As the EU bodies charged with finalising the Common Agricultural Policy (CAP) reform agreements reached in June return from their summer recess to resume work, in the UK farming groups have called on Defra to support a cap on direct payments.

Last month, the Tenant Farmers Association challenged the Food and Farming Department over its intention not to place a limit on direct payments when implementing CAP reforms. Although initial Commission proposals and CAP debates sketched out a mandatory ceiling of €300,000 (£255,000), the Council of Ministers has since stated that the decision to implement such a cap will lie with the governments of individual member states.

The failure to introduce an effective ceiling was widely condemned by CAP commentators who warned that the richest beneficiaries had successfully diluted measures designed to make the CAP 'fairer and greener'.

Ahead of EU officials' return from the summer recess, TFA Chief Executive George Dunn said the organisation supports the Commission's €300,000 ceiling; he believes that the details of the reform, even if it is implemented, will further undermine its stated purpose. Mr Dunn explained, "The EU rules are likely to allow Member States to enable those receiving in excess of €300,000 to ask for salary costs of employed labour to be taken into account for a possible uplift in the limit, the TFA does not consider the additional administrative cost to be justified."

Mr Dunn said Defra's aversion to a cap is curious, especially given the current government's ideological opposition to farm subsidies. He argued that a cap would provide wider social, environmental and financial benefits, including making more money available to bolster the budget for agri-environment and rural development spending which took a hit in recent negotiations.

His calls are backed by the authors of an influential report published in July, which found that the current subsidy system represents a poor deal for the public, burdening taxpayers with "considerable financial and environmental costs."

Mr Dunn added, "I cannot see why the government does not consider it appropriate to take advantage of the ability to limit payments.  It would lessen the extent to which the Government felt it needed to use modulation of direct payments affecting every recipient to pay for agri-environment and rural development spending."

In answer to a Parliamentary Question from Andrew George MP, Defra confirmed that only 174 claimants in England receive in excess of €300,000 in direct payments, representing only 0.01 percent of claimants. In contrast, over 80 percent of claimants receive less than €25,000 (£21,250). 

The TFA claims that savings brought about by implementing a ceiling on direct payments would amount to £70 million, which could be made available for agri-environment and rural development spending. Mr Dunn concluded that "restricting these large claims seems to represent good value for money for the taxpayer and could reduce modulation levels by at least four percentage points for every claimant."