House of Commons - Environment, Food and Rural Affairs

Select Committee on Environment, Food and Rural Affairs Ninth Report

CHANGES IN EUROPE

133. Environmental initiatives were at first nationally based but, following the agreement on the 1992 MacSharry reforms of the CAP, European Union regulations have played an increasingly important role. The Regulation which followed the MacSharry reforms (EC 2078/92) was worded in such a way as to permit the continuation of domestic schemes that already existed - but it also went further. Article 1 of the regulation said that

(a) the use of farming practices which reduce the polluting effects of agriculture, a fact which also contributes, by reducing production, to an improved market balance;

(b) an environmentally favourable extensification of crop farming, and sheep and cattle farming, including the conversion of arable land into extensive grassland;

(c) ways of using agricultural land which are compatible with protection and improvement of the environment, the countryside, the landscape, natural resources, the soil and genetic diversity;

(d) the upkeep of abandoned farmland and woodlands where this is necessary for environmental reasons or because of natural hazards and fire risks, and thereby avert the dangers associated with the depopulation of agricultural areas;

(e) longterm setaside of agricultural land for reasons connected with the environment;

(f) land management for public access and leisure activities;

(g) education and training for farmers in types of farming compatible with the requirements of environmental protection and upkeep of the countryside".[247]

The Regulation gave rise to a number of new 'agri-environmental' schemes, and also to environmental 'set aside'. The schemes launched in England (mirrored by similar developments elsewhere in the United Kingdom) included the Countryside Access Scheme, the Habitat Scheme, and the Moorland Scheme.

Table 9: Agri-environmental schemes launched after the MacSharry reforms in England

Scheme	Launch	Approximate budget (£)[248] (year)
Environmentally Sensitive Areas	1987	43,807,000 (2000)
Organic Aid Scheme	1 July 1994	270,000 (1995-96)
Countryside Access Scheme	8 September 1994	50,000 (1995-96)
Habitat Scheme	16 May 1994	950,000 (1995-96)
Moorland Scheme	28 March 1995	200,000 (1999-2000)
Nitrate Sensitive Areas Scheme	1990 (pilot) 1 July 1994 (expanded)	2,375,000 (1995-96)
Countryside Stewardship Scheme	1991	31,915,000 (2000)

Since then there has been some rationalisation of the schemes. The Countryside Access Scheme, Habitat Scheme and Moorland Scheme[249] have all been absorbed by the Countryside Stewardship Scheme. The Nitrate Sensitive Areas Scheme[250] closed in 1998, although existing agreements end only in 2003. The Organic Aid Scheme has been replaced by the Organic Farming Scheme, following a review in 1997.

134. After 1992 the need to promote restructuring in agriculture, development in rural areas and environmental improvement in the countryside was increasingly seen as important. As we have already described, one of the bases of Agenda 2000 was to switch rural spending from supporting agriculture (the 'First Pillar') to protecting the environment and encouraging rural development (the 'Second Pillar'). This resulted in the Rural Development Regulation, Council Regulation (EC) 1257/1999.[251] Article 2 of the regulation specifies that "support for rural development, related to farming activities and their conversion, may concern:

the conversion and reorientation of agricultural production potential, the introduction of new technologies and the improvement of product quality,

the encouragement of nonfood production,

sustainable forest development,

the diversification of activities with the aim of complementary or alternative activities,

the maintenance and reinforcement of viable social fabric in rural areas,

the development of economic activities and the maintenance and creation of employment with the aim of ensuring a better exploitation of existing inherent potential,

the improvement of working and living conditions,

the maintenance and promotion of lowinput farming systems,

the preservation and promotion of a high nature value and a sustainable agriculture respecting environmental requirements,

the removal of inequalities and the promotion of equal opportunities for men and women, in particular by supporting projects initiated and implemented by women."

The regulation required member states to draw up rural development plans "at the geographical level deemed to be most appropriate".[252]

Measures permitted under Articles of the Rural Development Regulation (EC) 1257/1999

Investment in agricultural holdings	Articles 4-7
Setting up of young farmers	Article 8
Training	Article 9
Early retirement	Articles 10-12
Less favoured areas and areas with environmental restrictions	Articles 13-21
Agri-environment	Articles 22-24
Improving processing and marketing of agricultural products	Articles 25-28
Forestry	Articles 29-32
Promoting the adaptation and development of rural areas	Article 33

Consequent changes in the United Kingdom

135. The England Rural Development Programme represented the implementation of the Rural Development Regulation in England. Separate programmes were adopted by the devolved Administrations in Scotland, Wales and Northern Ireland. Under the Programme total spending on rural development measures increases over time. The Environmentally Sensitive Areas scheme, the Countryside Stewardship Scheme and the Organic Farming Scheme are all now funded under the England Rural Development Programme.

Figure 8: England Rural Development Programme: spending 2000-2006

Organic Farming Scheme

"The aim of the OFS is to encourage the expansion of organic production. Under the scheme, farmers moving from conventional to organic farming methods receive financial help during the conversion process (see Table below). The scheme is being continued and expanded under the Rural Development Programme.

"Organic farming is controlled by EC Regulation 2092/1991 (as amended) which makes it an offence to sell products as organic unless produced in accordance with the rules set out in the Regulation by farmers and others who are registered with approved organic sector bodies and subject to annual inspection by them. The aim is to create an audit trail so that consumers can be assured that food sold as organic is produced to a standard, to protect genuine producers from fraudulent competition, and to facilitate trade within the Community.

"Research commissioned by Department for Environment, Food and Rural Affairs has shown that organic farming does have environmental benefits. It is not the only form of environmentally responsible and sustainable farming : many farmers operate systems which respect the environment and minimise the use of external inputs. Organic farming does nevertheless have the advantage that it is the only form of low input farming which operates in a legally defined system and where the products can command a premium price on the market.

"Conversion to organic farming systems provides gains in terms of soil health and fertility, benefits for biodiversity and wider landscape benefits resulting from the use of crop rotations, as well as from the absence of synthetic pesticides, herbicides and fertilisers"

Organic Farming Scheme: Aid Payments (£ per hectare)
Type of land	Year 1	Year 2	Year 3	Year 4	Year 5	Total
AAPS Eligible Land and land in Permanent Crops	225	135	50	20	20	450
Other Improved land	175	105	40	15	15	350
Unimproved land	25	10	5	5	5	50
Additional lump sum payments are made towards the initial costs of advice and training. The payments are £300, £200 and £100 in each of the first three years on the scheme.[253]

136. There has been some criticism of the schemes adopted in the United Kingdom. The Policy Commission described the current agri-environment schemes as having "been effective in their purpose of enhancing and restoring special habitats and areas of environmental value", but argued that they "had to be streamlined and simplified" and that they also needed "a stronger efficiency drive [as] at present transaction costs for some of the schemes are equivalent to almost 25 per cent of the programme spend".[254]

137. The Ramblers' Association told us that the current agri-environment schemes did not offer value for money, and in particular led to little new access to the countryside.[255] Research undertaken by the Association found that the Countryside Stewardship Scheme had given rise to "only a little bit" of new access. (Although it is not clear that improved access is one of the aims the Scheme.) Nick Barrett described the schemes as "unambitious" and "fragmented, dotted around the country and delivering, or arguably not delivering, very much in patches around the place".[256] Friends of the Earth was critical of the current focus of agri-environment policy which "is very much on enhancement", with "an insufficient recognition of the value of maintaining the highest quality habitat".[257] The CPRE echoed Friends of the Earth's view. CPRE also argued that the agri-environment schemes were "under-funded" despite the increases outlined in the England Rural Development Programme.[258] Although the National Trust considered that the agri-environment schemes had delivered "quite a lot", it agreed that the schemes could be criticised for their complexity. It argued for replacement schemes to have "more simplicity in administration", to be accessible to all farmers and that their "core aim should be to put the environment at the heart of each farming business".[259]

Organic farming

138. There are particular concerns about the Organic Farming Scheme. A number of our witnesses felt that it did not go far enough, and called for the establishment of binding targets for organic farming.[260] The former Agriculture Committee has cautioned against targets.[261] Our concerns are in many ways the converse of those who argue that the scheme is insufficiently radical. The Organic Farming Scheme is included in the Rural Development Programme as an environmental scheme, and research by the Government has shown that organic farming does have environmental benefits. But although there has been strong demand for organic produce in the past, and interest continues,[262] simply encouraging organic production if demand for the product does not exist is not sensible. There is already concern about over-supply of organic milk. The operation of the Organic Farming Scheme must be scrutinised to ensure that farms converted to organic farming are economically sustainable and are not converting in the belief that, somehow, organic production offers a financial ticket out of an existing crisis. We therefore note with some concern the recent report of the National Farmers' Union which found that the number of organic farmers making a loss has almost doubled in the past five years.[263]

139. On 29 July 2002, the Department for Environment, Food and Rural Affairs published its Action plan to develop organic food and farming in England[264] (which was also called for by the Organic Food and Farming Targets Bill Campaign[265]). The Action Plan "aims to identify what is required to ensure stable and strategic growth for the organic sector".[266] It set out priority action points in five areas:

organic standards;
food chain partnerships;
public procurement;
research and development; and
public support for organic farming.

The Action Plan made clear that "the justification for offering payments to organic farmers during conversion relates to the environmental public goods supplied by organic production methods".[267]

140. The provisions of the Action Plan reinforce the need for those converting to organic farming to have a robust business case for doing so. In the last Parliament the Agriculture Committee recommended that applications to the Organic Farming Scheme should be accompanied by a business plan.[268] It also concluded that whilst huge opportunities remained for farmers in the field of organics,

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It also noted that the plethora of organic certification schemes, and the pressures on the supervisory body, UKROFS, because of expansion of the sector, meant that there was no clear definition of just what 'organic' production meant. As the sector grows it needs to make sure it conveys a clear, not potentially confusing, message to consumers. We support payments to farmers to convert to organic farming provided that the payments made are 'one-off' or for a very short period of time, and provided that the decision to switch to organic methods is justified by a strong business case. Any ongoing payments should be related to a farmer's participation in other schemes linked to specific outputs and not to being an organic producer. Although opportunities remain for farmers in the organic sector, conversion payments should not be used to permit inefficient and unprofitable enterprises to stay solvent. Above all, organic production should not be seen as a panacea for the ills of British farming.

247 Council Regulation EEC No 2078/92 on agricultural production methods compatible with the requirements of the protection of the environment and the maintenance of the countryside. This regulation is no longer in force, but is available on the European Union's website at:

http://europa.eu.int/smartapi/cgi/sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg=EN&numdoc=31992R2078&model=guichett Back

248 HC Debates (written answers), 10 December 1996, cols 107-109 for actual expenditure in 1992-93 to 1995-96 and HC Debates, 14 February 2002, cols 640W-642W for the amounts paid in scheme years 1996 to 2000. Back

249 For details see: http://www.defra.gov.uk/erdp/schemes/landbased/old/habitat.htm for the Habitat Scheme; and also see http://www.defra.gov.uk/erdp/schemes/landbased/old/access.htm for details of the Countryside Access Scheme; and http://www.defra.gov.uk/erdp/schemes/landbased/old/moorland.htm for fuller details of the Moorland Scheme. Back

250 See: http://www.defra.gov.uk/erdp/schemes/landbased/old/nitrate.htm for details of the Nitrate Sensitive Areas Scheme. Back

251 Council Regulation (EC) 1257/1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF) and amending and repealing certain regulations. It is available on the European Union's website, http://europa.eu.int/. Back

252 Council Regulation (EC) 1257/1999, Article 41. Back

253 Details of the Organic Farming Scheme are taken from the DEFRA's organic farming scheme website, which can be found at http://www.defra.gov.uk/erdp/schemes/landbased/ofs/ofsindex.htm. Back

254 Farming and food - a sustainable future, p. 78. Back

255 Evidence taken on 6 March 2002, Q.576. Back

256 Evidence taken on 6 March 2002, Q.601. Back

257 Memorandum submitted by Friends of the Earth, Ev 161. Back