Agricultural subsidies. CAP

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Most payments in my farm come from vineyard rights

The Common Agricultural Policy (CAP) has been the most expensive policy of the European Union for decades. Raising farm income is its main goal. It includes other environmental and social targets. According to my experience, CAP achieves the first goal, but neglects the others.

I earn a living as an employee outside the agriculture industry. I make a small profit from my modest farm. I started by growing grapes in 2007, with a 1.3 hectares vineyard. I bought arable land and other vineyards later on. I planted my first almond orchard in 2013.

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 spirits making.

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 previous owners had historical records of subsidies linked to production. They transfered their rights to me. The good thing of these 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 because the did not take into account the land that I bought after that, so I am bound to lose subsidies. In 2017, I got 80€ per hectare from these historical rights.

There are still coupled payments per hectare provided by CAP. Luckily and unintendedly, nuts are one of them. These subsidies vary from year to year depending on budgetary availavilities. In 2016, 2017 and 2018 the annual subsidy is close to 25 € per hectare. 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.

Adding them up, I get around 100€ net payment per hectare each year. Subsidies are a significant share of farm income. My record shows that it represents between one fourth to one third of net profits. 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, the current regime sets a modest incentive to grow almond trees.

In practical terms, I do not have to do anything related to the environment or the rural areas to get the subsidies. I take care of the environment because I love my farm. I would do the same without any payment. CAP has not halted water depletion, soil degradation and biodiversity lost in my region. Young professional farmers are becoming fewer and fewer as times goes by. In my opinion, the European society is paying a high price just to support landowners profits.

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