsidy record. I just got a transitory subsidiy per hectare in 2009 and 2010, because there was a coupled payment per hectare for wine destined to brandy making. However, historical rights were able to be transmited, and that was the case with the people who sold me their land in 2009 and 2011. Those new fields were former vineyards and their former owners had historical records of subsidies linked to production. They transfered their rights to me. The good thing of this rights is that they are decoupled from production, so I can grow or plant whatever I like and keep on getting the same subsidy. gRAFICO PASTEL

CAP has been slightly reformed in 2015. The goal is to level to a certain extent the rate per hectare in a region, so that differences between farmers tend to lessen year after year. The reference period has been updated and the number of rights reset according to the number of hectares in a more recent period.  My right per hectare in the new reference period was high and my number of hectares low, so I am bound to lose subsidies. What is more, the new land that I am buying now has no rights, so that will make my average payment per hectare even lower.

There are still coupled payments per hectare provided by CAP. Luckily and unintendedly, nuts are one of those ramaining lucky. These subsidies are not very reliable, since their amount vary from year to year depending on budgetary availavilities. The requirements are that you grow almonds or certain other nuts in dry farming , with a density of more than 80 trees per hectare and market your crop through a producer assotiation. In 2016 I have got an extra 25 € per hectare.

All in all, subsidies are a significant share of farm income. Nontheless, this support is set to become less significant in the future. A possitive aspect of CAP payments is that they are minimaly distorting, since I have no hindrance when shifting from vineyards and arable land towards almond orchards. In fact, there is a modest incentive to grow almond trees in the current regime.

Grafico
Average payment per hectare in my farm
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