£60 million fine for Northern Ireland for CAP Errors

Northern Ireland gets some £300 million per year in CAP subsidy payments, but now the Executive (regional government) will be fined (or disallowed) £60 million for what seems to be a list of serious errors. The BBC has reported that claims were awarded where farmers were claiming for land that was built on (as agricultural land), ditches, and even different farmers claiming for the same piece of land.

The farmers submit claims to the Department of Agriculture, which are backed up with documentation including maps of the areas in question, and then on this basis the CAP money is given to the Department to be distributed amongst the farmers. The Agriculture minister (and my MP) Michelle Gildernew considers, it seems, that no one is really to blame. Since at least 2005 these faulty claims were being put through and these findings are obviously serious: how far did the department check up on how up-to-date the information it was provided with was? It may be hard to assign blame in many circumstances - some cases could be genuine mistakes - but farmers and the department should know about the differing values and qualities of land, and they especially should have the common sense to be able to ascertain whether or not land has been built on. From the minister's tone it doesn't seem as if she's open and willing to learn from past mistakes; hopefully she will have to anyway: after all, the department cannot risk fines in this economic climate, for it's the department and not the farmers directly who will bear the burden.

The department seems to be saying that it will push for a reduction in the fine, but last night we were treated to a very rare scene of a Commission Official explaining on local news that the fines cannot be altered by political pressure. The irregularities were discovered by Commission Officials who came in to check up on the NI situation. I wonder how seriously this will damage the Executive's voice in Europe. NI is far more rural than the rest of the UK, and has a big interest in the continuing of the CAP and seeing its interests represented in any reforms. Naturally, as a region, it's not likely that it would play a big role in discussions, but the example may provide more ammunition for those advocating more radical reforms and reductions in subsidies.

The EU has provided money to NI in the past in support of the peace process, and naturally enough the packages have decreased in size over time. It will be harder in the future for NI politicians to get a sympathetic hearing in Brussels.

Chasing Brussels #4

The fourth episode of Chasing Brussels is out now. This week we discuss the milk protests and the CAP in general.

Moderated by Joe Litobarski, with Jack Thurston of caphealthcheck.eu and farmsubsidy.org and myself as panelists.

Direct link.

Should Afghan opium be bought by Western Governments?

Tony Barber at the Financial Times has a very interesting article on a possible NATO policy of buying all of Afghanistan's opium crop and using it for medicinal purposes. The idea is that this will reduce the drug trade and reduce the funding of organised crime and terrorist organisations through the drug trade.

However, I think a major weakness of such a policy would be that it (by itself) does nothing to encourage Afghan farmers to grow traditional crops; indeed switching to traditional crops while Western governments are buying your produce would be a risky move, as any farmer attempting this would be leaving a secure market to try one which might have a learning curve for the farmer (would many farmers be experienced with traditional crops? Do they grow a small amount themselves to feed their families?), and require building up new buyer-seller relationships in a market they are unfamiliar with.

Perhaps what Afghanistan needs is... some version of the EU's Common Agricultural Policy?

That probably sounds like a strange idea, but it would be a good way of creating a more attractive, more secure market for farmers to grow (return to growing?) traditional crops. It would be hard to place a similar burden in terms of prices on the Afghan people as Europeans are under, but a system of subsidy and (perhaps more controversial, especially for the EU) more secure market access for Afghan farmers to western economies could help create a solid agricultural base in Afghanistan. With population growth and global warming, there should be a good market for Afghan food which will help an emerging agriculture sector to survive in the market when the West reduces and then ends protection of Afghan farmers.

This could also encourage more Afghans to "buy into" the system, and be a way of reducing the influence and support for terrorist groups.

That said, I'm not an economist and I claim very little economic knowledge; this is just an idea.