Memorandum submitted by the RSPB
IMPLEMENTATION OF CAP REFORM IN THE UK
1. The RSPB is Europe's largest wildlife
charity with over one million members. We manage one of the largest
conservation estates in the UK, covering more than 100,000 hectares.
Sixty of our reserves are farmed, covering more than 20,000 hectares,
with around 170 tenant farmers, and 200 employees. We protect
and enhance habitats such as lowland farmland, heather moorland,
lowland heath, wet grassland, estuaries and reedbeds, and our
reserves help to protect 63 of the 77 most rare or threatened
breeding bird species in the UK.
SUMMARY
2. The RSPB welcomes the decisions to regionalise
CAP implementation, introduce the new payment scheme in 2005,
and to adopt a fully decoupled approach. We recommend:
i. That the Single Farm Payment is introduced
on a regional average area basis, with differentiated payments
for Less Favoured Areas and lowland arable and grass. This would
secure full decoupling, sever the link to historic production,
offer administrative and social equity benefits, and move to a
more rational structure for Pillar I. It would be beneficial to
temporarily exclude the dairy sector land and budget from an area-based
Single Farm Payment until the reforms are phased in.
ii. That Government use the new National
Envelope to its fullest potential, as a tool to support farmers
through the process of CAP reform. The National Envelope could
focus on raising standards to good practice levels, farm business
adaptation, and support for extensive dairy farms, mixed farms
and marginally profitable farms which are beneficial for the environment.
iii. That Government seeks maximum flexibility
to target set-aside to achieve environmental benefits, by adopting
five metre strips, integrating set-aside with agri-environment
schemes, and preventing industrial crops from being grown on set-aside
land.
iv. Cross compliance should also be used
clearly to define the level of performance required from land
managers. We would advocate a risk based approach using tools
such as management plans. Cross-compliance, National Envelopes
and the Single Farm Payment system should be developed together
and should reinforce one another to achieve maximum benefits.
v. The CAP reform package implementation
process needs to be integrated with other land use issues which
Government is committed to act upon. For example; the Water Framework
Directive, the UK Biodiversity Action Plan, Public Service Agreement
targets for the environment, and flood risk management. At present
there is no indication that DEFRA has attempted to integrate these
policy objectives with agriculture reform process. This is a major
omission.
INTRODUCTION
3. The RSPB's vision is for sustainable
systems of farming that produce adequate supplies of safe, healthy
food; protect the natural resources of soil, air and water that
farming depends on; help to protect and enhance wildlife and habitats;
provide jobs in rural areas and contribute to a diverse rural
economy.
4. The RSPB recommends a practical package
of solutions to the current problems in farming, many of which
could be implemented quickly, backed up by longer-term changes
to UK and European agriculture policy.
STRATEGY AND
VISION
5. The RSPB recognises the good progress
that the UK Government has made towards reforms of the agriculture
sector, in setting up the Curry Commission and through principles
adopted in subsequent agriculture policy documents. These are
in line with the forward-looking reformist stance adopted by the
UK delegation during the CAP negotiations, and with RSPB's longstanding
policy objectives of an early and comprehensive reform to the
CAP. However, policy principles now need to be translated into
real change at farm level, and a real commitment to using public
money in the agriculture budget to secure the public benefits
from agriculture.
6. The Curry Commission made recommendations
concerning sustainable management of the environment, including,
seeking a movement of EU funds towards social and environmental
objectives under Pillar II, a shift in emphasis from production
subsidies to public funds supporting public goods and that the
EU's budget for environmental programmes be increased. Notably,
the wider recommendations of the Curry Commission and the reforms
of the CAP have followed similar themes and ideas for reform.
This sets a clear strategic direction for UK agriculture, recognising
the role farming plays in wider rural issues and towards public
money paying for public goods.
7. The proposals made by the Curry Commission
and accepted as Government policy in its Strategy for Sustainable
Farming and Food are being implemented at varying rates. We commend
the concept of establishing the Curry Implementation Group of
external experts, as this builds in opportunities for wider discussion
and helps make a bureaucracy-heavy process more transparent. The
Agri-Environment workstream is proceeding effectively, demonstrating
real commitment and willingness to deliver change, and capitalising
on opportunities to engage stakeholder experience and input which
add value to the process. The new agri-environment framework,
if the timetable for CAP implementation is maintained and it is
rolled out in 2005, should complement decoupling and assist farmers
in adjusting to the new policy framework. In particular, the Entry
Level Scheme and the outcome-oriented approach to more specialist
measures are tools which enact the principle of public support
for public goods. The Environmental Protection workstream appears
to be progressing more slowly, and may be in danger of falling
behind the CAP reform process. In particular, the Diffuse Water
Pollution from Agriculture project has not been transparently
handled and may miss opportunities to align CAP reform implementation
with the demands of the forthcoming Water Framework Directive.
PRINCIPLES AND
METHODS
8. The RSPB is working towards agriculture
policies which support sustainable agriculture, characterised
by profitable farming systems, abundant wildlife, and thriving
rural communities. We see the end point of CAP reform as a market-led
agricultural industry producing goods according to consumer demand.
As this would expose Europe's countryside to economic forces which
do not recognise environmental values, we see that it is the role
of public policy to ensure that agriculture continues to provide
those goods which society needs and expects (biodiversity, landscape,
historic environment, natural resources, and rural community structure).
This should be through a combination of regulation against pollution
and degradation, by creating a market for public goods through
the rural development regulation, and by enabling and educating
consumers to opt for goods produced to high environmental standards.
9. The RSPB broadly welcomes the 2003 CAP
reform agreement as a major step towards more sustainable agriculture
in Europe. However, we do not see the process of reform as ending
here. The level of flexibility available to Member States means
that benefits will be patchily delivered across Europe and on
balance the package will inadequately address many of the major
problems faced by the European countryside. The UK is likely to
reap many of the benefits of the package by retaining its strong
reformist stance, and has the opportunity to reinforce its leadership
in Europe with far-sighted decisions on how it implements the
current reforms.
Area-based single farm payments
10. The decision on implementing the decoupled
Single Farm Payment scheme (SFP) will set the framework for major
subsequent decisions on agriculture policy (area-based single
farm payments, modulation, new National Envelopes, elements of
cross-compliance and other schemes). While we appreciate that
the timing of this inquiry means that the decision on payment
rates may have been made before the committee takes evidence,
we feel the issue is of significant importance to merit a short
discussion here.
11. On the evidence available, the RSPB
supports regional area-based SFPs over historic SFPs, as they
secure full decoupling and sever the link to historic production.
They also offer administrative and social equity benefits, and
move to a more rational structure for Pillar I. The environmental
advantages of area-based SFPs are not the main argument in their
favour, but developing SFPs, cross compliance and new National
Envelopes together would allow them to reinforce one another with
large potential environmental benefits. In the longer term, area-based
SFPs would facilitate further reform by allowing support for specific
public goods to be quantified and moved into Pillar II, without
re-opening the debate over sectoral support mechanisms. We recommend
adopting Less Favoured Area and lowland area-based SFPs.
National Envelope
12. The RSPB welcomes the opportunity to
target public money to delivering public goods provided by the
National Envelope (NE), and recommends use of the full 10% budget.
13. The RSPB sees Pillar II as the main
delivery mechanism for support for the public benefits of farming.
We have previously highlighted that the National Envelope was
in part necessitated by the failure to provide adequate resources
for Pillar II, which could more effectively have met its aims
of supporting environmentally beneficial farming systems and quality
produce. Nevertheless, the NE has great potential to provide a
transitional support system as farmers adjust to the new direction
in agriculture. In particular the NE represents an opportunity
to help farmers ensure that their systems meet the standards which
will be required by cross compliance, and in the medium term,
to prepare for the forthcoming Water Framework Directive. The
opportunity to invest in change on this scale is unlikely to be
repeated in the near future, and while it may exacerbate redistribution
impacts in the short term, well designed NEs can only benefit
the farming industry in the long run.
14. In general, we would counsel against
sector-specific National Envelopes, as sectors have less meaning
in a decoupled system (and almost none in an area-based one).
However, we do see a need for a dairy National Envelope to support
environmentally beneficial dairy systems (often small family-run
extensive farms), and possibly to develop market infrastructure
for local fresh milk or dairy products.
15. If a historic SFP is adopted, the National
Envelope will be crucial to support less competitive farm systems
in marginal areas which are at risk of change, particularly extensive
beef grazing, or shepherding sheep. If an area-based SFP is adopted
and linked to well-designed cross-compliance, there will be less
need for this use of a National Envelope and more forward looking
purposes for the NE can be explored.
16. The RSPB recommends cross-sectoral support
for adapting farming in two systems:
i. Assessments and capital grants to ensure
that all farms meet minimum operating standards within a limited
timescale. This is particularly important if agriculture policy
is to integrate with the forthcoming demands of the Water Framework
Directive. The Environment Agency estimate that bringing farmers
across England up to good practice standards would cost £140
million, well within the scope of a NE.
ii. Enabling farmers to access advice on
restructuring, market orientation, and environmental threats and
opportunities, including facilitating co-operative activities.
Cross-compliance
17. The development of a meaningful definition
of "Good Agricultural and Environmental Condition",
and strict enforcement of both Annex III and Annex IV of the cross
compliance rules, will be essential if defensible environmental
standards across farmland are to be achieved and the benefits
of decoupling fully realised. While Pillar I payments are not
primarily for the delivery of environmental standards, this reform
represents an opportunity to reinforce the link between public
support and the need to reach agreed minimum standards. In particular,
it should be impossible for land managers to breach legislation
or agreed environmental conditions and still receive public subsidy.
18. Cross-compliance, National Envelopes
and the SFP system should be developed together and should mutually
reinforce one another to achieve the maximum benefits. We do not
consider this to be gold-plating, nor to legitimise Pillar I payments
in perpetuity. Cross compliance should also be used clearly define
the level of performance required from land managers. We would
advocate a risk based approach using tools such as management
plans, which are currently being piloted in the Entry Level Scheme
to address the problems of soil erosion, nutrient and manure management—which
contribute to diffuse pollution—as well as crop protection
issues, energy consumption and water management for those utilising
irrigation.
19. Whilst set aside remains, its potential
environmental value should be recognised and maximised. Despite
the fact that set aside is a supply control measure it can provide
an important habitat for biodiversity and as such the growing
of industrial crops should be banned on set aside.
Modulation and Agri-Environment Schemes
20. The RSPB sees further CAP reforms for
modulation, the reduction of Pillar I and strengthening of Pillar
II as inevitable and desirable if the principle of public payment
for public goods is to be enacted. Long-term European agriculture
policy, as acknowledged by UK and European Commission, is to reduce
Pillar I support to all farms. Pillar II funds support the UK's
agri-environment schemes, the most sophisticated in Europe.
21. The above diagram shows the "pyramid
concept" of agriculture support organisation.
i. The bottom tier includes all farmers,
who should comply with legislation, good farming practice guidelines
and cross-compliance measures in return for basic "pillar
1" area payments. No extra agri-environment payment is made
for adopting these practices.
ii. The second tier consists of relatively
simple and cheap measures to benefit the farmed environment, which
are accessible to most farmers for general greening of agricultural
practice. This could include habitat maintenance, field margins,
and some organic farming practices. The Entry Level Schemes being
planned for England, Wales and N. Ireland aim to fulfil this need.
iii. The third tier consists of more costly
and specific habitat restoration measures, which are available
to farmers in particular areas or with particular habitats on
their land. This could include extensive grassland, lowland wet
grassland, and measures to re-introduce mixed farming.
iv. The fourth tier consists of highly specialist
habitat protection or creation measures, typified by SSSI's, which
may be expensive and are likely to be appropriate to a minority
of farmers.
22. The RSPB recommends a 10% modulation
(5% EU modulation and 5% voluntary) in order to increase agri-environment
scheme funding in Pillar II in the short term. Future reform negotiations
will have to address fund switching mechanisms in order to shift
the bulk of direct subsidies into the Rural Development budget.
Farm advisory system
23. We note that the Government proposes
to introduce the Farm Advisory System in 2007. Given that 2005
will see the implementation of a new CAP package a new agri-environment
system—with attendant advisory infrastructure, possibly
National Envelopes with an advisory function, and a range of other
challenges for farm businesses—we recommend that the timetable
is brought forward and integrated with the development of other
advisory strands. It is likely that the most value will be gained
from a single integrated national advisory system which is in
place to support farmers when facing major changes, rather than
after two years of the adaptation process.
24. It is vital to accept that reductions
in direct support must be facilitated through Rural Development
and advisory programmes, if a stable farming infrastructure is
to be retained. If area-based SFPs are adopted, farmers who face
a change in Pillar I income must receive support through targeted
advice, access to National Envelope money for systems which are
important for the environment, and of course continued development
of the Rural Development Programme. If historic SFPs are adopted,
the same support mechanisms will still be required in the longer
term.
Links with other policy areas
25. Agriculture is the dominant lands use
over 75% of the UK land area. Its activities fundamentally affect
water quality, biodiversity and flood risk management. The CAP
reform process provides an unrivalled opportunity for true integration.
Such an approach will be required in any case to fulfill obligations
under the Water Framework Directive, particularly in respect of
diffuse pollution and river basin management. Abilities to deliver
on UK Biodiversity Action Plan and Public Service Agreement environmental
targets could be crucially affected by the eventual outcomes of
the reform package and its implementation. Flood risk control
is equally dependent on land use and on the approach to new ways
of incentivising water management and flood control through appropriate
farming techniques. It appears to date that this opportunity to
achieve an integrated solution to these imperatives has been missed.
IMPACT AND
APPROACHES
26. The RSPB believes that the long-term
benefits of reforming CAP to deliver environmental and social
benefits will outweigh any short term adjustment problems. We
recognise that reform options which redistribute Pillar I support
have serious political ramifications. In part, this is because
of the prevailing view in the farming community that the money
belongs to the historic recipients as of right, not to the taxpayer
to allocate where it will bring the greatest public good. Decisions
on the SFP could send a valuable message about the purpose of
public support, and for that reason the RSPB believes that fear
of redistribution alone is not a valid reason to disregard area-based
payments or National Envelopes.
27. The RSPB recommends that sectors subject
to major reforms should receive support during their transition
periods to allow them to adjust. We recommend that sectors undergoing
phased reforms (price cuts and compensation payments) must be
included in an eligible land area calculation. This creates the
illogical situation in which dairy land would be included in an
area calculation while the dairy payments are being phased in,
and would either receive the area payment plus the dairy compensation
payment, or would only receive the area payment and therefore
reduced targeted support during the maximum period of adjustment.
We anticipate that the same situation will be faced by sugar beet
producers, and the only way to circumnavigate it is to adopt historic
SFPs. This creates an obstacle to logical policy development,
because a short term difficulty in a few sectors could impede
adoption of a system which will benefit agriculture policy objectives
across the board in the long term. The RSPB would prefer that
sectors undergoing phased reform receive their compensation payment
only and can be excluded from the eligible area for regional average
payments until the reforms are complete, and recommends that the
UK explore this with the European Commission.
28. All farm businesses will need support
in order to adjust to the reformed CAP using facilitation and
training services for farmers and other rural entrepreneurs.
29. The price of agreement at the 2003 CAP
negotiations was a great deal of flexibility, and no two Member
States are likely to implement the same set of options. Final
positions are not yet know for all Member States, but are likely
to range from progressive (phased area payments in Germany) to
reactionary (possible partial re-coupling in France and Spain).
This lack of clarity extends to most principal tools in the CAP
package: cross-compliance, voluntary modulation, decoupling, and
national envelopes. Given the effective end of a common agriculture
policy across Europe, the UK would do best to retain its long-term
strategic objectives rather than playing for short-term advantages
over other Member States, and implement CAP according to the principle
of moving toward public support for public goods from farmland.
Royal Society for the Protection of Birds
December 2003
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