According to a report by the World Trade Organisation (WTO), changes in the CAP have allowed a shift in EU farm payments from income support based payments into more Blue Box payment types which can distort trade.
Under WTO rules, the Blue Box is for subsidies that are tied to programmes that limit production and can therefore distort trade. Blue Box payments include payments which relate to animal numbers and acreage but within schemes that also function to limit production in some way or which require land to be set aside.
At present, farm subsidies remain decoupled from both production and prices and this latest WTO report may highlight potential repercussions for UK administrations designing new payment scheme proposals in England and Wales.