Select Committee on Environment, Food and Rural Affairs Minutes of Evidence

Memorandum submitted by the Council for the Protection of Rural England (CPRE) (A16)


  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.


  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.


  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.


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.


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.


  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.


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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