Common Agricultural Policy

Glyn Davies Excerpts

Thursday 8th March 2012 Westminster Hall

[Miss McIntosh]

I am sure the Minister will have heard that. That proposition was not put before the Committee and we have not reached a conclusion on that. The farmers are making a huge effort—unpaid—in areas such as retaining and storing water, for which it may be possible to use funds from the CAP in future.

The CAP needs to provide a clear plan for growth and sustainability. As a Committee, we were not convinced that either the European Commission or indeed the Department have faced up to the challenges ahead. In our approach in the report before us this afternoon, we are perhaps less reformist than DEFRA. We express some reservations about the prospect of capping. The hon. Member for Newport West made an interesting intervention, but we will resist any attempt—it would not be the first attempt—to seek to discriminate against some of the larger units that we have. Farming units tend to be larger in the UK. That is partly historic and partly because they are more productive. We would resist any attempt to discriminate on the grounds of size, and we would also resist the greening of pillar one through compulsory measures.

We recognise that our farmers are already subscribing in larger part to agri-environmental measures than many other farmers in the EU. We believe that successive Governments have done absolutely the right thing in pursuing that policy. We do not want to see our farmers, who are in agri-environmental agreements, discriminated against by having to go possibly at short notice down a different path, or be discriminated against by facing a penalty when they leave agri-environmental agreements to look at new agreements. We want reassurance on that from the Minister today.

[Glyn Davies (Montgomeryshire) (Con)]

Even though I am making an intervention, I should declare an interest as a farmer. Does the hon. Lady agree that we must resist the principle of greening the CAP, which, I must admit, most people in this country support? It must not happen in a way that increases bureaucracy and the difficulty of operating within it to the extent that it discriminates against the British farmer.

[Miss McIntosh]

For the sake of clarity, I am addressing the House as Chair of the Environment, Food and Rural Affairs Committee. I will leave it to my right hon. Friend the Minister to respond to the debate, and I commend the work that he does. Having been a shadow Minister, I am delighted to participate in this debate.

I will deal some of the points that my hon. Friend has made. On food security, the EU must have a significant degree of self-sufficiency. Speaking personally, I am concerned that we are less self-sufficient in this country than we have been historically. That is a comparatively recent development over the past five years. I hope that we can stop such a development in its tracks and that we can become not only increasingly self-sufficient but a major exporter, following the Foresight report in particular and some of the invitations to farmers in that report.

--- Later in debate ---

[Dr Whiteford]

I agree entirely with the hon. Gentleman. Clearly, we have different climates and landscapes, diverse methods of farming and different ways of doing business in farming. Without prejudice to the common market, it is important that decisions are made in a practical way by the people best able to make them.

Member states will need flexibility in the process to tailor implementation to their own needs. Within the UK, all three devolved Administrations must be able to work around the challenges that they face in delivering sustainable agricultural development in some least favoured areas. About 85% of Scotland is classified as least favoured areas. That compares with much lower proportions in some other parts of the UK. I hope the Minister will offer assurances that he will press for greater regionalisation as the negotiations intensify and that the issue will not fall off the agenda.

The hon. Member for Thirsk and Malton (Miss McIntosh), the Chair of the Environment, Food and Rural Affairs Committee, quite rightly concentrated on direct payments in her remarks. I welcome the fact that the Government have moved away from the more rigid position of the previous Government, but I am still concerned about their direction of travel. I welcome the Minister’s remarks earlier on clarifying the Government’s position. I hope that he will listen carefully to the Governments of Scotland, Wales and Northern Ireland on direct payments and pursue a negotiating stance in Europe that reflects the needs and wishes of the whole UK.

It is worth remembering, as the hon. Lady pointed out, that direct payments are there primarily to compensate producers for the increased costs of operating in a highly regulated market and to enable them to meet the high animal welfare and food safety standards that we all expect. We need to acknowledge that that does not come for free. We need to accept the reality that, in the past few decades, farming has not been particularly viable as a commercial enterprise. If we did not support agriculture with direct payments, food production and land management simply would not be happening in large areas of the UK. Farming, especially in the least favoured areas, would have ceased a long time ago.

We cannot consider this in purely economic terms. The hon. Lady hit the nail on the head when she put food security at the heart of the debate. Brian Pack’s 2010 report, which was produced for the Scottish Government, highlighted not just the food security challenge, but the challenges of climate change, water supply, energy use and biodiversity as the starting points for CAP reform. In a global context of rapidly increasing demand for food and the need to manage our natural environment much more sustainably, the case for direct support for farmers is actually much stronger now than it ever has been in the past.

We also need to consider the future of direct payments against the historical backdrop of Scottish farmers receiving a disproportionately low share of pillar one support—a pressing issue for those Scottish farmers who want to export their produce. At present, pillar one rates in Scotland are only €130 per hectare, which is less than half the EU average, and well below the UK average of €229 per hectare. The UK needs to argue for its proper share of pillar one, not least so that it can provide a fairer allocation to Scottish farmers.

[Glyn Davies]

I want to return to the point that I made when I intervened earlier. I think that there is general agreement that pillar one is crucial. In Wales, where we have more than 80% of least favoured areas, it is absolutely crucial. Farmers who approach me are concerned that a significant part of pillar one will be subject to greening policies that are so bureaucratic that they will not be able to comply with them. The biggest threat is that the greening proposals on pillar one will probably make that part almost inaccessible.

[Dr Whiteford]

The hon. Gentleman raises a valid point. In their current form, the greening proposals are probably unworkable. They are inherently bureaucratic, which is exactly what we should be trying to move away from. I am afraid that they will have unintended consequences and that the one size will simply not fit everyone in exactly the same way as we have seen in previous incarnations.

One priority for farmers in my constituency, as well as other parts of Scotland, is the need to retain the option for coupled support for the beef sector. The hon. Member for Thirsk and Malton mentioned that in relation to upland farmers. The Minister will know that Aberdeenshire is famed for its beef, but we face challenges in least favoured areas. A lot of the land used for livestock grazing in Scotland is not suitable for arable farming. Grazing livestock is the most sustainable and environmentally friendly way to manage that land. I hope that the Minister listened to the concerns of Scottish farmers when he met representatives of the National Farmers Union earlier this week. I am sure they made their views known; I hope that he will take their concerns on board and respond to that issue.

Another issue that relates to the point about greening is the three crop rule, which will not work in those least favoured areas where only grass can grow—a lot of those areas are permanent pasture. I hope that the Minister can find a workable solution to that, too.

CAP reform gives us an opportunity to clear up some of the problems with the current approach, including the opportunity to target support at those who are actively farming the land. There has been recent controversy about so-called slipper farmers. It is worth making the point that, certainly in Scotland, more than 98% of those in receipt of farm subsidies are actively farming. It is important to keep that in proportion, notwithstanding the need to tighten up and close that gap.

This is a time of austerity throughout Europe, and everyone is feeling the spending squeeze. We need to justify the support that we give to farmers through direct payments if we want to keep public confidence in the benefits that they accrue. A very strong case can be made for our food producers and land managers, but it is hard to justify large handouts to those who are not actually involved in farming.

It is important that any active farming test is based on how the land is managed, not on an arbitrary accounting measure, because many small crofters in Scotland are part-time farmers—they either run other businesses or have other employment—and they could be adversely affected. Increasingly, perhaps more in my own area than in some others, farmers are trying to diversify their farm businesses. Renewable energy is probably the most obvious example, but they are moving into areas that are sometimes considerably more lucrative that their farming businesses. Farmers who are actively managing land sustainably should not be penalised because of their other business interests.