APPENDIX 24
Memorandum submitted by the Environment
Agency (A35)
1. 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
1.1 World Trade Organisation
There is little doubt that the level of production
subsidies and quotas will be reduced after the current round of
WTO discussions. The ministerial declaration following the WTO
meeting at Doha makes a commitment, without prejudice to the outcome
of negotiations, to substantial improvements in market access;
reductions of, with a view to phasing out, all forms of domestic
subsidies; and substantial reductions in trade-distorting domestic
support. The emphasis on reduction of export subsidies will put
pressure on CAP reform, while the references to non-trade concerns
imply that there is recognition of the environmental agenda.
The declaration also reaffirms the objective
of sustainable development; it states that members are convinced
that the aims of the trading system, protection of the environment
and the promotion of sustainable development can and must be mutually
supportive. No country should be prevented from taking measures
for the protection of human, animal or plant life, or health,
or of the environment at levels it considers appropriate, subject
to the requirement that they are not applied in a manner that
would constituted arbitrary or unjustifiable discrimination.
The declaration provides an opportunity to discuss
the role of and funding for agriculture in the UK. The Environment
Agency believes that agriculture is and should continue to be
multifunctional. We strongly support payments to land-managers
for delivery of wider public goods, including the protection and
enhancement of the natural resources of water, soil and air.
1.2 The mid-term review and future CAP reform
Whatever the outcome of the Doha round of talks,
CAP reform is inevitable as present levels of agricultural support
cannot be maintained in a larger European Union. The current expectation
is that the accession states will try to negotiate for the biggest
share possible of Pillar one funding. They are unlikely to support
a larger Pillar two, or increased modulation.
This combination of factors suggests that at
the EC level, the mid-term review will not result in radical change.
However by 2007, substantial reform will be inevitable.
1.3 The Environment Agency position (summarising
our submission to the Policy Commission on Food and Farming)
1.3.1 Immediate measures
Funding for agri-environment schemes should
be expanded up to the 20 per cent national discretionary limit
under the existing rules of the Common Agricultural Policy (CAP).
This funding should support new whole-farm agri-environment measures
that emphasise management of soil, water and air (ie resource
protection).
An industry-led whole farm environmental management
standard supported by DEFRA should be adopted. Within this, the
progressive integration of existing and new regulations in to
a single national delivery framework will simplify regulatory
processes for farmers.
1.3.2 At mid-term review
Following the mid-term review there should be
greater recognition of resources protection issues in Rural Development
Plans.
The rules governing allocation of funds should
be clarified to ensure that:
— there is a common understanding of
good agricultural practice;
— natural resource protection is recognised
as a legitimate target of agri-environment funding; and
— the option to make capital payments
for works in support of natural resource protection is permitted.
1.3.3 At the next round of CAP reform (2007)
At least half of all CAP funds should to go
Rural Development Regulation.
2. HOW CAN
BETTER STEWARDSHIP
OF AGRICULTURAL
LAND BE
PROMOTED?
2.1 Why is better stewardship needed?
The Agency is concerned that agriculture has
significant environmental impacts affecting soil, water and air.
Our submission to the Policy Commission on Farming and Food describes
these impacts, and the cost of these to the UK. The Agency's objective
is to see environmental issues placed at the heart of agricultural
business thinking. Protection of water, soil and air are fundamental
to sustainable agriculture and should not be relegated to an afterthought.
They must be addressed as an integral part of business assessment
and planning. Many of the principles of good agricultural practice
for both the environment and the farm business are encompassed
in a recent Agency publication entitled "Best farming practices:
Profiting from a good environment".
To change practice the Agency believes that
awareness of the impacts of agriculture, including the external
costs paid by society, need to be understood and accepted by the
industry. There is a need for higher standards to be adopted across
the agriculture industry and land management as a whole.
More environmental legislation from Europe is
inevitable. A list of Directives that will affect agriculture
is given in our submission to the Policy Commission. The cost
of implementing and complying with these Directives will be substantial.
However, new legislation and new regulations do not automatically
guarantee better stewardship. It is essential that farmers and
other land managers are given assistance and incentives to understand
their responsibilities and improve their environmental performance.
Regulatory effort and other controls can and should then be targeted
at poor performers.
The Agency sees three principal opportunities
to promote better stewardship:
— An Environmental Management Standard
for farms.
— Funding for natural resource management
through CAP and/or state aid.
— Better knowledge transfer.
2.2 Environmental management standard for
farms
The rationale behind the Agency's proposal for
an Environmental Management Standard for farms is provided in
our recent submission to the Policy Commission on Farming and
Food. In summary, we are proposing a scheme that will integrate
environmental objectives and targets into the farm business. It
will deliver both statutory environmental requirements (which
are set to increase dramatically) and key elements of good practice
for protecting the environment. To succeed the standard must be
owned by the industry and supported by Government.
Environmental plans will incorporate both natural
resource protection measures covering issues such as nutrients,
manures, pesticides, energy and waste management, emissions to
the atmosphere and measures to protect wildlife, biodiversity
and landscape.
The farm plan approach will place the responsibility
for farm environmental management firmly with the farmer. Farmers
can design environmental management plans to suit their enterprise.
There will be flexibility to take account of different farming
systems, within the environmental capability of the farm.
Benefits will include better environmental performance
from the sector as a whole, better protection of natural resources,
cost effective administration and regulation, incentives to adopt
good practice, and disincentives for those who choose not to participate.
2.3 Funding for natural resources management
A financial package to support natural resource
management through the Environmental Management Standard is needed.
This can be justified because the costs will be offset by reductions
in the damage to natural resources currently caused by agriculture.
The Environment Agency estimates that remediation, and damage
which cannot be remedied, is costing the UK some £1.5 billion
per annum.
2.4 Knowledge transfer
Farming in England and Wales is supported by
high quality research and development, conducted by the Government,
its Agencies and by the agricultural supply trade. However, there
is substantial evidence to suggest that new technologies and best
practice are not being adopted by the industry. Recent research
and policy development by DEFRA—supported by the Environment
Agency—has led to a proposal for a knowledge transfer strategy.
Outline proposals for this support a national facilitation service
supporting local networks. The Environment Agency believes that
a properly funded knowledge transfer strategy will be vital to
the future success of the agriculture industry. The Strategy should
build as far as possible on existing effective local networks
(eg the South-West Agriculture and Rural Development Project (SWARD).
3. THE OPPORTUNITIES
AND DIFFICULTIES
FACED AS
A RESULT
OF POSSIBLE
REDUCTIONS IN
PRODUCTION SUBSIDIES
3.1 Natural resource protection
It is important to recognise that land produces
a range of benefits. In some places food and fibre may be the
primary output or benefit to society, and other benefits such
as biodiversity, amenity/recreation, water supply and energy may
be secondary. Elsewhere, the reverse may be true, even where agricultural
outputs are currently the primary source of income. In practice
all land could and should produce a range of benefits. To ensure
that these benefits are maximised, expertise in land management,
not just agriculture, is required. Sustainable land management
must ensure that land use matches, but does not exceed, land capability.
3.2 Funding for agriculture
The UK has an opportunity to prepare for the
transition away from production support and into environmental
measures by taking immediate advantage of the full level of discretionary
modulation and by taking all necessary steps to achieve an extension
of discretionary modulation in the next round of CAP reform.
Transition away from production subsidies will
allow agriculture and wider land management greater flexibility
to diversify, and to receive payment for the provision of public
goods.
3.3 Land-use change and management
Changes in the level of and basis for public
support of agriculture may lead over the next decade or so, to
some land, particularly marginal land, becoming economically non-viable
for food production. This will open up opportunities for alternative
land uses. Non-food crops such as biofuels may become more attractive,
as may commercial afforestation. Prospects of land acquisition
by conservation and amenity interests for management may also
arise, on a minimal intervention basis, to allow reversion to
more natural habitats, with recreation, biodiversity and natural
resource benefits. In urban fringe areas, there may be opportunities
to provide such benefits where they are more accessible to large
numbers of the population, and deprived groups and those reliant
on public transport.
Even if land management costs are minimal, other
associated costs, for example fencing and footpath maintenance,
countering flytipping etc, may be significant. To ensure that
the benefits of land-use change are fully realised it will be
important to ensure that suitable funding is available. Where
payments, including those from the CAP, are available to agriculture
for provision of biodiversity, amenity, natural resource and other
public benefits, they should also be available to other land managers
undertaking similar works for the provision of such benefits.
3.4 "Green proofing"
Where land remains in agriculture, and farmers
continue to produce commodity crops, the Agency is concerned that
increased competition and cost reduction will lead to "cutting
corners" and that management for the environment will be
prejudiced. There may also be rapid changes in land use and/or
techniques. Many of these are likely to be outside the scope of
current planning and Environmental Impact Assessment regulations,
and so their environmental consequences will not come under scrutiny.
The Agency and its predecessors have expended
considerable effort and public money on correcting adverse environmental
impacts arising from the adoption of new technology. In the 1970s
new silage and slurry systems were introduced and adopted without
a proper understanding of the environmental consequences. This
led to pollution problems that have taken decades to correct.
Another example is where the widespread adoption of maize caused
significant environmental damage. Swift action by the Agency,
in collaboration with the industry, ensured that guidance was
produced to address the adverse impacts. However the problem is
not wholly under control. An earlier understanding of the environmental
impacts of maize production could have avoided considerable environmental
damage, and significant difficulties for individual producers.
The Agency believes that a system for "green
proofing" of new practices and technologies is needed, to
ensure that the environmental consequences are understood and
environmental good practice can be developed and promoted at an
early stage. We emphasis that only in extreme cases would change
be prevented. However, change must be managed to ensure that new
techniques do not compromise the environment.
3.5 Adding value
UK producers could focus on adding value by
processing food close to source, so that domestic primary food
production has a closely linked market and the impacts of transport
(carbon and other emissions) are minimised. The Agency would welcome
such a development, and public support to encourage its realisation.
The environmental as well as social and economic benefits of maintaining
profitable UK agriculture are considerable.
3.6 Flood management
We are also living at a time of increasing flood
risk due to climate change. Planning scenarios from the UK Climate
Impacts Programme currently suggest that peak flows for a given
return period could increase by up to 20 per cent within 50 years.
The Agency, along with its partners in Flood Defence, are introducing
Catchment Flood Management Plans (CFMPs) to take a strategic view
of managing flood risk in a sustainable manner throughout the
whole catchment. This will involve—in some catchments—the
development of significant volumes of flood storage on agricultural
land to reduce peak flows in the river and flood plain downstream.
The introduction of CFMPs and the new planning
guidance on Development and Flood Risk (PPG 25) provides the opportunity
to consider strategic changes in land use, including the realignment
of defences to designate new flood storage zones on structure
plans. Such changes would "enable flood plains to flood naturally
or more extensively, thus providing the necessary storage and
subsequent gradual release of flood water" (PPG 25). There
has been considerable interest in the use of agricultural land
to provide flood storage, particularly with additional benefits
for wetland creation. With the technical and statutory frameworks
in place, there is an excellent opportunity to formalise this
important future category of rural land use.
Flood storage is not synonymous with wetland
creation. Development of effective storage will require some engineering
works to "pond" water. Simply creating wetland is unlikely
to generate sufficient flood depth to deliver an adequate volume
of storage to reduce the impact of flooding downstream. For example,
work on the pilot Catchment Flood Management Plan for the River
Severn has established that to fully protect Shrewsbury, 60 million
cubic metres of storage space will be required, in addition to
the 20 million cubic metres already available in the Welsh borders.
(One million cubic metres equates to flooding one square kilometre
of land to a depth of one metre).
Depending on the design and management of each
zone of flood storage, the land flooded could revert to either
agricultural use (eg grazing; water meadow) or wetland after flood
storage. The inundation of zones would be graded so that some
zones flood regularly (eg annually) whilst others flood only in
extreme events (eg once in 20 years or more).
14 December 2001
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