A Brussels shake-up of agricultural subsidies could see British farmers lose up to £300 million in subsidies.

Forum Response: British Retail Consortium

Richard Ali, director of food policy at the BRC, told ePolitix.com: "We remain deeply concerned that the modern British food economy will be disadvantaged by the Commission's latest proposal to reform the common agricultural policy.

"Customers are retailers' main focus and are continually striving to meet their needs for quality food products at competitive prices while working in ever-closer cooperation with suppliers. Meeting the needs of UK customers requires retailers to rely heavily on the domestic supply base."While BRC welcomes the move away from the subsidisation of production to the support of rural development and the environment, retailers are worried that the way the proposals are structured will result in a major transfer of resources from UK agriculture to those countries with less efficient farming structures.

"We are also concerned that this could lead to a fossilisation in the sector and prevent further efficiency gains."Any proposal that artificially places the UK at a competitive disadvantage to its European competitors has the potential to hurt the British food chain and hurt the customer."

Forum Response: Country Land and Business Association

Sir Edward Greenwell, president of the CLA, said: "Reform of the CAP is inevitable if we are to create a sustainable future for farming in the EU. The principle of decoupling support from production in order to reward good environmental practice, foster rural development and reconnect farmers with consumers is, we believe, the right one.

"However this must be achieved in a way that is fair across all EU member states, rather than favouring some over others. In addition, the reforms must be bold enough to deliver the substantial change that is needed.

"It is proposed that the deepest cuts in direct payments should be imposed on larger farms (those currently receiving over 50,000 euros in production support).

"This would result in UK farmers paying a far higher share of the cost of CAP reforms than those in any other member state, as we have the largest proportion of farms in the large size category.

"The UK currently receives 13 per cent of total CAP direct payments, but could end up paying twice this share of the cost of the reforms. By contrast, France receives 28 per cent of direct payments and could end up paying less than this share of the reform costs.

"Not only would the proposed means of cutting direct payments discriminate against the UK, it would also act as a disincentive to necessary structural reform of agriculture across the EU, as it would be in farmers' financial interest to keep the size of their operation below the threshold at which their payments are cut more heavily.

"A fairer and more sustainable option would be a simple flat-rate cut of all direct payments to enable funds to be switched to Pillar 2 and to provide the funds for further reform.

"The new proposals retreat substantially on the commitment to switch from production support towards environment and rural development, compared with those contained in the July 2002 reform paper. It is questionable whether the projected funding to be switched to Pillar 2 would be sufficient to achieve the hoped-for environmental and rural development benefits.

"While it makes sense to decouple payments from production, it does not make sense to decouple them from land.

"If real environmental benefits are to be achieved and the public is to see something for its money, the payments must be linked to activities on specified land. However it is still not clear how the environmental conditions applied to the decoupled payments will be implemented.

"The fact that the UK has already gone further in using the voluntary fund switching than any other member state, and has plans to increase this in two years when the new stewardship scheme is rolled out, must be explicitly recognised. We must not be penalised for being ahead of the game.

"Our lobbying efforts to date appear to have been successful in seeing off the unfair and economically irrational payment ceilings as well as labour-adjusted franchises, which is welcome. However these new proposals are still threatening to UK interests.

"As a pro-reform friend of the Commission, the UK might have expected a better deal than this and the secretary of state will have to argue our case forcefully to make sure we get it."

Forum Response: Royal Agricultural Society

A spokesman for RASE told ePolitix.com: "The Royal Agricultural Society has consistently supported the broad thrust of the Mid-Term Review proposals. We are however, extremely worried about the detail of some of Franz Fischler's latest suggestions.

"British farmers could be facing large cuts in payments and extra bureaucracy while farmers in other countries will get off virtually scott free.

"If farmers receiving over £33,000 (50,000 euros) are to see subsidy cuts, through compulsory modulation, of up to 13 per cent this will affect about 16,000 British farms. And because British farms are generally larger than those in the rest of the EU we will be far worse off.

"The majority of EU farmers (around 70 per cent) will actually be exempted from cuts to support payments and extra bureaucracy because they receive less than 5000 euros. There is a double whammy for British farmers as the money is going to the Rural Development fund and Britain is allocated only three per cent of that fund.

"It just does not make sense to penalise "larger" farms. It is not just big 'agribusinesses' being affected; it is forward thinking, efficient family farms on a few hundred acres.

"Compulsory modulation will supposedly make agriculture more market oriented. Instead, if done in this degressive way, it will just penalise large efficient farms and protect very small farms for social policy reasons."

Forum Response: Countryside Alliance

Richard Burge, chief executive of the Countryside Alliance, said: "We welcome proposals which aim to provide farmers with a clear policy perspective whilst giving them the returns they deserve, and the public the return they demand on their investment. This announcement does, though, seem to focus greatly on the rural environment without recognising the need for wider reform and support of rural economies. Sustainable use of the land must be the bedrock of rural economy and society.

"The Alliance feels that the proposals to decouple subsidies from production and implement cross compliance by making payments conditional on environmental standards is a positive progression. It must, however, be recognised that such environmental issues should be part of a much wider reform of rural development with the rural economy being at the forefront.

"We do not see how this reform will make farming, in its broadest sense, economically viable and feel that more emphasis needs to be placed on a stronger rural development policy within which rural communities and livelihoods must be protected."