“Diversification” is defined by the Rural Department of the Government, DEFRA, as “the entrepreneurial use of farm resources for a non agricultural purpose for commercial gain”. 

DEFRA is, of course, guided by the EU and its CAP policy.  The importance of the CAP in the EU is underlined by the fact that just under half of the total EU budget is spent on the CAP, being just under 50 billion euros in 2006. 

Some other interesting statistics: less than six per cent of the EU’s population works on farms, and we are told the number of European farmers has fallen each year.

Also, just under sixty per cent of the population of the member states of the EU live in rural areas, and those rural areas cover ninety-one per cent of the EU. 

Diversification has become a key area within the CAP, and its objects supports diversification in rural development.  The review due at the end of 2012 results from the 1999 “Agenda 2000” agreement, which divided the CAP into two “pillars”: production support and rural development.  The rural development measures included diversification, and also support for young farmers (this is important, as about five per cent of the EU farming community currently is less than 35 years old).

In 2003 a European commission report suggested that the CAP needed significant reforms.  The report’s findings were largely ignored and, put simply, France led an agreement by EU countries to a fixed rate for CAP spending that would not be changed until 2012.

It is this review that we are now approaching, and 2012/2013 will bring some inevitable changes.

In April this year, the commissioner for Agricultural and Rural Development Dacian Cioloş headed the debate on the future of the CAP.  At a Brussels conference 19th and 20th July summarising the conclusions, he stated that he would like the new CAP to be “… fit to address seven major challenges: food production, globalisation, the environment, economic issues, a territorial approach, diversity and simplification”. 

For these reasons, the future of diversification in agriculture of this region is key.  Under the proposed CAP reforms, all the signs from the debate earlier this year are that diversification will become more and more important, particularly with genuinely “green concepts”. 

We will get a communication in November 2010 and then a formal consultation will be launched in 2011, during which time the legislation will be drafted.

In 2011 the proposal will be presented to the EU Council, and the European Parliament.  Following the Lisbon Treaty in December 2009, extending the powers of the European Parliament, agricultural matters are now decided by the European Parliament with the European Council. 

Some commentators believe that this will lead to the European Parliament having strong lobbying from various sectors.  And some believe that the involvement of the European Parliament will cause a long procedure to result in further delays before legislation results. 

The April 2010 debate shows that some EU citizens believe that the EU budget should not be spent on the CAP.  Others argue that subsidies are essential to keep the rural environment. 

Given the statistics mentioned above, you can see why there is a strong view that a lot of money is perhaps being spent on less than six per cent of the EU’s workers. 

One can also see how the trend towards non-agricultural use, based on those figures, will inevitably increase.

The current rural development policy of the EU is focused on three “thematic axes”.  These include improving the quality of life in rural areas, and encouraging diversification of the rural economy. 

The Brussels conference this summer concluded that the reform should, amongst other things, ensure the protection of the environment, conservation of the countryside, sustainment of the rural economies and preserving/create rural jobs, and also mitigate climate change and make adequate resources available for successful rural development.

This is excellent news for farmers in the region, if it can be delivered.  It may mean more CAP money for non-agricultural activities.  

The lobbying will be intense, and no one should assume that there are any “done deals”.

It could equally herald greater uncertainty for rural businesses relying on CAP support. 

What, however, is clear is that if farmers in this region can move away from direct support through the EU/CAP, through diversification, that must make sense for the future survival of their business. 

In conclusion, the purpose of the BALE award is to encourage, reward and celebrate diversification in the region.  Its importance will increase, with uncertainties under the CAP, and we will no doubt see further changes after 2013, with the possible introduction of a new system of subsidies. 


This article is for general information purposes only and does not constitute legal or other professional advice. You should not act or rely upon this information.

Author: Jeanette Dennis, Agricultural Solicitor

Date: September 2010