MR
JOHN LLOYD
JONES AND
MR BRIAN
MCLAUGHLIN
Chairman
186. Mr Lloyd Jones, thank you very much indeed
for your written evidence and thank you for coming to see us today.
I believe this may be your second interrogation by a Select Committee.
(Mr Lloyd Jones) Yes, Chairman, I seem
to be incapable of learning from my experience of last month!
187. A glutton for punishment! That apart I
must also invite you to introduce yourself and your colleague
to us today.
(Mr Lloyd Jones) John Lloyd Jones, Chairman of the
NFU's Parliamentary Land Use and Environment Committee and a farmer
from Wales.
(Mr McLaughlin) Brian McLaughlin, I head the Environmental
and Land Use Department at NFU.
188. Thank you very much indeed. In your written
evidence you say that the Commission's rural development proposals
are "a modest but logical development." Do you think
they have got the pace and scope for what they are planning to
do about right? Do you think that the balance between agri-environmental
and rural development policy is about right?
(Mr Lloyd Jones) It is far too early to say. I would
make this point, that I think it is very important we do not differentiate
between agri- environment and rural development. Some of us would
see it as those two items being fully integrated. Surely one of
the big challenges that we have in the future is to develop agri-environment
schemes which are job creating schemes in their own right? I wish
to make that point right at the very beginning. Also because agri-environment
is a compulsory part of the package it is very important that
we do not lose sight of the rural development option as well.
(Mr McLaughlin) There are two other concerns, one
of which the tenant farmers have already highlighted. There is
a concern about the compatibility of the current proposals with
WTO. There is a suggestion that as soon as we have some agreement
on this package it will be back in the melting pot again and of
course, Chairman, as you know the current proposals do not address
a number of key sectors, the sheep regime, the sugar regime and
none of the Mediterranean commodities. To some extent because
of the importance of the knock-on effect we have a slight concern
that the current proposals are incomplete.
189. If my memory serves me correctly, MAFF
have already told us that under the agri-environmental schemes
they saw employment as a bonus, and that the primary objective
had to be environmental. Would you share that view with MAFF?
(Mr Lloyd Jones) I would not like to differentiate
between them. Surely job creation is a bonus in itself and much
of the agri-environmental work does mean you have to employ extra
labour in order to carry it out. Many of these schemes are time
consuming and labour consuming. Please let us get away from the
idea that agri-environment schemes mean leaving things alone.
190. A number of witnesses have said to us,
CLA notably among them, that the problem with this Rural Development
Directive is that it talks about farmers rather than the broader
rural economy and indeed the ability to bring environmental services
through the broader rural society as well and they feel that is
a flaw at the heart of this Directive. Do you agree with that
analysis or not?
(Mr Lloyd Jones) In part but what we would like to
see is sustainable rural development meaning that we can add value
to what the countryside and what agriculture produces.
191. "We" being farmers?
(Mr Lloyd Jones) Yes, we as farmers have been absolutely
brilliant at providing raw materials to the food industry, but
I think we need to move away from that slightly by actually adding
more value to the raw product closer to where it is produced.
That does not only mean agricultural products but it also means
the countryside in general because of the contribution that we
make to other industries like the tourist industry from which
we as farmers have not been brilliant at benefiting.
Chairman: These are issues that we will explore
in the rest of the questions. Thank you for that introduction.
Mr Mitchell?
Mr Mitchell
192. Just on the wider context of the rural
development proposals, before we look at the regulations themselves,
do you not think that you under-estimate the difficulties of establishing
a framework in an area as diverse as the EU and underestimate
the difficulties in establishing a framework of good agricultural
practice?
(Mr McLaughlin) Chairman, as someone who sits on a
DGVI Committee I never underestimate the difficulties of getting
anything in Brussels! No, we do not underestimate it but I think
we have to temper that difficulty with the real concern we have
that you can produce some significant "unlevel playing fields"
through the environmental agenda. Perhaps our evidence is slightly
misleading in the context that we use the word "framework",
which I know in Brussels language means something much more definitive
and legalistic. I think what we are really looking for is some
sort of broad guidelines from the Commission to the Member States
of at least the sort of things they would expect Member States
to consider or address in cross-compliance issues. I think if
we start from that end we may find that there are broad areas
of agreement. Whether they do it in practice is another question
but most Member States would prioritise the protection of the
primary resource base—air, water, soil—or at least
should and I think the farming communities would sign up to those
to some extent because they are part of the raw material of farm
production. So I think what we are looking for at this stage is
some fairly broad indicators and not a detailed framework. I do
not think that is impossible. It is difficult but then nothing
worthwhile is easy.
193. You could have a framework where there
is going to be one kind of enforcement in one country and a different
kind in another. You do not know whether money is going to distort
markets or is going to the agriculture or environmental purposes
for which it is intended. I do not see any way in which you can
have a common enforcement.
(Mr McLaughlin) Because we have never addressed it
before it is easy to say that it is too difficult so we will not
do it. I do not think we should give up the exploration to find
some broad guidelines. If having spent some time we decide it
is not possible, so be it. It does seem to me to be a rather easy
way out to throw our hands up in the air and say because it is
awfully complicated, it is difficult, it is not possible. We say
it is difficult but yet I get the feeling that somehow we managed
to work our way towards some sort of broad headings of agreement
on the Water Framework Directive, for example, and it does seem
to me that sets the sort of model one might use for looking at
agri-environment.
194. The Commission proposes some kind of tapering
so the bigger producers gets less and they say that is a reasonable
way of taking account of economies of scale so you avoid excessively
high payments to a single individual. Are you sympathetic to that
point of view?
(Mr Lloyd Jones) No we are not because although those
payments may be to an individual it does not take into account
the number of farming families that may be making a living from
that business either as partners or as workers. The other thing,
of course, is that we have continuously been told that we have
to be more and more competitive yet the whole concept of labour
modulation seems to fly in the face of the element of competitiveness.
195. But is that view influenced by the fact
that we have more big efficient units in this country than elsewhere?
(Mr Lloyd Jones) All the more reason then to be against
labour unit modulation. Why are we hampering our industry in this
country?
196. Are there any calculations on what we would
lose if this tapering off came into effect?
(Mr McLaughlin) There has been no systematic evaluation
largely because there are a number of unknowns in the variables
that are included in the equation not least whether the frozen
green rate will be applied in terms of the pound or whether it
will be a market rate. There were some initial attempts done when
the regulations were published in the context of the cereal sector.
There was an estimate there that something of the order of 3,400
farmers were above the 100,000 ecu threshold if it became an £80,000
equivalent and if it became a £70,000 equivalent over 6,000
cereal producers would be caught. That is the level of analysis
done so far.
197. It is fairly crude.
(Mr McLaughlin) Yes.
(Mr Lloyd Jones) There is another element in this.
If we did go for labour unit modulation then I am quite sure it
would be an extremely good job creation scheme for solicitors
who specialise in the creation and dissolution of partnerships.
Chairman: A very good answer. Mr George?
Mr George
198. On to structural funds and the form of
rural development funding. You say in your memorandum to us that
the Government should press for alternative criteria for the definition
of those rural areas most in need, for example regional GDP. My
understanding is that that is one of the key criteria being used,
is it not?
(Mr McLaughlin) No, the initial set of regulations
or draft regulations put greater emphasis on employment which
is the origin of our concern because by standard conventional
indicators of unemployment the United Kingdom in general and rural
United Kingdom in particular does not score very highly and given
the fact that the Commission starts with a policy of reducing
the target areas to be assisted in the first place, then by focusing
on potentially fairly strict unemployment criteria, I think we
put those two things together and decided maybe the future for
rural Britain might not be so good. Having said that, Mr George,
I think this is the difficulty of writing papers on an agenda
that is fast moving. Of course, in the light of the latest decision
on the statistical units of data collection and the prospect of
Cornwall and West Wales now enjoying NUTS II classification, this
to some extent could change the geography of rural assistance
because if our hope is correct that Cornwall and West Wales subsequently
benefit from Objective 1 it will not only benefit them but hopefully
will give us a bit more rural population quota in Objective 2.
So our concern in going for regional GDP as one of the criteria
is to try to break the apparent fixation in Brussels on targeting
unemployment. The other problem of course was to try and get something
that was measurable across the European Union which made indicators
such as quality of employment and so on very difficult. Thus regional
GDP seemed to be one criteria that was marketable.
199. I understand that 75 per cent GDP per head
is the benchmark used for Objective 1 and NUTS II areas, is that
right, so unemployment is not a factor taken into account?
(Mr McLaughlin) Well, we were thinking particularly
of sub-Objective 1 levels. Our big concern, and I think a shared
concern, is the area of 5b designation next time round or its
equivalent could be significantly reduced, although again the
Commission commitment that no Member State should lose more than
one-third of the population in the redesignation to some extent
tempers that concern.
