Common Agricultural Policy

Debate between Huw Irranca-Davies and Dai Havard

Thursday 1st November 2012 Westminster Hall

[Huw Irranca-Davies (Ogmore) (Lab)]

Mr Havard, it is good to serve under your stewardship.

[Mr Dai Havard (in the Chair)]

I have been watching you.

[Huw Irranca-Davies]

I am glad. I need watching, Mr Havard. My thanks to your predecessor, who was here until a couple of minutes ago. You tried to throw me by changing chairmanship as I stood. It was a delight to serve under Mr Chope’s stewardship as well.

I welcome this debate. It is an excellent and timely chance to examine the Government’s approach in the EU negotiations, and to support and challenge it where necessary. I thoroughly commend the Environment, Food and Rural Affairs Committee, and its Chair, the hon. Member for Thirsk and Malton (Miss McIntosh), on their work. I had some lovely nights in my flat reading the Committee’s compendious volume. It was very good and had some excellent recommendations, to which the Government have responded; I read that response, too. The report has brought a good open and transparent debate to some of the key issues around the CAP, including the issue of greening the CAP, which we are debating.

I also commend the engagement of wider society in this debate—that is imperative—including the engagement, mentioned by several hon. Members, with domestic and international non-governmental organisations, farming bodies, farming leaders, farming unions, and farm workers. EU parliamentarians are playing an increasingly important role in this recent process of co-decision. The hon. Member for Thirsk and Malton urged MPs—and Ministers, I think—to, in her words, “snuggle up to MEPs”. We are indeed facing some cold winter evenings, so that might be something that we want to do, although it could lead to some racy headlines, particularly for a happily married man such as me.

The process was always going to be complex and all-consuming for those concerned with food security, domestic and international; competitiveness within the farming sector; and, of course—the focus of today’s debate—the wider environmental and public benefits that good reform can bring. There is the rub: good reform, not just any old reform.

The hon. Lady, who introduced the debate, rightly talked about the potential impacts of any delay to agreement on the multi-annual framework. That is an item that we have raised before. It would be good to get an update from the Minister on where he thinks the budgetary debates are going, because they could have an impact on CAP reform and forestall the changes that we are talking about. The hon. Lady also commented on the broad issue of achieving a level playing field, which we are always chasing. Today’s debate has flushed out not only the difficulty, but the absolute necessity, of achieving that, so that our farmers who strive for the highest standards of environmental gain and animal welfare are not at a disadvantage in so doing, compared with farmers in other EU nations. What struck me about the hon. Lady’s comments was that there is probably cross-party agreement that in the reforms we should be seeking a green and pleasant, but also productive and biodiverse land.

The hon. Member for Banff and Buchan (Dr Whiteford) pointed out that many farmers would not be viable without the support of the CAP, which tempted me to reiterate a comment that I made earlier this year: happy 50th birthday to the common agricultural policy! I do not think that many hon. Members will join me in saying that, but there is an element of truth in the statement that one of the unavoidable outcomes of the CAP over the past five decades has been an element of price stability and avoidance of price volatility. As we move towards a more competitive CAP with fewer barriers to trade that opens out internationally, the challenge will be different.

Successive Governments have made it clear that they need to move away from food production subsidy to more competitive farming and fewer trade barriers. Indeed, the hon. Lady spoke up extremely well for diversity within farming—a critical issue not only within CAP reform, but in wider domestic reforms that the Government are looking at. I entirely agree with her that we need to see the socio-economic importance of the diversity of farming. That will give us resilience, and it includes having smaller farmers alongside larger farmers, and highly productive land alongside less favoured areas. Diversity needs to be maintained and supported, not least for the public benefits that it brings.

Public benefits are not purely about the birds and the bees. I declare an interest as my wife keeps bees. They have done very well this year. I will discuss with the Minister later how they have done well, because it is to do with the preponderance of a particular non-native species in our area, which has kept them going in pollen this year.

[Mr Dai Havard (in the Chair)]

It has done a lot of other damage.

[Huw Irranca-Davies]

Indeed. The hon. Member for Tiverton and Honiton (Neil Parish) spoke with expertise, as always. He described how we got here with the CAP, and spoke about the diversity of approaches to payments in the UK. That will be a major factor for the Minister as he tries to steer a way forward. The hon. Member for Tiverton and Honiton also spoke of his worry that his infatuation with the CAP and farming meant that the men in white coats would soon be coming. I assume he is not referring to officers of the Animal Health and Veterinary Laboratories Agency. He also referred to the madness of some of the Commission’s proposals, so there seems to be a running theme in his contribution.

My hon. Friend the Member for Glasgow North East (Mr Bain) widened the debate significantly and spoke with a great deal of expertise about the increasing speculation in food markets by those who, frankly, have never set foot in a field or run a farm—other than a health farm, so that they could have their limbs massaged alongside their profit margins. There is a world of difference between commodity trading by farmers to enhance their profit margins and pure speculation, which my hon. Friend mentioned, which lines the pockets of traders to the complete disadvantage of not only farmers, but consumers, because it is undoubtedly having an effect on prices.

My hon. Friend also talked about the overriding priorities that we should be focusing on: food security, food price stability and removing trade barriers. Removing such barriers will help the competitiveness of our UK farmers and improve the viability of those in developing nations. It will help us to tackle the global food supply and shortage problems. He talked about innovation and the priorities affecting food supply chains, and their role in climate change, as well as the big social justice issues that we often miss when we talk about CAP reform. He also reminded us specifically of the market distortions of CAP, and their impact on developing nations in particular—the reason we are trying to change it and move away from it.

My hon. Friend the Member for Bristol East (Kerry McCarthy), with a little instigation from me, introduced the concept of one-nation CAP reform, for which I thank her. The basic premise is simple: CAP reform is not only to do with farmers. It is to do with wider public benefits, and taxpayers have a prominent stake in it, as do consumers, NGOs and farmers. It must be a subject that inspires debate beyond the agricultural or food-processing community and this Chamber. My hon. Friend called for genuine environmental benefits, not greenwashing. I am sure that the Minister heard her, and I hope that that call is also heard in the European Parliament. It is a valid concern and brings us back to my initial point: let us have good reform, not just any old reform. One Europe-wide organisation, BirdLife, said that the rather purist original Luxembourg proposals

“would signal the end of any legitimacy of EU direct payments to farmers”.

I think we all agree that we need to avoid that result at all costs and explain to people the wide variety of reasons why it is valid to put those funds back into farming, not least of which is the environmental and wider public benefits.

The hon. Member for Camborne and Redruth (George Eustice), the closing Back-Bench speaker after a wide range of contributions, raised the issue of green tape, as opposed to red tape, and complexity. I agree with him that we need to find ways of simplifying things. He engaged with the detail of proposals and interestingly discussed the cap on CAP payments. That raises the question, for me, of what additional benefits in public goods for the taxpayer can come from very high-level payments. They might take the form of increased productivity on the part of the largest recipients of CAP payments. There is an increasing necessity to explain to taxpayers, day by day, why their money is being used as it is. We can do that, but we need, with the Minister’s help, to explain why it is a good use of money, and what extra we get from it, as opposed to large volumes of production.

The hon. Member for Camborne and Redruth also dwelt on the potential for greater regional management and subsidiarity, which is the direction under the common fisheries policy; I think it is slightly ahead of the CAP in that respect. It took a fair deal of persuasion to get where we are on the CFP, and NGOs, alongside fisheries people, did a lot of good work to articulate the fact that the approach could work scientifically as well as commercially. I think we will win in that case, and I hope that the process continues. Perhaps, some time in the future, we can reach the point of much more ownership, regionally and locally, among the farming communities, NGOs and others, of how we take things forward. Sustainability underpins all that is happening, and the scientific evidence. The hon. Gentleman also introduced the interesting concept, which raised quizzical looks between me and the Minister, of transferable obligations. That strikes me as having some similarities with carbon trading, which has advantages, but also loopholes and disadvantages. The concept is interesting, and worthy of further consideration.

The UK has long been in the lead among the more progressive nations on CAP reform. I am thankful for the leadership shown under successive Governments, in successive negotiations, including by my right hon. Friend the Member for Leeds Central (Hilary Benn) when he was Secretary of State. At the forefront of like-minded and progressive nations, he advocated strong reform of the CAP, to bring about enduring benefits for farmers, consumers, taxpayers and the environment from bold, ambitious, green reform—good reform.

[Huw Irranca-Davies]

The hon. Lady raises a strong point and is right. Although co-decision brings more challenges in negotiation, I welcome the fact that it is a great enhancement of democratic engagement beyond what has been referred to as the bureaucrats. It puts things into the hands of people who are democratically elected, and can speak up for their regions, including on international issues and trade. They can speak up for wildlife and farmers. We need to engage with and influence those individuals.

I was delighted that the head of the agriculture committee came to Westminster for a seminar, attended by various organisations, that brought us up to speed on the 7,000-odd amendments. He has his plate full, because he must work through the various Members who have tabled them and come up with his priorities, just as Ministers do. It is almost like adding a new but very democratic level to the previous tripartite arrangement. However, the hon. Lady is right that it gives an opportunity for a different means of influence. We should use that. Towards the end of the month, I shall be going out to meet European parliamentarians to discuss that very issue. I shall treat that as being as important as meeting the Commissioner.

We continue to believe that farmers should be supported by the Government for the public goods for which the market will not automatically reward them. As my hon. Friend the Member for Wakefield (Mary Creagh), the shadow Secretary of State for Environment, Food and Rural Affairs, has said:

“Labour wants CAP reform to encourage growth, a secure food supply and environmental benefits”.

As the Environment, Food and Rural Affairs Committee notes, those sometimes apparently contradictory aims can be difficult to reconcile, not least in the minutiae of EU negotiations, made more complex, as we have just heard, by democratic co-decision. However, we must reconcile them if we are to have good reform, not just any old reform—and especially not the old-style reform, which did not take us as far as we wanted. To do that we must have friends, and work with them, so I ask the Minister, as the hon. Member for Thirsk and Malton did, to update us on progress on the greening proposals of the more progressive, like-minded states—our friends, including the Danish and Swedish Ministers—and on the extent to which their influence is being felt among the clamour of competing voices, some of which may be arguing for a more retro approach to CAP reform, a “déjà vu all over again” approach of protectionism and old-style production subsidy. By the way, the accidental use of the imported term “déjà vu” in no way indicates any one specific nation that may advocate a less bold set of reforms.

[Mr Dai Havard (in the Chair)]

We will take note of that when we are dealing with French treaty discussions.

[Huw Irranca-Davies]

Among progressive reformers, there has long been a focus on delivering a smaller, greener CAP with a more competitive and productive farming sector, both in the UK and across the EU. Does the Minister agree that yesterday’s vote in Parliament on the question of seeking a real-terms reduction in the next multi-annual financial framework actively assists the Government in pursuing those aims? If so, perhaps he can explain why Ministers were whipped to oppose the motion. Surely yesterday we provided a clear assist to the Government, in strengthening their hand in negotiations on the overall budget, and ultimately in respect of bold CAP reform. We should not forget, with regard to greening and all other matters, that part of this long-advocated reform is intended to reduce the barriers of protectionism, not put more up. It is intended to liberalise trade, which I am sure is supported on both sides of the House.

As well as the need to increase the competitiveness and productivity of UK farming, there is a need to level the playing field across the EU. Let us not forget the need to reduce the trade barriers that disadvantage the poorest farmers in the developing world. We often talk about food security in domestic terms only, but it is also an issue for international trade and developing nations. We urgently need to support growth in agricultural production, especially in the developing world, to feed a rising and poor population.

Let me again commend the forensic work of the EFRA Committee, and then ask the Minister several specific questions on the greening elements of the CAP. First, on a consensual note, we are glad to see the Government continuing with Labour’s focus on a greener CAP, with a greater proportion spent on public goods. We note as well the Government’s commitment

“to a very significant reduction of direct support under Pillar 1 …and a CAP that moves away from market-distorting subsidies.”

We are also glad that the Government are focused on simplification. However, we share the EFRA Committee’s concerns that elements of the proposals, as currently understood, will indeed add to the complexity and the bureaucracy of delivering public goods, including environmental benefits.

The Government must continue to argue in the EU for flexibility for the UK to devise and implement greening measures, to build on what has been referred to in this debate as the great success of the past couple of decades—it is 25 years since we first introduced agri-environment schemes in the UK—and to further those environmental gains. We do not want to destroy our progress or duplicate, overcomplicate or add bureaucracy. One of the things that have not been emphasised as much as they should have been today is the fact that the EU needs to go further. Resting on our laurels, however comfortable, is not an option. Ambitious green reforms need an acknowledgement from Government and from farming leaders that there is more still to do.

I note the Government’s response to the Committee’s concerns, expressed in recommendation 8, about gold-plating greening, in which they restate their high level of ambition for greening across the EU. It is right that we should be ambitious about greening in the UK. Does the Minister agree that, despite all our progress in this area, we need to do more? We need to ensure that there is a level playing field, and that farmers in other nations are stepping up to the green mark, and not finding easy access to indirect payments that support production, thereby disadvantaging UK farmers who are doing the right thing.

The Commission’s impact assessment estimates a 15% increase in administrative burdens linked to direct payments. I hope that the Minister can tell us that he will not be returning to the UK at the end of the negotiations with additional costs and burdens for farmers. What can he tell us of his hopes to achieve simplification and lower costs, alongside the green reforms and public benefits? He understands the concerns about the crop diversification proposals, which, in the UK, could have negative consequences, whereas crop rotation could improve soil and water quality, and help climate change mitigation.

There needs to be flexibility in the ecological focus area proposals to reflect the diversity of UK farming. Perhaps we could use our imagination and modify further the proposal. One suggestion, which is already in play for the Minister, would assist farmers and the environment, and it ties in with ideas proposed by the hon. Member for Camborne and Redruth. It reduces the 7% devoted to EFA to 5% for farmers who are willing to work together to collaborate on projects such as wildlife corridors, and to co-ordinate on a spatial and regional basis to develop those things that help us with climate change adaptation. I have met with large-scale farmers, both out in the fields and here at Westminster, who are already working effectively together on environmental measures, and such an approach, I suspect, would appeal directly to them.

The permanent pasture proposals are in danger of failing to deliver the environmental benefits that they profess to seek.

[Huw Irranca-Davies]

Indeed. That is one of the many unintended consequences of devising a central system, which is why it is vital that we have the right flexibilities in place, so that we can sometimes work around this. We will support the Minister in any way that we can on this matter. I remember, at the 11th hour of a three-day CAP meeting, when we had come up with a final list of proposals, a great chap—I will not say what region he came from, to avoid the risk of embarrassing somebody—who had been involved in the negotiations from the fisheries side came up to me and said, “I cannot say this publicly, but well done, Minister. That is the best possible deal we could have had. I am now going to go away and see how we can work around it.” What we do not want is that sort of outcome. We do not want to come up with a complex list of things that people plan to work around. We would rather see the matter simplified. None the less, the hon. Gentleman makes a good point.

I mentioned the permanent pasture proposals. There is a world of difference between valuable permanent pasture that is not ploughed over regularly, which is home to semi-natural vegetation and great biodiversity, and pasture that is periodically cultivated and seeded. How does the Minister intend to negotiate the maximum public good from that proposal?

On exemptions, how does the Minister guard against the fear of double payments and maximise taxpayer benefit? Will he give us more details on the ways the Government will improve the competitiveness and productivity of UK farming while promoting further progress in greening and the achievement of wider public good? What specific measures are the Government working on now, regardless of CAP reform, that will allow both aims to be achieved simultaneously? We do not want the green food project, which has been quite well received, going the same way as the green deal in the Department of Energy and Climate Change, which has over-promised, is forecast to underachieve and is fundamentally flawed. The green food project needs to produce benefits and to bring together all the strands. I am sure that the Minister will be able to stand up and assure us that that is the case.

The Government have had some criticism from the EFRA Committee and others for the late introduction of proposals for a points system that would aid flexibility of the Commission’s proposals on a member state basis. I welcome the proposals, but wonder whether playing this card so late has diminished the chances of success in negotiations. May I also ask the Minister how, in promoting the laudable aim of achieving member state flexibility, we can guard against the use of such flexibility by some member states to dilute their greening imperatives? Does not that risk mean that the Commission will strictly have to constrain any flexibility, and what impact will that have on the Government’s ability to deliver for farmers in the UK while trying to guard against the dangers of flexibility among other EU nations? I notice that the Minister is chuckling, but he knows what I am talking about.

In short, flexibility at member state level is not just desirable but essential, but it cannot be allowed, in other nations, to add to the very real cost for UK farmers and consumers. It cannot be allowed to become a euphemism for an abdication of environmental responsibility.

The Minister has a lot on his plate, but if he tires, I am more than willing to step in and pick up where I left off. That would of course require this Government to step aside, so it may not be an option for the moment. Meanwhile, I genuinely wish him well in continuing negotiations on greening, and on all other aspects of CAP reform. Labour will support where we can, and we will challenge where we should, to achieve the outcome that is good for farmers, consumers, taxpayers and the environment—a smaller, greener CAP, and a more competitive and productive farming sector. I am talking about a one-nation approach to CAP reform where the many, not the few, gain.

[Mr Dai Havard (in the Chair)]

I call Mr David Heath to speak. He got a soundbite in as well.

--- Later in debate ---

[Mr Dai Havard (in the Chair)]

I am not sure where “snuggling” and “cuddling” fit in the lexicon of Hansard.

[Huw Irranca-Davies]

The Minister should put on record to whom he was snuggling up.