Examination of Witnesses (Questions 1080-1099)
RT HON
MARGARET BECKETT
MP, LORD WHITTY
AND MR
ANDY LEBRECHT
WEDNESDAY 15 MAY 2002
1080. Would you accept that a large part of
the task is not about CAP reform but of DEFRA reform and culture
change?
(Lord Whitty) Partly, yes, but it is also true that
some of the individual allegations of over-regulation and over-bureaucratisation
do not actually stand up in terms of what actually operates in
other countries, in that there is, for example, in the meat hygiene
area, at least a greater degree of regulation in France as there
is in the UK. It may be conducted in a slightly different manner
but in terms of actual bureaucracy we are not by any means out
on a limb in bureaucratising what are already bureaucratic procedures
when they emanate from the EU. Nevertheless, we do recognise it
is one of the major tasks to get this on a more user-friendly
basis and one which does not get in the way of farmers making
proper economic decisions.
1081. Do you think the broad, shallow scheme
would be a Pillar II scheme?
(Lord Whitty) Yes.
1082. If it was available to everyone?
(Lord Whitty) If it was available to everyone or even
if it there was some restriction on it, it is primarily a Pillar
II scheme. There is a parallel here about cross-compliance as
long as we have the production subsidy regime, so that we could
green some of Pillar I in the transition.
1083. You can certainly see some arguments that
this is just going to be another handout to farmers with another
name, unless there is rigorous qualification, which of course
implies more bureaucratic processes to achieve that. Do you feel
that if we did have a shallow scheme it should be a degressive
scheme which reduced in value over time, if it is essentially
a sort of bottom plane for farming quality and a subsidy for really
being in the business at all?
(Lord Whitty) If the main support for farming is to
deliver the environmental and land management values we are looking
for, then we do not necessarily need to reduce the total amount
of money going into that. It is a different question as to whether
you want to ratchet up what that minimum access level should be.
Over time we would hope we did indeed ratchet up—
1084. Which may have the effect of reducing
its cost.
(Lord Whitty) Indeed. Of course, you are talking about
an approach to the totality of the CAP where we want some degressivity
built into the total quantum.
(Margaret Beckett) With great respect to the Chairman
and his dislike of the words, if you are looking at something
that is there to support public goods, there is not an automatic
assumption that it is degressive.
1085. No, unless you take the view that there
is a finite level for farming support of any kind, which we may
seek to reduce over a period of time. I think you were hinting
that that might be the case and that, therefore, broad, shallow
schemes of this kind might be among those that would be affected
by that.
(Lord Whitty) Yes. We put a high priority on the broad
and shallow scheme, so within an overall reduction of the quantum
of CAP we would tend to keep the broad and shallow scheme as a
priority expenditure.
Chairman
1086. I have to say that I can quite understand
the point that you want to make payments to people in order to
get them from point A to point B, for example, to build hedges
or to establish footpaths, or to put in trees and put protections
around the trees and that sort of thing. There comes a point where
nature, to some extent, looks after itself, and I think it may
be difficult five years down the road to continue to justify a
fixed level of payment for schemes once whatever you wanted to
see happen has happened. I make that as an aside.
(Margaret Beckett) I accept that, and that may sometimes
be true, but it depends a little bit on the nature of the scheme.
Even under Countryside Stewardship what tends to happen is people
come in—
1087. But you are moving then towards support,
are you not? We are finding different mechanisms for the same
purpose.
(Margaret Beckett) If I can just go back a second
to the nature of your question, it all depends on whether you
accept the argument—and to a certain extent I do—that
one of the reasons we have the landscape that we have in many
parts of the UK is because it is a managed landscape. If you leave
a managed landscape to itself after X years it will revert, it
will not stay as that landscape that you want to see. If, for
example—and it is only an example—what you are supporting
is the facility to manage that landscape so that it stays in,
broadly speaking, that condition—whether it is wetland or
whatever—then it may be something that you would want to
continue to support. It may not, but I think we can all rest assured
that the Treasury will keep a beady eye on it at some stage, and
so I do not think one could rule it out.
1088. If you want to keep cattle, say, in North
Yorkshire in uplands then you have got to maintain your hedges
as part of your normal business management. Sir Don Curry recently
got rather irritated at what he thought was the slow pace of things.
I think he referred to these environmental schemes as the "salvation"
of agriculture. Would you use that word? If you would not use
that word, what word would you use?
(Margaret Beckett) I do not know that I would use
the word "salvation". Destiny, maybe?
1089. That depends on destiny being good or
bad. I think Sir Don was rather implying that this would help
farmers.
(Margaret Beckett) If I can go back to your proposition,
I am aware of many, many attempts by different journalists to
get Sir Don to say how impatient he is with the pace of change,
and to get him to say how disappointed he is that there was not
more in the budget, when he said at the very beginning that he
never expected there to be anything in the budget.
1090. Let me rephrase that question. Are they
going to make the difference between a healthy agriculture and
an agriculture which is in crisis? Or does the heart of the argument
rest upon the efficient production and competitive production
of food, for which the environmental payments may well be a helpful
and useful cashflow and, if you like, a core purpose? However,
without the pre-core purpose of food production, they are not
going to save or bail out agriculture by their own weight and
volume.
(Margaret Beckett) It is the latter. It is only being
competitive and profitable that is a viable future for UK agriculture,
but I think Sir Donald would be the first person to say that.
Mr Borrow
1091. We touched earlier on the issue of the
linkages between the World Trade Organisation's discussions and
CAP reform and certainly the Uruguay Round assumed that production
subsidies for agriculture would be phased out and I think there
was a date fixed for that, but that seems to have become somewhat
fuzzy now. To what extent do you think that the Agriculture Council
of the EU have adopted a substantially radical negotiating position
in the WTO current Round on agriculture?
(Margaret Beckett) Well, it was before I was a member
of the Agriculture Council, but of course the negotiating mandate
for Doha was that, as was agreed, we should phase out export subsidies,
production subsidies, trade-distorting subsidies and so on, so
to that extent the Agriculture Council did take what was quite
a radical view. Having done so, I think it would be only fair
to acknowledge that there are some who now perhaps are less enthusiastic
than they might be, but there was unanimous agreement, as I understand
it, to that negotiating mandate, and that is the basis on which
we are in the European Union approaching the Doha talks. Andy,
you were there.
(Mr Lebrecht) I think there was a big difference between
the way the Community is approaching the present Round as compared
with the Uruguay Round where basically in the Uruguay Round it
tried to resist change almost all the way through. What it has
agreed for the present Round is that it is prepared to get engaged
in reductions in production subsidies, it is prepared to negotiate
on reductions in exports and it is prepared to negotiate on increased
access to imports. The other side of the coin as far as the European
Union is concerned is that there must be some movement of what
are called "non-trade concerns", which is basically
recognition that parts of the world, like Europe, do have wider
anxieties about the contribution that their farming makes to society
than just the multi-functionality issues and, therefore, what
the European Union has said is that it is ready to get engaged
in all these issues and to negotiate seriously and that is a step
change from where we were last time round.
1092. If the WTO negotiations are successful
and the negotiating position taken by the EU is very much in line
with the eventual outcome of those negotiations, would that imply
changes to CAP in the EU?
(Margaret Beckett) Well, the two go hand in hand to
a certain extent, but yes, it could well.
(Mr Lebrecht) I think the answer is it is inevitable.
I think the movement on the production subsidies, the import access
and the export subsidisation would all require reductions in Pillar
I support, but the other side of the coin is that acceptance in
the WTO of the importance of the non-trade concerns would accept
recognition of the importance of Pillar II, so the two are very
much hand in hand.
1093. I know we touched on it before, but I
would just like to explore it a little more, and that is the repercussions
of the US Farm Bill. I find it difficult to reconcile the situation
where the US Government in the WTO discussions is seeking a radical
outcome involving the elimination of production subsidies while
obviously having a domestic regime which is totally at odds with
that. Whilst the Administration may be able to separate those
two positions, my assumption would be that it would make it very
difficult to persuade any other countries within the WTO to go
along with such radical changes that the UK Government would want
and the US Government would say they wanted.
(Margaret Beckett) Well, as I said earlier, it is
certainly helpful to those who would rather resist change, but
earlier this year I spoke in the States to some people who were
the prime sponsors of the Farm Bill in Congress and in the Senate.
Congressman Stenna, I think it was, was refreshingly frank. He
said, "We are going into these negotiations in the Doha Round.
We are committed to trying to phase out subsidies. You, the European
Union, subsidise your agriculture far more than we do", and
there was an argument about that, "and, as far as we are
concerned, we know there is room for manoeuvre in the budget,
there is a certain amount of headroom, it is money we can assign
and we think that if we put up the money, we are certain to find
to the maximum amount to take account of the headroom that we
have in the budget, then it strengthens the United States' negotiating
hand because we can negotiate down more than you will be able
to if we were not putting that much in". One can say, "How
disappointing", but that was his approach. The more we have
at the moment, the better our platform for negotiating down, and
I accept the underlying case he was putting, that of course it
makes the environment political, but his argument was, "At
least we have a better platform from which to come down and a
more comparable platform from which to come down to the European
Union than we had before", so we are really helping the Administration
in its negotiations, but the Administration is grateful. Well,
that was his argument. We know that it is an election year in
the United States and that the states which are marginal are farm
states.
1094. I find it somewhat difficult to accept
an argument which says, "We are seeking radical reform and
elimination of subsidies, so we will increase our subsidies to
the maximise in order to strengthen our negotiating position".
You will understand that the initial position is one of giving
away as little as possible.
(Margaret Beckett) I can assure you that I endeavoured
to persuade him of the error of his ways, but I merely report
to you what his argument was.
(Mr Lebrecht) There is just one point and that is
just to recall that the United States is a major exporter of agricultural
products and its interests are not just in respect of getting
countries to reduce their domestic support, but they also want
to get them to reduce their export subsidies and to improve market
access, so the United States does have material objectives to
achieve in those areas and presumably will have to make concessions
elsewhere if it is going to achieve them.
Mr Simpson
1095. Secretary of State, one of the criticisms
that we have heard from a wide variety of groups who have given
evidence here is a degree of frustration that every area of DEFRA
is continually being reviewed and there is a plethora of policy
groups and across government there is the impression that activity
is mistaken for action. When we look in your own area, we see
that from September 1999 there have been three Red Tape Working
Groups examining "unnecessary regulation" in agriculture.
In December 1999 the Government's "long-term strategy for
the future development of [the] agriculture industry", and
the England Rural Development Plan was launched. In March 2000
the Prime Minister chaired a summit that launched an "Action
Plan for Farming". Hills, Inputs and Milk Task Forces were
established in December 2000 as a result of the Action Plan for
Farming. The Report of the Policy Commission on the Future of
Farming and Food was published at the end of January 2002. Those
are just the main ones and there is probably a plethora of task
forces that even you might have forgotten about. The point about
this is that one understands that government has to review policies,
it has to reach out and involve large numbers of people, but,
as a consequence of all of this, has your Department now actually
established a strategy for UK agriculture and is that about to
be published?
(Margaret Beckett) Not about to be and we are working
on that project now. When I say "not about to be", not
for the summer recess. If I can just pick up one of your underlying
points, you say that there has been a lot of activity and not
action, but I do not think you could say that the ERDP and the
development of the ERDP is not action. There are quite a lot of
schemes now under way and I think making a useful and valuable
contribution, but it is certainly the case that in the aftermath
of a series of disease outbreaks that we have had, the Government
did decide that it was right to have the Policy Commission and
to take a much more long-term view, and of course we are very
mindful too that the mid-term review would be coming up this year
and that there would be pressures with the WTO Round and so on,
so we agreed that it was right to take a look at the long-term
future of agriculture and to try and draw the strands of what
has been a very wide-ranging debate together. Now, we are in the
process of not consulting about the Report itself in the sense
of what it said, but consulting with a whole range of stakeholders
as to how we actually could implement the kind of vision of those
kinds of proposals. We have had eight regional consultations and
we have the others scheduled to run into the summer. Larry is
about to work with a contact group to draw the strands of that
together. There will be other more detailed, separate consultations
and so on and the whole idea of all of this is indeed to produce
a long-term strategy proposal in the autumn of the Government's
approach to agriculture policy, so that is where we have got to.
Now, I take your point to some extent, but I think in a sense
you put your finger on part of the answer yourself. Everybody
recognises that there are problems in UK agriculture, and most
people would like those problems to be addressed, but it would
be just as irritating if the Government went off and did it on
its own and then came back and said, "Here you are. This
is what you do". People do want to be engaged in those discussions
and they are.
1096. I can fully appreciate that, but are you
able to give the Committee some indication of the core elements
of this strategy?
(Margaret Beckett) Well, the core elements will be
much the things that the Policy Commission have identified. We
will be of course pursuing CAP reform separately and we shall
be looking to see what proposals we can make about the broad and
shallow scheme, and we have not completely decided yet whether
we make proposals in the absence of CAP reform or how we will
address that issue in terms of what the Policy Commission said
about modulation and so on, but basically the key will be to try
to identify ways in which we can help put British farmers more
back in touch with the marketplace. We know that we have already
facilitated the setting up of the Food Chain Centre and the English
Collaborative Board has, I think, had its first meeting or is
about to have its first meeting, so we will be going in that continued
direction to try to open up British farms to the marketplace and
to encourage them to be more competitive and profitable.
1097. And will this be a departmental paper
or will it come out as a consultation document to be consulted
further on?
(Margaret Beckett) My inclination is that it will
be a departmental paper. I accept part of your case that one can
consult forever and the hope is that we will have reached a sufficiently
clear amount of common ground to be able to put something forward
and make it work.
Mr Simpson: Secretary of State, can I congratulate
you on that. It is nice to see a Secretary of State putting their
head above the parapet. It is an old-fashioned term and it is
called leadership, not management.
Chairman: I think I am supposed to berate the
Committee at that point!
Mr Simpson
1098. Can I move on to Sir Donald Curry's Policy
Commission to which you have already alluded. He obviously was
involved in the meeting of the 26th March when the Prime Minister
called together a wide range of interested parties to "map
out the way to a more sustainable future" and "to start
delivering on the recommendations" of the Curry Commission
Report. You yourself are credited as saying, "We are urgently
taking forward work in a number of areas". Could you perhaps
tell the Committee what this work consists of which is now being
urgently taken forward?
(Margaret Beckett) Well, I have referred to the process
of discussion over the summer which leads to the discussion document
and that is a great bulk of the work, but the things which we
announced on the 26th March, and we can send the Committee a note
fleshing this out if it would be helpful to your work, is the
launch of the Food Chain Centre. We have started work on it and
already had quite a good large-scale meeting of people to discuss
action on illegal imports and we have commissioned a risk assessment
which we expect quite soon, the end of May, I hope, because one
of the things which came out of that session was that everybody
agreed that the prime tool that we needed was a high-quality risk
assessment to know where best to direct efforts. We could guess,
but we would like more information, so that is under way. We have
instituted some Agriculture Development Scheme grants to try to
help improve marketing and that is about £5 million. We were
able help to secure access to a DTI scheme to improve competitiveness
so that there is a DTI grant for the red meat sector of about
£1.5 million to help them to improve competitiveness. We
have announced the development of the Food and Farming Action
Plan and that too, I hope, will be published in the not too distant
future, and on regulation, to try to get a better joint approach
to regulation. The Collaboration Scheme, the English Collaborative
Board, that is an industry-led proposal and that again is something
that we have encouraged and we are looking at and we hope to try
to be able to establish a pilot for the demonstration farms proposal,
which Sir Don and his colleagues put forward, by the end of the
year, so those are the things that we did as a kind of starter
which we were able to do, which we had the freedom to do at that
stage. Now, obviously we are looking in the long term in this
process of consultation.
1099. Following on from that and your very careful
phrase about the freedom to manoeuvre which you had to take forward
because these are important issues, of course the core element,
which I am sure you would agree, and certainly Sir Don Curry in
his evidence to us outlined, is the actual funding. The core element
of the funding that Sir Don Curry identified of £500 million
which I think the Committee, as a consequence of its questioning
of Sir Don Curry, recognised is that this was a base sum because
many of his other proposals were not funds, and the £500
million is the baseline. Has your Department costed out the whole
of the proposals and would they be available to the Committee?
Secondly, without of course expecting you to prejudge the Spending
Review, could you give some indication to the Committee of the
arguments you have put forward to the Treasury in support of Sir
Don Curry's proposals?
(Margaret Beckett) A very neat way of trying to get
me to explain our spending bill, which I feel I ought to resist,
Mr Simpson, because it has always been my view that exposing these
issues to the light of day does not always help you with the Treasury
and, to be honest, at the moment, deeply though I admire and respect
you on this Committee, my attention is more taken up with being
nice to the Treasury than being nice to you.
Chairman: He is going to say that he admires
you for that as well!
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