The UK and the rest of the the EU normally produce more cereals than are needed by their own consumers. However it is expensive to store and export the surplus to other world markets, and the subsidies needed to do so are both costly to the taxpayer and disruptive to world trade. Subsidized EU exports can also undermine the development of local agriculture in Third World countries. Set aside was introduced as part of a programme for tackling the over production of cereals within the EU. A major review of the CAP in 1992 (MacSharry reforms) addressed over production and agreed to reduce the amount of subsidies paid to to farmers for cereals by 35% over the proceeding three years. To help compensate farmers for their loss of income the Arable Area Payments Scheme was introduced. Under this scheme, farmers can claim support payments based on the size of the area used to grow cereals, linseeds, oilseeds and protein crops such as peas, beans and lupins. However, to qualify for these payments, all but the smallest producers must 'set aside' part of their arable land, taking it out of production.
Whilst the present UK government would have preferred to use price cuts alone to reduce over production, it accepts that set aside acts directly and quickly to reduce production and provides significant environmental benefits.
UK farmers have a choice between moving their set aside area around the farm each year or setting the same piece of land aside for a number of years. This gives them more flexibility as they plan their future cropping. Farmers can leave up to 25% of their set aside land uncut for up to three years in order to develop a range of wildlife habitats. Farmers must, however, manage their set aside land so that it could be brought back into agricultural production if necessary. Farmers can claim support payments based on the area of an entire field, and not just the parts used to grow crops. This helps in the protection of the countryside as it means farmers have no incentive to remove hedgerows and single trees which support valuable wildlife, in order to increase the payment area.
The set aside management rules are kept under review and changed when necessary in consultation with the main environmental organizations. Under the current rules, the cutting of the set aside cover is prohibited between the 15th April and the 1st July, when a non selective herbicide has been used to control weeds. Similarly, the cultivation of set aside may not start before the 1st July. These practical rules are designed to help to provide enhanced environmental benefits, particularly for ground nesting birds, such as stone curlews, lapwings and skylarks.
Within the Agenda 2000 reforms of the CAP which were agreed by the member states in March 1999. The principle of compulsory set aside was retained with a rate set at 10% for the 2000 - 2006 period. However the rate for any particular year can be altered by the agreement of the Commission and a qualified majority of member states. Voluntary set aside also continued to be available to farmers. All set aside will receive payment but at a slightly reduced rate matching that for cereals. New rules also came into force in January 2000 (the start of the set aside period) as a result of the Agenda 2000 CAP reforms. The main change is, that although set aside strips normally have to be at least 20m wide, now 10m strips can be placed next to water courses and lakes, including streams and ditches. These strips provide important environmental benefits, such as acting as buffer zones for spray drift, providing wildlife habitat, becoming beetlebanks where beneficial insects can live and breed, and creating wildlife corridors around farms where animals and birds can find cover.
Some crops may be grown on set aside land for certain uses other than food. These range from oilseed rape, used in lubricants, paints varnishes and pharmaceuticals, to non traditional or new crops such as willow coppice or elephant grass, both fuel crops.
Following the recent mid term review (2005), set-aside became part of the new Single Farm Payment with a rate of 8%. However in 2008 the rate was set at 0% - it is thought that the set-aside measure will be abolished sometime in the future.
Pause for thought........ Can you think of examples in other industries in the UK where owners of a resource are paid either not to use the resource, or to manage it in a specific manner?