AUTHORS: National Audit Office

This National Audit Office report makes recommendations to DEFRA on how it should adapt its farm business development schemes in light of research conducted by IEEP and CCRU on schemes in other countries.

Farmers in the United Kingdom currently receive nearly £3 billion a year in subsidies under the Common Agricultural Policy. The reforms to the Policy agreed in June 2003 are the most radical in its history and will mean a step-change in the way subsidies will be paid in the future. At the heart of the reforms lies the concept of “decoupling” – breaking the link between production and subsidy. Decoupling will give farmers the opportunity to re-connect with their markets, freeing them to produce what consumers want rather than what the subsidy regimes dictate and enabling them to reduce costs by maximising profit rather than production.

The Common Agricultural Policy reforms are a key development in the delivery of the Strategy for Sustainable Farming and Food which was launched by the Department for Environment, Food and Rural Affairs (the Department) in December 2002. The Strategy sets out a vision of a competitive and efficient farming sector, which protects and enhances the countryside and wider environment, and contributes to the health and prosperity of all communities.

The Department plans major changes, in part informed by our review. Independent evaluations of the Department’s farm business development schemes suggest a number of areas for development.