Single Farm Payment
Encyclopedia
The Single Farm Payment is an agricultural subsidy
paid to farmers in the EU.
(CAP) emphasised direct subsidies for agricultural produce. To reduce price distortion, the connection between payments and specific crops was removed; instead, a "Single Farm Payment", which subsidised farmers on a per-hectare basis, was introduced in June 2003; although farmers may now attempt to claim subsidies for more land than they actually have. This "decoupling" of subsidies means they are accepted in the "Blue box" category of subsidies in the Agreement on Agriculture
, in line with international agreements
to reduce market-distorting subsidies and price controls.
, an executive agency of Defra. Some British farmers have experienced problems due to delays in verifying how much land they have which is eligible for subsidy.
The Scottish government offers farmers an online system to claim subsidies, which reduces the burden of paperwork.
In non-Euro countries, payments to farmers may be made in local currency at an exchange rate set by the European Central Bank
.
In 2010, the EU spent €57 billion on agricultural development, of which €39 billion was spent on direct subsidies.
Agricultural subsidy
An agricultural subsidy is a governmental subsidy paid to farmers and agribusinesses to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities...
paid to farmers in the EU.
History
Historically, the EU's Common Agricultural PolicyCommon Agricultural Policy
The Common Agricultural Policy is a system of European Union agricultural subsidies and programmes. It represents 48% of the EU's budget, €49.8 billion in 2006 ....
(CAP) emphasised direct subsidies for agricultural produce. To reduce price distortion, the connection between payments and specific crops was removed; instead, a "Single Farm Payment", which subsidised farmers on a per-hectare basis, was introduced in June 2003; although farmers may now attempt to claim subsidies for more land than they actually have. This "decoupling" of subsidies means they are accepted in the "Blue box" category of subsidies in the Agreement on Agriculture
Agreement on Agriculture
The Agreement on Agriculture is an international treaty of the World Trade Organization. It was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade, and entered into force with the establishment of the WTO on January 1, 1995....
, in line with international agreements
World Trade Organization
The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...
to reduce market-distorting subsidies and price controls.
Payments to farmers
National governments within the EU make their own arrangements for implementation and for paying subsidies to farmers; in the UK this is done by the Rural Payments AgencyRural Payments Agency
The Rural Payments Agency is an executive agency of the UK Department for Environment, Food and Rural Affairs .The RPA was created on 16 October 2001 from the amalgamation of the Intervention Board for Agricultural Produce and the Defra Paying Agency as a single paying agency for most Common...
, an executive agency of Defra. Some British farmers have experienced problems due to delays in verifying how much land they have which is eligible for subsidy.
The Scottish government offers farmers an online system to claim subsidies, which reduces the burden of paperwork.
In non-Euro countries, payments to farmers may be made in local currency at an exchange rate set by the European Central Bank
European Central Bank
The European Central Bank is the institution of the European Union that administers the monetary policy of the 17 EU Eurozone member states. It is thus one of the world's most important central banks. The bank was established by the Treaty of Amsterdam in 1998, and is headquartered in Frankfurt,...
.
Economics
The Single Farm Payment is a large proportion of income for many farmers, who say they could not profit without subsidies. However, farm subsidies in developed countries push up food prices and impoverish third-world farmers. Taxpayers in the EU get very little in return for their money.In 2010, the EU spent €57 billion on agricultural development, of which €39 billion was spent on direct subsidies.