Abolishing direct payments will undoubtedly ease land prices and enable young farmers and new entrants to get a foot on the farming ladder.
Lauren Dean and Olivia Midgley report...
Prof Dieter Helm, chairman of the independent Natural Capital Committee and specialist in energy policy, regulation and the environment at Oxford University, said pillar one payments distorted the market and were responsible for pushing up prices to unsustainable levels.
He told the Oxford Farming Conference it was ironic the EU had introduced young farmer payments when its Common Agricultural Policy was the reason high land values were preventing young people from getting into the industry.
Without subsidies, Prof Helm said the UK would see land values normalise to reflect yields, farmers would be paid to deliver public goods and prices would be determined by the market.
Land prices were also a hot topic at the Oxford Real Farming Conference, where Environment Secretary Michael Gove agreed the current payment regime often locked out those without access to large amounts of capital.
He said changing the regime would scupper those landowners who used agricultural land for tax purposes.
“I think one of the things that the current method of subsidy currently does is obviously boot up the price of agricultural land and some people for example use agricultural land for tax purposes rather than caring for that land,” Mr Gove said.
“If we remove those subsidies then the price of land should fall and make it easier for people to move in agriculture on a bit by bit basis and allow them to farm progressively.
“So changing the method of subsidy will create a more dynamic movement towards the type of people who have got different ideas on we cultivate to move into agriculture.”