17 Arable set-aside requirement for 2004-05
| (25040)
14725/03
COM(03) 691
| Draft Council Regulation derogating from Regulation (EC) No. 1251/1999 as regards the set-aside requirement for the 2004-05 marketing year.
|
| Legal base | Articles 36 and 37 EC; consultation; QMV
|
| Document originated | 11 November 2003
|
| Deposited in Parliament | 15 November 2003
|
| Department | Environment, Food and Rural Affairs
|
| Basis of consideration | EM of 26 November 2003
|
| Previous Committee Report | None
|
| To be discussed in Council | No date specified
|
| Committee's assessment | Politically important
|
| Committee's decision | Cleared
|
Background
17.1 In order to qualify for direct income payments under the
Community's Arable Area Payments Scheme (AAPS), farmers are required
to set-aside a percentage of their arable land. Council Regulation
1251/99[49] sets a default
rate of 10%, though this rate may be varied for any given year
by means of a further Council Regulation. In this document, the
Commission is proposing that the rate for 2004-05 should be 5%.
The current document
17.2 The Commission says that this change is a necessary response
to the severely reduced cereals harvest this year, as a result
of the serious drought and excessive heat, with Community production
likely to be around 25 million tonnes lower than in 2002, and
production elsewhere in Europe likely to be similarly affected.
It says that, despite a series of measures to try and boost supplies,
this has led to serious concerns about the balance for supply
and demand for grain, particularly for animal feed, and that even
a return to a more normal harvest in 2004 would not lead to a
significant re-building of stocks. It adds that, were the 2004
harvest also to be reduced, the Community market would be exposed
to potentially serious risks. Against that background, it has
proposed a reduction in the set-aside rate next year to 5%, which
it estimates could increase Community production by up to 7 million
tonnes.
The Government's view
17.3 In his Explanatory Memorandum of 26 November 2003, the Parliamentary
Under-Secretary of State (Farming, Foods and Sustainable Energy)
at the Department for Environment, Food and Rural Affairs (Lord
Whitty) says that the UK has consistently argued against the retention
of compulsory set-aside in order to leave farmers free to make
their own production and marketing decisions. At the same time,
it has also sought to ensure that, so long as compulsory set-aside
is retained as means of regulating production, it should be implemented
in a way which maximises the potential wider benefits, including
its use for environmental purposes and the growing of certain
non food and energy crops. He says that these wider benefits do
pre-suppose a degree of stability and predictability in planning
terms, and that a decision to vary significantly the rate of set-aside,
and at short notice, inevitably poses difficulties, particularly
so close to the marketing year in question. However, he says
that, whilst the Government recognises those concerns, it feels
on balance that the exceptional supply considerations, together
with the UK's longer-term policy of favouring market-based reform,
justify it supporting "this exceptional measure".
17.4 The Minister's Explanatory Memorandum also touches
upon three detailed aspects of the proposal. These are:
- that it will impose no new
burdens on farmers, and indeed will provide greater flexibility
in terms of cropping plans for 2004 for those farmers who have
not already decided on their planting programme;
- that the Commission estimates that the increased
cereal supplies arising from the measures could result in additional
Community expenditure of €74 million on export refunds and
public storage, but that this sum needs to be viewed against the
€650 million reduction in appropriations for the 2004 budget
because of corresponding savings arising from lower production
this year;
- that, although environmental organisations have
expressed some concern that a reduction in set-aside could reduce
the environmental benefits, uptake in the UK is expected to be
limited.
Conclusion
17.5 While this proposal appears to be a logical
response to the reduction in Community cereal production this
year, it does have certain economic and environmental implications,
though we note that the Government expects these to be limited.
In clearing the document, we think it right to draw these points
to the attention of the House.
49 OJ No. L.160, 26.6.99, p.1. Back
|
