The European Commission is currently working on a new Common Agricultural Policy (CAP) that will come in from 2014.
But a report from the Environment, Food and Rural Affairs (EFRA) Committee found that current proposals will make the system “even more complex and bureaucratic”.
At the moment farmers in Britain receive a direct payment every year, the Single Farm Payment (SFP), based on how much land they have.
Around 200,000 farmers across the UK receive around £3 billion every year from the EU in subsidies.
Most of the money is paid out directly in an annual ‘Single Farm Payment’, that is rewarded per hectare of land.
However Brussels wants to ‘green the CAP’ by adding a number of environmental incentives to the direct payment.
Anne McIntosh, Chairwoman of EFRA said the EC proposals are in danger of making the already complex and bureaucratic system of farm subsidies in Britain even worse.
“A future CAP should place greater emphasis on sustainable farming, but is should do so through a system of incentives and not through additional regulation. The EU proposal for more mandatory environmental measures will make the CAP more complex.”
Instead the report called for environmental measures to be increased separately to the direct payments.
“A future CAP should place greater emphasis on sustainable farming, but it should do so through a system of incentives and not through additional regulation. The EU proposal for more mandatory environmental measures will make the CAP more complex without delivering tangible benefits,” she said.
Ms McIntosh also criticised the Department for the Environment Food and Rural Affairs (Defra) for lobbying in Europe to scrap the direct subsidy.
She pointed out that more than half of UK farm businesses would be unprofitable without support from CAP, especially smaller farmers in the uplands, and said direct payments should continue until at least 2020.
She said Defra is at risk of alienating the rest of Europe by insisting subsidies are scrapped completely and should take a more balanced stance.
“While we broadly support the government’s desire to reduce reliance on subsidies, we do not believe that cuts to direct payments are the best way to achieve this,” she said.
“Ministers need to set out exactly how UK farmers will become self-supporting, against a backdrop of rising fuel, fertiliser and feed prices and in the face of greater competition from third countries that do not operate to EU standards of environmental protection or animal welfare,”
Peter Kendall, President of the NFU, said farmers would like to survive without subsidies.
But the burden of regulation, unfair prices from supermarkets and competition from farmers abroad who have less regulations, makes it impossible at the moment.
“None of the farmers I have talked to want to rely on public support; they would much prefer to get their return from the market but British farmers continue to face barriers: dysfunctional supply chains, both here and in the EU, and unfair competition from imports produced to lower standards are just two. These are the issues which politicians should address and soon,” he said.