Common Agricultural Policy

Neil Parish Excerpts

Thursday 1st November 2012 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Chope. I thank my hon. Friend the Member for Thirsk and Malton (Miss McIntosh), the Chair of the Select Committee, for securing the debate.

First, I want to say that I am probably a very sad case, because I spent 10 years in the European Parliament, and all that time was spent on the agriculture committee, which I chaired from January 2007 to June 2009. I am actually waiting for the men in white coats to come and get me; I am sure they will, before too long. The only thing that gives me some recompense is the knowledge that I will probably not be the only one who is taken away. It is a good idea to debate greening the common agricultural policy. Like the Chair of the Committee, I want to start with some history—how we have come to the place we are in—and the issue of the mythical level playing field that farmers always seek, but that often seems further and further away.

We not only do not have a level playing field across the 27 member states of the European Union, but do not have a level playing field in the United Kingdom, because we have three different agricultural policies. The policy in England is to spread payments across the land and is not so historically based on the number of cattle and sheep kept, whereas in Wales and Scotland payments are made entirely on the basis of historical payments made to farmers between 2000 and 2001-02. There is no doubt but that we must look again at some of the systems of payment, because it is ridiculous to base an agricultural policy from 2014-15 to 2020 on payments made to farmers in 2001-02.

Another issue, which is probably more European, is that Estonia receives €70 per hectare and Greece €500 per hectare, so there will have to be a little bit of levelling of those payments. When in the European Parliament, I was not always admired by the French and Germans when I said, “In 2004, when the new member states came in, they were not equal, but by the time we get to 2014-15 and later, they ought to be much more equal.” Those payments will have to be levelled, like it or not, across the EU. The one good thing for British farmers is that we are somewhere in the middle of the payment table, between Estonia and Greece, so should not be affected too badly by some sort of levelling. If there is to be any form of common policy, the level of payment across Europe needs to be considered.

The CAP was started in 1962 by five member states to produce food after the war, and it was successful in producing food until the 1980s, when there was a lot of food in the world and Europe was subsidising it. When there was too much food in Europe, we put it on the developing world’s markets, destroying their markets. Something had to be done about that. We were subsiding Greek tobacco, for instance. One can argue about whether it is right or wrong to subsidise food and food production, but to use good taxpayers’ money to subsidise tobacco takes a little bit of working out, especially when one third of the tobacco grown in Greece was burnt in heaps on the ground, one third was reasonable quality and the other third was dumped on developing-world markets, leading to Zimbabwe and other countries having trouble with this dodgy tobacco.

We have to face up to the fact that it is no good producing food for the sake of it. The idea of CAP reforms was to move towards an environmental, land-based payment. That is being done to some degree. It is also useful from a world trade point of view, because payments are put into the so-called green box and are not directly linked to production, and so can technically be made to farmers without distorting the international market for food. That also means that we are not directly subsidising the number of cattle or the number of hectares—in real money, acres—of corn, and so on, to produce more food.

We have rightly moved in that direction, but as we move into 2012-13 and onwards, we should recognise that we are living in a different world. The Labour Government, slightly belatedly, worked out that there was a need for food and food production. I attended a Morrisons breakfast the other morning. We were talking about the affordability of food. There is no doubt—I do not level the charge at Morrisons in particular—that certain big buyers over the years have looked around the world to buy reasonably cheap food. However, now there are not vast amounts of cheap food to be had out in the world. China was eating 500,000 tonnes of beef 40 years ago, but is now eating 5 million tonnes of beef. The United Kingdom produced 1 million tonnes, but China is now eating five times the amount of beef that we produce. The beef produced in Brazil, Argentina and other countries that produce lots of beef is not necessarily finding its way on to our markets; it is finding its way into China. Therefore, food and raw material prices are higher.

Although the CAP must be greened, it also has to reflect the fact that we need food that is produced at an economic price that our consumers can afford. I am a farmer—I declare an interest—and farmers would like the prices that they are paid for food to be higher. Of course, consumers are having to pay more. We should ensure that enough of the money that the consumer pays the retailer for his or her food gets back into the producer’s—the farmer’s—pocket. Although that is not necessarily part of CAP greening, it is relevant to agriculture and farmers’ incomes.

[Huw Irranca-Davies]

The hon. Gentleman makes an important point about food prices. Does he agree that, although people always say that farmers receive subsidies, as if those are going straight into their back pocket, the truth is that in a lot of cases farm subsidies in recent decades have subsidised a cheap-food policy? Household expenditure on food has been falling for many decades, and that has reversed only recently.

[Neil Parish]

The hon. Gentleman makes an interesting point. The payments coming to farmers have encouraged them to produce food—in many ways quite rightly—and helped to keep the price of food down for the consumer. It is only now, in recent times, with 7 billion people and rising in the world, that more food has been needed, and its price is going up.

In recent times, the prices of fertiliser, fuel and all those inputs that are needed to produce food have doubled. Therefore, the key is to consider an agricultural policy that is not only green, but looks to ensure that food that can be produced sustainably, is supported. This point has been made many times before, but if we look at our upland and hill farming, why are our hills so green and pleasant? Because they are farmed, and because there is stock on those hills. We need to consider that in respect of the CAP, because again—I am probably a little bit more controversial than some in this regard—it is no good just making a general payment across all farmers in future; we must look at the way that those payments are made.

Does the East Anglian farmer on the fens, who can produce 4 or 5 tonnes of wheat per hectare, necessarily need the same payment as the farmer struggling on the hills? Is it not time that we found a way for the farmer in East Anglia, who could carry on producing good wheat, to trade his environmental payments with somebody farming on the hills? In Britain there is not a shortage of land used for conservation and agri-environment schemes; nearly two thirds of the land is in one scheme or another.

[Huw Irranca-Davies]

I attended the same breakfast as the hon. Gentleman; it was a good discussion. On the important point that he is making, is there a case for the Minister engaging in that? In respect of high levels of CAP payment, particularly to the large agri-industrialist arable farmers towards the top end, there may be a case to be made for ensuring that the additional money from taxpayers is used for increased innovation, research and development, and more targeted and accurate farming, so that the productivity, not just production levels, on such farms is massively increased as a result of using taxpayers’ money.

[Neil Parish]

The shadow Minister is exactly right, and he leads me down a path towards making a point on which not all will agree with me, which is that the one thing that is being denied to European and British farmers is biotechnology and science. No other industry in this country is hampered by not being able to use the best science. A blight-resistant potato used for starch production is in existence. Eventually, we will have a blight-resistant potato fit for human consumption; will we then deny ourselves the use of it? Many in the House are better historians than me, but was it not potato blight that caused the potato famine in Ireland? Solving the problem of having to spray potatoes 20 times a year—probably more this year, because of the terrible weather conditions—would be a great bonus. Similarly, as always promised, we might soon have nitrogen-enhancing wheats and oilseed rapes. Will Europe deny itself those, too?

As a Government, we need to be a little more proactive in discussing biotechnology. It is not for the Monsantos and Syngentas to promote it, but perhaps for our universities and others, so that we can tell people about the possible green bonus from crops that need to be sprayed less and that use less artificial fertiliser—all part of science and technology.

[George Freeman (Mid Norfolk) (Con)]

On science, technology and innovation, as my hon. Friend knows, because he has attended meetings of the all-party group on science and technology in agriculture, of which I am chair, the Government have just launched a call for evidence on precisely that—a strategy for agricultural science and research, as part of a comprehensive life sciences strategy. Does he agree that, as we think about greening the CAP, we should consider how Europe’s farming and its agriculture, science and research base, often led by this country, can play a part globally in tackling the challenge of sustainable intensification, as laid out in the foresight report?

[Neil Parish]

My hon. Friend makes a good point. I congratulate him on chairing the all-party group. We need to bring to the attention of the world what is needed, with biotechnology. We have a moral duty not only to look after the environment, but to feed people. As there is more and more global warming, northern Europe, and we in particular, will need to produce more and more food, and using biotechnology is the way forward. Europe, however, has dragged its feet, as has this country. The debate would be worth having if the potential for environmental and productive gains and slightly cheaper food could be presented to the British public, and if they could see some financial benefits—people’s hearts are on the left and their pockets are on the right.

If we look at the protein that we feed our chickens, our pigs in particular, and our dairy cows, most comes from South America and America, and most is genetically modified soya, so the idea that we are living in a world free from GM is absolutely wrong. The Americans, dare I say it—I never was politically correct—might in part be slightly overweight, but they have not died from eating GM products, which have been used to good effect in America. If we want a more competitive agriculture in Europe and Britain, denying ourselves GM in the future would be wrong. A Government who brought up that subject for debate would be brave, although I think that the public might just about be ready for it. I am interested in what our new Agriculture Minister will say. I am tempting him, ever so slightly, to comment on the subject.

We have some good stewardship schemes in this country, probably among the best in Europe. The trouble is that the Ciolos reform is trying to go down to the lowest common denominator. Of the 27 countries, some have monocultures of maize, maize and more maize, so Ciolos is trying to bring in such things as a four-crop rotation, but if we have land in stewardship schemes or permanent pasture, or hill land that is extremely valuable for its landscape, the last thing we want to do is encourage farmers to plough up part of it. Some of what is coming through from Ciolos, therefore, is complete madness. One idea is that every farm has to have 7% set aside, but some farms have anywhere between 20% and 40% of their land in a stewardship scheme—some more—while other, highly productive farms are much better off producing food and getting on with it. That is why “one size fits all” is not the way forward, as my hon. Friend the Member for Thirsk and Malton said.

We will have to fight hard in Europe—I look forward to the Minister fighting his corner—because in this country we run very productive farms. We farm pretty competitively. When some of my farmers in the west country get excited if the Commission talks about small farmers, I warn them, “Don’t get too excited,” because the Commission means farmers of about 5 acres, or 2 hectares, not farmers of 50, 100 or 150 acres. Poland has more farmers than the rest of the European Union, or certainly did when it entered, because it has so many small farms. Be careful when the Commission offers handouts to small farmers, because it does not mean ours.

That brings me to a key point. As we green the CAP, what is needed is agricultural environmental policy, and at the moment too much social policy is involved. Many member states will talk about labour requirements that very much favour the huge amount of labour on the very small farms in some countries, which will put British farming at a disadvantage. That will also take the CAP from where we want it to go, because the whole idea—probably with cross-party support—is to see farmers not only farming in a green way, but producing food competitively, and we also want them to get more money out of the marketplace. That is where I disagree with the hon. Member for Banff and Buchan (Dr Whiteford), who spoke before me. It is not a matter of finding more money from the CAP to support farming; it is about enabling farmers to be competitive and produce food well. I do, however, agree with the need to look much more at what land is given the CAP payments; that is where Scotland may well benefit.

[Dr Whiteford]

I agree with the hon. Gentleman on his latter point, because in Scotland we have some serious disadvantages, in the kind of land that we have, its quality and its location. My key point was that the proportion we get of the overall CAP budget, whatever its size, needs to be more equitable.

[Neil Parish]

I understand exactly where the hon. Lady is coming from, but looking at Scotland, dare I question whether the highlands and the bare rocks need the same payment as some land that can be farmed, such as grasslands? Averages of payment throughout Scotland are interesting. How I dare even suggest such things, I do not know—I do not want to get into a war with Scotland—but there are statistics and statistics.

We are at a crossroads, and at a place where Britain is well in advance of others, with regard to environment payments. We need to ensure that we can pay for those payments. I agree with my hon. Friend the Member for Thirsk and Malton that modulation is unfair to British farmers. However, I also know that the Treasury is not noted for its generosity, and if we do not modulate, we will not have enough money to pay for our stewardship schemes. If the Minister and the Secretary of State with responsibility for agriculture went cap in hand to the Treasury, saying, “We already receive £2 billion or £3 billion from the CAP, but we need more money from the Treasury to prop up stewardship schemes,” I suspect that they would be told in good Anglo-Saxon terms to go on their way. As we negotiate the new agricultural policy, we must ensure that those stewardship schemes are funded through it in some shape or form. We must be careful when we say that we will throw the modulation out with the bathwater, because that may not be the right way forward.

This debate is a great opportunity, and I wish Ministers well in their negotiations. The argument in Europe is always that we should have an agricultural policy for the whole of Europe and a budget to fit that policy, but in the real politics of the European Union, there is a budget for agriculture, and agricultural policy is then fitted to that budget. That is exactly what will happen this time.

We must get the best deal for our farmers and the environment. I wish our new Minister and the Secretary of State well in their negotiations with our European partners. We must be tough to ensure that we move our agriculture forward to competitive food production and a green agriculture policy, but we must not lose sight of the fact that in the end, much of the food that our farmers produce is also part of the green environment.

[George Eustice (Camborne and Redruth) (Con)]

Does my hon. Friend agree that a problem with a one-size-fits-all policy such as the CAP is that it is difficult to have policy innovation, because any such innovation is stifled by the need for negotiations between 27 member states? Does he think it might be better gradually to move to a system with a common agricultural policy with common objectives—safeguarding the environment, improving animal welfare, and food security—so that those policies are increasingly delivered on the ground by national Governments from their own budgets, and we do not recycle funds through the EU in the first place?

[Neil Parish]

Yes. My hon. Friend raises a good point. What needs to be brought in is not only a policy, but co-financing, because each member state would then pay for its own agricultural policy, and might not be quite so keen on throwing money away on strange projects, as some countries do. Olive oil is produced in Greece, and reindeer are supported in north Finland and Sweden. Wheat and barley are grown across much of Europe, and rice is grown in parts of Italy and Greece. It is difficult to support a policy and have one aim. It would be much better to ensure that member states had their own money. The downside of that is that we do not want the French throwing all its money into supporting suckler cows and beef production, and that highly subsidised beef then coming across the channel to compete with our beef, which may not be subsidised in the same way.

[George Eustice]

I completely accept that point, but does my hon. Friend agree that for any other goods, and in any other part of the single market, state aid rules, which the European Court of Justice enforces, prevent that from happening? It would be possible to have an agricultural policy with common objectives, but delivered nationally, with those state aid rules to prevent the sort of behaviour he mentioned.

[Neil Parish]

My hon. Friend has heard the phrase, “The law works for the law-abiding,” and we can be certain that the French would find every reason to distort the market in their favour, wait until that was challenged by the European Commission, and drag it through the European courts for years, so I am not as sure as he is that state aid rules will stop the French or anyone else distorting the market. We must be careful if we go down that route. State aid rules are a blunt weapon, and I believe the Anglo-Saxons in Europe conform to them more closely than those in other parts of the European Union. State aid rules alone will not be enough.

We must ensure that CAP reform is done in a way that does not distort the market further. We should green it, but have food production, and ensure that as we deal with farmers in this country, we have food production on the best land and increase it sustainably, but have conservation on our more marginal land. That is the way forward, and that is where we must be careful in our negotiations on the greening of the CAP. I look forward to Ministers doing a good job.

--- Later in debate ---

[George Eustice (Camborne and Redruth) (Con)]

Thank you for allowing me to speak, Mr Chope. I am conscious that I was not here for the opening of the debate. The title of the Select Committee’s report is “Greening the Common Agricultural Policy,” but more specifically the Commission’s proposals are about greening pillar one of the CAP. It is worth noting that supporting the greening of pillar one represents quite a significant departure from the long-standing British foreign policy position, which is that we should gradually phase out pillar one and direct payments all together and put our support into pillar two, so that we can have more tailored local and national support for environmental stewardship schemes.

My concern is that by going for the greening of pillar one, we will end up with what is already being called in some circles green taping—rather than red tape, we will have green tape. There will be quite bureaucratic and centralised diktats coming out about what farmers can and cannot do, which invariably will not have been thought through properly. We might lose the opportunity to achieve the more satisfactory long-term objective of removing pillar one altogether and having effective, well thought through countryside stewardship schemes. In recent decades, British Governments of all colours have led the way in developing some of the successful ones. The entry-level and higher-level stewardship schemes are held up as exemplars for others to follow. There is a danger that we will lose that momentum towards a more sensible CAP and end up reverting to and getting bogged down in, again, quite a bureaucratic process.

I shall highlight a few key problems that I see with some of the proposals. There is the idea that we should go back to set-aside. We moved away from set-aside 15 or 20 years ago because it was not working. The point was made by my hon. Friend the Member for Tiverton and Honiton (Neil Parish) that it is not always right to have just 7% of every farmholding set aside and not farmed intensively. The evidence is that if we really want to encourage wildlife, we should have wildlife corridors. Some parts of the country where the agricultural value of the land is lower might opt to do more of these environmental schemes—

[Neil Parish]

My hon. Friend is absolutely right about the set-aside argument. Do we get value for money in greening with set-aside, counterbalancing the fact that we are taking out a lot of land that could be used for food production? There is a moral duty to produce food as well as taking land out for so-called environmental set-aside.

[George Eustice]

That is right. The environmental stewardship schemes in pillar two are much more proactive about encouraging wildlife and improving biodiversity, whereas the problem with set-aside is that it becomes something that has to be done and everyone finds all sorts of ways around the rules so that, for instance, they can graze a particular type of goat on the land and get away with it. There is an issue with the bureaucratic system of set-aside.

My hon. Friend the Member for Tiverton and Honiton also alluded to the crop rotation requirement. Anyone who has been a farmer, as I once was, knows that crop rotation is a good thing. A farmer who farms without rotating their crops, particularly in the arable or vegetable sectors, will soon run into problems, such as crop disease, which causes a great deal more expense than any subsidy would have been worth. I question the value of insisting, in the latest proposals, that each farmholding must grow three crops. It proves that whoever came up with the idea is not a farmer; they are a bureaucrat. One could grow three brassicas—cabbage, oilseed rape and cauliflower—which would satisfy the three-crop rule, but the farmer would have clubroot disease in all those crops within two or three years.

I understand why some would regard the proposal to cap subsidies to individual farmholdings as superficially attractive; they think, “Why should we give a huge amount of money to very large farms?” However, no one has thought through the likely impact. Large farmholdings might break themselves into small farmholdings to get around the rules. There would be all sorts of avoidance problems, which would need a suite of anti-avoidance measures and people to ensure that farmers did not break up their holdings to circumvent the provisions. There would be major problems with that, so one must question what we are trying to achieve. If an objective of the CAP always has been and should be to promote food security and competitive farming, why would we want a policy designed to undermine the most productive and efficient farms in Europe and reward the least efficient? Although I understand why some would find the proposal superficially attractive, it is a mistake.

[George Eustice]

That is an interesting proposal, which I would like to look at more closely. I have previously argued that we could develop a system in which environmental obligations became transferable in some regards. The lettuce grower on the Cambridgeshire fens, who has a model that getting the single farm payment is irrelevant to, might forgo the payment, which could instead go to a farmer on more marginal land in, let us say, Wales—I do not want to offend anyone with a Welsh background. Such schemes could therefore receive more investment.

A problem that we all recognise in the EU negotiating process, which I alluded to in my question to my hon. Friend the Member for Tiverton and Honiton, is that rather than going into negotiations saying, “What is the best possible agricultural policy we could design?” and “What is the optimum policy we could pursue?” we are always hamstrung by voices in DEFRA and the civil service that say, “You can’t do that because Denmark won’t agree. If you advance this idea France will reject it, and we will lose our allies in Poland and eastern Europe.” Everything about agricultural policy ends up being seen through the prism of an incredibly complicated 27-way negotiation, which frankly leads to a poverty of vision of what our agricultural policy could become. We instead plod along like a blinkered horse, trying to achieve what we can. It is all about the lowest common denominator, rather than genuinely successful and thoughtful policy. Pillar two is a classic case of that.

[Mr Dai Havard in the Chair]

In the last Parliament, our Committee, before I was on it, criticised the Labour Government for arguing that we should phase out pillar one and have pillar two only, because it was not achievable and undermined our negotiating position. If we do not even articulate what we believe because we are concerned that doing so will undermine our negotiating position, there is a problem.

I would like a much looser CAP in future: a common policy about common objectives. We could set common objectives for improving animal welfare, safeguarding the environment, enhancing biodiversity and promoting food security. There could be much looser policies and arrangements centrally and much more decision making and responsibility for implementation devolved to national Governments.

[Neil Parish]

This will tempt my hon. Friend further from the topic of debate, but would a looser common agricultural policy, or an agriculture policy, be part of a new relationship that we might negotiate with Europe?

[Mr Dai Havard (in the Chair)]

Do not be tempted too far, Mr Eustice.

--- Later in debate ---

[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.

[Neil Parish]

Not only is there a problem with permanent grass payments, but if we are not careful, farmers will plough up in advance grassland that they would not otherwise have ploughed up if it had not been for this ridiculous measure coming from the Commission.

[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.

--- Later in debate ---

[Mr Heath]

The hon. Gentleman is absolutely right. Mr Havard, we are going to have an embarrassing degree of consensus in Westminster Hall today on an awful lot of this material, because we have very strong common ground across the political parties and across the nations and regions.

I must say that it was not always so. When agri-environmental schemes were introduced, I remember that in my part of the world in particular there was a huge outcry about the “imposition”, as it was described, of agri-environmental schemes on the Somerset levels. People were very upset about what was happening, and then effigies of Ministry of Agriculture, Fisheries and Food officials were burned on the levels. We get very excited about these things in my part of the world—we are all revolting peasants at heart.

[Neil Parish]

indicated assent.

[Mr Heath]

My hon. Friend will agree with that contention, as I know where he comes from.

The confidence in agri-environmental schemes is, as the hon. Member for Ogmore says, the result of careful preparation and consideration, as well as ensuring that everybody understood not only what they were to do, but the reasons why they were to do it and why the schemes would have an effect.

That is partly the answer to the point made by my hon. Friend the Member for Thirsk and Malton about modulation. From our point of view, it is essential that we are able to ensure the continuation of these schemes, and the way that we can do that is to make sure that there are the funds within pillar two that enable us to maintain them. It is not just the agri-environmental stewardship schemes that matter, although they are important. It is also through one of the other things that she mentioned—the rural development programme for England—that we can deliver the other added benefits and the public good, by the use of modulated payments. We must be very conscious of that.

My hon. Friend also made a specific point about the exit from the schemes. I hope that the Government response to the Committee’s report set out the position of someone who has signed up to a 10-year involvement, which is clearly the legal position. However, if difficulties arise after we have concluded the negotiations and if the new schemes clearly require us to look again at transition, I will be happy to talk to her, the rest of the Select Committee and indeed other interested parties about that, to ensure that people are not penalised for something that is outwith anything that they might reasonably have expected. That is because my determination is that farmers who enter into agri-environmental stewardship schemes have the confidence that, in doing so, they are not shackling their businesses to something that they do not want to do and are not making a rod for their own back. Instead, they should have the confidence that the scheme will continue and will provide the support they need for them to do the things that they want to do, both in running their businesses on that land and in achieving the environmental benefits for the wider good. I happily give my hon. Friend that assurance.

--- Later in debate ---

[Mr Heath]

I note what the hon. Gentleman says about flexibility. That is certainly what we are trying to achieve. We want the flexibility to apply practical, effective and simple measures for our farmers. I thought that he ended a sentence in his speech with, “We want flexibility in the United Kingdom but not in other nations”. I thought, “Right. Yes, just stop there,” but I do not think that that is an achievable negotiating position. To be fair, he did carry on with his sentence.

Let us be absolutely clear: we want to achieve an environmental benefit across Europe, but we do not want to lose our high standards. We are engaging, therefore, with the European Commission, the European Parliament and other member states to ensure that there is flexibility in the EU’s approach to greening.

My hon. Friend the Member for Thirsk and Malton requested an update on the process. It will be extremely difficult to offer the precision that she requires. Many different views are being expressed within the Agriculture Council and the European Parliament, and much will depend on the outcome of the overall budget negotiations. As Members have already said, until that budget is completed we will not know what the quantum is, and it would be difficult to resolve many of the CAP issues without knowing the size of that envelope.

There is a move by the Cypriot presidency to achieve a partial general agreement, before the end of the year and the end of its EU presidency. Such an agreement will come about only if we are satisfied that we have something that is sustainable in all its senses, and as far as the UK is concerned I think that we are some distance from that. I expect—this is no more than an expectation—that it is more likely that we shall come to a conclusion during the Irish presidency, following the conclusion of the budget round.

My hon. Friend the Member for Thirsk and Malton asked whether we have allies. Yes, we do. As always with European negotiations, there is a constantly changing kaleidoscope on different issues, but there are member states that clearly understand our points about flexibility and complexity and about how we can achieve the results, rather than focusing on an incomplete understanding of how we can best achieve better environmental benefits across Europe. It would probably be unhelpful at this stage in the negotiations to be numbering our friends and our enemies, because someone’s friend on one issue will often be their opponent on another.

Let me make it plain that we are not opposed to the concept of greening if it delivers greater public benefits from taxpayer expenditure. That is our clear position—the hon. Member for Bristol East made that point—and we want it to be achieved in a way that recognises the wide diversity of agriculture around the European Union. I just do not believe in the one-size-fits-all approach. It is hard to find such an approach even within the United Kingdom, as the hon. Member for Banff and Buchan said. Circumstances are different within England itself, with a hill farm in the Pennines being different from a cereal farm in East Anglia, and different parameters apply. I entirely agree with the EFRA Committee’s view that a one-size-fits-all approach might lose its relevance when applied to particular circumstances, and certainly when applied to our own.

Each of the areas proposed by the Commission initially, which were crop diversification, the retention of permanent pasture and the need for a proportion of land to be designated as ecological focus areas, has the capacity to divide opinion—informed opinion, because of exactly the points that Members have made today. Each measure contains the essence of a good idea—there is something there in the initial thinking—but the environmental benefits are not clear when the proposals are considered in the light of our own circumstances. I know that many other European Union member states are forming the same view, particularly when the supposed benefits are considered in the light of the costs and complexities of implementation. It is not obvious that the money should be spent in a way that more demonstrably delivers complexity rather than environmental benefit, which is crucial.

It is fair, and not unkind to Commissioner Ciolos, to say that a particularly remarkable aspect of the greening debate in Brussels is the fact that the Commission seems to have few, if any, supporters for the precise way forward that it has proposed. I would take some comfort from that if I saw a majority in favour of an alternative, but at the moment there are only many minorities.

Some countries have yet to be convinced about the basics, about the further shift towards paying farmers for delivering environmental public goods. They see ideals that we have long shared in this country as an expensive luxury at a time of economic difficulty, and we have to be alive to that view. There are attempts by some to water the proposals down and exempt the majority of their farmers. It is funny how definitions always exempt a member state’s own farmers from their effects—that is known as greenwashing. There are issues about greening by definition, and we do not want this to be a badge of convenience, with people carrying on exactly as before but with the application of greater funding, as that cannot be in anyone’s interest.

[Neil Parish]

The Minister makes an interesting point. There are cases in Europe of people wanting to exempt small farmers from a lot of the conditions. In countries where the majority of the land is made up of very small farms, all the greening aspects get taken out because the farmers are ruled out of them.

[Mr Heath]

Precisely so. Time and again people pay lip service to a “very good idea” but somehow it then does not apply to their own circumstances. We have to be wary of that and not fall into the same trap.

If we are to go down a route of some form of greening by definition—to which there is some advantage, in reducing complexity and allowing for easier systems—it has to be on the basis of something that shows the environmental benefit. I would argue, for instance, that our stewardship schemes do that. We could demonstrate beyond anyone’s reasonable doubt that our environmental schemes show a clear commitment to environmental benefits on the land within their compass. If we extend the self-definition too far, however, we get to the point at which simply having a hedge is sufficient qualification to be a greened farm. That is not an adequate definition.

Other member states share our view that this is basically the right direction for the CAP to be moving in, but that the Commission’s proposals are too blunt, too inflexible and too complex in their implementation. We have heard a few examples of that. The hon. Member for Banff and Buchan talked about the definition of “active farmer,” and my hon. Friend the Member for Tiverton and Honiton (Neil Parish) pointed out that quite a lot of Scotland is not farmed as intensively as most parts of England because of the nature of the ground. Yes, that is true, but the Scots have a case with, for instance, grazed heather, and we are helping to press that case strongly in the negotiations on behalf of the Scottish Government, with whom we have very close contacts, as we do with the other devolved Administrations.

With tenants, there is a question of who is the active farmer. It is far more important to identify the activity, rather than the status, of the person doing the farming. I hope we can move in that direction. I have already mentioned hill farming, and in the negotiations we have to be alive to the interests of less favoured areas. I said as much when I was in Cumbria recently and, not surprisingly, I received a measure of support, but we have to be conscious of the fact that there are many different types of farming, and we need to have something that, as far as possible, can accommodate those differences.

The hon. Member for Ogmore and others mentioned capping—I am sorry, but I cannot remember who provided the response. With the proposals on capping and young farmers, for instance, it is all too easy for lawyers simply to adjust the holding to fit the policy, rather than change what is happening. I am wary of that. I want to maintain the incentives, the competitiveness and all the rest. Although I can sometimes see the advantages of such proposals, I do not want the nominal ownership of an enterprise to be changed simply to create a money stream that would not otherwise be there, because that is not in the interests of efficient farming or the objectives that we have set.