Over the past ten years we have come quite used to the Labour government not wishing to interrupt the accumulation of wealth by the richest individuals and companies in the country. As Peter Mandelson put it so inimitably way back in 1998: "We are intensely relaxed about people getting filthy rich."

It is one thing to be relaxed about people getting filthy rich but it is surely another to be relaxed about the filthy rich getting richer still from unlimited taxpayer-funded handouts. But that is exactly the policy of this government, which is continuing to oppose any limit on the amount that an individual can claim in farm subsidies under the EU's common agricultural policy (CAP).

Around £2.5 billion is paid out in the UK each year in farm subsidies. As things stand, half of this goes to the top 10 per cent of recipients. In 2005 David Hencke and Rob Evans of The Guardian and I forced the government to open the books on who gets what. The list of top claimants read like a page out of Burke's Peerage. The Duke of Westminster has an estimated net worth of £4.5 billion. He got £1.3 million in three years in farm subsidies. The Duke of Bedford, the Marques of Cholmondeley and Sir Richard Sutton feature high up on the list, as does the Earl of Buccleuch, who owns a fair sized chunk of Scotland. Prince Charles lags somewhat behind with - but he shouldn't worry. When he finally accedes to the throne he'll inherit the subsidies currently going to his mum for Windsor and Sandringham: a cool half million a year.

It is a similar picture right across Europe. Prince Albert of Monaco gets a hefty six-figure handout, while the Crown Prince of Liechtenstein, who is not even an EU citizen, nets well over a million every year for his estates in Austria. In Spain, the Duchess of Alba is among the top recipients dubbed 'sofa farmers'. Under the perverse logic of the CAP, the bigger the farm, the bigger the subsidy. Land ownership has always been concentrated in the hands of the few and now that you don't even have to grow anything to get a subsidy, big landowners can get paid for sitting and watching the grass grow. Alternatively they can rent out their land to a working (and unsubsidised) farmer while keeping the subsidy for themselves. It's no wonder that small farmers are being bought out by their larger and more heavily subsidised neighbours or that young farmers can’t get a start because land prices have are so inflated by the flow of subsidies.

The European Commission has realised that the stark inequalities of the CAP and in particular the huge payments to Europe's fat cat landowners are an embarrassment and has proposed limiting very large payments to individuals. A hard ceiling of €300,000 was proposed in 2003 but was resisted by the UK and Germany, the two countries that have the largest proportion of very large farms. This year the Commission is floating a slightly more modest taper that would cut the very highest payments by around one third. The same issue is on the agenda in the United States, where subsidy payments can be even bigger. President Bush, not known for his redistributive tax policies, is threatening to veto the farm bill unless Congress accepts his plan to cut farm subsidies to anyone earning more than $200,000 a year.

So why is the Labour government opposing payment limits? After all, Gordon Brown made targeting (otherwise known as means testing) the foundation of his welfare policy. Why should his government be against means testing for farm handouts? As shadow chancellor in the 1990s he made his name revealing the fat cats in the recently privatised utilities and calling for a windfall tax on their excess profits. Why no windfall tax on excess farm subsidies?

My conclusion is that this is one of those issues where Ministers have simply not engaged, and instead are happy to parrot the lines given to them by their blinkered civil servants at Defra.

Officials argue that a payment limit would be a bonanza for lawyers, as farms simply subdivided their businesses to evade upper limits. This rather depends on where the limit is set, and there are plenty of ways of guarding against evasion: just ask the Inland Revenue for some advice. Another argument is that a payment limit would penalise large, commercially successful farms. But if a farm is commercially successful, does it need a subsidy at all? It is sometimes said that a payment limit would hit Germany and the UK - two countries that already pay in far more to the CAP than they get out. Wrong again. The Commission has explicitly stated that funds raised from payment limits would be ring-fenced for spending on rural development and landscape conservation programmes in the country concerned. A final argument is that these days farm subsidies are not subsidies at all but payments that recognise farmers as 'stewards of the land'. The more land they look after, so the more they should be paid. Research has shown that to collect their payments farmers do not have to do much more than what the law already requires. Inspections are infrequent and when breaches are found it is extremely unlikely that payments will be significantly reduced.

I'll concede that a payment limit would be mostly symbolic and by itself does not constitute real reform of the CAP. But symbols are important. A modest payment limit now would be a first step towards a wider-reaching reform later. If the government wants to remind voters of its pledge to govern for the many and not the few, this would be a very good way to do it.

Jack Thurston is a former Labour special adviser at the Ministry of Agriculture and is a co-founder of farmsubsidy.org, a pan-European network of journalists, researchers and activists pushing for more transparency in the EU's common agricultural policy.