Examination of Witnesses (Questions 200
- 219)
WEDNESDAY 12 JULY 2006
RT HON
DAVID MILIBAND
MP, DR SIMON
HARDING AND
MR ANDREW
LAWRENCE
Q200 Lynne Jones: For example, Sir
Donald Curry, Chairman of the Government's Sustainable Food and
Farming Implementation Group, said, "The economic analysis
is based on OECD analysis that took place before the reform in
2003 and I find that unacceptable." There are many other
criticisms. I suggest you actually look at the document produced
by the House of Commons Scrutiny Unit on the use of statistics
in the vision document. It talks about statistics being used in
a misleading manner, support estimates used inappropriately because
they make assumptions that if you reduce direct support, that
will not make any changes in the amount of production.
David Miliband: Have you seen
this?
Dr Harding: Indeed. I am aware
that several criticisms have been made of our use of statistics
and I am happy to say that nearly all those criticisms of our
use of statistics are actually ill-founded and misconceived and
in fact, where we have used OECD studies that are a little bit
out of date, nevertheless, the results of those studies are still
valid, and the way that we have used them is equally valid, and
on the point about producing support estimates and so on, again,
we have the assurance from the OECD themselves that we have made
appropriate use of those.
David Miliband: Maybe we should
send you a little commentary on the House of Commons Scrutiny
. . .
Q201 Chairman: We will send you the
document, because I do not think you have seen it actually.
David Miliband: You have seen
it, have you?
Dr Harding: I have certainly seen
something very similar to what Lynne Jones said.
Q202 Chairman: We will make certain
we are talking on common ground. Can I just ask you for clarification's
sake, because one of the figures that is oft quoted is the calculation
for the family, the average family of four, what the cost per
week is. Does that include all aspects of expenditure currently
sanctioned under the present Common Agricultural Policy, in other
words, all the Pillar 1 and all the Pillar 2 expenditure?
Dr Harding: It does not include
Pillar 2. It includes only Pillar 1 expenditure.
Q203 Chairman: One of the things
that struck me is that your Department has told us that you have
done a lot of extensive research to value or to assess what the
public put as a value on the outputs of farming, yet when you
talk about the cost to this average family of four of the CAP,
there is never a contra-count of the benefits which the CAP brings
which you yourself have analysed. Do you not think it would be
fairer to produce a net figure of what the cost is?
Dr Harding: Indeed, if we were
able to accurately value the benefits that Pillar 2 produced.
Q204 Chairman: Last time we had a
witness from your Department we were told you had done extensive
work and that you had got that, because we were probing on the
value of environmental goods that were being purchased under the
entry level and higher level schemes, and it was put to us very
clearly that you had talked to the public, you had got the values
that they attached to these outputs of farming activity, and that
guided you in terms of your environmental programme. So if you
have it, why do you not net it off?
Dr Harding: It is one thing to
say that we have estimates of the value that the public place
on these goods; it is another thing to do an accounting exercise
which tots them all up and nets them off against a financial figure,
which I think is a much more challenging objective, and one that
we do not think is quite appropriate.
Q205 Lynne Jones: I think it would
be useful if we actually had your response to this document, and
it is not just people in this country, NFU and Sir Donald Curry,
but obviously there have been criticisms in Europe. There are
the criticisms from the European Commission's Directorate-General
for Agriculture and John Bensted-Smith, which you are probably
aware of. It would be very useful to have a response to those.
In your dealings with your EU counterparts, what sort of response
have you had, and particularly, would you like to comment on the
response from Mariann Fischer Boel?
David Miliband: You are meeting
Mrs Fischer Boel. I think it would not be right for me to comment
on what she said to me in private. You should ask her.
Q206 Lynne Jones: She says "The
vision of a merely industrial agricultural sector as presented
in the UK paper is not a vision I share." Many people will
think that people highly value the countryside and the environmental
impacts, and are we not heading with this document towards just
ever larger farms?
David Miliband: I am very happy
to deal with the substance. I do not think it would be right for
me to say what I think Mrs Fischer Boel believes or what she has
told me. I am confident that the Commission will play a constructive
and engaged role in CAP reform, both in 2008 and beyond. I do
not believe that Mrs Fischer Boel has said that there is this
blighted future of a dehumanised countryside. If anything, you
can make the case that for the first time the promotion of Pillar
2 takes seriously the environmental stewardship role of farming
and actually is a very positive vision for the future of the countryside,
precisely reflecting the sort of value that you are referring
to and that we strongly share.
Q207 Lynne Jones: But you are proposing
to phase out direct payments in favour of developments to the
rural economy, and the impact of those on farms will be tremendous.
David Miliband: Let us be absolutely
clear about this. Pillar 2 directs the large majority of its funding
to the second axis, which is about environmental stewardship.
It has minima of 10% in respect of the rural economy and rural
social life.
Q208 Lynne Jones: That is at present,
but the vision is that it moves away from direct payments.
David Miliband: No, sorry. You
are absolutely right; we want to move from Pillar 1 to Pillar
2. Yes, we want to decouple and move away from direct payments,
but within Pillar 2 you are right to say that there is some support
for the rural economy. There is some support for the rural social
life, axes 1 and 3 of the second pillar, but the heart of Pillar
2 funding is on environmental stewardship, which is precisely
giving the sort of support to the countryside that it has not
had and using farmers as the delivery agents for that.
Q209 Lynne Jones: Only if Pillar
2 increases substantially. Do you envisage a substantial shift
of the amount of expenditure in Pillar 1 into Pillar 2?
David Miliband: Certainly, we
have talked very clearly about a rise in size of Pillar 2.
Q210 Lynne Jones: A rise, but to
the level that you actually reduce Pillar 1?
David Miliband: The EU has to
make a judgment overall about how much money it puts into agriculture
compared to other things and that is a discussion to be had, but
we have been absolutely clear that we want to see rising sums
spent in the second pillar, and I think that is very positive
for the countryside.
Q211 Lynne Jones: Yet the outcome
of the last negotiations was a reduction of Pillar 2.
David Miliband: No, the outcome
was a reduction only on a figure that they could not get agreement
on, so let us be clear about that. The 1.05% and the final agreement
under the British presidency involved a reduction from a level
that the Union could not get agreement on.
Q212 Lynne Jones: Do you not think
we should have actually found out what the impact was of the current
reforms before heading recklessly into advocating massive changes
in the future?
David Miliband: That is an interesting
point, and one has to strike a balance—you are right—between
seeing reforms through. I agree with you that the reforms that
have been agreed in 2000-2003 are substantial. One has to strike
a right balance between seeing those reforms through and going
further. To be fair to the document that was published by Margaret
Beckett, it is a vision document. It talks about 2020, so given
that there was major reform in 2003 now coming on board, I do
not think the change is either reckless or headlong. The CAP has
been going for only 50 years, and we are talking about a 15-year
transition. That seems to me to be pretty judicious and careful.
Q213 Lynne Jones: It has rubbed a
lot of people up the wrong way though, has it not? It has not
actually helped.
David Miliband: Which people are
you thinking of?
Q214 Lynne Jones: I have not heard
anybody speak positively about the document, quite frankly.
David Miliband: We are talking
to the same people and I do not think it is a one-way traffic
at all. As I said earlier, I think that there was a sharp intake
of breath, but there is now real engagement with it, and frankly,
it is the only show in town at the moment.
Q215 Lynne Jones: What does that
mean, "real engagement"?
David Miliband: People see the
power of the vision, they see the potential attractions of the
vision, they also see real issues that have to be worked through
in order to deliver on it, and I think we have gone beyond the
sort of knee-jerk reactions and people now are engaging in a way
that recognises there is real intellectual and political and social
coherence and credibility and integrity to this vision.
Q216 Lynne Jones: I will defer my
judgment on the intellectual validity of it till I have seen the
response . . .
David Miliband: There was one
name that you mentioned.
Q217 Lynne Jones: John Bensted-Smith.
David Miliband: Would you like
to respond to that in particular?
Dr Harding: I think he referred
to a World Bank study which he thought had been discredited. We
certainly do not feel it has been discredited at all and do not
know anybody else who does really. He referred to that as a discredited
study and that we had inappropriately drawn upon it as evidence.
We rather reject that criticism on the grounds that no-one else
seems to think that study was discredited and that we made appropriate
use of it.
Lynne Jones: He s not alone in criticising
the use of statistics, so let us wait and see what you have to
say to all this.
Q218 Chairman: Let me move on to
the next steps in this particular process, because there is what
has been described as a health check coming up in 2008-09. Did
the Commissioner give you a publicly quotable indication as to
what she understood that health check to contain?
David Miliband: No, nothing beyond
what she has said publicly. I think it is a major opportunity
to look at the structure and organisation of the CAP and I think
that is the position. It is all to play for.
Q219 Chairman: It was not quite the
impression that we got during our travels, that it was very much
a check to see how the 2003 reforms were working and not a grand
opportunity to re-open the whole dialogue as far as the future
of the CAP is concerned. You had a discussion with your French
opposite number a short while ago. The official French position
as confirmed to this Committee by their Department of Agriculture
was no change until 2013. Did you get an indication that they
might just be a little more flexible and forward-thinking rather
than waiting until 2013?
David Miliband: I will let Andrew
talk about the official level contacts. I had a very enjoyable
dinner at the French Agriculture ministry with my opposite number,
Mr Bussereau, who managed to get me from Charles de Gaulle airport
to the Agriculture Ministry in about 12 minutes, which was a record
speed.
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