Country slickers
Ross Clark on how the new CAP rules make it profitable for city folk to buy farms and use them as homes — with big gardens
irf the words 'Get orff my land' are delivered in future less in yokel tones than in the mid-Atlantic accent of the trading floor, don't be surprised. The Royal Institution of Chartered Surveyors reveals that two thirds of all farms sold between April and June this year were bought by non-farmers, many of them by City bankers who like the idea of living in a country house surrounded by 300 acres of their own land. The land agents Strutt & Parker confirm that wealthy buyers are seeking to buy farms rather than landless houses in order that they might 'control the living space and environment around them'. These bankersturned-farmers want to be able to plant a belt of trees here, put a flock of sheep out to graze there, and generally create their own little playgrounds far removed from the stresses of metropolitan life.
That is very nice for them, but is there any reason why the rest of us should have to pay for their place in the country? To anyone who has been following the reforms to the Common Agricultural Policy (CAP), the sudden attraction of country life to the nation's bankers and businessmen should come as no surprise. Of all the daft schemes dreamed up by Brussels over the years, the plan to subsidise the creation of gentlemen's estates must rank as one of the most absurd.
The original CAP, introduced in 1962, was foolish enough. It encouraged farmers to produce mountains of unwanted food, punished the consumer through artificially high prices and gave rise to bizarre and often, no doubt, apocryphal tales of corruption. My favourite concerns Italian cattle farmers who were offered a subsidy for slaughtering cattle which officialdom deemed to be surplus to EU requirements. Since payment was made upon the presentation of a pair of bovine ears, it wasn't long before a strange new breed of earless cow started to appear in the fields.
But at least the architects of the original CAP had the excuse that the wartime food shortages were a recent memory. The CAP, as it was, stands out as a relict from another age inhabited by U-boats, ration books and stunted Lancastrians trying to bring up ten children on a ha'porth a week of bread and margarine. The functionaries who came up with the new, reformed CAP, agreed by European agricultural ministers in June, have no such excuse. The concept of the new system amounts simply to the subsidy of agreeable lifestyle. Under the new, reformed CAP, farmers will not receive a subsidy for producing food; instead they will receive a 'single farm payment' related to the acreage of their farm but entirely unrelated to any crop they may or may not produce. If your farm looks like a farm, you will qualify for public money. Moreover, the more 'environmentally friendly' your farm, the more money you will be paid. Nine billion euros have been reserved for `agri-environmental' schemes. Payments will be withheld for breaking environmental, food safety and animal welfare standards. They will not be withheld, on the other hand, for failing to produce any food.
It clearly hasn't taken our bankers long to work out that they will be able to maximise the taxpayer's input to their estates by not doing things: not spraying crops with fertiliser, not adding pesticides, not tearing out hedges. As a gentleman farmer you might produce nothing more than a few pints of goat's milk for your friends, but that does not matter under the new CAP so long as you can convince officials that you are in the farming business. This will not be difficult. Indeed, it is possible to give the impression of being a farmer without doing anything at all. The nighttime vigils of the lambing season, the daily grind of getting cattle to the milking parlour, the arduous tasks one associates with farming become entirely unnecessary when one abandons any hope of making money from the enterprise. There is a herd of feral cattle in Northumberland who have been living happily for many years without any intervention from man. They simply keep on nibbling, procreating and dropping dead of their own accord. Goats and pigs can also be 'farmed' without any effort, though curiously not sheep, who have been selectively bred over the centuries to produce such thick fleeces that it is impossible for a ram to find the right target on a ewe.
The 'reformed' CAP will cost European taxpayers every bit as much as they pay already: 43 billion euros a year — half the EU budget. No matter, claims agriculture commissioner Franz Fischler: 'Consumers and taxpayers will receive more for their money: more transparency, more quality, more environmental protection and animal welfare.' Transparency apart — whatever kind of public service this is supposed to be — taxpayers would get all this and more by the simple expedient of discontinuing CAP altogether and allowing uneconomic farmland to revert to wilderness. What taxpayers won't get for their 43 billion euros is the justification for setting up the CAP in the first place: a guarantee of food security in times of war. Were war to break out in Europe in future, Europeans would turn to their land and discover some very contented animals, some very well-tended meadows looked after by some very leisurely farmers, but no guarantee that any food is produced at all. In fact, the incentive would appear to be to produce anything but food. Strangely, while making great play of 'de-linking' subsidies from production, the EU has managed to slip into its proposals one or two entirely novel production-linked subsidies: one for nut production, which will attract payments of 120 euros per hectare, the other for 'energy crops' bound for biodiesel production, which will attract payments of 45 euros per hectare.
Under the new system, taxpayers won't even get to picnic or ramble in the fields to whose upkeep they will be so generously contributing: there is no mention of farmers having to offer public amenity in return for their billions. As taxpayers, we are presumably supposed to be grateful for a distant glimpse of grazing livestock and wafting corn.
Even without CAP reform, farms have become used as onshore tax havens. Never believe a wealthy City gent who buys a farm in his sixties saying that he wants a fresh challenge. The chances are that the only challenge he is taking up is that of avoiding the taxman. Under Inland Revenue rules, farmers can pass their farms to their children free from inheritance tax. In order to qualify for the tax break, you don't personally have to drive the tractors, feed the cattle or even decide when to plant the corn, but merely show that it is you who pays the bills.
In future, there needn't even be any bills to pay. just 'single farm payments' to bung in the bank. Stand by for the world's first subsidised tax dodge.
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