Common Agricultural Policy

Roger Williams Excerpts

Thursday 8th March 2012 Westminster Hall

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

I congratulate the Environment, Food and Rural Affairs Committee and its Chair on the report and their important work in scrutinising the CAP reform process.

I want to pick up on a few key issues in the Commission’s proposals that will be of great significance to farmers in Scotland, not least in the parts of Banffshire and Buchan that I represent, where farming has been a way of life for many generations and where food production is still absolutely the mainstay of the local economy.

I suspect that there is a good deal of consensus across the House on a couple of critical issues in today’s debate, the first of which is the need to cut red tape and reduce the administrative burden on farmers. In many respects, that is about fixing a major problem with the current CAP regime and is linked to the need for effective regionalisation and flexibility for member states. I hope that the Minister will consider in his comments at the end how we can start making decisions much closer to home and in the interests of our farming communities.

[Roger Williams (Brecon and Radnorshire) (LD)]

The hon. Lady touches on an important point. A common agricultural policy is needed, but considering the difference between farming in Finland and farming in Greece, we need to ensure that local decisions are taken on local matters within the umbrella of the CAP.

[Dr Whiteford]

I agree entirely with the hon. Gentleman. Clearly, we have different climates and landscapes, diverse methods of farming and different ways of doing business in farming. Without prejudice to the common market, it is important that decisions are made in a practical way by the people best able to make them.

Member states will need flexibility in the process to tailor implementation to their own needs. Within the UK, all three devolved Administrations must be able to work around the challenges that they face in delivering sustainable agricultural development in some least favoured areas. About 85% of Scotland is classified as least favoured areas. That compares with much lower proportions in some other parts of the UK. I hope the Minister will offer assurances that he will press for greater regionalisation as the negotiations intensify and that the issue will not fall off the agenda.

The hon. Member for Thirsk and Malton (Miss McIntosh), the Chair of the Environment, Food and Rural Affairs Committee, quite rightly concentrated on direct payments in her remarks. I welcome the fact that the Government have moved away from the more rigid position of the previous Government, but I am still concerned about their direction of travel. I welcome the Minister’s remarks earlier on clarifying the Government’s position. I hope that he will listen carefully to the Governments of Scotland, Wales and Northern Ireland on direct payments and pursue a negotiating stance in Europe that reflects the needs and wishes of the whole UK.

It is worth remembering, as the hon. Lady pointed out, that direct payments are there primarily to compensate producers for the increased costs of operating in a highly regulated market and to enable them to meet the high animal welfare and food safety standards that we all expect. We need to acknowledge that that does not come for free. We need to accept the reality that, in the past few decades, farming has not been particularly viable as a commercial enterprise. If we did not support agriculture with direct payments, food production and land management simply would not be happening in large areas of the UK. Farming, especially in the least favoured areas, would have ceased a long time ago.

We cannot consider this in purely economic terms. The hon. Lady hit the nail on the head when she put food security at the heart of the debate. Brian Pack’s 2010 report, which was produced for the Scottish Government, highlighted not just the food security challenge, but the challenges of climate change, water supply, energy use and biodiversity as the starting points for CAP reform. In a global context of rapidly increasing demand for food and the need to manage our natural environment much more sustainably, the case for direct support for farmers is actually much stronger now than it ever has been in the past.

We also need to consider the future of direct payments against the historical backdrop of Scottish farmers receiving a disproportionately low share of pillar one support—a pressing issue for those Scottish farmers who want to export their produce. At present, pillar one rates in Scotland are only €130 per hectare, which is less than half the EU average, and well below the UK average of €229 per hectare. The UK needs to argue for its proper share of pillar one, not least so that it can provide a fairer allocation to Scottish farmers.

--- Later in debate ---

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

It is a pleasure to follow the previous speakers.

I am a member of the EFRA Committee, and I agree very much with many of the points made by its Chair, my hon. Friend the Member for Thirsk and Malton (Miss McIntosh). In particular, I agree with her criticism of the current direction of the reforms. The Committee is a broad Church, however, and it would probably be fair to say that I am less critical of the stance the Government have adopted, for the simple reason that all British Governments face the same problem on the CAP: ultimately, the policy is not their decision.

There are complicated negotiations between 27 member states, so our negotiating stance constantly comes up against opposition from other countries. That makes it quite difficult to set out a clear view of what we want to do; indeed, the previous Select Committee criticised the Labour Government for wanting to see everything in the long term done in pillar two, and for wanting pillar one to be phased out. The Committee said that it was unrealistic to suggest that in negotiations and that it was wrong for the Government even to have a vision of where they wanted to end up.

I disagree, and farm policy is a good example of what happens when we stop making decisions at a national level and subject ourselves to the spirit-crushing process of endless negotiations with 26 other countries. We end up with a poverty of vision right across Europe about what a good agricultural policy should look like, and I will say more about that in a moment.

[Roger Williams]

I thank the hon. Gentleman for making that point, but does he not agree that if we are to have a common market and a trade in food between our nations, we need commonality and a common agricultural policy?

[George Eustice]

As I will say later, we need common objectives, but not necessarily a common policy. We also need clear state aid rules, as we have in other sectors. In that way, we can have a proper functioning single market and protect it, even though we do not have a common uniform policy across Europe.

The most important point about the proposals on the table is that they are a backward step for the CAP. The aim was to simplify it, and simplification has been the buzz word for many years, but the proposals will make it more complicated. As the Chair of the Committee said, we are effectively seeing a return to set-aside, with suggestions that 7% of people’s land should be set aside. At a time when food security, which should be a key objective of a common agricultural policy, is a growing issue, that is a step backwards.

I also object to the cap proposed on payments to farmers. If we want to encourage farmers to become less dependent on subsidies in the long term, we need to support consolidation and more efficient farms. A cap on payments would force farmers to break up holdings into collections of smaller holdings so that they still qualify for the subsidy, but that makes no sense. If we want a more efficient agricultural industry, why penalise the larger, more efficient farms?

There are some ludicrous things in the proposals. For instance, in an attempt to achieve crop rotation, there is some suggestion that farmers grow at least three crops to qualify for a subsidy. We can tell that the proposal was written by people who do not understand farming, because insisting on growing three separate crops will not necessarily bring the benefits we seek from crop rotation. For instance, somebody might grow cabbages, cauliflowers and oilseed rape to ensure they have their three crops, but those crops all come from the same brassica family, and are all subject to similar diseases, so a farmer who grew them would soon run into serious problems on their land.

What should a new CAP look like? We should start moving towards something that is about common objectives, rather than a unified common policy. The CAP should have key objectives, such as enhancing biodiversity, improving animal welfare and delivering food security. However, we should then give national Governments much more freedom to innovate, try new policies and adopt approaches that work in their countryside, rather than trying to have a uniform approach that works from Scotland all the way down to Greece, which is clearly difficult to achieve.

Allied to that, we would have a clear set of state aid rules that were specific to the agricultural sector, just as we have clear state aid rules for the single market in every other sector. Such rules would prevent, say, France from subsidising its farmers more than the UK Government and thereby putting our farmers at a disadvantage. Provided that we got those rules right, we could protect a single market in agricultural produce.

The key benefit of such an approach is that it would be more fluid. We would be able to hold the UK Government to account and say, “Why aren’t you trying this great new idea that is working so well in France? Surely, it would work here.” Instead, the best we can do now is to say, “How many meetings have you had with Poland to try to outmanoeuvre France?” That is not a good way forward.

When we make such proposals, people immediately think, “That’s a good idea, but it’s not realistic in the current time horizon.” I have heard that, too. Indeed, when I put these ideas to the Secretary of State last week, the answer was that they were ahead of their time, which is a flattering way of saying, “No, we’re not going to do that.”