Panorama and Farm Subsidies
Samantha Poling reveals how millions of pounds of public money are being paid out to businessmen and millionaire farmers in an abuse of the farming subsidy system. Investors tell us how they have been paid without having to do any farming at all. And Samantha also sets out to see if she can take advantage of the subsidy system and become rich from the loophole.
The programme also examines the rest of the subsidy system and hears criticism of large payments to wealthy individuals like the Queen and the Duke of Westminster simply on the basis of owning large amounts of land.
I managed to watch about two minutes of this before getting bored, but the what I saw and the synopsis seems to suggest it was a lazy ill-informed programme.
Put to one side what we think about farm subsidies. Let us just take them as a fact.
They are an entitlement to an annual payment with certain terms and conditions which was set up to last until 2013, and may continue longer. The main condition is that the land the subsidy is ensuring stays in a good agricultural and environmental condition stays so for each year. These entitlements are tradeable.
Some farmers have wanted to cash in their entitlement for a lump sum, they may be retiring, moving, divorcing or just want the cash. So a business man can buy the entitlement, giving the actual farmer what he values the future value of payments at. The businessman then receives the annual payment as long as the land is maintained.
Is that so hard to understand? The businessman isn't milking the system. The system had provided the subsidy for the farmer and the farmer has cashed it in with the businessman.
The fact the businessman is making a large return on the lump sum invested is a reflection on that setting up these deals isn't that easy. A couple of years ago I spent some time looking at them for a city contact and the difficulties and risk meant he walked away from the potential return.
And as to large landowners receiving large returns. If you pay people by the acre to manage land and reward them by the mile for planting hedges then those who have more will get more. Because they do more.