Common Organisation of the Markets in Agricultural Products (Fruit and Vegetable Producer Organisations, Tariff Quotas and Wine) (Amendment etc.) Regulations 2021

Baroness Bloomfield of Hinton Waldrist Excerpts

Tuesday 15th June 2021 Grand Committee

Moved by

[Baroness Bloomfield of Hinton Waldrist]

That the Grand Committee do consider the Common Organisation of the Markets in Agricultural Products (Fruit and Vegetable Producer Organisations, Tariff Quotas and Wine) (Amendment etc.) Regulations 2021.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, this instrument applies to retained EU law relating to the common agricultural policy, including the common organisation of the markets, or CMO. It uses powers in the European Union (Withdrawal) Act 2018 to correct deficiencies in retained EU law and enable functions to be exercised by UK public authorities.

First, the instrument fixes an error relating to the commencement of Part 4 of the Agriculture (Payments) (Amendment, etc) (EU Exit) Regulations 2020. There is doubt as to whether the amendments made by Part 4 of that instrument came into force, as intended, at the end of the transition period due to the error in the commencement provision of the instrument. To put this matter beyond doubt and ensure that the retained EU legislation has been amended as intended, this instrument revokes and remakes the amendments that Part 4 of the Agriculture (Payments) (Amendment, etc) (EU Exit) Regulations 2020 purported to make. Those amendments concerned fruit and vegetable producer groups, fruit and vegetable producer organisations and notifications of agricultural market information to domestic authorities. The instrument also revokes and remakes some provisions made by the Common Organisation of the Markets in Agricultural Products (Producer Organisations and Wine) (Amendment etc.) (EU Exit) Regulations 2020 concerning fruit and vegetable producer organisations that may not have taken effect due to the commencement error in Part 4 of Agriculture (Payments) (Amendment, etc) (EU Exit) Regulations 2020.

Additionally, this instrument remakes amendments to EU regulations relating to the fruit and vegetable and processed fruit and vegetable sectors and the fruit and vegetable producer organisation aid scheme, including, among other things, activities that can be funded under the scheme, the amount of aid that can be claimed and the requirements that the producer organisation must meet to be eligible for funding. No policy changes are made through these amendments; they simply minimise any ambiguity in the rules, which will apply to this legacy scheme in the UK until it is switched off in England.

The instrument also amends retained EU legislation to make specific provision for transnational producer organisations implementing an ongoing operational programme to continue to receive aid in respect of all their members based in the UK and the EU until the end of their ongoing operational programmes. These amendments are required to prevent the retained EU legislation being operationally deficient as a result of the application of Article 138 of the withdrawal agreement to ongoing operational programmes.

The instrument also remakes amendments to EU Regulation 2017/1185 to ensure that Defra and the devolved Administrations can continue to obtain certain production and price data from economic operators. The information is used for market management purposes. Defra and the devolved Administrations intend to maintain the collection and use of this information in the UK.

I turn now to the provisions that concern the administration of tariff rate quotas. The specified EU law relevant to this instrument sets out broad provisions on the administration of export tariff quotas that result from international agreements. The instrument seeks to make operability amendments, which are needed to give the Secretary of State the power to make detailed provisions in a future instrument for the administration of export licences for UK goods imported into third countries under tariff rate quotas, such as UK cheese imported into the United States. This in turn will allow UK exporters to continue to benefit from preferential market access, although other powers will be needed to ensure that traders in the Crown dependencies can access such quotas.

These amendments replace references to “EU” with “UK” and remove references to the administration of import tariff rate quotas, as these are covered by regulations made under the Taxation (Cross-border Trade) Act 2018. No policy changes are made by these provisions.

I turn now to the provisions concerning wine. We have included a minor change to entry 1 of the table at Annexe 9A of retained Regulation 1308/2013. This change will make it clear that the established wines referred to are those recognised as

“established protected designation of origin”

and “established protected geographical indications” of the type referred to in Article 107(2) of retained Regulation 1308/2013.

I hope I have assured your Lordships that this is a simple instrument needed to correct remaining inoperabilities in retained EU law to create an operable legislative framework to manage and administer many aspects of agricultural policy. I beg to move.

--- Later in debate ---

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I thank all noble Lords for contributing to this short debate. I agree with the noble Baroness, Lady Jones, that this situation is far from ideal. However, to put it in context, since July 2018, Defra has laid 340 SIs subject to parliamentary procedure, 216 of them relating to EU exit. Current estimates are that we have at least as big a programme in mind for the current year. The 340 instruments Defra has laid since July 2018 represent nearly one-quarter of the UK’s entire EU exit and transition period SI programme. I am afraid that some errors were always going to happen given that volume of work.

I was asked specifically by the noble Baroness, Lady Ritchie, and the noble Lord, Lord Bhatia, what the error was. It was a drafting error in the commencement provisions of the Agriculture (Payments) (Amendment, etc) (EU Exit) Regulations 2020. There is some uncertainty as to whether Part 4 of that SI, the amendments that relate to retained EU legislation, came into force as intended on IP completion date as that part of the SI was stated to come into force immediately before IP completion date. That resulted in Part 4 of the SI purporting to amend retained EU legislation that did not exist immediately before IP completion date. I hope that that answers the question.

My noble friend Lord Moynihan asked a number of questions to do with wine, as did my noble friend Lady McIntosh and the noble Baroness, Lady Jones. The Government have met the Wine and Spirit Trade Association. Defra Ministers had useful discussions with Miles Beale and his team at WSTA. The WSTA was keen to press its concerns about VI-1s and raised a few other issues, including labelling and electronic certification, which officials are actively looking into.

On my noble friend Lord Moynihan’s questions, the UK wine sector prepared well for Brexit, with the result that trade has continued largely unaffected by the new arrangements. However, like some other food sectors, wine has encountered ad hoc problems with exports to certain EU member states in terms of customs arrangements and wine certification. We have worked with the companies involved, their agents, the Foreign, Commonwealth & Development Office and the member states concerned to resolve immediate issues and to establish what can be done to ensure that the matter does not reoccur on future shipments. Leaving the EU gives the UK Government scope to review and change policies so that they may better suit the needs of our people and businesses, so there may be the opportunity to review the need for VI-1 certification for imports. We keep all these areas of retained EU wine law under review to ensure that they meet the needs of consumers and the trade and are generally fit for purpose. It is possible to transmit wine certification via electronic means. We will consider all aspects of the process and transmission as a matter of urgency.

My noble friend Lady McIntosh asked about stakeholder engagement. The SI was drafted in active consultation with policy officials from all devolved Administrations, who were given the opportunity to comment at each drafting stage. Affected fruit and vegetable producer organisation stakeholders are aware of and engage with Defra’s plans for the sector. Defra has proactively engaged with transnational producer organisations affected by the UK leaving the EU and the operability amendments that that requires.

I think that I have already answered the question about wine importer labelling, but I should add that the Government have introduced an easement that allows an EU importer or bottler to be displayed on wine marketed in the UK until 30 September 2022. Similar arrangements are made for food products and are designed to support the industry’s transition to new rules. In the intervening time, we continue to work with industry to review the current wine labelling arrangements and replace them with something more practical if that is possible.

The noble Baroness, Lady Ritchie, asked a number of questions about Northern Ireland trade, some of which I will answer in writing if I am unable to do so here. In terms of trade disruption, the UK has always been clear that implementing the protocol had to respect Northern Ireland’s place in the UK customs territory. We have protected and respected that important principle. Through the UK trader support scheme we are ensuring maximum continued ability for Northern Ireland businesses to export both to the EU and to GB and therefore keep disruption over the next few years to a minimum. In the long term, the prosperity of Northern Ireland will depend on the whole set of economic measures that the Government implement, of which agriculture and agri-food is only one part. I should add that agriculture is, of course, currently devolved, but we are very keen to work with all the DAs because we all want the same thing: an environmentally sensitive, sustainable food system.

Turning to the questions asked by the noble Baroness, Lady Jones, on the impact on the food and vegetable producer organisations aid scheme, there is actually no impact on this scheme. The UK continues to follow EU legislation as it applies to EU member states for the duration of the current operational programmes implemented by producer organisations. They have continued to implement their approved operational programmes and receive all payments due. The retained legislation, as amended by this SI, will apply to any new operational programmes implemented by UK POs. This is likely to be from 1 January 2022 onwards. We hope to begin negotiations shortly with the EU to agree to switch to retained legislation before the end of the current programmes, but this SI will be in force before that happens. This means there will be no gap between legislation, and therefore no impact on producer organisations.

The noble Baroness, Lady Jones, also asked whether there were occasions when fruit and vegetable producer organisation legislation could have been invoked if the relevant amendments had been in force. The answer is that they could not: EU legislation continues to apply to existing operational programmes. She also asked about requirements about where head offices are sited, whether they change the position for transnational producer organisations and whether they can still access funding. As we are continuing to follow EU legislation for the duration of current operational programmes, transnational producer organisations can continue to receive funding in respect of all actions carried out by their members, no matter where in the UK or the EU they are based. If we switch to retained EU legislation following agreement with the EU, this SI will mean that UK transnational producer organisations will continue to receive aid in respect of all their EU-based members for the remainder of their current programmes.

The noble Baroness, Lady Jones, also asked whether the market for wine has recovered following the transition period. The UK market saw a slowdown at the beginning of the year, as many companies had moved supplies of wine as a contingency for a no-deal Brexit. Similarly, the hospitality sector has been hit at a global level due to Covid, which has also impacted on transport costs. We are seeing the sector recover now, and the opening up of the hospitality sector will help. In answer to the question about whether the UK has a fully functioning GI scheme, the UK has a fully functioning GI scheme covering food and drink, wines, spirits and aromatised wines. We also have a new logo for products protected under the UK scheme to use, which I recall was dealt with in an earlier SI when we met one another. On third-country wine imports and exports, we have taken steps to ensure that wine products can be imported and exported freely. We have recently extended the easement whereby any wines arriving from the EU will not need to have associated wine certification to 1 January 2022. This will provide time for the sector to adjust to the new trading arrangements, including those set out under the UK-EU Trade and Cooperation Agreement.

Lastly, I reiterate that we are in continual discussions with the Wine and Spirit Trade Association. I think I have now answered most of the questions, barring those from the noble Baroness, Lady Ritchie, which I will answer in writing. I apologise to my noble friend Lady McIntosh that I am unable to answer her specific questions on honey, which I recall was also covered by a previous SI: I fear that the honey team is not in its hive today. I will look at Hansard in case there are other points I have missed. In the meantime, these regulations are worthy of your Lordships’ support, and I commend this statutory instrument to your Lordships.

Motion agreed.