Examination of Witnesses (Questions 60-72)
WEDNESDAY 23 JANUARY 2002
60. In that case, are any discussions between
the candidate countries and the WTO always conducted in the context
of agreeing through the EU as well?
(Mr Roberts) As I said earlier, I maintain regular
contact with their negotiators so that as far as possible we take
a common line. We discuss the line we are going to take on the
business of the day, with a view to ironing out as many differences
as we can. It is clear that the discussion on direct payments,
for example, presumes the continuance of the blue box because
it is the blue box which means that the direct payments are not
subject to WTO reduction commitments. There is a clear interface
within the two negotiations. If the timetables which have been
set in different places for the two negotiations hold, the first
candidate will be joining at the beginning of 2004 and the WTO
negotiations will end at the end of 2004, so we will have a period
where we are merging our existing obligations. When the new WTO
agreement comes into force, we, the enlarged Community, will have
to conform to our new obligations.
61. Do you foresee any particular problems with
the WTO in respect of the EU enlarged area?
(Mr Roberts) That depends, of course, on the outcome
of the WTO negotiations. When we frame proposals for the next
stage in the enlargement negotiations, we will have in mind the
need for the enlarged Community to respect our existing commitments.
We cannot foresee how we fulfil our future commitments because
we do not know exactly what they are.
62. On the basis of our present commitments,
do you foresee any particular problems in the enlarged Community
applying the WTO obligations?
(Mr Roberts) No, but I will be able to answer that
question better when the Commission has decided what its proposal
is. I am not playing with words here. The Commissioner has said
in Berlin that we are considering a simplified area payment. Assuming
that the proposal for that simplified area payment is adopted
and assuming that the candidates like it and do it, and depending
on how it works out in detail, then it would be a green box payment.
If it is a green box payment, then some potential problems in
relation to WTO commitments would be very much eased.
63. I would like you to clarify my perception
of how the question of accession of candidate states and the WTO
and the CAP will fit together. As I understand it, at the moment
the level of agricultural support within the EU is higher than
the level of agricultural support within the candidate states.
Therefore, any accession of new states would limit the amount
of agricultural support that can be given by an enlarged EU to
the total of the new Member States that exist in the EU now. Therefore,
any new CAP regime will need to reflect that lower per-head amount
than would be available with an enlarged EU as against the existing
EU, which means there is pressure from the mechanics of that,
let alone the WTO negotiations. There is pressure simply through
enlargement to reduce the level of agricultural support within
existing EU Member States. There is also pressure to reduce agricultural
support from the budget mechanism within the EU itself in that
there is an unwillingness amongst existing Member States to subsidise
agriculture in new Member States to the existing level in any
case, because that would have budget implications for the EU.
Thirdly, if the WTO round itself was seeking to reduce market-distorting
supports, then that is a further push in the same direction of
reducing support for agriculture within the existing states within
the EU. I am puzzled, if there are all these pressures moving
in that direction to reduce support for agriculture within the
existing Member States of the EU, how the combination of the WTO
round and enlargement of the uniongoing back to your early
remarkslead to schism between Member States wanting a big
bang reform and reduction in agricultural support, and at the
same time can give support for a conservative position that is
arguing for no change or minimal change in agricultural support.
I cannot see, from the mechanism, any pressure to maintain the
(Mr Roberts) You have put, very elegantly, the case
for the change, but there are alternatives and there are nuances
in what you say. First of all, the candidate countries do have
a lower level of support and we have a higher level of support,
so when you merge the two, there is less. But what is there less
of? There is less margin in our amber box commitments. Thus there
is not a necessity to reduce our amber box commitments, even within
the enlarged Community. If however the amber box commitments are
reduced by more than that margin, then we would indeed have to
make changes. Those changes do not necessarily imply less support;
they imply moving from trade-distorting support to non-trade-distorting
support; that is, they imply that we have that option. Whether
we would in fact take that option relates to the other point that
you raised, which is the willingness of the existing Member States
to face up to that budgetary consequence. That is not a WTO issue,
that is a domestic issue. Those who would take a conservative
position would say, "we have a mandate to the Commission
to negotiate within the margins of Agenda 2000; we have enlargement;
enlargement should not be at the cost of producers in the existing
Community". If the Community wants to enlarge, then it has
to find the financial means to do so, and the cost of enlargement
should not fall just on those groups in the Community which happen
to benefit from existing Community policy. I am not trying to
take either position, I am simply saying that you can imagine
that Member States in either position will use the enlargement
process to justify their position, rather than imagine someone
saying, "in the light of enlargement obviously everything
I have ever said about the defence of agriculture in my country
. . ." (and you put the name of the company as you like)
"no longer applies". You do not logically have to change
that position; you have to ensure that the balance of adjustment
is placed somewhere other than on the backs of their producers.
64. Turning to rural development, historically,
the UK has done badly and gets about 3.5 per cent, whereas the
Irish get 7 per cent of the EU budget and the French get towards
20 per cent. Why do we get such a low amount, and what do we have
to do to increase our percentage of this very useful extra source
(Mr Roberts) First of all, a consumer warning: I have
never dealt with rural development and I have never been involved
with the negotiation of the envelopes. Most of the other things
I have been talking about I have been involved in. The amount
one gets out of the structural funds is partly a function of how
your countryside is classified. Any negotiation starts from where
you were to begin with. Historically, the UK did not have a very
great deal of land in the old objective 1 area, and that therefore
limited the baseline for the British Government's negotiations
when the national envelopes were distributed.
65. Are you saying there is nothing we can do
to constrain them, that it does not matter and there is no way
we can tap into the extra resources?
(Mr Roberts) There are extra resources which can be
made available within the UK because we have the modulation provisions
in the direct payments. If the British Government chooses, as
indeed it has chosen, to reduce direct payments, it can switch
that money into rural policy objectives.
66. What do you think would be the consequences
of moving money away from farming and allowing other people in
the rural areas to access this money?
(Mr Roberts) I think it would be using money in ways
which were better targeted in terms of rural development objectives
because the direct payments, as they now stand, give a lot of
money to arable producers, and they are not targeted to some of
the aspects of multi-functionality, which we normally talk about.
It is a matter of national discretion. You can improve your agri-environmental
schemes, for example, and devote more money to them, if you devote
less to the arable payments.
67. What assessment has the Commission made
of the role of monies for specific environmental improvements,
for example habitat improvements?
(Mr Roberts) Again, I give a consumer warning, that
I have not dealt with this personally. The UK has a good record
in using the agri-environmental scheme, and it was my understanding
that it was particularly in order to beef that up that it exercised
the option of transferring some of the direct payments into that
68. You touched briefly on modulation. Only
three countries are modulating at the moment. What assessment
has been made by the Commissioner of the success or the implications
(Mr Roberts) I think we are disappointed that more
countries have not taken the opportunity to do this. It is one
of the issues that we have to look at in the mid-term review.
We have to draw the conclusion that an optional scheme is attractive
to only a few countries. Whether you conclude from that, that
the proposal to make it compulsory would never get through, or
whether you draw the conclusion it must be made compulsory in
order to allow those countries that would like to do it but do
not dareto do so unless they can say they are constrained
by the Community to do itI do not know, but it is clear
that until now anyway this option has not been attractive to many
69. There has been no collective study of the
three schemes that have been produced so far, which are all different,
and what implications those have had?
(Mr Roberts) To say there has been no study . . .
70. Or do you think that is really down to the
individual Member States to work that one out for themselves?
(Mr Roberts) When we were dealing with Agenda 2000,
one of the buzz-words was "subsidiarity", so we do think
it is down to Member States, or at least that is our existing
policy. If we are going to give it a big push, then we will have
to consider the question as to whether it should be compulsory.
I am not saying we are considering it; I am saying that that issue
has to be addressed.
71. If we are moving down that route, then clearly
you need to do some studies of the schemes that have been done
so far and what effects they have had on competitiveness and other
(Mr Roberts) We certainly keep in touch with what
is going on, and we will use that experience in developing our
72. In the past it has always been said that
the budget will force change. Am I right in saying that the budget
is rather well behaved at the moment and is not posing any great
imperative? Can you give us a final burst on the state of the
(Mr Roberts) The budget is fairly well behaved at
the moment and we had quite an under-spend last year, when we
expected it to be very tight. That does not mean that it will
continue to be okay. You can have effects with currency changes,
or world prices moving against you, and you can have new animal
health emergencies. But it is true that we do not face the kind
of budgetary crisis that we did in the mid eighties, when the
need to go beyond the 1 per cent VAT ceiling was a trigger for
Agricultural Policy reform.
Chairman: Mr Roberts, thank you very much. We
are going to Brussels and I think that we will be seeing your
Commissioner, which we are looking forward to very much indeed.
You have been helpful, and you may even have been slightly more
helpful than you thought! It has helped us to get a feel or the
sort of territory we are venturing into, and you have given us
a remarkably accurate feel for that territory: I think we will
need to wear Wellington boots. Thank you for coming.