Memorandum submitted by Water UK
IMPLEMENTATION OF CAP REFORM IN THE UK
KEY POINTS
I. We welcome the latest agreement on CAP
reform. In particular those measures that will improve environmental
performance whilst maintaining agricultural incomes. We congratulate
Defra and UKREP on their positive achievements in this European
policy area.
II. The current approach to agriculture
in the UK is unsustainable and we believe that the implementation
of the CAP reforms should be able to rectify this situation.
III. The UK water industry is currently
paying over £150 million per year to remove agricultural
pollutants from drinking water. The implementation of cross-compliance
and switch of resources to the second pillar should reduce this
burden.
IV. Agri-environment schemes developed under
the new CAP should focus specifically on water management and
the prevention of diffuse pollution.
V. The Government should go further than
cross-compliance and also make subsidies conditional on water,
nutrient and energy audits for farms. Practically this could be
done by allowing a general binding rules approach so that those
farms participating in good-practice schemes could be automatically
accredited (along the same lines as the French ferti-mieux schemes).
VI. Substantial grants should be made available
for farm improvements, which have environmental benefits, such
as winter storage reservoirs, improved organic waste stores and
efficient irrigation/water reuse systems. These would benefit
the sectors of farming that are currently unsubsidised.
VII. Subsidies should be used to enable
farms to deliver services such as urban flood protection, pollution
attenuation and biodiversity enhancement, and promote alternative
uses of land such as industrial crop production, energy crop production
and sewage treatment.
VIII. The Government should provide free
advice, guidance and training for all farmers.
IX. We also recognise the current financial
difficulties faced by the farming sector and believe that the
reformed CAP system should recognise the positive contribution
farming makes to the social, economic and environmental well being
of rural areas, and should support farm incomes at a sustainable
level.
X. The Government has a number of laudable
initiatives on rural and agricultural issues; we believe that
these initiatives, CAP reform and the Water Framework Directive
must be considered in conjunction. We believe that Defra offers
the ideal vehicle for the Government to develop an integrated
policy on water and land issues which could be structured around
the CAP reforms.
INTRODUCTION
1. Water UK is the representative body of
the water industry in the UK. The water industry has a direct
interest in the CAP as it influences the way in which the land
is managed, which in turn affects the quality and availability
of the nations' water resources. Therefore we welcome the opportunity
to submit evidence to this inquiry.
2. Water UK believes that agricultural policy
should contribute to sustainability. This requires not only affordable
high quality food production, but also a cohesive rural society,
vibrant rural economy and enhanced natural environment.
3. Currently water customers are paying
for the off-farm effects of farm practices. In particular the
water industry has to remove pesticides, nitrates and pathogens
such as cryptospiridium from abstracted water to ensure drinking
water meets regulatory standards and to protect public health.
In many instances CAP funding exacerbates the problems leading
to increased environmental problems. In addition CAP funding can
often act to block sustainable solutions such as the use of riparian
wetlands to mitigate flooding and diffuse pollution.
4. Consumers pay in three ways for the current
CAP system. Firstly they pay through taxation, as over 40% of
the EU budget goes on the CAP. Secondly they pay in higher food
prices, as the CAP inflates the price of certain foodstuffs up
to 20% more than the world market price. Thirdly they pay through
the costs of cleaning up the off-farm environmental impacts of
subsidised farming.
5. If we look specifically at the UK, it
is estimated that the CAP costs consumers £10 billion a year
directly through higher taxes to pay for subsidies and higher
food costs arising from quotas and tariffs. They also pay indirectly
for the CAP through water bills and taxes for the costs of cleaning
up the impacts of agricultural pollutants; this has been estimated
at £172 million each year. In addition to these costs there
are environmental and social costs arising from the CAP, which
has led to a subsidy dependence culture in sections of agriculture
and has lead to loss of biodiversity and environmental degradation
in the British countryside. At the same time agricultural incomes
are at their lowest for decades and many farm businesses are unable
to survive.
6. We therefore strongly support the reform
of the CAP away from production (Pillar I) and towards environmental
support (Pillar II).
ISSUES THAT
NEED TO
BE ADDRESSED
7. The environmental problems we need to
address are, inter alia, water pollution, soil erosion,
over grazing, habitat destruction and flooding. In more detail
the sort of effects that farming can have on the environment in
general and the water environment in particular are:
7.1. The management of land used for farming
and food production has a direct impact on the hydrological cycle,
this affects resource availability for the water industry in terms
of groundwater levels and surface water levels, it can also increase
the likelihood of flooding.
7.2. Increased production levels can lead
to diffuse pollution from crop protection products and fertilisers,
which have an impact on raw water quality and has cost, energy
and quality implications for the water industry.
7.3. Biological contaminants from livestock
farming and untreated manure spreading, such as viruses and bacteria,
can adversely affect water quality.
7.4. Methods of ploughing and types of crop
production can affect soil erosion, which can lead to turbidity
in watercourses. They can also affect run-off patterns which can
contaminate groundwater and in extreme weather may also contribute
to flooding.
SPECIFIC AREAS
FOR ACTION
Agri-environment schemes
8. There should be an expansion of the agri-environment
scheme programme. There are currently no specific agri-environment
schemes for water management or the prevention of diffuse pollution.
A number of the schemes have incidental water benefits, but the
enhancement and protection of the water environment in its own
right is not recognised in the funding regime. The establishment
of water and pollution agri-environment schemes is essential to
meet the requirements of the Water Framework Directive.
On-farm water management
9. Assisting farmers in moving from bad
to good practice is hampered by the lack of a coherent framework
to water management at the catchment level and a lack of funding
mechanisms. It is also hampered by the lack of a free on-farm
extension service on complex issues such as pesticide management.
10. We recognise that many farmers in the
UK are following good practice and that many are farming in a
way that protects and enhances the environment, but these actions
are rarely supported by CAP subsidies and much of the good work
is voluntary. CAP funding should be directed towards helping farmers
carry out good practice in water management.
11. There are specific actions that should
be funded such as payments for winter storage reservoirs to reduce
the impact of farm abstraction on water resources, or the provision
of on-farm storage for organic wastes, or the production of on
farm water and nutrient audits.
Multi-functional flood storage
12. The current aims of farm water management
are effectively to drain water from the land and into the sea
as quickly as possible. Separation of rivers from their floodplains
has had a significant effect on their hydromorphology. The CAP
subsidies for increased production have led to an increase in
hard flood defences to enable the use of riparian lands for year-round
high value agricultural production. This has meant the removal
of wetland ings and floodplains, which has restricted the capacity
of rivers to deal with increased flows. This has compromised the
natural regulating function of wetland ecosystems and contributed
to the catastrophic flooding of recent years. In the past, rivers
were much wider and more variable than their current state. A
study of current riparian areas shows that most ings or floodplains
are now under agricultural production and a number of riparian
wetlands have been drained. Farming up to the edge of watercourses
both adds to pollution risk and disconnects the river from its
floodplain. If the funding structure were changed agricultural
land could play a significant role in attenuating flood hydrographs.
13. However, one of the major obstacles
to funding for restoration of riparian wetlands for multi-functional
flood storage is the current level of CAP funding currently allocated
to some riparian producers. This is because a farmer with a high
CAP income would be unwilling to allow his land to be flooded
as part of a river naturalisation programme unless the available
grants matched those of the CAP and this distorts the cost-benefit
assessment of using wetland storage rather than hard defences
for flood protection.
Diffuse pollution control and source protection
14. The water industry believes in the "polluter
pays principle". We believe that water customers should not
have to pay higher water bills to clean up fertiliser, pesticide
and pathogen pollutants from farming.
15. We are concerned that whilst the water
industry is rightly targeted by the Environment Agency over point
source pollution, diffuse pollution from farming is simply not
being addressed.
16. However, we also understand that there
are difficulties in addressing diffuse pollution and that farmers
are not intentional polluters. We believe that the current system
of subsidies provides farmers with no incentives to tackle diffuse
pollution. On the contrary, payments based on maximised production
(set-aside is still only a small part of the CAP budget) and high
stocking densities leads to increased diffuse pollution.
17. This is sending the wrong signals to
farmers. Farmers should be being incentivised to reduce diffuse
pollution; this could be done through increasing the amount of
payments available for set-aside. There has been some practical
progress with the Government allowing 10m (rather than 20m) set-aside
strips for water course protection, but there still needs to be
a lot more work done to address this issue.
CONCLUSIONS
18. Water UK welcomes the new CAP reforms
and congratulates Defra and UKREP on their achievements in shaping
this European policy.
19. It is essential that the money, rules
and structure associated with the reformed CAP are aligned with
other Government initiatives relating to water and land management,
rural reform.
20. The reformed CAP should deliver actions
that lead to the protection of water supplies and are in line
with the requirements of the new Water Framework Directive.
Water UK
January 2004
| 
