Select Committee on Agriculture Appendices to the Minutes of Evidence


APPENDIX 8

Memorandum submitted by English Nature (S 13)

1.  INTRODUCTION

  1.1  English Nature is the statutory body responsible for advising both central and local government on nature conservation and for promoting the wildlife and natural features of England. In fulfilling its duties, English Nature:

    —  advises Ministers on the development and implementation of policies for nature conservation;

    —  advises Ministers on other policies affecting nature conservation;

    —  identifies, notifies and safeguards Sites of Special Scientific Interest (SSSIs);

    —  establishes, maintains and manages National Nature Reserves;

    —  provides guidance and advice on the principles and practice of nature conservation to a wide constituency;

    —  commissions and supports a wide range of research and other projects relevant to nature conservation.

  1.2  Through the Joint Nature Conservation Committee, English Nature works with sister organisations in Scotland, Wales and Northern Ireland to advise Government on UK and international nature conservation issues.

  1.3  Our interest in trade negotiations concerns their possible effects on biodiversity in England resulting from the impact of trade agreements on the agriculture sector, on agri-environment programmes, and on the use of genetically modified organisms (GMOs). In association with the other UK Wildlife and Countryside Agencies (Countryside Agency, Countryside Council for Wales and Scottish Natural Heritage), we have undertaken innovative research on the potential environmental effects of agricultural liberalisation (Potter et al, 1999). This submission concentrates on the potential impact of trade rules on biodiversity in England. However, our work with the other Agencies suggests similar issues relating to landscape and other rural policy issues.

  1.4  In responding to the Select Committee's inquiry, this submission focusses on three issues raised in the inquiry press notice. First, the effect of trade liberalisation on the agriculture sector and the environment; secondly, environmental support regimes; thirdly, restrictions on trade in genetically modified (GM) foodstuffs and issues relating to scientific dispute. We have no comment on the other issues raised, which mainly involve human health matters beyond our remit.

  1.5  The UK Government's new strategy on sustainable development states that, "Liberalising trade can help to ensure that resources are used efficiently, to generate the wealth necessary for environmental improvement, for development, for the spread of cleaner technology and for improved social conditions. On the other hand, where economic activity is unsustainable, trade can act to magnify this, increasing pollution and depletion of natural resources such as forests, fish and other wildlife, and minerals". We support this balanced interpretation of the potential effects of trade on the environment and suggest that this should be a key statement guiding UK and EU trade negotiations.

2.  SUMMARY OF OUR SUBMISSION

The general approach to trade and environment relationships

  The key immediate priority is that the agenda for the next trade round, including that for the "built-in" agenda, should make the promotion of sustainable development a specific objective and outcome for the negotiations.

  We recommend that all new trade measures, individually and as a whole, be appraised in terms of sustainable development including direct and indirect effects (see Annex A).

  We welcome the EU's suggestion that the new trade round investigates the relationship between Multi-lateral Environmental Agreements (MEAs) and trade agreements. We recommend that the EU should as a negotiating goal ensure that the trade round takes account of the overall objectives of MEAs, in particular the Biodiversity Convention (Rio 1992).

The effect of trade liberalisation on the agriculture sector and agri-environment policy

  Agriculture should be multi-functional. Many of the most important wildlife habitats in England have been created by environmentally sustainable agricultural practices over hundreds of years.

  Maintaining this link is essential if the UK is to achieve its international commitments under the 1992 Biodiversity Convention.

  We support the desire to reshape further the current system of EU agricultural subsidies, the majority of which remain production related and stimulate environmental damage.

  However, research for the UK Wildlife and Countryside Agencies indicates that simple removal of existing subsidies will not deliver the necessary environmental gains. There is no evidence to support the assertion that trade liberalisation in itself will deliver a win-win solution for the economy and the environment on a scale necessary to achieve our international biodiversity commitments. The evidence to date points to environmental risks resulting from accelerating the process of structural change in farming, and the need to redirect support towards environmentally sensitive farming.

  This emphasises the need for a precautionary approach to trade liberalisation involving sufficient accompanying policy measures, including a radically increased agri-environment programme.

Environmental support regimes

  It is essential that new trade rules enable the application of domestic subsidy regimes that are genuinely aimed at delivering our national and international environmental commitments. Trade negotiations must recognise the inherent links between agriculture and biodiversity in Europe. Biodiversity benefits have strong "public good" characteristics, indicating the need for public subsidies. In addition, since biodiversity benefits are jointly produced with sustainable agriculture, it is inevitable that delivering biodiversity protection will have some effect on agricultural production levels.

  Current and future trade rules may constrain the Government's ability to implement the necessary environmental programme. We believe they need to be revised to enable the implementation of legitimate environmental subsidies at the necessary scale.

  We believe that there is scope for an alternative win-win solution through the next trade round. This could involve significant reduction in the current level of market support, and increased access to domestic markets, but must ensure a sufficient programme of environmental payments, on a considerably greater scale.

Genetically modified organisms

  We are concerned about the possible effects of GM crops grown in England on wildlife, and support the need for a halt on herbicide tolerant and insect resistant GM crops grown in England until the farm scale trials are completed, which will demonstrate the level of risk to wildlife.

  It is essential that this policy is not constrained by trade rules. We believe the precautionary principle to be a legitimate approach in trade policy and that its application should be clarified in the new trade round.

3.  THE EFFECT OF FREE TRADE ON THE UK AGRICULTURE SECTOR AND THE ENVIRONMENT

European agriculture should be multi-functional

  3.1  A large proportion of the most valued wildlife habitats and associated species in England has arisen from agricultural management of the natural environment over hundreds of years (see annex B). While this "multi-functionality" can be contested in terms of its uniqueness, it is indisputable that England, and other parts of Europe, is characterised by an "old-settled" agricultural system, one that has developed over a period of many centuries. However, this multi-functionality is threatened by the recent intensification of agricultural production.

  3.2  The UK Biodiversity Action Plan includes the protection of farmland habitats and species. This represents our international commitments under the Biodiversity Convention (1992), signed by 175 nations. It is precisely this semi-natural character and mosaic of habitats which makes them unusual and important in a world context. These commitments require both maintenance of the remaining resource and recovery of former losses.

The policy implications of the links between biodiversity and farming

  3.3  Maintaining these links is essential to achieving our commitments under the Biodiversity Convention. Agricultural goods and biodiversity can be seen as "joint products" of a sustainable agricultural system. Protection of this wildlife is difficult to achieve in other ways. Attempting to recover and maintain former levels of biodiversity, without the use of sustainable agricultural practices, carries high risks in terms both of environmental effectiveness and cost effectiveness. We are, for example, committed to the protection of certain species and habitats that rely on specific cattle grazing regimes.

  3.4  A wide area approach is needed to maintain existing conservation resources, to prevent further damage through habitat fragmentation effects, and to recover former losses. This needs to be based on the conservation of remaining semi-natural habitats and widespread use of sustainable agricultural practices across the countryside as a whole, not just in isolated areas covered by statutory designations.

The effects of trade liberalisation

  3.5  Trade negotiations may lead to some further reform of subsidy payments under the Common Agricultural Policy (CAP), many of which cause environmental damage. The recent Agenda 2000 package will do little to deliver environmental benefits and does not support the multi-functional objectives described above. The balance of support remains strongly production linked and too few resources are devoted to the delivery of environmental public goods. To the extent that trade liberalisation may drive further subsidy reform, this is supported by English Nature. However, the analysis below indicates that simple removal of existing subsidies will not achieve our biodiversity objectives.

  3.6  Recent research for the UK Wildlife and Countryside Agencies attempts to understand the possible effects of free trade in agriculture (Potter et al, 1999). It analyses the possible economic response of farmers and then predicts the environmemtal consequences. The study covered 244 farms in five European study areas, of which three were in the UK. A summary is at Annex C. The research categorised farmers' response to free trade as follows: "business as usual"; changes to farm management; farm household response (such as lower spending or additional sources of income); and structural change (such as early retirement and change of farm ownership): Different places indicate different effects: in East Anglia, the "business as usual" response will probably predominate. However, upland and pastoral areas such as the Welsh and Scottish case studies indicate significant structural change.

  3.7  Some have argued that trade liberalisation will lead to win-win gains in terms of both economic and environmental benefits, simply through the removal of these environmentally damaging subsidies. However, this research challenges that view. While caution is required in interpreting the results, the following conclusions are suggested:

    —  No economic changes can be identified that are likely to lead, in themselves, to the replacement of "lost" conservation features on the scale that it necessary to achieve our biodiversity objectives;

    —  There are likely to be some environmental gains from a reduction in the intensity of farming. However, there are also likely to be losses, for example from reduced labour time for conservation management. More importantly, the dominant effect will be long term structural changes in farming, which carries significant environmental risks from processes of amalgamation, changes in farm layout and management and loss of land out of farming.

  3.8  The "win-win" interpretation is based on too narrow an interpretation of environmental effects and fails to understand the potential risk of irreversible habitat loss through the processes of structural change. More research is required in this area, but the current evidence suggests the need for a precautionary approach, recognising the need for sufficient protection measures to accompany trade liberalisation, until further information is available. This should include an English agri-environment programme in the future that is significantly greater in scale than the current level of payments.

4.  THE IMPLICATIONS FOR TRADE POLICY AND ENVIRONMENTAL SUPPORT REGIMES

  4.1  Trade policy may cause significant structural change in agriculture which could threaten the existence, maintenance and recovery of important conservation features on all types of farm, and especially the economically vulnerable farms. Negotiations must allow legitimate and sufficient domestic support measures to ensure environmental protection.

  4.2  Biodiversity benefits have strong public good characteristics, which means that they will be under-provided by free markets and public subsidy is necessary to provide the level of benefits that society wants.

  4.3  Current "green box" rules seek to restrict any domestic support measures that will have a more than negligible impact on agricultural output, and there is a move to make these even tighter in the new round. However, biodiversity protection policies inevitably specify certain farming processes and are likely, therefore, to have an effect on agricultural production levels. The provision of countryside services may either tend to increase or reduce agricultural output depending on the technical relationships between the agricultural system and the environment. Where measures have a negative effect on production, for example by reducing fertilizer use, the conflicts with trade policy are less acute. However, in some cases biodiversity protection will inevitably have a positive effect on production levels compared with a "without biodiversity scenario". These cases include the maintenance of farm landscapes and provision of sufficient grazing levels in vulnerable farming areas. Although this positive effect will be much less overall than the current subsidy regime, it may mean that trade rules will conflict with our environmental priorities.

  4.4  These rules fail to recognise the relationship between agriculture and the environment in Europe. It is necessary to distinguish between "domestic support measures" and other payments made to farmers for the provision of public goods. The latter may well have effects on production but should not be included within the Aggregate Measure of Support (AMS). Legitimacy of domestic support payments should be based on whether their size and form is appropriate in relation to environmental and other rural support objectives. Legitimate public good subsidies should be seen as correcting market failures rather than as introducing trade distortions.

"Blue Box"

  4.5  We support the use of precautionary but well-targeted measures to protect the environment from any risks from an accelerated process of structural change. However, the current "blue box" payments allow a subsidy regime which remains too closely linked with production and does little to use public funds in a creative way to protect and enhance biodiversity.

  4.6  We believe our proposals for the Less Favoured Areas may provide a useful more general model for the long term and would want this model to be developed in trade negotiations.

  This involves:

    —  Flat rate area payments, zoned according to environmental priorities;

    —  Supplementary additional area payments which focus on existing habitats and landscape features and on beneficial elements of extensive farming systems.

"Green box"

  4.7  The "green box" rules, agreed in the previous trade round, may constrain the implementation of legitimate public good subsidies in pursuit of our international commitments. Our specific concerns are:

    —  Even legitimate environmental payments may be ruled out if they have a more than "minimal trade distorting effect" (Uruguay Round Agriculture Agreement, annex 2, paragraph 1). As argued above, biodiversity protection policies will inevitably have an indirect effect on agricultural production levels. This criterion needs to be amended.

    —  Instead, the key issue should be whether the payments are legitimate in terms of the environmental criteria, amongst others, set out in the green box rules (URAA, annex 2, paragraph 12). However, to meet the concerns of member states about the real legitimacy of such payments, we would support a better definition of the environmental criteria, subject to important caveats set out at annex D.

  4.8  Such changes would allow the new green box rules to be defined appropriately to distinguish "true" environmental support programmes. Having done so, the "green box" should facilitate the expansion of such programmes in order to allow member states to take the necessary action to protect the environment.

Overall approach

  4.9  Further research is needed to determine the scale of payments to prevent damaging effects from structural change and to achieve biodiversity objectives. However, English Nature believes that a sufficient domestic support package to achieve environmental objectives would cost much less than the current level of subsidies. This suggests that much of the trade liberalisation agenda could be implemented in a way that also ensured environmental protection. However, it is essential that reformed blue and green box rules are supportive of theses objectives, and that trade liberalisation measures are accompanied by sufficient domestic policy measures to ensure environmental protection and enhancement.

5.  GENETICALLY MODIFIED ORGANISMS

  5.1  English Nature is very concerned about the potential environmental risks from the growing of GM crops in this country. These risks include:

    —  The direct toxicity of GM crops to wildlife, especially those containing insecticidal proteins;

    —  The transfer of genes to native plant species either deliberately or inadvertently. The commercial introduction of herbicide resistant grasses (which have recently been created experimentally) would enable farmers to eliminate all other species from pastures. Transfer of insect, virus and fungus resistance genes to wild plants may disrupt their population dynamics to the point that they would become more weedy.

    —  The potential for changes in agricultural methods enabled by GM crops. Fields of herbicide resistant crops would be sprayed with broad spectrum herbicides at the growing stage, eliminating all weeds on which wildlife relies for shelter and food. We view the commercial introduction of these crops as a further step in increasing agricultural intensification. Evidence relating bird declines to herbicide efficiency supports this view (Campbell et al, 1997).

  5.2  English Nature is not opposed to genetic modification as a plant breeding technique but is concerned about widespread release of certain GM crops. We support the need for a halt before the commercial release in England of GM herbicide tolerant and insect resistant crops to:

    —  allow time for research into their effects on biodiversity in England to be completed and assessed;

    —  develop changes in the regulatory system to take account of the wider environmental effects of GM crops;

    —  encourage biotechnology companies to develop crops which minimise gene flow and enhance in-crop biodiversity.

  5.3  It is essential that such a policy is not compromised by trade rules. The use of a precautionary approach is justified. We welcome the EU's suggestion that key principles, such as the precautionary principle, be clarified in the new round. We suggest that the reasonable application of the precautionary principle should be recognised more clearly as a key principle in trade policy. Recent rulings, such as in the beef hormone dispute, suggest that the reasonable use of precaution is acceptable providing proper risk assessment procedures have been followed. However, we remain concerned about the body of evidence that may be required before precautionary approaches are deemed to be reasonable. Such judgements need to be recognised as inherently subjective and contestable, and no single methodology for risk assessment exists. With new technologies, there is often a period where environmental concerns exist, justifiable on sound theoretical grounds, but where direct scientific evidence in either direction is lacking.

  5.4  Market access measures such as eco-labelling may sometimes be necessary in order to provide a level playing field between domestic operators whose production methods are constrained by environmental policies, including GMO crops, and overseas operators who are not. We believe that such measures can be legitimate to protect domestic environmental objectives assuming they are designed carefully so as not to impose any unfair or unnecessary trade restrictions. The recent Shrimp-Turtle ruling is helpful, to some extent, in defining possible circumstances where such action may be legitimate.

  However, we are concerned that this still imposes too great a burden of proof, and of necessary process, on countries who wish to impose environmental standards on domestic markets and then level the playing field in terms of international competition. The UK/EU need to ensure that the next trade round debates and institutes a new process which agrees reasonable circumstances where "level playing field" measures may be legitimate and necessary in pursuit of domestic environmental objectives. This is especially relevant where such measures support internationally agreed environmental commitments.

REFERENCES:

  Campbell et al, 1997. A review of the indirect effects of pesticides on birds. Joint Nature Conservation Committee report no. 227.

  Doyle C, Ashworth S and McCracken D, 1997. Agricultural trade liberalisation and its environmental effects. Report prepared by the Scottish Agricultural College for the UK Wildlife and Countryside Agencies.

  Potter C, Lobley M and Bull R, 1999. Agricultural liberalisation and its environmental effects. Report prepared by Wye College, University of London for the UK Wildlife and Countryside Agencies.

  Tilzey M. Sustainable development and agriculture. EN Research Report DETR, 1998.

English Nature

1 November 1999


 
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