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Farm income

What old-style CAP defenders claim

Subsidies are necessary to ensure a fair standard of living for farmers. The Single Farm Payment (SFP) that supports farm incomes directly is a good instrument to mitigate poverty and social inequality in Europe.

Discriminating against non-farmers

Social policies should minimize poverty, without discriminating against women, colored people or non-farmers. To do so, social policies should be directly linked to income and nothing else. Such reasonable social policies include progressive taxes and social security benefits. Including other criteria, such as agricultural employment or land ownership, as an entitlement for support will necessarily come at the cost of the poor. It means favoring a farmer and disadvantaging a non-farmer with lower income who would otherwise receive more support.

Favoring potentially rich households

Singling out farmers as recipients of preferential income support is especially ineffective for reducing poverty. In some countries, farmers have above-average incomes, and in many countries, their average incomes have been increasing in recent years. This trend is likely to continue in the future: output prices are forecasted to move on a long-term upward trend and labor is leaving agriculture, raising the earnings of those who remain in the sector. Moreover, many farmers are asset-rich: they own machinery, farm buildings, and above all land. It is difficult to justify why people who own a lot should have a privileged access to public money.

Helping poor farmers little

Moreover, poor farm households benefit little from the EU’s main income support instrument, the SFP. 20% of recipients reap roughly 80% of the SFP. More than a quarter of the payments goes to farmers with at least € 50,000 SFP receipts. In the Czech Republic, the average beneficiary receives almost € 50,000. A related problem is that much of the SFP ends up with land owners and not with those who actually farm the land. The poorest in the agricultural sector – tenant farmers and contracted farm labor – are on the losing end.

Social policy is a national responsibility

In any case, social policies – whether implemented rationally through support to poor households or absurdly through farm income support – should not be paid for by the EU. Social policies have to respond to local circumstances and preferences, and there is no European model that could successfully be generalized. European solidarity should limit itself to transfers from richer to poorer member states.

Conclusion

It is easy to feel sorry for farmers who do hard work in all weathers to earn a living. But the data shows that the farming poor get only small crumbs of the big subsidy cake. The distribution among farmers could be improved, but it would be much better to remove the entire system of agricultural income support. Whatever society wishes to spend to relieve poverty in the EU should be targeted directly at poor households, without any discrimination in favor of farmers, and be a national, not an EU policy.