Common Agricultural Policy

Debate between Lord Plumb and Baroness Trumpington

Thursday 18th November 2010 Lords Chamber

[Lord Plumb]

My Lords, in declaring my farming interests and involvement with agricultural policy and development over many years, I welcome every opportunity to look to the future—recognising, as I hope we do, that farming is part of a global industry as well as a major part of our national economy.

Many noble Lords will remember that the UK’s farm policy changed from the price guarantee and efficiency payment system when we joined the European Union in 1973—a policy which farmers were beginning to realise was creaking at the seams as production and costs increased—and moved, in six steps over a period of five years, into the common agricultural policy. The CAP has faced a lot of flak over the years, and some of the criticism has been justified, but those who wish to scrap it should understand, as my noble friend Lord Greaves has recognised, that it operates in the long-term interests of consumers.

The CAP has been regularly reformed over the past 50 years and, despite its often perceived failings, reliably fulfilled its primary role of providing high-quality food throughout Europe. It has also delivered the current standards of environmental management, food hygiene and animal welfare. However, this more modern food and farming industry has become energy intensive, requiring oil to produce fertilisers, agrochemicals and fuel. Agriculture uses 70 per cent of the world’s water and is responsible for 14 per cent of global greenhouse gas emissions. Agriculture and the food industry—which now employ 14 per cent of our nation’s workforce—are therefore very much part of the global climate change problem. The demand for more renewable energy sources also means that the food processing industry now has to compete with the biofuel industry, which uses sugar, maize and wheat, for example, for raw materials. As that demand increases, the cost of food will rise.

Before I raise the issues that the reformed common agriculture policy will have to confront, your Lordships may wish to consider the reply I received from my noble friend Lord Sassoon in response to questions I posed, following the spending review debate, about Defra’s position. After recognising that Defra’s running costs would be reduced by £174 million, he stated that, by the end of the spending review period, a saving of £66 million will be made right across the rural development programme for England. The document which my noble friend supplied said:

“However, by making the most effective use of the European funding available to the programme and by taking advantage of movement in Euro/Sterling exchange rates, funding on the Higher Level Scheme will rise by 83% by 2013-14”.

Where hedging risks from exchange rate movements represented good value for money,

“Defra, Natural England and the Rural Payments Agency will work to ensure RDPE payments are made promptly and accurately”.

I welcome that.

The CAP will be reformed in 2012-13. As to its cost, many figures are quoted and misused, but they are spread across the lands of 500 million people, and I am told that €50 billion—£40 billion—is equal to 23p per day to consumers.

A reformed CAP has to confront five new issues; my noble friend has already mentioned them. They include food security, price volatility, climate change and rural degradation. The intensification of farming, as it has changed over the years and continues to change, threatens the viability of extensive regions of moorland and forest. There are three conflicting demands: the price of food against the background of budget control and the effect of the recession on consumer spending; globalisation and the liberalisation of world trade as we try to feed 9 billion people in the world; and the long-term trend in energy costs and the incentives for growing energy crops. The Commission’s proposals as we have read them in their leaked form are a little like the curate’s egg.

With all the development that is taking place, I am optimistic about a future in which science and technology, including GM crops, will become more important. In order to feed the world’s growing population, we need to double the output of food. We need a progressive common agricultural policy. It should be clearer, simpler and less confusing. It should involve less risk and be more market-focused and competitive in spirit. It should offer incentives to improve environmental performance. Above all, a common agricultural policy has to maintain productive capacity.

I hope the Government will oppose a renationalised policy giving more flexibility and possible co-financing by member states. I hope the Minister will also look further at the regulation payment rates for agri-environment schemes, as set out in his letter following our debate on the Prince’s Countryside Fund.

[Baroness Trumpington]

My Lords, before the noble Lord sits down, may I ask him whether he includes the valuable research done under the heading of “general agricultural policy”, which is of benefit to the entire world?

[Lord Plumb]

Of course I value the tremendous research done both privately and publicly. Without it, we would not have seen the growth that has been delivered through science and technology. That development is not only important but has been taken on with enthusiasm by people who realise that, in the long term, the food industry is probably one of the most important industries that we have in this country and throughout the world.