Do Subsidies Kill Farmers’ Innovativeness?


Do Subsidies Kill Farmers’ Innovativeness?

In July this year, I attended a symposium of the International Farming Systems Association (IFSA) and a SUFISA (see more here) partners’ meeting in the UK. Yes, it was the first of many activities for me this year. The first time in the UK, first time at a conference during my PhD, first time of traveling through the Brussels Airport after that horrendous terror attack and of course, the first time of traveling a long distance on a Sunday.

The expectations for all these first-time activities were massive but the main focuses were the reasons for my travel, to participate in SUFISA partners’ meeting and the IFSA symposium. I finally arrived in the UK on Sunday 10th July in the evening. First, it was the SUFISA meeting and then the IFSA symposium. All too soon, the short but intensive SUFISA meeting came to a close on Tuesday and all attention turned to the IFSA symposium. It was a well-organized symposium, well attended, a great opportunity to interact with many researchers with same visions and objectives, good foods and much more. It was also the time for non-native English participants to change their English accents and to adjust their ears to that slick British English. I found that quite funny but after all,  if you go to Rome, you do what the Romans do.

As part of the symposium, there was a field trip with six options to choose from. Honestly, just by looking at the topics from the six options gave me no motivation but I had to choose one by the way. So I settled on a visit to an organic Silvopastoral Agroforestry (in Shropshire, UK, more here) and a Forestry (Llandegela, Wales) land management systems. Your guess for my choice might just be right. There were two reasons. Firstly, the opportunity to visit a place in Wales for the first time and secondly, to see how a silvopastoral agroforestry system works.

Agroforestry is the integration of valuable forest trees and shrubs with food crops or pastureland while a silvopastoral system is a land-use system whereby trees, perennial ground cover crops and livestock are produced on the same piece of land.


Silvopastoral agroforestry (Source: Shropshire Agroferesty project)

We started our trip early in the morning on Thursday and to the silvopastoral farm. This was about 40-acre farm with about 70 Cattle integrated with over 50 leguminous tree/shrub species, in a nicely spaced-out rows. It was a well-managed farm layout on a beautiful landscape.

And behind this state of the art agroforestry system was a passionate 64-year man, Mr. Aspin Peter. Our tour with him for almost one and half-hours was never a boring one. His compassion, jovial utterances and in-depth knowledge in his field amazed all the participants of the trip. In fact, we exhausted our time without any hint we had spent that much time with Peter.

Participants asked questions during the guided tour to clarify how Peter managed to achieve the successes in his farm. There came in the issue of agricultural subsidies to farmers. Peter was asked about his impression about subsidies from the Government as a way of maintaining and sustaining his agroforestry farm. And to my surprise, he thinks subsidies are for lazy farmers and it is a disincentive to innovation. Thus, he believes subsidies allow farmers to sit back and depend on government for the survival of their farm businesses. But without it, they may be forced to think outside the box and come up with innovative measures to improve and keep their farms running. Is this really the case? It was the first time of hearing this from a farmer as well. I know farmers like subsidies but whether it is always an incentive was not something I had given a second thought. Peter made me pause to think about that.


Visit again next time where I take you through the rest of the trip and provide an extensive discussions on agricultural subsidies and  farmers’ innovation.







2 Responses

  1. Zorica

    Papa congratulations for your Blog, I really like it. I wish you a lot of success! 
    I highly support the idea that Subsidies are measure for lazy farmers, or they give incentive the farmers to be lazy. However, one factor of great importance to be mentioned is the awareness and the mindset of the farmers. It seems that the EU farmers tend to be more aware and more properly use the subsidies given to them. Nevertheless, there are several aspects that should be considered while answering this question. The World is so heterogeneous, so everywhere the cases are different.
    Hereby, I would like to mention my country as a case. I do not like to criticize. I would simply like to describe the actual situation and the subsidies allocated to the Agricultural Sector. Republic of Macedonia as an EU candidate state in its pre-accession period receives Direct Income Payments as a measure of CAP. Each year, the DIP spending dramatically increases, the trend goes strictly upwards, especially from 2007 onwards. The distribution of payments is made with respect to SAPS using the historical model, or SPS, and so decoupled from production. But, the production and the quality of the production are constantly decreasing. The own fact that the subsidies are decoupled from production has a lot to do with the awareness of the farmers, something that I mentioned above. It equivalently decreases their incentives to produce, and increases the incentives for other purpose use, because the subsidies are given in monetary amount to farmers.
    There are several requirements for the eligible farmers: 1).The farmers have to register their parcels in the system of identification of agricultural parcels (Minimum 1 ha of land is the requirement to receive a DIP); 2).To comply the requirements that are prescribed on the list of special animal conditions for good agricultural practices (GAP) and protection of the environment (Cross- compliance); 3). The farmers have to settle all the financial duties regarding the Ministry of Agriculture, the Agency for Agricultural support and Rural Development, the Public pastures company (for using the pastures that are state-owned), the aquatic communities, and the users of the resources in the area of stockbreeding have to settle all the obligations required by the Animal Health Act and identification and registration of the animals.
    If we make a look at the criteria, DIP contribute for rural inequality. One might infer that the very small farms (less than 1 ha) are not eligible for the SAPS, and all of these problems cause direct negative effect on the income of the smallholders. The indirect effect is that the direct payments weaken the credit limitless of the farmers who receive credits that they use for further investments and thus, they increase their production, which leads to higher prices of the inputs and higher prices of the agricultural land.
    Another factor particularly for Macedonia and for small countries as it is, is, the privatization of the agricultural land which has made a pivotal role on the reduction of the effective use of land, because of the parceling and fragmentation, which led to high prices of the agricultural land and increased the number of farming households, while at the same time decreasing the average size of the family farm. For instance, in the past, the small family farms realized better productivity and profitability results, despite the negative circumstances during the transition process. Now, it is only the big farms that benefit, and they are the ones to whom the highest share from the DIP support is targeted. I do not agree that big farms are, and should be the most efficient. The importance and care towards the small farms is crucial. They have to be provided with greater access to all of the sources of support, which will provide them higher incomes and more incentives to produce. Small doesn’t mean unproductive! On the contrary- They should be considered as small, but efficient drivers of the competitiveness of the agro-food sector.
    A big disadvantage is that the time planning is not corresponding to the season of specific crops, so some producers receive the money after the season has been finished instead of receiving it in advance. Way to mitigate this inconvenience is an aggregate time planning for several years and considering the seasons of all the crops, but it hasn’t been done so far. Moreover, while in the CAP, the payments for set-aside are so long ago abandoned, in Macedonia it still exists, so subsidies also go for farmers who decide to leave their land for some period of time in order to improve the productivity of the soil.

    Lately, for the farmers in Macedonia, it is difficult to comply with the environmentally-friendly practices, because in their production process they use very detrimental practices for the environment and simply lack of incentives to preserve the environment. It may not be their fault and it is just how it is here. It is again directly related to the awareness and the mindset of the farmers and the own system of the Country.
    What actually should be done to increase the productivity and the efficiency of the farmers and farms in general, is to give the subsidies to the farmers in the form of raw materials and machinery. Most of the farmers use outdated machinery which makes them less efficient and productive. This will totally change the cycle, and will boost the agricultural production and make the farmers more hard-working, aware and happier.

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