Speaking at the Oxford Farming conference this week, food and farming minister Lord Whitty said the deal to reform Europe's Common Agricultural Policy (CAP) had exceeded expectations, but if farmers were really to reap the rewards at home and abroad, the hard work was only just beginning.
"The challenge for farming is to take advantage of the opportunities created by CAP reform, the most radical yet in the 50 years of CAP. For the first time we achieved a revolutionary change by breaking the link between subsidy and production through decoupling," said Lord Whitty.
Moving towards a more liberal trade strategy, although still hotly criticised by developing countries for its protectionist stance, last year Europe cleared a raft of reforms to the CAP, a policy with a €45 billion envelope.
Led by the European agriculture commissioner Franz Fischler, the reform established the notion of 'decoupling'. "By decoupling support from production, and combining the majority of existing support schemes into a single farm payment based on historical references, we have taken major strides towards making the CAP less trade-distorting, less complex, and more market oriented," said Fischler at the time of reform last year.
According to Fischler, the new single farm payment scheme is expected to shift some €1.2 billion from market support to rural development each year from 2005 onwards.
"The reform deal gave us a very significant degree of flexibility, and transformed the European Union from the most internally protectionist in the World Trade Organisation to being on the front foot in agriculture's contribution to trade liberalisation," said Lord Whitty this week.
The reforms freed farmers from artificial production incentives of the past, enabling them to make informed business decisions based on what their customers wanted, rather than how much subsidy they can get, and streamlined bureaucracy to reduce burdens on the industry, he added.
The UK government has already announced that it will implement the new CAP Single Farm Payment from 1 January 2005 on a country-by-country basis. England, Scotland, Wales and Northern Ireland will decide according to local priorities.