Originally pubished in Agricultural Bulletin, 2007
With set-aside not scheduled for discussion until November, the EU Commission’s recent announcement to fix it at 0% for 2008 came quite unexpectedly.
In a surprise move, EU farm ministers agreed at their July council meeting to fix compulsory set-aside at 0% for the 2008 growing season.
While the decision is not yet set in law, the Commission expects to confirm the zero rate by the end of August so that farmers can start planting additional crops this autumn. However, this is a one-off derogation and does not abolish set-aside permanently.
The decision was driven by low intervention stocks, the uncertainty of this season’s harvest due to the disruptive weather, and the livestock sector’s high prices. The Commission estimates that the move should increase EU cereal production by between 10m and 17m tonnes for the 2008 harvest.
There was little opposition to this move, with only Slovakia raising a slight objection due to the environmental benefits of set-aside. The Commission is well aware of these benefits and is in the process of trying to quantify them in time for the November Health Check, when plans to abolish set-aside permanently will be discussed.
The question is: will compulsory set-aside be reinstated in 2009 or is this the end of the mechanism in its entirety? The fact that the Commission has set it at 0% rather than abolish it suggests that farmers are meant to recognise that it could return, and should therefore be discouraged from ploughing out valuable habitats. However, there is an expectation that it could be permanently removed as early as 2009 and definitely by 2012 at the latest.
There is little doubt that whatever the outcome of set-aside under the Health Check, farmers will be encouraged to keep valuable habitats, presumably with additional agri-environmental schemes. Of course, under the existing Single Payment regime, land does not have to be cropped or grazed to trigger entitlements. It can be left in ‘arable fallow’ for one year or in longer-term fallow with a grass or other cover, both of which come under the Good Agricultural and Environmental Conditions (GAEC) 12 rules (this used to be termed voluntary set-aside). In the UK, a considerable area of poor land and some in environmental strips (Local Environmental Risk Assessement for Pesticides or other) is expected to remain in GAEC 12 in 2008.
Assuming that the 0% set-aside goes ahead, farmers will continue to have set-aside entitlements (at least for the 2008 year). But following the 0% ruling, we expect farmers will be able to activate their set-aside entitlements for payment in 2008 with land that is either in production or fallow.
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