Context into which the Vision
document arrived
18. In the run up to the end of the Luxembourg Presidency
of the EU in June 2005, much of the discussions had centred on
the UK rebate and the possibility for further reform of the CAP.
As the budgetary negotiations had ended in stalemate, responsibility
for agreeing the next Financial Perspective, for the period 2007-2013,
was passed to the UK Presidency. This provided an opportunity
to press for what the UK described as a more rational and balanced
EU budget.[25] However,
it was not until 2 December 2005, just two weeks prior to the
next European Council, that HM Treasury and Defra spelt out the
direction the UK Government wished further agricultural reform
to take, by publishing their Vision for the Common Agricultural
Policy.
19. Many people criticised the timing of the report,
including Commissioner Fischer Boel, who suggested that it "was
not the right moment" for the UK Government's radical Vision
of the future to have arrived, while in the midst of trying to
agree an EU budget for the next seven years.[26]
Professor David Harvey, from Newcastle University, also thought
the paper was "mis-timed",[27]
as did the NFU and the Food and Drink Federation. Both these organisations
suggested that the timing of the paper's release—in advance
of the EU budget discussions and the World Trade Organisation
Ministerial meeting in Hong Kong—was detrimental to the
paper's reception and its credibility.[28]
Moreover, the timing of publication suggested to the TFA that
the CAP Vision document had been "hastily prepared in order
to allow Ministers and in particular the Prime Minister to answer
questions from other parts of the Union on what the UK meant by
further CAP reform, particularly as the EU had just been through
the most major CAP reform in its history".[29]
20. The fact that the UK Government's proposals for
further CAP reform were following so closely behind the last major
reform was a theme repeated to us during the Committee meetings,
both home and abroad. The NFU summarised these views when it suggested
that farmers were "still acclimatising to the largest ever
reform of CAP" and "to present, at this stage, plans
for future reform without sufficiently analysing the current situation,
the feasibility of the proposals or their effects on competitiveness
appears hasty".[30]
Since several EU Member States had not even begun to implement
the new Single Payment Scheme at the time the Vision was published,
it was perhaps unsurprising that that the UK proposals were met
with calls for a period of stability, rather than even more change.
In any case, the Fischler reforms of 2003 had an inbuilt review
clause, mandating the Commission to conduct a series of studies,
or 'health checks' as the Commissioner would have it described,
to monitor the effectiveness of the CAP during 2007 and 2008.[31]
Around December 2005 and the early part of 2006, it was also becoming
increasingly apparent that Defra and the Rural Payments Agency
were struggling to make payments to English farmers as part of
the process of implementing the SPS.
Agreement on the EU budget
21. Agreement was reached on the EU's budget for
the period 2007-2013 at the conclusion of the December 2005 European
Council. The UK Presidency had failed to revolutionise CAP spending
overnight. However, it had managed to negotiate into the final
agreement a commitment for a full and wide-ranging budget review
"covering all aspects of EU spending, including the CAP",
with the European Commission due to reports its findings in 2008/09.[32]
22. A combination of tight controls on the overall
budget, along with an unwillingness to renegotiate a previous
agreement to maintain levels of Pillar 1 CAP spending, meant that
Pillar 2 rural development funding inevitably suffered.[33]
As part of the EU budget deal, ministers decided to award a final
sum of €69.75 billion for rural development over the period
2007-2013, a slight increase on previous indications, but still
significantly lower than the proposal of €74 billion tabled
by the Luxembourg Presidency back in June 2005, and way below
the Commission's original optimistic suggestion of €88.7
billion.[34]
23. Commissioner Fischer Boel described to us how
disappointed she was with this final allocation of rural development
funds, given the increasing importance of Pillar 2 of the CAP.[35]
In a recent speech, the Commissioner suggested the EU heads of
state had "scored a spectacular own goal" in agreeing
to the reductions in the rural development budget, which in her
view represented a "false economy".[36]
The NFU also noted how a potential contradiction in the stance
of the UK Government had been highlighted by the proximity of
the publication of the Vision report, which had proclaimed the
importance of a CAP focused on the environment and on rural development,
and the agreement on the budget deal. The NFU concluded that "the
reduction in rural development funding, as a result of the Financial
Perspectives deal (brokered by the UK Government) and of the low
UK share of EU rural development funds, has resulted in a fundamental
mismatch between agri-environmental and rural development objectives
and resources".[37]
Our conclusions
24. The Prime Minister's earlier speech to the European
Parliament sought to address the allegation that he had only raised
CAP reform during the later stages of the budget negotiations
in order to divert attention from calls for the UK to relinquish
its rebate.[38] His defence,
alongside the suggestion that the Vision's publication had to
be delayed until after agreement was reached on an EU sugar reform
package, was not wholly convincing. Further reform of the CAP
is both necessary and inevitable. However, we conclude that the
Government showed a naivety in believing that its Vision for the
Common Agricultural Policy document could be its catalyst to a
reform agenda when it was introduced so near to the end of its
Presidency and without any programme in place to gain support
for its British position. Not only did this approach subsequently
damage its prospects for Pillar 2 development, it may well have
undermined the UK Government's ability fully to influence the
reform agenda in the future by antagonising the European Commission
and the other EU Member States. We call on the Government to provide
an assurance that any future reform proposals will be developed
in a more thorough and considered way.
25 Tony Blair's speech to the EU Parliament, 23 June
2005 Back
26
"UK report urges more CAP reform", Agra Europe,
9 December 2005, EP/6-7 Back
27
Ev 161 Back
28
Ev 213, 99 Back
29
Ev 113 Back
30
Ev 103 Back
31
Commissioner Fischer Boel appears to have chosen the term 'health
check' to describe the forthcoming appraisal process consciously
in order to avoid the phrase 'mid-term review', which had been
used in 2002-03 by her predecessor Franz Fischler. That process
had ultimately resulted in a major reform of the CAP and people
might naturally presume that substantial changes were likely,
if the phrase was revived. Back
32
European Council, Note on the Financial Perspectives 2007-2013,
15915/05, 19 December 2005, p 32 Back
33
Q 16 [CLA] Back
34
"CAP review agreed as UK reaches deal on new EU budget",
Agra Europe, 23 December 2005, EP/1-4 Back
35
Q 260 Back
36
Commissioner Mariann Fischer Boel's speech at the Agra Europe
Outlook Conference, 27 March 2007 Back
37
Ev 103. The historical allocation methodology for sharing out
Pillar 2 funds means that the UK gets only around 3.5% of the
rural development budget for the former EU-15, despite having
8% of its rural population and around 7% of its rural area. The
UK's allocation, including compulsory modulation, for the seven-year
period of the Financial Perspectives is €1,909,575,420-approximately
£1.3 billion-which represents around 2.2% of the rural development
budget for the EU-27. Back
38
Tony Blair's speech to the EU Parliament, 23 June 2005 Back
