Memorandum submitted by the Local Government
Association (X11)
RURAL DEVELOPMENT REGULATION
1. BACKGROUND
The LGA is pleased to contribute evidence to
the Select Committee's inquiry. Local authorities have an important
interest in CAP reform and the Rural Development Regulation. Local
authorities:
— As community leaders to both urban
and rural communities are keen to see the public obtain some reciprocal
goods and benefits from continuing public support for agriculture;
— are promoting sustainable economic
development and employment growth in rural areas—and recognise
that the future of agriculture is central to the economic future
and well-being of the countryside as a whole;
— are involved through the planning
system in managing and protecting many valued local landscapes;
— are responsible for many aspects
of public protection and therefore have a close interest in promoting
the production of safe good quality food and other agricultural
and forestry products;
— are providers of recreation and leisure
opportunities many of which lie in the countryside;
— are themselves large landowners.
The county estates are let to over 5,000 tenant farmers and cover
approximately 130,000 hectares.
2. CURRENT POSITION
ON CAP REFORM
The EU's Berlin Summit (March 1999) decided
the latest reforms to the CAP. Many UK commentators agreed that
the decisions reached at this summit represented a watering down
of the deal agreed by the earlier European agriculture ministers
and fell far short of the UK Government's desired outcome.
On the plus side the Berlin agreement did provide:
— A new focus on rural development—the
so-called "second pillar" of the CAP;
— Modulation (allowing for considerable
national level discretion to add to rural development and agri-environment);
But on the minus side it failed:
— To provide sufficient resources to
Rural Development Regulation (RDR) (particularly for the UK);
— To introduce significant reductions
in production support nor to introduce degressivity.
3. UK GOVERNMENT'S
POSITION ON
AREAS OF
NATIONAL DISCRETION
The Government announced its decisions on areas
of national discretion resulting from the Berlin agreement on
7 December 1999. This followed various consultation processes
(to which the LGA contributed). With its strong focus on rural
development and modulation this announcement was widely welcomed
by UK rural interests. Many felt it represented a considerable
national level step forward within the context of the small step
forward agreed by the EU in Berlin.
4. PROSPECTS
FOR FURTHER
REFORM
Some commentators feel that the Berlin deal,
which was designed to last from 2000-06, will unravel long before
then. This is because:
— The deal is felt to be unsustainable
in the context of the World Trade Organisation (WTO) talks begun
abortively in Seattle in December 1999;
— The last round of world trade negotiations
(the Uruguay round) included a "peace deal" preventing
further challenge to the CAP—but this deal expires in 2003;
— The CAP threatens EU enlargement
(at least on any basis of equality);
— Of the continuing need to control
and limit the expansion of the EU budget (almost 50 per cent of
the EU budget is spent on agriculture);
— Of the incompatibilities with EU
objectives on assisting 3rd World development;
— Of the need to continue to bear down
on unacceptable levels of fraud within the CAP.
5. RURAL DEVELOPMENT
AND CAP REFORM—THE
NEED FOR
ACTION
The CAP still fails to deliver sufficient environmental
and social goods. It still distorts agricultural trade, increases
the price of food to the consumer, and fails to provide value
for money for the taxpayer.
The LGA is strongly supportive of continued
reforms to the CAP. We believe that in future CAP support should
achieve:
— diversification from agriculture
and into wider rural economic and social growth;
— environmental goods (eg sustainable
husbandry and high animal welfare standards, wildlife protection
and water quality);
— public goods (eg healthy and good
quality food at reasonable prices, conservation of valued landscapes,
increased public access,); and
— social goods (eg supporting more
employment).
We want to see:
— a greater role for the Rural Development
Regulation and its continued co-ordination with the EU structural
funds and LEADER Plus;
— more sources for the RDR (currently
10 per cent of CAP across Europe);
— a greater UK share of RDR resources
(currently only 3.5 per cent of the EU total compared to 9.7 per
cent for Austria and 7.3 per cent for Ireland);
— Phasing out of production supports
through use of degressivity principles with savings being redirected
into wider rural development through the RDR;
— a strong role for local authorities
both at local level and operating at the regional and national
levels in influencing RDR policy and implementation;
— consideration given to extending
modulation in the future. But modulation should not put UK agriculture
at a competitive disadvantage within Europe. Nor should it detract
from need to bear down on production and direct supports. Extending
modulation throughout the EU should produce significant public
goods. It will also, by repatriating more of the costs of CAP
to national budgets, help to promote a more prudential approach
to budget growth;
— consideration given to the introduction
in a reformed system of "back-stop" support mechanisms
to deal with occurrences of total market failure; and
— continued use of cross compliance
measures linked to production and direct supports as long as they
last.
15 February 2000
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