MPs have warned lavishing controversial EU agriculture subsidies on environmentally friendly farming risks exposing the industry to "shocks" caused by poor weather and price vulnerability.
The Government wants to transfer 15% of direct farm payments given to all farmers – based on acreage – to environmental and rural development measures such as building dry stone walls and creating wildlife habitats.
But the Environment, Food and Rural Affairs (Efra) Select Committee of MPs has warned this will "penalise" British farmers when £20 billion of subsidy is dished out over seven years. Its report on the Common Agricultural Policy (CAP), published today, says the fact the UK will get less money between 2014 and 2020 than it does now – while France and Italy will see their allocations increase – is compounded by the greater emphasis on "green" farming.
Committee chairman Anne McIntosh MP said the Government should maintain the current 9% rate of transfer away from direct payments. She said: "The Government needs to recognise that cutting payments to these businesses will reduce their ability to compete in the marketplace, will leave farmers less able to invest in vital infrastructure and may make them more vulnerable to shocks such as poor weather, higher input costs and price variations."
Ministers have defended plans to make the full 15% transfer to the environmental "pillar 2" budget as taxpayers want to see more value for their money by boosting jobs or maintaining the country-side. But farmers argue that direct payments – needed to invest in vital equipment such as tractors – ensure they are producing food amid global shortages and fears over food security.
The committee – which includes Tory MPs Sheryll Murray (South East Cornwall) and Neil Parish (Tiverton and Honiton) – says a 15% transfer should be considered two years in only if there is clear benefit from the "green" projects proposed.
The MPs were also critical of plans to ditch paper-based applications – and install a new computer system – when administering the payments.
They are alarmed by the move to "digital by default" given that many farmers have to cope with slow or limited internet connections in the countryside.
Westcountry farmers had hoped they had seen the end of late payment of grants, which pushed many into hardship, after the Government finally got to grips with the hapless Rural Payments Agency.
Ms McIntosh said: "Farmers know from bitter past experience that the development of the new IT system will be a stand-out challenge for Government. A lot went wrong in the last round of changes, and these problems gave rise to £580 million in penalties.
"With that in mind, we question whether it makes sense to introduce a new computer system at the same time as complex new payment rules.
"Forcing people to engage digitally when they may well lack adequate broadband or the knowledge required could undermine successful implementation of the new scheme.
"We support the Government's ambition to encourage and support as many people as possible to apply online, but people who need to must be able to get hold of the complicated guidance and apply on paper too."
National Farmers' Union President Peter Kendall welcomed the report, given that "up and down the country farmers are concerned".
He said: "A perfect storm of new rules, a new IT system and a dearth of detailed rules is brewing on the horizon.
"Efra is correct to challenge the Government now, while policy details are still being worked out, to ensure that English farmers are not left disadvantaged."
A Defra spokesman said: "We want to target Common Agricultural Policy funding in ways that will deliver real benefits to the environment, boost the competitiveness of our farming industry and grow the rural economy.
"We will consider the views from the Efra Select Committee and give our formal response in due course."