Common Agricultural Policy

Jesse Norman Excerpts

Monday 7th July 2014 Commons Chamber

[Neil Parish (Tiverton and Honiton) (Con)]

It is a great pleasure to take part in this debate and to follow my hon. Friend the Member for Brecon and Radnorshire (Roger Williams), who made a good case for Welsh farmers. I pay tribute to my right hon. Friend the Member for South East Cambridgeshire (Sir James Paice). He referred to the Rural Payments Agency and how much it has improved, much of which was down to his stewardship when he was a Minister. He worked very hard, and payments are getting out on time. We inherited quite a mess, which leads me on neatly to my first point.

When the single farm payment was introduced in 2003-04, there was no doubt that the Beckett formula was complicated. It took years to sort that out, and we paid more than half a billion pounds in fines to the EU for the mistakes that were made. We do not want to repeat those mistakes, and I appeal to the Minister to ensure that we do not do so. I have been sold on the idea that the maps are best done digitally, especially because of the hedgerows and everything else, but if farmers do not have access to broadband, they either have to have somewhere to go—not just a library but somewhere where they can access broadband securely and privately—or they have to be able to use agents. Farmers do not expect to be given a fortune, but they need money to do that. We are working hard to deliver rural broadband, and I am certain that we will get there, but we are not there now. If we make a mess of introducing the reform in the first year, it will carry on year in and year out. That is precisely what happened with the previous system, and it took years to sort it out. In fact, there are some cases that have never been sorted out.

I hope that people who were not able to register under the old system for various reasons—some people pursued their registration for years—are able finally to register their land under the new system. I also pay tribute to the idea that young farmers should be helped, because the population of this country and the world is growing and we need to produce more food.

[Jesse Norman (Hereford and South Herefordshire) (Con)]

I share my hon. Friend’s views on the importance of supporting young farmers. On the question of broadband, does he share my view that there is scope for supporting wireless broadband to reach rural areas that are hard to reach by wired means, as it were?

[Neil Parish]

I could not agree more with my hon. Friend. Wireless broadband will reach parts of my constituency in the Blackdown hills that fibre optics will not, but wireless broadband will not necessarily get there in time to ensure that applications for the single farm payment can be made online. That is why we must take care to get the payment right in the first year.

Ensuring that it is the working farmer who receives the payment is a good idea, and I am interested in what the Minister has to say about that, but we do not want to create the biggest bureaucratic nightmare to prove whether someone is or is not the farmer. If we are not careful, we will make the system increasingly complicated.

I spent rather a long time—some might say too long—dealing with the CAP in another place, and I think that one of the overall problems is that across 28 countries, from Finland to Greece, from Poland to Germany and right through to Great Britain and Ireland, there are so many crops that can be grown, so many soil types, so many temperatures and so many amounts of rainfall, with some areas getting very little and others being flooded, that if we try to come forward with a common policy, we will end up with the biggest mess known to man and woman. There is no doubt about it. We cannot have a common policy unless there is much greater flexibility.

Are we to have a policy that demands three rotational crops, because Germany grows solidly maize, maize and maize? This country has very diverse farming and lands, with uplands and grasslands, but many countries have hardly any grassland. Somebody driving from Calais to Berlin will see hardly a single hedge the whole way there, because they have all been ripped up over the years as a result of a different policy on the way they farm. We have great hedges, and it is good that they have become ecological focus areas. In my view, the hedges are probably the most important part of a field, because they are home to wildlife and birds. That, above all, is what we need to concentrate on.

--- Later in debate ---

[Mr Mark Spencer (Sherwood) (Con)]

I start by drawing Members’ attention to my declaration of interest in the register.

As my hon. Friend the Member for Tiverton and Honiton (Neil Parish) said, the countryside we see today is the result of many generations of farmers who have managed it and created the landscape that we hold so dear. For many generations, they did that without any support from politicians or Governments because they cared for the countryside and wanted to farm for many generations to come.

The common agricultural policy is probably the single most successful policy ever dreamt up by a politician in that it was designed to keep Europe well fed. For three generations, our nation has enjoyed supermarkets and shops full of food, and people have become used to having food on the shelves when they demand it. During the war, my grandmother would go to the shops to buy lamb chops and be told, “You can’t have lamb chops—you’ll have beef dripping”, and she would have accepted that. We have now had two or three generations of consumers who have no concept of what food insecurity is like. We should be very grateful not only to the common agricultural policy but to our farmers for giving us this period of being well fed.

Many changes are coming in the common agricultural policy shakedown, and not all of them should be welcomed. There are large implications for how the UK’s food will be produced in future. We should bear in mind that food production and our being well fed as a nation is the fundamental point of this policy. Putting that at risk would be a great disaster.

[Jesse Norman]

The National Farmers Union has said:

“A modulation rate of 9%”

on pillar two

“would have been able to fund all current DEFRA rural development programmes, renew all agreements expiring within the funding period and have a further £1 billion to spend on new commitments.”

Does my hon. Friend agree that makes it harder for UK farmers to compete, and has this not worked out as well as well as he would have liked?

[Mr Spencer]

As I was saying, a number of challenges are coming up. UK farmers are particularly skilled at competing. For at least two generations, they have competed on an uneven playing field and managed to continue their business in doing so. I accept my hon. Friend’s point. It is also worth bearing in mind that the taxpayer is putting an enormous amount of cash into the system and so has to get not only food security but a benefit to the environment that they are not getting at the moment.

It is very easy to stand up in this Chamber, be critical of Ministers and say that they could have done this or that. What we do not hear about, however, is the stuff that the Secretary of State and the Minister block—the ideas from Europe that did not make it into the final agreement. If the Minister has time during his summing up, it would be interesting if he could indicate some of the things he was able to stop happening that would have had us jumping up and down in the Chamber if they had made it through and some of our near neighbours on the continent had got their way.

Many Members have referred to the need for broadband in order to deliver the documentation required to make an application. There are farmers in Nottinghamshire who are based within 5 miles of the city centre of Nottingham whose current internet speed is 3 megabits. It is almost quicker to drive to Nottingham to collect a form than it is to try to dial-up on the internet to download it. They are very close to a major urban population, but BT has no plans to take them out of that not spot. Nottinghamshire county council has a programme to roll out broadband across Nottinghamshire, but unfortunately those farmers are not part of that programme. We have to find a way to help them.

--- Later in debate ---

[Huw Irranca-Davies]

Yes, indeed. That is why it is essential that the framework works in respect of what CAP reform has always set out to do—to break the link between pure production subsidy and the targeting of the subsidy at public goods, increased innovation and productivity, and not just production. It cannot be a one-size-fits-all model. The framework has to be there at an EU level, but the implementation at the level of the nation state is critical. We should not be afraid to take the lead on that and to try to get our balance right as between the environment, farming and food security.

The conservation director of the Royal Society for the Protection of Birds, Martin Harper, observed that the proposals

“failed to maximise the amount of money that it could have invested in wildlife-friendly farming and now it has made the greening measure meaningless.”

So we have “meaningless” and “useless” from the perspective of environmental organisations; and “deeply disappointed” and “a missed opportunity” from the perspective of farming unions. A change is needed in Europe and in the UK on how CAP is done. We need to show real leadership and real direction on both farm productivity and sustainability—it is not happening.

The key question is whether the more than £15 billion annual subsidy payment to farming in the UK—and £11.5 billion in England specifically—provides the best value for taxpayers’ money. A study last year suggested that sensitively adjusting the focus of the subsidy in the UK to enhance environmental and public goods, including things like flood alleviation, rather than purely units of production, could produce annual additional benefits of over £18 billion in the UK. The study did not take into account the additional benefits of cleaner air and cleaner water, which would further improve the net gains.

The Secretary of State—one would think he would find favour with that sort of approach—said last year:

“I do believe there is a real role for taxpayer’s money in compensating farmers for the work they do in enhancing the environment and providing public goods for which there is no market mechanism.”

He also said specifically last year:

“I believe that transferring the maximum 15% from Pillar 1 to Pillar 2 would be the right thing to do where we can demonstrate it would deliver worthwhile and valuable outcomes for farming and society and contribute to rural economic growth and enhance the environment”.

He was quite specific on that. When the Secretary of State said that repeatedly, wildlife and environmental groups had every right to be optimistic at least on pillar two funding, even with their disappointment on the greening elements of direct payments. As the RSPB said in its response to the consultation earlier this year:

“We…welcome the Secretary of State’s assertion that Pillar II ‘unquestionably represents the better use of taxpayers money’”,

and it went on to urge the Government to

“follow through on their intention to maximise the benefits that Rural Development can deliver.”

The Secretary of State, then, was unequivocal, unyielding and unbowed all the way through—until he crumbled, U-turned and settled on 12%. I have to ask why he was outflanked and outgunned by other forces; what happened to his unequivocal stance?

The Government have signalled that they will review the situation in 2017, but I have to say that this looks like a smokescreen to cover the Secretary of State’s embarrassment at being forced to retreat from the repeatedly stated 15% modulation that he had repeatedly promised. That is not the only sign of weakness either, as the decisions on degression and capping of CAP are also spectacularly lacking in ambition and vision.

[Jesse Norman]

Will the hon. Gentleman give way?

[Huw Irranca-Davies]

I cannot, I am afraid; I do not have time.

The Secretary of State’s minimalist position, choosing to go no further than the bare minimum prescribed by the European proposals, shows a worrying lack of leadership as well as a depressing lack of ambition for the best use of public money. Farming unions and landowning associations must understand—I hope they do—and have to engage with the growing public discontent of hard-pressed people and families who face a cost-of-living crisis at public money going to some of the wealthiest and most powerful landowners in the country on the basis of the size of land that they farm.

Last year, more than 35 of the wealthiest and most powerful landowners in the UK claimed over €1 million each a year in farm subsidies. A couple of hundred others claimed in excess of €300,000 a year. That is divorced from the reality of what we have heard about today—the reality of small-scale upland farmers struggling to get by; the reality of medium-sized mixed, traditional family farms that are vital to the fabric of our rural economy struggling to compete; or the reality of tenant farmers struggling to get their first foot on the rung of purchasing land against a backdrop of rising land prices fuelled by lucrative subsidies. It is certainly a world away from squeezed UK consumers facing rising food bills, and the exponential growth in food banks in every town and village in the country.

There might be some rationale if the biggest payments were tied to additional investment in agricultural innovation, to productivity improvements, to encouraging new entrants to farming, to pioneering environmental improvements in large-scale arable agri-businesses, or indeed to any marginal improvement. However, those payments are not for “additionality”; they are for scale and units of production, pure and simple. They are a reward for being big, and the bigger you are, the more European money—I am sorry; public money—you get.

As long as there is still subsidy flowing through the common agricultural policy to farmers across the EU, we must ensure that the right share of that funding comes to our farmers in the UK, but placing rigorous demands on the highest CAP payments is about demanding more—in productivity, environmental innovation and entry to farming—for the public money that is spent on the very biggest of the biggest subsidy recipients.

This is a value-for-money argument, and a fairness argument. I am talking about fairness for smaller and tenant farmers who lose out as the big money goes to the biggest landowners, fairness for the public who want real and transparent value for the money that they pay out each year, and fairness for this and future generations who are concerned about the environment, about the countryside that they love, and about sustainable agricultural production.

It is time to challenge the accepted wisdom, and to shake off any sense of the cosy complacency adopted by the Secretary of State. We must not assume that this is the way it must be. We can change things for the better for farmers, for the public, and for the good of the nation. If we do not do so, the voices of discontent over CAP payments will grow and grow. We need to do better than this.

Let me end by again thanking the Select Committee for the very good report that was introduced by the hon. Member for Thirsk and Malton. I am sure that the Minister will respond to the detailed points that have been made.

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (George Eustice)]

It is a pleasure to be in the Chamber with so many fellow farmers. I have heard many of them declare their interests this evening. I congratulate the hon. Member for Thirsk and Malton (Miss McIntosh) on securing the debate, and thank members of the Select Committee for their report.

Let me begin by saying a little about the approach that the Government took during the negotiations. My right hon. Friend the Member for South East Cambridgeshire (Sir James Paice) explained very clearly the difficulty that we experienced. We set out to secure a common agricultural policy that was simpler and greener, but despite the best endeavours of my predecessors and a very talented negotiating team, we have ended up with a CAP that is more complex because it was not possible to move the European Commission, or indeed sufficient numbers of other member states, to our position. Our view all along had been that we should keep pillar one—the single farm payments—as simple as possible, and that pillar two was the right option to deliver for the agri-environment.

There are two key issues about which farmers are expressing concern. One is the issue of the three-crop rule, which will affect at least 7% of farmers; the other is the issue of the environmental focus areas and some of the administrative burdens connected with them.

It is important to note the successes that my predecessors achieved in the negotiations. My hon. Friend the Member for Sherwood (Mr Spencer) asked what had been my achievements. I have to say that I was not involved in the negotiations, so the credit for what we achieved should go to my predecessors. However, when it came to the three-crop rule, we did manage to increase the threshold to holdings with 30 hectares or more. We did manage to get the Commission to accept that there should be a distinction between spring barley and winter barley, or spring wheat and winter wheat. And we did manage to move the Commission away from its initial proposal for action that would have been very intrusive—looking at farmers’ incomes to see exactly how much they were earning from agriculture—and, instead. to establish a negative list to remove, for instance, airports, railways and golf courses. So there were successes in the negotiations.

On implementing the CAP, however, we have tried to stay true to that basic stance that we adopted during the negotiations: first, we should keep the implementation of pillar one as simple as possible so farmers can implement this in the most flexible way that works for their own individual holding; and, secondly, we should take the environment very seriously, and we want to deliver for the environment through pillar two—through the agri-environment schemes for which this country has built up an admirable track record.

[Jesse Norman]

Does my hon. Friend share my surprise that the shadow Minister should be so strong in his condemnation of the position the Government have ended up with through these negotiations, without in any way spelling out what the Labour party would do on any of the issues?

[George Eustice]

Well, I think there was quite a degree of consensus. I suppose we have to recognise that the last Government gave up a chunk of our rebate supposedly in order to get CAP reform, but that did not work either. I want to stay on the substance of the issue before us this evening, however.

In terms of applying this basic approach of keeping the pillar one payments as simple as possible, when it came to greening we were clear we wanted to have the flexibility to allow farmers, for instance, to use hedges to count towards their environmental focus areas.