Memorandum submitted by the Council for
the Protection of Rural England (CPRE) (A16)
INTRODUCTION
1. CPRE is a national charity that promotes
the beauty, tranquillity and diversity of rural England by encouraging
the sustainable use of land and other natural resources in town
and country. We promote positive solutions for the long-term future
of the countryside and to ensure changes values its natural and
built environment. The role of farming is central to achieving
this objective and CPRE is committed to campaigning for environmentally
sustainable farming policies and practice which can help achieve
this vision. We welcome the opportunity to submit evidence to
the Environment, Food and Rural Affairs Committee and believe
that recent events, although profoundly distressing, have presented
an opportunity to forge a new and more sustainable future for
farming.
SUMMARY
2. CPRE believes that further trade liberalisation
must take account of agriculture's multifunctional role, weighing
its economic function alongside its significance for society and
the environment. Likewise, farming in the future should be more
responsive to the increasingly sophisticated needs and demands
of the public as consumers. This means recognising that farming
is about more than the production of primary food commodities—it
is also about providing healthy, high quality food at a fair price;
a beautiful, diverse and accessible countryside; and vibrant rural
communities and economies.
3. Future support and policies for farming
should seek to maximise these opportunities and help farmers adjust
to the new ways of working they require. This means continuing
to switch emphasis from current production subsidies, which do
little to promote competitive and diverse farm businesses and,
in many cases, encourage unsustainable and environmentally damaging
farming practices, into rewarding farmers for delivering the public
goods increasingly demanded. It also means better protecting existing
environmental resources to maximise the opportunities offered
by a high quality rural environment for farming and the wider
economy, for example through rural tourism or the branding of
local produce.
4. To secure a sustainable, long-term, future
for farming, further reform of the Common Agricultural Policy
(CAP) is needed but this will inevitably be a long and painstaking
process. However, in the wake of the recent outbreak of foot and
mouth disease (FMD), farming, the countryside and rural communities
need immediate attention. It is, therefore, essential that in
the short-term Government makes better use of innovative policies
and programmes, such as the England Rural Development Programme
(ERDP), which are already in place and ensures that the UK makes
maximum use of the Rural Development Regulation (RDR) funds and
measures already available.
5. CPRE recommends that the Committee call
for:
— In the short term: increased funding
for the ERDP. The EU Agenda 2000 reforms gave all Member States
the option to redirect or "modulate" up to 20 per cent
of production subsidies the Rural Development Regulation. The
Government is currently only committed to redirecting 2.5 per
cent of the £3 billion spent on agriculture each year—it
is imperative that they seize this opportunity and increase the
current rate of modulation to 20 per cent by 2006.
— In the medium term: Government must
ensure that the UK secures a fairer share of RDR funds in the
2003 mid term review of the CAP and lobby the EU to make modulation
a requirement, not an option, for all member states.
— In the long term: Government must
engage in a proactive campaign to ensure further reform of the
CAP, including a major and progressive transfer of funding from
production related subsidies (the first pillar of the CAP) to
the RDR (the second pillar).
6. Commitment to all three of these objectives
is essential. The UK will only be in a convincing position to
argue the case for further reform of the CAP when it has demonstrated
its commitment to reform through fully implementing those measures
which already have EU approval, such as 20 per cent modulation.
7. Our submission is accompanied by our
reports Farming Futures, Sustainable Local Foods and Rural
Recovery.
BACKGROUND
8. Foot and mouth disease is only the most
recent in a series of disasters for the farming industry, coming
on top of a severe depression in farm incomes and the tragedy
of BSE. The future of farming depends, however, on more than crisis
management. The industry is facing profound and long-term changes
that will be critical not only in deciding the future structure
of the industry, but also in shaping our countryside.
9. Since the war, farmers have been encouraged
by Government policies to increase production of bulk agricultural
products to overcome food shortages and increase national self-sufficiency.
Chronic inability to reform these policies as conditions changed,
or respond to problems as they arose, has resulted in:
— major damage to our landscapes, wildlife
and natural resources[5];
— a huge financial burden on taxpayers;
and
— failure to give farmers the right
policy signals and incentives to build viable and environmentally
sustainable businesses.
10. Market intervention and production support
mechanisms have also made it difficult for farmers to respond
to changing consumer and market demands. Farming is now about
much more than the production of primary food commodities—it
is also about providing healthy high quality food at a fair price;
a beautiful, diverse and accessible countryside; and vibrant rural
communities and economies[6].
In light of these changes production related subsidies are no
longer delivering, either for farmers or consumers and farm businesses
will have to find ways of adapting to these trends if they are
to be economically viable and environmentally sustainable. Support
mechanisms must enable, rather than inhibit, farmers from making
this transition and adequately reward those farmers who deliver
those social and environmental outputs that are of clear importance
to the public in general.
THE PROSPECTS
FOR PRODUCTION
SUBSIDIES AND
QUOTAS, AGAINST
THE BACKDROP
OF WORLD
TRADE LIBERALISATION
AND THE
MID TERM
REVIEW OF
THE AGENDA
2000 REFORM OF
THE CAP.
Where next for farm businesses?
11. The costs and benefits of greater liberalisation
of agricultural trade are highly contested. CPRE believes that
further liberalisation is inevitable, but this process needs to
be managed, both at a national and international level, to take
much greater account of social, environmental and animal welfare
implications. Trade liberalisation cannot ignore the principles
of sustainable development, which must be a global process.
12. Trade liberalisation and its consequences,
will be a dominant process in the future and all businesses, including
agricultural businesses, will need to learn to adapt to it. Yet
this does not mean that the only farms that will be economically
viable in the future are those who can compete on global scale.
To be truly competitive farming must respond to the increasingly
sophisticated needs and demands of the consumer. There is no longer
a fixed model for success based on greater production of bulk
commodities at larger economies of scale and lower costs of production.
Instead there will be a number of ways in which farm businesses
will respond to these diverse needs and expectations[7].
These options include:
— Specialist producers of bulk commodities:
marketed on the basis of environmental quality as well as quantity.
Producers of commodities will increasingly seek to add value to
their products by offering guarantees on the basic standards of
production, particularly in terms of food safety, through quality
assurance schemes. Currently most quality assurance schemes focus
on ensuring producers have met certain food safety requirements
but offer little in terms of meeting legally required environmental
or animal welfare standards. The current proliferation of assurance
schemes and logos also makes it very difficult for consumers to
make informed choices about the products they buy. Government
needs to work not only with the farming and food industries in
developing British food standards—but also with environmental
and consumer groups to ensure that standards and the claims made
for them are fair, meaningful and can be trusted.
— Value added producers: responding
directly to growing consumer demands for quality, diversity, safety
and traceability. Unlike the basic commodity sectors, these markets
are not primarily price driven. This allows competitive advantage
to be based on "quality" criteria and makes UK produce
less vulnerable to exchange rate fluctuations. By processing and
retailing food locally farmers can receive a better price for
their produce and significant benefits can also be secured for
the economies of rural areas, revitalising rural communities and
supporting investment in a beautiful and environmentally diverse
landscape[8].
13. Consumers, and the public in general,
are also increasingly expecting farmers to deliver "public
goods" such as habitat and landscape management. Some of
these activities will present additional marketing opportunities
and therefore secure some financial remuneration for the farmer,
but many will receive no support from the market and as a result
will require public support. These include:
— Alternative forms of land use: such
as energy crops, forestry, recreational use, soil carbon banks
and flood control systems; and
— Managing, enhancing and restoring
the countryside: to deliver the kind of countryside so many people,
and businesses, use and depend upon[9].
Maximising the opportunities
14. Future Government support and policies
should seek to maximise the opportunities offered by these options
and help farmers adjust to the new ways of working they require,
rather than simply promoting a monolithic agri-food chain. This
means continuing to switch emphasis from current production related
subsidies to support systems which reward environmentally sustainable
farming practices and encourage rural development as a whole.
15. The ERDP is the first major step in
bringing about the redirection of traditional farming support
to promote more sustainable farming practices and meet wider rural
development objectives. The ERDP has two main objectives—the
creation of a productive and sustainable economy in rural areas
and the conservation and enhancement of the rural environment.
The programme:
— helps to reintegrate farming with
wider economic and social interests and emerging market opportunities;
— provides transitional aid that helps
farmers adapt to changing market conditions and consumer demands,
acquire new business skills, establish new enterprises and improve
the marketing and processing of products;
— rewards farmers for providing "public
goods" such as managing, enhancing and restoring the quality
of the farmed landscape; and
— ensures that policies are tailored
to the specific needs of rural areas through regional chapters
which also allow regional stakeholders to become involved in policy
formation and implementation.
16. The ERDP, however, is currently grossly
under funded. Of the £3 billion spent on agriculture each
year, the UK Government has committed only 2.5 per cent to rural
development measures, this is set to rise to 4.5 per cent by 2006
but such a small increase will make very little difference on
the ground. This shortage of funds means:
— only a limited number of farmers
and rural businesses can benefit from the schemes on offer, despite
the fact that all farmers contribute to the funding of these schemes
through the redirection of subsidy payments;
— schemes will continue to be heavily
oversubscribed and farmers wishing to pursue more sustainable
farming practices will continue to be turned away;
— the ERDP will be unable to facilitate
rural recovery for the majority of farmers and rural communities
affected by FMD; and
— the economic, social and environmental
benefits offered by the ERDP will remain geographically isolated,
failing to offer benefits at a wider scale.
17. We urge the Committee to recognise that
in the future, farm businesses will have a range of options. The
ability of these businesses to respond to these options will,
however, vary and require public support to help them adapt. A
range of policy tools will be needed, including market incentives,
increased public support through the ERDP and better regulation
to ensure the protection of environmental resources.
HOW BETTER
STEWARDSHIP OF
AGRICULTURE LAND
CAN BE
PROMOTED.
Beauty brings prosperity
18. The impact of FMD and the Government's
measures to control it have dramatically demonstrated that the
beauty, diversity and distinctiveness of the countryside are major
national assets worth billions of pounds to both local and the
national economy. Recent research by the National Trust has shown
that the special environmental qualities of the countryside are
the bedrock of the recreation and tourism industry, some 40 per
cent of employment in tourism depends directly on a high quality
environment. In a rural context this rises to between 60 and 70
per cent[10].
Since the value of tourism to the economy greatly exceeds that
of agriculture it is clear that the "public good" benefits
of pastoral farming systems, such as distinctive landscapes and
wildlife habitats, in large areas of the countryside far outweigh
the market value of its tradable products.
19. A high quality countryside also provides
an economic yield or stimulus in a range of other ways, as well
as being a foundation of the tourism industry. It is a direct
employer, thousands of people are employed in conservation work,
it is a source of identity for the branding of many products,
it is an economic driver for regional economies and provides a
"natural health" service. It is a tragedy, however,
that is has taken such a major threat and possible lasting damage
to this asset for its true value to begin to be recognised. All
land use planning and economic development policies, initiatives
and strategies and rural regeneration projects that are likely
to have an impact on the environmental quality of the countryside
should be required to protect, strengthen and restore these assets.
20. Agri-environment schemes, which protect
and enhance priority habitats and valued landscapes around the
country, must be an important part of the future policy framework
for farming and the economy of rural areas. They encourage both
environmentally sensitive farming practices and better public
enjoyment of the countryside. However, despite receiving a considerable
boost in funding in December 1999 agri-environment schemes are
still under funded. This means that many farmers are excluded
from the benefits offered by the schemes available and those who
are involved are not adequately rewarded for the work that they
do. Government must commit itself to securing increased funding
for these schemes and improve their administration and delivery
on the ground. CPRE believes that in the forthcoming review of
agri-environment schemes Government should adopt the following
ten key recommendations compiled by Wildlife and Countryside Link[11].
Ten point action plan for agri-environment schemes
(1) Create a much larger, unified scheme
to involve the vast majority of farmers in England and deliver
a broad range of environmental benefits across the country. Building
this scheme, the Government needs to take the following five steps:
— combine Countryside Stewardship,
Environmentally Sensitive Areas and the Farm Woodland Premium
Scheme into a single national scheme;
— allow for much greater local
variation in payments, detailed targets and management guidance
reflecting local needs and priorities, using local environmental
and farming knowledge;
— broaden the environmental focus
of schemes;
— reward the management of existing
environmental value and encourage an enhanced standard of environmental
management across the whole farm; and
— significantly increase the budget
for agri-environment schemes, through UK funding and further CAP
reform.
(2) Reform payment rate calculations to ensure
that payments reflect the true costs of management and planning
to achieve environmental outputs.
(3) Place new emphasis upon achieving area-wide
benefits at a landscape scale.
(4) Improve the delivery of schemes and their
benefits through stronger shared ownership between community,
environmental and farming partners, allowing more flexibility
for schemes to address local conditions.
(5) Make the most of the experience, enthusiasm
and capacity for innovation shown by farmers who are already involved
in schemes.
(6) Ensure integrated high-quality advice
and support which works with the business needs as well as the
environmental potential of each applicant or agreement holder.
(7) Strengthen the local rural development
links, recognising that agri-environment schemes need to be compatible
with thriving businesses, involve local communities and work with
other regional and local initiatives.
(8) Develop a national strategy to promote
agri-environment schemes in order to raise awareness of the real
benefits of the schemes and strengthen the case for their expansion.
(9) Strengthen the links between agri-environment
schemes and other mechanisms, including regulation and cross compliance.
Agri-environment schemes should stand on a foundation of environmental
regulation and "good farming practice" that protects
the countryside against pollution and the destruction of valuable
or irreplaceable environmental features and assets.
(10) Continue to press for further reform of
the CAP, ending farm subsidies that cause environmental damage
and increasing resources available for rural development.
21. All those receiving either business
advice or financial assistance through other ERDP schemes, such
as the Rural Enterprise Scheme, should be required to implement
an environmental programme as a condition of aid.
22. We urge the Committee to recognise that
the better stewardship of agricultural land will require a mix
of incentives and regulation. Positive support should be provided
through enhanced agri-environment measures and an improved ERDP.
All payments should be conditional on basic environmental performance
and the essential qualities of the countryside should be protected
through a positive approach to land use planning and effective
implementation of the Environmental Impact Assessment (EIA) for
agricultural projects on uncultivated land.
THE OPPORTUNITIES
AND DIFFICULTIES
FACED BY
AGRICULTURE AS
A RESULT
OF POSSIBLE
REDUCTIONS IN
PRODUCTION SUBSIDIES.
23. The recent foot and mouth outbreak has
undoubtedly shown that the countryside is worth a great deal to
the economy and the nation as a whole and as a result is worthy
of significant investment. However, the current production focus
of existing support mechanisms means that the majority of the
money currently being spent on agricultural support is at best
ineffective and at worst damaging. CPRE therefore believes that
the current investment of £3 billion should be redirected
towards supporting public goods that will generate far greater
economic returns for the country as a whole. Farmers need to receive
a realistic return for those goods that cannot be supported by
the market yet are of crucial importance to the economic, physical,
cultural and environmental well being of the nation as a whole.
24. In the wake of FMD, the future of farming,
the countryside and rural communities cannot await further CAP
reform before significant increases are made to the ERDP budget.
Agenda 2000 gave all Member States the option to redirect or "modulate"
production subsidies up to 20 per cent. The Government has the
ability to make some major changes now and it is imperative that
it seizes the opportunity to increase the current rate of modulation
to 20 per cent by 2006.
25. Increasing the amount of funding available
to the ERDP, through a higher rate of modulation would provide
transitional aid that helps farmers adapt to changing market conditions
and consumer demands and reward farmers for providing "public
goods" such as managing, enhancing and restoring the quality
of the farmed landscape. It would also make the ERDP more accessible,
ensuring that all those farmers who contribute a proportion of
their subsidised income could benefit from those opportunities
on offer.
26. To ensure that the potential side effects
of further modulation are minimised there must, however, be detailed
economic research into how any increase could best be managed.
The current "flat rate" modulation, increased to 20
per cent would disproportionately affect and discriminate against
small and medium sized producers. There are other options open
to Government including introducing "banded" or "progressive"
modulation, so that larger producers, receiving greater production
support, pay proportionately more of their subsidised income.
Those transitional funds available through the ERDP should also
be particularly targeted at small and medium sized enterprises,
which otherwise may not be able to afford the capital investment
necessary to adapt to changing market conditions as production
subsidies are gradually withdrawn.
27. In the medium term the Government must
ensure that the UK secures a fairer share of RDR funds in 2003
and the flexibility to apply these funds to all rural development
objectives. Government should also press to make modulation a
requirement on all member states and not an option. This would
help to remove resistance to higher rates of modulation in the
UK on the basis that it could make UK producers less competitive
in the short term compared to farmers in countries which chose
not to modulate.
28. In the longer-term, the Government needs
to commit itself to further reform of the CAP and to engage in
a pro-active campaign across Europe to gather support for change.
This campaign should aim to secure "degressivity"—
a major and progressive transfer of the great majority of the
current CAP budget away from production related subsidies and
into the Rural Development Regulation.
29. We urge the Committee to recognise that
the reduction in production subsidies through the introduction
of further modulation, at a national level, and degressivity,
at a European level, is essential but must be carefully managed.
In particular there should be research into the winners and losers
of different mechanisms for implementing further modulation and
throughout the process farmers should be assisted by improved
facilitation, access to training and advice and better funded
rural development measures. We believe that the end result will
be an economically viable and environmentally sustainable industry,
which delivers more for the economy and society of rural areas
and the nation as a whole.
CPRE
December 2001
5 This includes: the loss of more than half of England's
hedgerows since 1947, Countryside Survey 1990 & Institute
of Terrestrial Ecology 1993; a steep decline in many farmland
birds with a 40 per cent reduction in population since the mid
1970s, RSPB, The State of UK Birds, 1999; and the loss
of an area of permanent grassland the size of Bedfordshire since
1992, MAFF Agricultural and Horticultural Census, 1992-97. Back
6
National Consumer Council, Feeding into Food Policy, November
2001. Research shows that the concerns of consumers on low incomes
extend way beyond the price of food. Recommendations of workshop
participants included: calls for greater trust and dialogue within
the food chain; for food safety issues to be addressed; for better
information and labelling; for more encouragement for "natural"
farming methods; and for better means to maintain the countryside
and rural life. Back
7
See CPRE, Farming Futures, October 2001. Back
8
See CPRE, Sustainable Local Foods, September 2001. Back
9
A study for the National Trust in the South West of England found
that the conserved landscapes in the South West attract a spend
of £2,354 million from holiday trips and supported 97,200
jobs (43 per cent of all tourist related jobs) in the region. Back
10
National Trust, Valuing the Countryside, 2001. Back
11
Wildlife and Countryside Link, Paying for the Stewardship
of the Countryside, July 2001. Back
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