Further memorandum submitted by the National
Farmers' Union (NFU) (CAP 12a)
The NFU welcomes this opportunity to update
its written submission to the EFRA Committee Inquiry into the
UK Government's document "A Vision for the Common Agricultural
Policy".
The Government's "Vision" was that
by 2020 farmers would receive no public support and would only
receive public payments for delivering specific non-market goods.
The NFU highlighted in its original submission in February that
the document failed to present a "roadmap" of how the
objectives outlined in the text were to be achieved in practice
and also neglected to explore the accompanying measures that would
be required to allow British agriculture to survive as a profitable
industry. In brief these were that:
— changes take place uniformly across
the European Union;
— there is significant progress to
reduce support worldwide; and
— there is a properly functioning food
chain.
There have been developments on these three
issues this year. The Commission is now explicitly saying that
the CAP "Health Check" in 2008-09 is the opportunity
to make the CAP simpler and more uniform and that this will require
changes not only on technical issues but to underlying policies.
This is welcome. The WTO talks have been suspended and seem unlikely
to resume in the near future. On balance this is unwelcome because
the EU risks losing the credit it would have claimed for the 2003
CAP Reform and could lose its leverage to reduce the domestic
support of its competitors, notably the USA. The Competition Commission
has begun a new investigation into retailer practices. This is
welcome as far as it goes, but there is a wealth of evidence that
the food chain is currently dysfunctional.
The NFU predicted that the lack of focus, the
content and timing of the document were likely to antagonise some
members states and the Commission. Regrettably, recent policy
and political developments have confirmed our concerns.
While the document proclaims the importance
of a CAP focused on the environment and on rural development,
this seems to have been somewhat contradicted by the stance of
the UK Government. 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.
The consistency of the UK Government's strategy
has been further brought into question in view of its attitude
concerning the debate on national modulation. Despite the uncertainty
that surrounds the issue at this stage, the UK appears unique
amongst EU Member States in considering the introduction of national
modulation rates. Moreover, the UK appears as the clear instigator
of the concept of national modulation without a requirement of
associated co-financing from the national budget, signalling its
willingness to "go it alone" in the CAP reform process.
This strategy seems to demonstrate the intention of the UK Government
to follow a reform path regardless of developments in other EU
countries and to the obvious consequences for the UK agricultural
sector.
In the past DEFRA has justified the use of national
modulation as a manifestation of its commitment to rural development
that would eventually result in an increased share of EU Rural
Development funds. Recent developments have proved that this strategy
has not succeeded and is unlikely to succeed in the future, partly
as a result of the confrontational approach adopted by the UK
Government. Moreover, both the European Commission and the European
Parliament have expressed their opposition to the concept of national
modulation with no compulsory match-funding and taken actions
in order to prevent an implementation of national modulation along
the lines desired by the UK Government. These developments further
exemplify the danger of the antagonistic approach adopted by the
UK Government.
One of the main criticisms levied by the NFU
to the "Vision" document was its lack of detail concerning
the "roadmap" for achieving the objectives outlined
in the paper and as to whether progress at the national level
was to be conditional on developments at the EU level. The NFU's
concern with the 2003 CAP Reform is that it opened the way for
very different policies in different countries, which risk causing
serious distortions in a single market.[6]
The NFU's priority now is to move to a simpler and more uniform
policy.
The NFU very much welcomes the way that the
Commission is approaching the CAP Health Check. In our view, the
British Government's negotiating position should be to emphasise
the objectives of simplicity and uniformity, since these will,
in fact, logically lead to significant modification of the underlying
policies. This approach is far more likely to be productive than
the approach hitherto adopted of starting the dialogue by demanding
further radical reform, which simply convinces many of our partners
that our Government's goal is to dismantle the CAP as soon as
possible.
In summary, recent developments have confirmed
the lack of success of the UK Government strategy to date while
highlighting the shortcomings of the "Vision" document.
Given the challenges ahead, it can be argued that a reconsideration
of Government strategies and priorities should be considered,
with simplification and reduction of differences across EU countries
as priority items.
6 Indeed, the fact that there are now three different
policies within the UK has seriously weakened the consensus within
the UK, both at Government and farmer level, about the desirable
future direction of the CAP. Back
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