Common Agricultural Policy

Lord Greaves Excerpts

Thursday 18th November 2010 Lords Chamber

Moved by

[Lord Greaves]

To call attention to proposals for reform of the Common Agricultural Policy; and to move for papers.

[Lord Greaves]

My Lords, this is a good opportunity to start a parliamentary debate on the reform of CAP, which is clearly going to last over the next two to three years while the decisions are being made. Today is particularly opportune, as we understand that the Commission will publish its proposals today.

The long and tortuous history of the common agricultural policy is approaching one of its periodic turning points. A new phase in the CAP to the end of the decade is due to start in August 2013. The details of that have not yet been agreed in any shape or form, so the next two years are going to be interesting. In introducing the debate, I want to give a fairly broad-brush overview. I am not going to talk about much of the technical detail. I am grateful for all the briefings that have come from various organisations and bodies and I hope that other noble Lords will fill in some of the detail. I want to put forward a series of propositions with which I have considerable sympathy and which I think should form the basis of a great deal of the discussion that is taking place.

The European Parliament has already agreed its position, based on a report from my Liberal Democrat colleague, George Lyon MEP. I am grateful for the many insights of what I am saying now, which are based on discussions with him. The Commission communication is due out later today. There has been a well leaked draft from commissioner Dacian Ciolos and I have no reason to doubt that the communication will be based on his views. However, there could be changes, so I do not want to talk about that in detail until we see exactly what is said.

Legislative proposals are due in 2011. There obviously will be interesting discussions during that time in the Council of Ministers. The CAP is subject for the first time to co-decision between the council and the European Parliament. Decisions have to be made by the end of 2012 or in early 2013 in order for the new system to come into operation in 2013. Clearly, a major part of deciding what will happen will be the overall European budget and the size of the pot, which will be decided by member states in the mean time.

My first major issue is the urgency for the United Kingdom Government, working with the devolved Administrations in Scotland and Wales, to negotiate. It is clear that the line that was taken by the previous Labour Government has been abandoned—rightly so, because it isolated this country in the discussions on the future of the CAP within Europe. Will the Minister give me some idea of what the Government see as the timetable for coming to views on UK government policy with a view to negotiation and discussion with the other European countries and, as part of the Council of Ministers, with the other European institutions?

In trying to give an overview of the position, I will try to avoid using as much Euro-jargon as I can. It seems to us that sustainability and fairness have to be at the heart of a new CAP. The CAP has to be economically and environmentally sustainable at global, European and local levels. It needs to be socially sustainable, particularly in what Ciolos calls,

“areas with specific natural constraints”,

which may be the new Euro-jargon for less favoured areas, or it may be a little wider than that.

Food security is increasingly important and it has to be politically sustainable across the EU. In particular, we need to refocus CAP towards creating a sustainable agricultural system that meets the challenges, first, of climate change and other environmental challenges and, secondly, of the increased demand for food, which will occur across the globe and will require a large increase in food production. All that will be within a highly imperfect global market in which the patterns of demand and need for food are at variance with each other and in which the systems and patterns of trade reflect the demand rather than need.

Climate change makes the necessary increase in production more difficult due to scarcity of new land, water and energy. Increased demand is due to more people, an estimated 9 billion of us by 2050—or 9 billion others, because I do not think that I will be around in 2050—and demand for more varied and westernised diets.

George Lyon has identified four key areas of fairness: fair trade with major trading partners, most of whom support their agriculture; redistribution of direct payments under CAP to meet demands of new member states; support for local food production for local communities in less favoured areas or areas with specific natural constraints, as we might now call them, particularly upland and more remote areas throughout Europe and in this country; and a fair food chain through the strengthening of the negotiating power of farmers against multiple retailers.

My second proposition is general and relates to the way in which CAP has evolved in the decades that it has been in existence. Should we continue to phase out remaining export subsidies, as the Commission and the Parliament are suggesting? To what extent should we continue to phase out the remaining elements of market intervention? Most of them have gone and we do not have beef mountains or wine lakes any more. Also, to what extent should we attempt to get rid of coupled direct payments altogether, or should that be an option for member states? If the last two are to remain in place to some degree, at what level and on what basis would that be acceptable? This is fundamental to reform in the next phase.

The third proposition is the clear need to move towards a fully area-based system throughout Europe by 2020. Payments under the present phase have been decoupled, but in many places they are still being paid on an historical basis, so that, although they have been decoupled from existing levels of production and stocking, they are still linked to former levels. The longer that goes on, the more unfair it is. It does not represent the current realities.

The fourth proposition is the redistribution of payments in Europe. There has to be a rebalancing of area payments away from the old members of the EU—if I can put it that way—particularly in western Europe, to the new member states, which are mainly in eastern Europe. When the new member states joined, it was on the understanding and belief that, over time, there would be a more equalised system of area payments. A useful graph in the Lyon report from the European Parliament sets out the 2008 payments. If we ignore Greece, which is right at the top, but look at western European countries, we see that Belgium and the Netherlands received payments that averaged over €400 per hectare. Germany received over €300, France around €300 and the United Kingdom over €200. Romania and two other countries received less than €50 per hectare, while Poland, the largest of the eastern European countries to join, received around €80 per hectare. That is clearly not fair, as it denies countries in eastern Europe funds to support the restructuring and modernisation of agriculture that for many of them is absolutely necessary. People used to talk about inefficient French farmers, but they do not do that any more because in the 1950s and particularly the 1960s France reorganised substantial parts of its agriculture, as did southern Germany. That kind of process now has to take place in eastern Europe.

My fifth proposition is that there has to be a significant further greening of the system. Both the Lyon report and the Ciolos paper substantially go along with that. Is it not clear that the purpose of farm support—the reason why it exists—is to support the producers of food? It does not exist to achieve environmental public goods, but those goods are vital, so green outcomes need to be embedded throughout the system. Different ways to further strengthen the greening of the CAP are set out in the two documents. I do not want to go into those details at the moment, but other noble Lords may do so. However, whether that is done by amendments to the two existing pillars or in some other way, it has to happen.

That leads to the last two fundamental propositions. The first is the absolutely vital need to maintain a common European agricultural policy and to resist nationalisation of the CAP either by the patriation of significant parts of it or by resistance to further moves towards co-funding. These are simply attempts to undermine the whole basis of a very necessary system.

The final proposition is the size of the budget. If the aims set out in the Lyon report and what we expect to see in the Commission report are to be achieved—indeed, if the CAP is to do what it has to do—it will not possible to make any significant further reductions to the proportion of the EU budget that is allocated to the CAP from 2013. It was 75 per cent in 1984; it is now about 43 per cent, while the projected level for 2013 is 39.6 per cent. However, if we are serious about food security in Europe, climate change, fairness to eastern Europe and all the other issues—never mind sorting out the political problems—the projected level in 2013 is probably inevitable. My advice to the Government is to accept that, more or less. They should not spend their energies arguing about it; they should argue about the important thing, which is what the CAP has to do. I beg to move.

--- Later in debate ---

[Lord Greaves]

My Lords, it falls to me now only to thank everybody who took part in the debate with some very expert and interesting contributions. I particularly thank the noble Lord, Lord Wills, who put a very different point of view from that advocated by most speakers, including myself, which was extremely welcome. I also thank the Minister, who did his best to give a very careful response to the debate in quite difficult circumstances, because he has not actually seen the document which we were all trying to talk about on the basis of its leaked version. I thank him for that. We wish him and his colleagues well in the discussions on this matter in Europe in the next couple of years. I am tempted, slightly naughtily, to wish him well in his discussions within the Government on this matter, but if I pursue that too far, I shall get into trouble and I would never want to do that. So thank you to everybody who took part and I beg leave to withdraw the Motion.

Motion withdrawn.