APPENDIX 16
Memorandum submitted by the Council for
the Protection of Rural England (CPRE) (H17)
INTRODUCTION
1. CPRE exists to promote 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 change respects 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.
2. CPRE believes farming in the future should
be more responsive to the increasingly sophisticated needs and
demands of the consumer. 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. There is no longer a fixed model for
commercial success based on greater production of bulk commodities
at larger economies of scale and lower costs of production. Instead,
the future of farming will be shaped by a number of factors including:
— the need for a changing, innovative
and adaptable industry;
— the economic decline of primary production;
— a wealthier and more discerning society
in terms of consumer choice; and
— the growing demand for environmental
products.
4. Future support and policies should seek
to maximise the opportunities offered by these changes 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, such as a high quality countryside,
increasingly demanded. It means better protecting existing environmental
resources to maximise the opportunities offered by a high quality
rural environment for farming and the wider economy.
5. The Policy Commission on the Future of
Farming and Food recognised the multifunctional role that farming
can play. The Commission urged Government to initiate reform at
both a domestic and European level to ensure that farmers are
better rewarded for the variety of services that they provide.
CPRE welcomed their proposals and the measures that have already
been taken to implement their recommendations. In order to maximise
the potential of the Curry report, however, it will be essential
for Government to engage actively in the mid-term review of the
CAP. CPRE welcomed the measures for reform agreed in 1999 at the
European Council in Berlin, in particular the consolidation of
rural development as the second pillar of the CAP. The current
mid-term review provides the UK and the EU with a valuable opportunity
to consolidate and extend these objectives and ensure that the
CAP better meets the demands of society as a whole.
SUMMARY OF
RECOMMENDATIONS
6. CPRE broadly supports the package of
reforms presented by the European Commission. We urge UK representatives
in the negotiations to voice their support for the package of
proposals. In particular, we recommend that the UK supports the:
— move away from production related
support and towards payments that are conditional upon maintaining
high environmental standards and delivering public benefits;
— introduction of "compulsory
dynamic modulation" and the resulting shift in funding towards
rural development in all Member States; and
— principle of encouraging food to
be produced to high environmental and animal welfare standards.
7. To maximise the benefits of the proposed
reforms for the UK and the wider environment, however, we believe
the final package should:
— afford Member States and regions
the flexibility to tailor proposals to their specific needs and
circumstances;
— outline the Commission's intent to
move towards an area-based land management payment in the medium
to long term;
— set out cross-compliance standards
that go beyond basic regulatory requirements and are instead based
on a revised framework of good agricultural practice that addresses
landscape and habitat objectives alongside resource protection;
— address environmental need as part
of the criteria for redistributing modulated money;
— ensure agri-environment schemes are
guaranteed a significant share of all Rural Development Regulation
(RDR) funds;
— target environmental set-aside where
it will deliver the greatest environmental benefit;
— ensure that farm audits become effect
environmental management tools; and
— require that funding made available
through the food safety chapter is well justified and delivers
identifiable public benefits.
PROPOSALS FOR
REFORM
8. The Commission's discussion document
on the mid-term review argues that public expenditure for the
farm sector should be better justified. It states that the CAP
should not only support farm incomes but also address issues of
food quality, protection of the environment, animal welfare, landscapes,
cultural heritage and social equity. To achieve these goals the
Commission proposes to:
— cut the link between production and
direct payments;
— make those payments conditional upon
environmental, food safety, animal welfare and occupational safety
standards;
— substantially increase EU support
for rural development via a modulation of direct payments; and
— introduce new rural development measures
to boost quality food production.
9. The following paragraphs look at the
Commission's proposals in more detail and outline CPRE's response
to their recommendations.
DECOUPLING PAYMENTS
FROM PRODUCTION
The farm income payment
10. The Commission proposes to introduce
a single decoupled farm income payment based on the historic payments
received by each farmer. CPRE supports this move away from production
related support and towards payments that are conditional upon
maintaining certain environmental standards. We believe that all
production support should be incorporated into the single income
payment as soon as possible to avoid sending mixed signals to
farmers. We should ensure, however, that individual Member States
are given some discretion as to how payments are applied. This
should aim to avoid payments disparities between neighbouring
farms by defining a balance between individual payments entitlements
and regional and national averages. The Commission's proposals
suggest that such flexibility would be considered.
11. The proposed system should reduce incentives
to over supply and enable farmers to respond better to consumer
demands while retaining a degree of economic security. The impact
of this measure on land use patterns will be of major importance
when considering the environmental outcome of this proposal. There
should, therefore, be adequate safeguards to ensure that any negative
environmental impacts resulting from changes in production patterns
are minimised. Cross compliance requirements, the availability
of agri-environment schemes and the recently implemented EIA Directive
on Intensive Agriculture on Uncultivated Land will be particularly
important in ensuring that this is the case.
12. We recognise that in the short term
farm income payments, based on historic receipts, will allow a
relatively smooth transition from a coupled to a de-coupled support
system. We believe that in the medium to long term, however, it
will be difficult to justify paying farmers for their past activities,
especially if these practices have resulted in environmental damage.
We therefore believe that the Commission should state its intent
to move towards a system of area-based payments, which reward
positive environmental management, from 2006.
Cross compliance
13. The Commission proposes that the farm
income payment will be conditional on compliance with statutory
environmental, animal welfare and food safety standards on both
used and unused agricultural land. This will involve the respect
of statutory management requirements and an obligation to maintain
land in good agricultural condition. CPRE supports this proposal
but believes that it is essential that these cross compliance
standards should be based on a revised framework of good agricultural
practice that addresses landscape, habitat and historic environment
considerations alongside resource protection.
14. CPRE are concerned that the Commission's
requirement that land should be maintained in "good agricultural
condition" could prohibit or discourage farmers from taking
land out of production in order to achieve particular environmental
benefits. We believe that the Commission should recognise that
in the future it will be increasingly desirable, in both social
and environmental terms, to convert certain areas of agricultural
land to alternative land uses, such as flood plane re-creation
or forestry. It would therefore be disappointing if such measures
were discouraged by the proposed cross compliance criteria.
Environmental set-aside
15. The Commission proposes that current
set-aside arrangements should be replaced by long-term environmental
set-aside as part of the cross-compliance requirements for receiving
direct payments. CPRE supports the explicit environmental role
that set-aside will perform as a result of these proposals. In
the past we have been critical of the system of set-aside which
perpetuated the myth that we had too much farmland rather than
addressing the real problem of over production. This concern has
been addressed by the proposal to decouple agricultural payments
from production. Yet there is still the risk that a policy of
compulsory set-aside encourages intensive farming as farmers strive
for greater yields on their remaining land to compensate for lost
production, thereby locking farmers into intensive and potentially
damaging farming systems. We therefore believe that cross compliance
requirements should ensure that environmental management requirements
are attached to both cultivated and uncultivated land.
16. To ensure maximum environmental benefit
it is essential that set-aside is positively managed in the future.
Set-aside should no longer be seen as a mechanism to pay farmers
for "doing nothing". We believe that both rotational
and non-rotational set-aside can have environmental value. Permanent
set-aside should be used to target land of particular landscape,
historic or biological importance that is not dependent on continued
agricultural practices and we believe this land should be prioritised
for conversion to set-aside. Rotational set-aside should be encouraged,
however, in areas where it creates valuable habitats on agricultural
land and where there is a need to target particular species. Farm
audits should be used to target land designated as set-aside to
ensure that maximum environmental gain is achieved.
Energy crops
17. The proposal for a carbon credit to
support the planting of energy crops is welcomed. It is of utmost
importance, however, that the beauty and tranquillity of the countryside
are not damaged in the process. It is also vital that these crops
are appropriately and sensitively situated so as to avoid damaging
important landscapes, habitats and historical features. For example,
Miscanthus can grow to a height of 3.5 metres and as a result
could have a dramatic visual impact on the local landscape. In
such circumstances, the Commission should consider adopting appropriate
assessment and consent mechanisms, such as land use planning permission
or Strategic Environmental Assessments.
18. The carbon credit system should also
recognise that electricity generation from biomass is only sustainable
if it is carbon dioxide neutral, with the carbon dioxide released
when the fuel is managed, harvested, transported and burnt is
in balance with the carbon dioxide taken up during growth. It
is vital, therefore, that the crops are grown as close as possible
to processing and generating facilities.
Farm auditing
19. The Commission proposes to introduce
a mandatory system of farm audits for producers receiving more
than
5,000 per year in direct payments. CPRE supports
the introduction of whole farm audits. We believe they potentially
provide an invaluable tool for delivering advice and support to
farm businesses as well as a valuable means by which the environmental
repercussions of the change to the new system of support can be
minimised.
20. Farm audits should be used as "contracts"
to ensure that land is managed to desired environmental standards
and that public money is being well spent. They should contain
common criteria throughout the EU but Member States should be
able to tailor them to meet regional circumstances and incorporate
existing auditing mechanisms.
21. Farm audits should also be seen as the
first step towards developing an integrated farm management plan
that combines regulatory, conservation and business components.
Farm audits should ensure that farmers have clear and detailed
information about their environmental assets and constraints.
They should also be used to articulate the management practices
that farmers need to adopt in order to meet cross compliance requirements
and provide advice on any options for further support that may
be available.
22. We urge the Committee to support the
Commission's proposals to introduce a de-coupled farm income payment.
This payment should be conditional upon farmers meeting environmental
standards that go beyond statutory requirements and include positive
land management conditions. The farm based payment, however, is
only credible as a short term, transitional measure and we encourage
the Committee to argue that in the medium to long term the Commission
should move towards a system of area-based land management payments.
SWITCHING FUNDS
FROM PRODUCTION
TO RURAL
DEVELOPMENT
Compulsory dynamic modulation
23. The Commission proposes to introduce
a system of "compulsory dynamic modulation" for all
Member States. This will result in a 20 per cent shift in funding
from Pillar one to Pillar one over a period of approximately seven
years. CPRE supports the principle of "compulsory dynamic
modulation" and the resulting shift in funding away from
production and towards rural development. Existing funding levels
mean that only a limited number of farmers and rural businesses
can benefit from the RDR measures on offer. This has meant that
the economic, social and environmental benefits offered by the
RDR have been geographically isolated and have been unable to
offer benefits at a wider scale. The proposed measures start to
redress this balance but we believe the Commission could go still
further and that this should be the first phase of an ongoing
programme to transfer money from Pillar one to Pillar two.
24. To ensure that the UK makes the most
of these proposals it is essential that modulated money is not
re-distributed according to the allocation key set out in the
current Rural Development Regulation. A continuation of this system
would mean that the UK would contribute 20 per cent of total EU
modulation money but would only get back 3.5 per cent. The UK
should argue that modulation criteria set by the Commission should
aim to reward the provision of "public goods". The redistribution
criteria should therefore aim to incorporate environmental needs
alongside agricultural area, agricultural employment and prosperity.
If the Commission is unwilling to introduce specific environmental
criteria then we recommend that the UK should argue that a considerable
proportion of funds should be allocated on the basis of agricultural
area as the criteria which best represents requirements in terms
of land management.
25. The UK should also negotiate satisfactory
interim arrangements to ensure that the transition for the current
UK system of modulation does not lead to a reduction in funding
for Pillar two measures in the short term. Transitional agreements
should ideally result in improved funding for rural development
measures in the UK and should at least match the targets outlined
in the recent spending review.
26. CPRE does not oppose the capping of
subsidies over
300,000. As the whole farm payment is presented as
an income aid that is decoupled from the amount produced and the
area of land farmed, it is no longer valid to criticise ceilings
as penalising the most efficient farms. Recent research by the
Federal Research Institute for Agriculture has also shown that
only 1 per cent of the UK's aid volume would be affected and that
this could be redistributed to UK producers via the RDR. We believe
that by conceding this point the UK may be able to make more valuable
gains elsewhere in the negotiations.
27. CPRE welcomes the additional support
for agri-environment schemes that will result from this shift
in funding and from the increased rates of co-financing proposed
by the Commission. If agri-environment schemes are to become a
main-stream option for the majority of farmers, however, we believe
that the Commission will need to consider changing the way in
which agri-environment payments are structured to better reflect
the actual costs and value of the work undertaken through these
schemes. We are also concerned that by broadening the scope of
the RDR there is the danger that limited agri-environment funding
will be stretched still further and that as a result agri-environment
schemes may loose valuable resources. To avoid this happening,
we believe the Commission should consider ring fencing a percentage
of the RDR budget for these schemes.
28. We urge the Committee to support the
principle of "compulsory dynamic modulation" and the
resulting increase in funding for RDR measures. If these additional
resources are to secure the greatest environmental benefit, redistribution
criteria should take account of environmental need and adequately
reflect the area of agricultural land in each Member State. The
Committee should also argue that a proportion of RDR funds should
be ring fenced for agri-environment measures to ensure that positive
environmental management remains a core component of the second
pillar.
STRENGTHENING THE
RURAL DEVELOPMENT
REGULATION
New chapters
29. The Commission proposes to add two new
chapters to the Rural Development Regulation. These new chapters
would focus on food safety and "meeting standards".
CPRE supports the principle of promoting food safety and higher
production standards but we emphasise that this should primarily
be supported through the market. We believe that funding made
available through the food safety chapter should be well justified,
deliver identifiable public benefit and should not divert excessive
funding away from other agri-environment measures which receive
no market support. Farm assurance schemes supported through the
RDR should be based on standards that go beyond the framework
of good farming practice demanded by the new cross compliance
requirements. This would exclude schemes such as the British Farm
Standard—which only requires farmers to comply with regulation
and in some cases codes of good agricultural practice—but
include schemes such as LEAF, Freedom Foods and Soil Association
certification—which have more demanding production standards.
30. Farm audits should be supported by the
necessary funding and advice to ensure that they are effective
management tools which clarify the regulatory, cross compliance
and management standards required from each farmer. Eligibility
for funding to assist with compliance with future legislation
should be identified in the farm audit and be independently verified.
31. We are concerned, however, that the
Commission's proposals suggest that the RDR is becoming more focused
on supporting agricultural practices rather than moving towards
a more inclusive process which engages a wide range of rural stakeholders.
We understand that at the current time, and within a still limited
budget, broadening the recipient base for RDR funds could diminish
existing measures. However, we believe in the medium to long term
the RDR will have to become increasingly responsive to the wider
rural community.
32. We urge the Committee to support the
Commission's proposals to promote food safety and higher production
standards but to question how involved the RDR should become in
funding these standards. The Committee should argue that the measures
outlined in the new chapters should be well justified set within
the wider objectives of the reform package via the farm audit.
The Committee should also encourage the Commission to look towards
widening the recipient base of the RDR in the medium to long term
by better engaging with rural communities as a whole.
CONCLUSION
33. CPRE welcomes the reform package presented
by the Commission and urges the Committee to voice their support
for the reform process. The proposals represent an important first
step towards the more sustainable system of agricultural support
outlined in the Curry report. Under the system proposed by the
European Commission public payments will no longer encourage the
intensive production which has been so environmentally damaging,
instead they will support environmentally responsible land management
and enhanced production standards. As a result these proposals
send an important signal that, in the future, payments will be
based on the delivery of public goods and not on increased volume
of production.
34. It is important, however, that the Committee
recognises that these proposals are only a first step in the reform
process and that the UK will have to develop a clear idea of its
medium to long term objectives. CPRE believes that these should
focus on:
— moving towards a system of area based
land management payments;
— progressively transferring funds
from Pillar one to Pillar two; and
— broadening the recipient base of
RDR funds to better represent the interests of rural areas.
35. In the short term, however, it is vital
that the positive thrust of the reform package is not undermined
by the detail of the proposals. In particular, we believe that
the decoupling of payments should only go ahead alongside meaningful
cross compliance requirements, a specific environmental role for
set-aside and increased resources for agri-environment measures.
We believe that the farm audit should be used as a tool to manage
change and ensure that the environment becomes a core concern
of all farm businesses.
Council for the Protection of Rural England
30 September 2002
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