Common Organisation of the Markets in Agricultural Products Framework (Miscellaneous Amendments, etc.) (EU Exit) Regulations 2019
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Lord Gardiner of Kimble
That the draft Regulations laid before the House on 13 February be approved.
Relevant documents: 18th and 19th Reports from the Secondary Legislation Scrutiny Committee (Sub-Committee A)
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)
My Lords, I declare my farming interests as set out in the register.
The matters in these instruments are closely interrelated, and I hope that noble Lords might find it helpful if I speak to them together. These instruments amend retained EU law and domestic legislation on the common organisation of the markets in agricultural products—also known as the Common Market Organisation or CMO —to ensure their smooth transition into a domestic regime. They also amend retained EU law and domestic legislation covering a limited number of miscellaneous rules and functions within the wider common agricultural policy.
The CMO is part of Pillar 1 of the common agricultural policy, alongside direct payments. It comprises a number of schemes and standards designed to support, directly or indirectly, farmers and the prices they receive for their goods.
The technical and operability amendments made in these regulations will maintain the effectiveness and continuity of this legislation, which would otherwise be inoperable following exit. They will ensure that we can continue to operate schemes under these regulations for our vital farming sector and maintain the standards they set, which support confidence in our farmed goods in domestic and international markets.
This legislation makes appropriate corrections to ensure that these standards and processes continue to operate in a UK context. Where changes are required, we have endeavoured to ensure that these will have limited impact on businesses and other stakeholders. We have consulted extensively with the devolved Administrations on these instruments to ensure that the legislation that they amend continues to work, while also respecting the devolution agreements.
For six of the instruments, most of the areas they cover are devolved, with powers transferring to devolved Ministers. In many cases the Secretary of State is able to act on behalf of the devolved Administrations, should they give their consent. However, in some circumstances this does not apply to Wales, due to certain provisions that are specific to the Welsh devolution settlement. The Welsh Government have carefully considered whether the Secretary of State should be able to act on their behalf in respect of each of the functions concerned, and the drafting reflects that. Only one relates exclusively to reserved matters: the draft Common Organisation of the Markets in Agricultural Products and Common Agricultural Policy (Miscellaneous Amendments) (EU Exit) Regulations 2019.
The majority of the instruments under debate concern the common organisation of agricultural markets. The CMO sits in Pillar 1 of the CAP and was set up as a means of meeting the latter’s objectives, in particular by stabilising markets, ensuring a fair standard of living for agricultural producers and increasing agricultural productivity. It has over time broadened to provide a range of measures that enable the EU to manage market volatility, incentivise collaboration between and the competitiveness of agricultural producers and facilitate trade.
The first statutory instrument in this group, draft Common Organisation of the Markets in Agricultural Products Framework (Miscellaneous Amendments, etc.) (EU Exit) Regulations 2019, amends retained EU legislation with the purpose of making operable the overarching framework of the CMO, rather than the detailed rules of each of the constituent policies. These amendments are all appropriate to ensure the continued operability of this framework, and include such amendments as those replacing tonnage ceilings for market intervention schemes that apply across the whole EU with a level that is suitable for the UK’s domestic market.
Lord Gardiner of Kimble
My Lords, I am most grateful to all noble Lords who have spoken. Like the noble Lord, Lord Addington, I have the disadvantage of being before my noble friend Lady Byford and the noble Lord, Lord Grantchester, who farm in a much more extensive manner than I do. I reiterate my commitment to the farming world as a farmer.
I thank the noble Lord, Lord Addington, and the noble Lord, Lord Grantchester, for acknowledging government support. I think I have been clear in previous debates—we have had a number of debates on this—about the government commitment to maintain the same level of support until the end of this Parliament, expected in 2022. This is certainly unique. In the European Union, for instance, no other member state’s farming sector has had that level of guarantee. This commitment includes all funding provided for farm support under both pillar 1 and pillar 2 of the current CAP. The noble Lord, Lord Grantchester, may recall from the debate that the point about the RDPE funding is that any agreements under pillar 2 that have already started will continue to be funded by the Treasury under that guarantee, even if they go beyond 2020.
The noble Lord, Lord Addington, asked about change. I entirely agree with the noble Lord, because at a time of change there is always much concern. Sometimes it is not quite as bad as we all imagine. I emphasise that there are no immediate changes for farmers and consumers due to the statutory instruments before us. Indeed, these instruments maintain the status quo, with amendments made to ensure that the existing regulatory regime continues to work properly and to provide a consistent regulatory framework.
I raise two areas where changes have been made. In both cases we have worked to ensure that the impact on farmers, businesses and consumers is minimised. The first is in the labelling of farmed goods, where minor changes are necessary to some labels as UK goods will no longer be able to be identified as EU goods. To allow producers and traders time to adapt and to use up their existing labelling stock and reduce waste, we have pragmatically introduced transition periods for these labelling changes until the end of 2020. Another pragmatic point I mentioned earlier was in the tagging of live bovine animals. Here EU legislation requires the retagging of all live bovine animals imported from third countries. We have exempted animals from the EU from this definition so as not to introduce a new requirement of retagging EU animals when we leave. As I said before, this is because the tags are fully compliant with our IT systems, and we thought that that would prevent unnecessary additional costs. These statutory instruments are absolutely designed to ensure continuity and stability for farmers by maintaining the current CMO and livestock frameworks. I think the noble Lord, Lord Addington, meant the complete range of regulations. On livestock movement, again I assure the noble Lord that there will be no changes on the ground. I reiterate that this livestock movements SI does not introduce new rules or new policies. The rules that livestock keepers and businesses must comply with will be unchanged by this SI.
My noble friend Lady Byford asked a number of questions. If I get all the answers, I will of course report on them. If I do not, it would be much better if I wrote in some detail. My noble friend asked about livestock fee charging and what this entails. There is a power in the retained regulation on cattle ID registration, regulation 1760/2000, to charge for controls in this area. It is not Her Majesty’s Government’s policy to charge for these controls and we have no plans to do so.
My noble friend Lady Byford asked about agricultural promotions and the specific questions raised by the SLSC about funding for agricultural promotions laid out in the Common Organisation of the Markets in Agricultural Products Framework (Miscellaneous Amendments, etc.) (EU Exit) Regulations 2019. The department provided a response and we confirmed to the committee that there is no funding from the Government for the continuation of these multi-programmes after exit until their completion in 2020 and that stakeholders have been informed.
On the question of livestock, the ESIC and SLSC’s sifting committees made similar points suggesting that the changes made by the SI conferred significant new powers on Ministers and provided for charging for cattle ID. As I say, they disagreed with the department’s original Explanatory Memorandum, which described the changes being made by this instrument as minor and technical. They took the view that 20 or so amendments being made by it had the effect of conferring functions on a Minister in their domestic ministerial capacity that EU regulations confer on the UK as a member state. As I said, we have no intention of charging.
My noble friend asked about price reporting. We have made operable the provisions to set up a system for price reporting in the sugar sector. If I have any further information on that, I shall write to my noble friend and provide a copy to all noble Lords who have spoken.
My noble friend asked a question on public intervention and crisis measures. We are retaining these measures, as it is not appropriate to revoke them under the European Union (Withdrawal) Act 2018. However, the economic case for market intervention is weak. In a global trading environment it can achieve its aim of increasing prices only in very specific circumstances. Where it does, there is a cost not only to the taxpayer but to consumers. The Government—I think this is the case across parties—have not historically supported the general use of public intervention and private storage aid in the EU, and the medium-term intention would be to phase out this policy.
My noble friend Lady Byford asked about a safety net and what assistance would be available if there were a crisis. We have already carried out significant no-deal preparations and have contingency plans in place to minimise disruption as much as possible. As part of this, we are in close contact with the devolved Administrations, all farming sectors and farming unions, including the livestock sector, and are looking at a range of possible options if we were to leave without a trade deal.
The noble Lord, Lord Grantchester, raised a number of matters on consultation and assessment. As I think the noble Lord is expecting me to say, there are no changes in policy except in the really limited areas I have described, which are all pragmatic. Where there are changes, they are largely minor and reflect the domestic context. I can say that Defra carried out targeted stakeholder engagement on these policy changes and, as I say, consulted extensively with the devolved Administrations. Where there is a possible impact on businesses, such as with labelling changes, a transition period will be implemented.
I want to take noble Lords back and embellish what I said about multi-programmes. The term refers to programmes that involve multiple member states. I think we all have to accept that there is no reasonable way in which we could make these schemes work domestically, given that they engage a number of other member states. I do not think that the UK’s share of the work and funding is variable. For simple programmes that require the participation of only one member state, as I have said, we have given a Treasury guarantee that they will be fulfilled. However, it would not be possible to operate programmes with multiple member states and so we will not be continuing with those.
Lord Grantchester
Can the Minister provide clarity on these multi-programmes? There are obviously implications for UK businesses that partake in those, and I understand the Minister’s remarks on that. However, will he clarify that none of these schemes has implications for government commitments and obligations to fulfil EU schemes as part of the £39 billion transfer of funds? Do they all fall outwith those obligations?
Lord Gardiner of Kimble
It is only reasonable that I answer the noble Lord precisely in writing to provide clarity. I would not want to assume the configuration of the £39 billion and whether schemes in this area may be implicated.
On consultation, the approach we have taken to engagement has been proportionate and fair, particularly given that the changes made by the statutory instruments are technical and operable in so many cases. We have worked closely with the farming world.
The noble Lord, Lord Grantchester, asked about the legislative functions SI. These provisions allow the Secretary of State to require export licences for the export of farmed goods. They are necessary to allow the UK to manage any new third-country export quotas that the UK may need to manage. Examples of current export quotas that the EU manages, and that the UK will therefore need to manage, include export quotas for cheese to Canada and the United States and for skimmed milk powder to the Dominican Republic. As I am sure the noble Lord knows, the administration of import tariff quotas will be subject to separate regulations made under the Taxation (Cross-border Trade) Act.
As I have said, Defra has consulted extensively with the devolved Administrations on all aspects of the SIs, and consent was sought and given for those that relate to devolved matters. In so far as the regulations make amendments to food law, we consulted in accordance with our legal obligations through representative bodies such as Dairy UK, the NFU and local councils. We received replies from numerous public bodies and organisations in England, and in all four constituent nations, expressing support for our proposed operability changes.
Where industry bodies requested longer transition periods for labelling, we took that into consideration and increased the length of transition to the end of December 2020.
On the livestock SI, my noble friend Lady Byford, and the noble Lord, Lord Grantchester, with his long-term dairy interest, will be pleased to hear that stakeholders—and I have been part of this—have played a leading role in helping Defra develop the principles and approaches that will underpin the delivery of its planned new livestock tracing services over the next few years, through its traceability design user group. Again, this is really important, and there is enormous buy-in from industry.