Common Agricultural Policy

Ian Paisley Excerpts

Thursday 8th March 2012 Westminster Hall

[Miss McIntosh]

The evidence we received was very clear in that regard: as long as there is a level of farm support across the European Union—and in other parts of the international community—farmers subscribe to decisions being taken within the European Union, so that there is a proverbial level playing field. That is something I have sought most of my professional life. I do not know if we have reached it yet.

I want to say a few words about direct payments. In the Committee’s view, direct payments should be retained—the evidence was very powerful in this regard—up to 2020. They should not be abolished until business conditions in agriculture improve, because UK farms are highly dependent on direct payments—currently the single farm payment as introduced in 2005. Without them, more than 50% of farmers would be unprofitable. I dare say that many of those would probably be in my uplands in Thirsk, Malton and Filey. The evidence we received indicated that UK livestock production would fall significantly as a result of such an approach although, interestingly, it would have only a negligible effect on crop production. The Committee is concerned about the implications for food security and for landscapes, and the rural livelihoods that depend on farming.

[Ian Paisley (North Antrim) (DUP)]

I thank the hon. Lady for giving way in this very important debate. Does she accept—and has the Committee reflected on—the issue regarding the fair distribution of the amounts between pillar one and pillar two? Does the Committee recognise that there must be a fair distribution, which should not be at the expense of one pillar over the other?

--- Later in debate ---

[Ian Paisley (North Antrim) (DUP)]

At the outset, I thank the hon. Member for Thirsk and Malton (Miss McIntosh) for the way in which she introduced what is one of the most important subjects Parliament deals with—the production of food. It is one of the nation’s most important industries. It has been taken for granted too often, and for too long, and cast as a secondary issue, but it is crucial, and it is right and proper for the House to have the opportunity to debate it.

I think that we are all on a common page, if not a common agricultural policy, and that page is headed “The system doesn’t work.” As the Irishman said: “But you wouldn’t start from here”; but the trouble is, we are here. We are at this point after years of implementation of a policy that was initially flawed anyway, and which created huge butter mountains and a waste of food. There is virtually nothing we can do about where we are now. Those who suggest that we can suddenly end this, and everything will be all right for the industry, are just barmy. That is just silly. If anyone were to say that about any other sector of the economy, they would realise how daft it sounds. From time to time, people cry out, “What about New Zealand? It did it.” It took New Zealand nearly 20 years to get things right, and there was a lot of pain in the process. Those who advocate moving away from subsidised agricultural production need to get a grip, and to make comments relevant to the needs of the sector.

[George Eustice]

Does the hon. Gentleman recognise that when New Zealand abandoned its subsidies it substantially devalued its currency at the same time, so that farmers lost subsidies but gained a dramatic increase in price for their produce?

[Ian Paisley]

That is an interesting debate in its own right; there could be a good examination of what has happened in countries that have tried to reform their agri-food sector. The New Zealand question is not a debate for today, but we should always have it at the back of our mind.

No matter what we try to do, it will be pain for someone. Most importantly and obviously, it will be pain for the farming community. We must ask ourselves whether we want to put that community through pain. Let us put the matter in perspective: agri-food production in this nation is a £20 billion industry. Milk production alone represents more than £8 billion in the industry. Good, clean, traceable food, that the consumer wants to put into their body, is a positive and beneficial product. If we start to mess about with it and ruin the stability of the industry, we must be careful to understand the consequences. The production of food that the public do not feel comfortable with, or about whose production they do not feel confident, will destroy a positive and powerful economic factor for our nation. We always need to bear that in mind when we deal with agriculture; because it goes by the way, which sickens me. We need to get a grip on the fact that agri-food production is, as I said, one of the most important industries, if not the most important, in which this nation is involved.

In Northern Ireland, agriculture is a key driver in our economy. Indeed, the agri-food sector represents approximately 20% of the total private sector employment in Northern Ireland. The food and drink sector contributes £3.2 billion to our little country’s national turnover. At a time of economic difficulty, agri-food production is in a state of growth, whereas other sectors of the industry are either stagnant or in minus figures. The sector is positively growing. Agri-food production will be a crucial factor in rebalancing our local economy away from total reliance on the public sector. The key to achieving those goals is driving an export-led growth in the agri-food sector in Northern Ireland.

Given the importance of the common agricultural policy to the Northern Ireland economy, and its cross-cutting nature across the majority of Government Departments, including not only Agriculture and Rural and Development, but Enterprise, Trade and Investment, and Environment, a formal agreement should be reached at Northern Ireland Executive level on how the reformed common agricultural policy will be implemented in Northern Ireland. The implementation of the reformed policy must deliver the objectives of the draft Northern Ireland Executive programme for Government. In bringing that about, it is vital that our Minister, locally in Northern Ireland, should up the game and engage directly with the ministerial team here, nationally.

Let us face it, the Minister present today, and his team, will negotiate the CAP package, no matter what form it takes. I want him to be on my side, and to argue the case for Northern Ireland. He will know that case, and how it affects the part of the United Kingdom I come from, if our Minister in Northern Ireland ups the game and engages more directly with him. I hope that that happens. The challenge is a serious one, because time is against us. The clock is ticking. The Minister needs to know all the permutations and ramifications of each decision that he will take at the CAP reform meetings, and how they will affect my part of the United Kingdom. There is a duty on politicians now to lobby hard, and that is why I welcome the debate. It sets some pretty important touchstones, which need to be recognised, and I think are being recognised, to a greater or lesser degree.

We also need to ensure that Northern Ireland gets its fair share of the UK CAP budget. It is a point that we need to negotiate directly. I do not want to do that against Scotland’s interest. Scotland has every right to make its case too—as does, of course, the great Welsh Principality, which has to be saluted at every opportunity in this place. We must ensure that there is regional flexibility within the United Kingdom. I understand that there could be a degree of flexibility across the regions of Europe. I want flexibility in the UK, so that the Department can ensure that it shares—parcels out—the money fairly and appropriately, understanding the unique circumstances in all parts of the UK. As a politician, I believe that the draft reform proposals outlined by the European Commission are deeply flawed, because they fail to address those peculiar, necessary needs and could have a major negative impact on our major industry in Northern Ireland, which would be proportionately much more significant than in any other part of the UK.

People should stop for a moment, pinch themselves and imagine a United Kingdom economy that does not have an agri-sector. If they do that, they will realise that without that sector we would be bereft of a culture and a way of life for many people and bereft of a powerful, important industry which, as I have mentioned, contributes a £20 billion value. We need to do that to recognise what is at stake and to ensure that we go out there and campaign, lobby for and achieve a settlement under the CAP that is beneficial for the whole kingdom.

The Commission’s CAP proposals will cause a huge redistribution of moneys within Northern Ireland, from lowland to hill farmers—similar to the constituency of the hon. Member for Thirsk and Malton. That will impact greatly on those who are able to make food production sustain a community and sustain a way of life. Under those proposals, they will lose out and will be disincentivised from becoming competitive. We have to put the finger on that and recognise that the policy drivers that Europe is pursuing are upside down. The speed of transition is too fast and will not allow adequate time for the industry to adjust from a 30% flat-rate payment to a 40% transition in direct payments in one year. That is too much. A slow, proportionate transition period is ultimately required.

There should be regional flexibility within the 27 regions that comprise Europe, and internal flexibility. At regional level, it is important that Northern Ireland receives its fair percentage. I mentioned earlier fair distribution between pillar one and pillar two. It will be difficult for us to argue for fair distribution when the Government’s policy appears to be a reduction in CAP money anyway, but the money that we get must be fairly distributed, when we get it, between the two pillars. I will not go into detail in respect of my views on the active farmer, but I agree with the points made by the hon. Member for Banff and Buchan (Dr Whiteford), who made that case exceptionally well.

The 7% set-aside rule is nonsense in light of the increasing global population and the increase that we have witnessed in westernised eating habits. In that regard, I should like to reflect particularly on the dairy sector, which is worth more than £8 billion to the UK economy and employs more than 80,000. We are the third largest milk producer in the European Community and the ninth largest in the world. Our products can be found in 98% of UK households.

Jim Begg, the director general of Dairy UK, wrote a pamphlet that has been distributed called “Action for growth”, in which he deals with how the CAP should address the needs of the milk producers:

“A requirement for ecological set aside of 7% of arable land will reduce the area available to dairy farmers for feed crops. Maintenance of permanent grassland will also restrict the ability to increase the production of home grown feed. The termination of historic payment calculation method will disadvantage dairy farmers in particular.

It is imperative that the UK ensures the distribution of payments in the EU and the UK does not discriminate against UK farmers or undermine their productive potential.”

A hearty “Hear, hear!” to that. The milk industry needs that security of tenure. We should not be doing something that upsets an already difficult market, in which prices can be difficult.

I make my comments as a representative of my constituency, in which the single largest employer is the poultry sector. One factory alone employs 1,100 people. Unfortunately, today it announced 19 redundancies, but in the scale of things—in the current economic climate—that could, of course, have been an awful lot worse. Poultry production is incredibly successful in Northern Ireland, but the fact that it, too, is feeling the squeeze at present and is having to announce re-jigs and evaluate job-shares makes it clear that even the most successful parts of our industries face a crisis at present. Heaping CAP reforms on such businesses does not address their real, genuine needs and is a flawed way for us to proceed.