Examination of Witnesses (Questions 260-279)
LORD WHITTY,
MR TOM
EDDY AND
MR PETER
MURIEL
TUESDAY 10 DECEMBER 2002
Mr Jack
260. One of the things that intrigues me in
listening to this discussion is this question of cross-compliance.
In your evidence in paragraph 33 you said to the Committee ".
. . the cross-compliance rules as encouraging compliance with
EU statutory requirements, plus an obligation similar to that
in the current EU small farmer scheme to keep land in good agricultural
condition." I suppose the basic question is who is going
to be responsible for defining the standards which represent cross-compliance?
How will that be done?
(Lord Whitty) The straight answer is I do not know
yet until we are clear what the Commission's proposals under decoupling
and cross-compliance are likely to be. There is a precedent for
some of that being defined by national codes of practice as distinct
from EU statutory requirements.
261. So you could have variations on a theme?
(Lord Whitty) Yes, to a limited degree.
262. I can see that opening up a very fearsome
debate amongst our farmers because we would obviously, I am sure,
want to have a very good standard, whatever that standard would
be. You mentioned earlier in your comments about the broad and
shallow scheme it is quite difficult to find out where you are
going to set the base line. In other words, what is the base line
for good farm practice, what is the base line and an acceptable
way of looking after that bit of the countryside for which you
as a farmer have responsibility? Clearly where you set it depends
whether you have to spend more or less money than the farmers
are spending at the moment on their environmental responsibilities.
It is a bit of an open-ended arrangement, is it not?
(Lord Whitty) We are engaged in a process of defining
what we mean in that context for the entry scheme level, as we
are now calling it. We have announced the pilots will run for
two years before we finally define it. The intention is that farmers
who have methods which meet what are generally regarded currently
as good agricultural practice would be able to meet the requirements
of the, old speak, broad and shallow scheme.
263. Is there a piece of paper that I can go
to and pick it up and it says "DEFRA good agricultural practice"
and find a definition of what you think it is at the moment?
(Lord Whitty) There always used to be. There is not
a single piece of paper but in relation to—
264. I am prepared to accept more than one.
(Lord Whitty) In relation to livestock farming, arable
farming and environmental standards there are various bits of
paper. That is what the process of setting up these pilots is
intended to do so that we can see for different types of farming
what the standards would be and how they could be effectively
applied. The intention is to get something like what you are describing.
265. What kind of audit arrangement do you think
there would be to make certain that people comply in a uniform
way across the Community because I can really see British farmers
being very worried that our Government in a desire to be seen
to be the best when it came to environmental practice would set
standards which could be measurably above those that would be
adhered to in other Member States? For example, on a small farm
stuck somewhere in the Greek outback I would imagine that the
adherence to environmental standards of whatever level might be
more difficult to achieve than in the rural acres of the lusher
parts of England simply because of the differences in the farming
regimes. How are you going to ensure equivalence across the Community?
(Lord Whitty) It does not quite work like that. We
are the only people at present who are proposing the broad and
shallow arrangements. We need the European Commission's agreement
that that meets the criteria for Pillar II payments. Likewise,
the Greeks would require the Commission's agreement. This would
be subject both to national inspection and to EU spot-checks,
the same as any payments of subsidy are now. Yes, there would
be different regimes operating but they would not all be a requirement
to meet the minimum land management and environmental standards.
266. Why can you not just have some basic rules
of compliance and if people do not adhere to them then they do
not get their money? Why do we have to go into defining an even
more complex scheme? Why can we not just have a system that says
if you are not a good farmer by these rules you do not get any
cash, end of story?
(Lord Whitty) That is effectively what we are working
to.
267. You are talking about the broad and shallow
but you had better make some definitions. Is it going to be the
ultimate lowest common denominator?
(Lord Whitty) No, it will not be the lowest common
denominator because those that would fail under the present quality
control would not meet the standards, but in general those who
farm the land with effective, good land management practice, meet
all the environmental standards, would have access without additional
expenditure to the broad and shallow scheme.
268. These cover more than land management,
they cover food safety, environmental protection, animal health
and welfare, occupational safety as well. It is a pretty comprehensive
package.
(Lord Whitty) Under all of which there are statutory
requirements.
269. There are indeed. Are you saying then that
what we have already got in terms of what farmers have to do now,
it is your hope that as long as people comply with those rules
that will be the gateway to them receiving their money?
(Lord Whitty) That would be part of the package to
receiving the money, yes. This also fits in with the overall Curry
proposition of a whole farm approach, that you would regulate
on the basis of the totality of management of a farm. Within that
you would have to meet the various currently multiple regulators'
requirements but you would be judged on the totality of how you
manage the farm. If you like, you would have an inspection that
you met those standards and were therefore entitled to the payment
on the one hand, and on the other hand it would confirm that you
had met the statutory obligations in so doing. The Curry vision
would add to that and it could also in a commercial context mean
that you would have a basic assurance scheme as well, so it would
have a market benefit to meet those standards as well as a subsidy
and a management benefit.
270. And no attempt to encourage, if you like,
higher than minimum standards?
(Lord Whitty) As I said earlier there would continue
to be a higher premium environmental schemes under Pillar II in
the way that—
271. What about animal welfare?
(Lord Whitty) There may be a higher standard of animal
welfare schemes as well. At present there are not Pillar II schemes
but there could be, for example, on organic production or free
range schemes or whatever. Certainly there will be the equivalent
of the current environmental schemes in terms of woodland and
enhancing the environmental condition of the land more generally.
There will continue to be some premium schemes but only a minority
of farmers will go for those premium schemes. What the broad and
shallow, entry level scheme, would provide would be for the generality
of farmers to meet a different standard in, ideally, a one-off
basis of regulation.
Chairman
272. We are building a sort of architecture
of agricultural policy, are we not, which is differing more and
more from that in the United States? If we are going to get animal
welfare and the green programmes, and no doubt we will have labour
market conditions, Uncle Tom Cobbley and all before very long,
demanding that all of these have account taken of them in the
WTO it is going to make it harder and harder. Do you not occasionally
say "hang on, this is going to be difficult enough to pull
off the WTO round to take account of the needs of the developing
countries, which are more insistent demands than perhaps in previous
rounds, without having to go grinding on about animal welfare
and all sorts of other things as well"?
(Lord Whitty) You are now talking about the trading
conditions as distinct from the subsidy conditions?
273. I am saying if we are building this support
system which increasingly comes to depend on non-production elements
and we have then got to balance those off and seek account of
those in the WTO we are just making the negotiations more and
more complex, are we not?
(Lord Whitty) This goes back to the question of whether
the kind of support system that Fischler is describing and I am
describing will be regarded by our trading partners as Green Box
areas. My belief is that it will, although there will be some
scepticism undoubtedly by some of our trading partners, particularly
the Cairns Group. That is something that we will have to be seriously
negotiating for, no doubt.
274. There is going to be a lot of Blue Box
left around as well, is there not?
(Lord Whitty) The Blue Box will be phased down during
the course of the next round. That is effectively the Doha commitment.
The Americans will have to shift whatever farm subsidies they
continue to have and they will have to pay that on a basis which
is unrelated to production. Indeed, they have tried to dress up
some of their present Farm Bills as if it is already in the Green
Box. The Americans are already switched on to this need. It is
not that the Europeans are getting ahead of the game but if we
are not careful the Americans will be further ahead of the game
and regarded more benignly by developing countries and the liberal
countries than we are, or the EU is, by the time we get to Cancun
in September.
275. Let me move on to floors and ceilings because
they are very much in vogue at the moment. There are three proposals
in the modulation which I think I would like you to comment on.
The first is the money collected goes into the central coffer,
it does not remain with the national government and, therefore,
there will be calculations made about whether you are in the red
or in the black as far as the payments are concerned. Secondly
there is the
5,000 floor and, thirdly, there is what I might call
the Walston matter, which is the
300,000 ceiling. What is our reaction to each of
those three?
(Lord Whitty) We are in principle in favour of the
money collected going back into Pillar II for Pillar II purposes
provided those Pillar II purposes are sufficient not only to meet
our needs but also to end up with a rather higher proportion of
Pillar II expenditure coming to the UK than does under the old
Pillar II.
276. Just to paraphrase that: you are happy
for that to go into the central coffer as long as more comes back
than goes in?
(Lord Whitty) I think that is a better way of expressing
it, yes, Chairman. Not necessarily more comes back than goes in
but that we have a higher proportion than we have got now.
277. As long as we do not lose by that process,
let us put it more modestly?
(Lord Whitty) Yes.
278. The agreement would incorporate some figures,
would it, for what Member States would expect to get out of this?
(Lord Whitty) Not necessarily figures. There are not
figures on the current proposals but the current proposals are
limited by historic patterns and we would expect that to be lifted.
279. How would the agreement then give you the
assurance you have just sought?
(Lord Whitty) It would depend on what the schemes
were, whether the UK was best placed to capitalise on this.
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