Memorandum submitted by Natural England
Partnership (CAP 19)
ENGLISH NATURE, THE RURAL DEVELOPMENT SERVICE
AND THE COUNTRYSIDE AGENCY
BACKGROUND AND
SUMMARY
1. This consultation response has been produced
jointly by English Nature, the Rural Development Service and the
Countryside Agency's Landscape, Access and Recreation division
who are working to create Natural England, a new agency for people,
places and nature. Natural England is being created and will have
responsibility to conserve and enhance the value and beauty of
England's natural environment and promote access, recreation and
public well-being for the benefit of today's and future generations.
2. The creation of the new organisation,
Natural England, has already begun, with English Nature (EN),
the Landscape, Access and Recreation division of the Countryside
Agency (LAR), and the Rural Development Service (RDS) working
together as partners. This natural partnership is delivering joint
outcomes and paving the way for Natural England, whilst continuing
to deliver their separate and respective statutory duties:
— English Nature is the independent
Government agency that champions the conservation of wildlife
and geology throughout England.
— The Rural Development Service is
the largest deliverer of the England Rural Development Programme
and a range of advisory and regulatory rural services.
— The aim of Countryside Agency's Landscape,
Access and Recreation division is to help everyone respect, protect
and enjoy the countryside.
3. The Government is tasking Natural England
with securing environmental benefits and championing the environment.
A large part of this will be achieved by Natural England delivering
environmental schemes under the England Rural Development Programme
as part of the new Environmental Land Management Fund.
4. Our evidence relates to the Committee's
questions that most closely illuminate how the Government's "Vision
for the CAP" might impact on Natural England's core purpose
and the Government's environmental priorities. In summary we:
— support the overall critique presented
and welcome the Vision as far as it goes but consider that it
lacks any explanation as to how parts of the vision could be achieved.
For example achieving sustainable agriculture will require more
than regulation and the existing Pillar 2 support. We, therefore,
recommend that the vision is further developed to set out a clearer
vision for the shape of future European support for sustainable
agriculture, land management and the rural environment;
— caution that the new Vision will
need to identify how any negative environmental impacts from reform
will be addressed and how it will avoid the export of environmental
production problems outside the EU as a result of changes to patterns
of production arising from greater global trade;
— recommend that a more developed Vision
will need to collate and present convincing evidence and arguments
to persuade other EU Member States of the need for the CAP to
evolve rapidly into a substantive EU environmental or rural policy
that ensures sustainable rural land management that delivers environmental
and other public goods which cannot be secured through the market;
and
— advise that Natural England will
wish to assist the Government in developing the Vision as set
out above.
COMMENTS ON
THE GOVERNMENT'S
OVERALL VISION
FOR THE
CAP
5. The Government's Vision, questioning
the justification for existing expenditure in Pillar 1 of the
CAP and recommending phasing out all such support by 2020, is
a key issue for the Natural England partners. Natural England
will want to engage in and inform the debate that will take place
ahead of the 2008-09 review of CAP financing.
6. We support the broad critique of the
current CAP presented in the document, and welcome the Vision
as far as it goes. However, the Vision set out in paragraph 1.5
is stronger on what intervention is not required in agriculture,
rather than setting out a bigger vision of the role of agriculture
and more sustainable land management in contributing to Europe's
environment, cultural heritage and rural communities. It will
be essential to develop a clear "bigger vision for sustainable
agriculture, land management and the rural environment in Europe"
if we are to persuade our sceptical European partners of the overwhelming
case for reform.
7. As part of setting out this bigger picture
we think it would be helpful if the Vision (as set out in paragraphs
1.5 and 1.32) also reiterated the key principles underlying the
Government approach to intervention in agriculture, land management,
the environment and the local economy in rural areas. In particular
this should highlight key environmental principles and commitments
including:
— the polluter pays principle, underpinned
by appropriate regulation;
— the need to deliver on international
environmental commitments including the Natura 2000 network, the
Convention on Biological Diversity, the Water Framework Directive
and the European Landscapes Convention;
— the need for specific incentives
to address identified market failure;
— relevant England Government policy
objectives including the Strategy for Sustainable Food and Farming,
the Rural Strategy and the England Forestry Strategy;
alongside other Government objectives such as
the need for intervention to be non-trade distorting and respect
the Single European market in agricultural goods.
COMMENTS ON
THE POSSIBLE
ENVIRONMENTAL CONSEQUENCES
OF THE
PROPOSAL TO
PHASE OUT
ALL PILLAR
I SUPPORT BY
2020
8. There is evidence to support the basic
contention that commodity intervention has encouraged over-intensive
agriculture and thereby loss and damage to habitats in England.
This is not solely associated with the CAP: the Nature Conservation
Review of 1977[10]
referred to "the steady eradication in arable areas of all
habitats . . . extraneous to the crop itself" and this started
long before the UK accession to the CAP in 1973. A recent English
Nature SSSI condition report[11]
highlights agricultural practices as the single major factor in
unfavourable condition of SSSIs. Particular problems were associated
with headage payments encouraging overstocking on upland SSSIs
and diffuse pollution of riverine SSSIs associated with overuse
of fertilisers. We thus strongly support the analysis in paragraphs
2.32-2.38 and 2.43-2.46 of the Vision.
9. However, the UK perception of the largely
adverse environmental impact of the CAP is not necessarily typical
in Europe. As the Vision sets out, in the UK the general impact
has been to support a damaging over-intensification of production,
but this pays insufficient attention to the issue that in parts
of Europe, Pillar I of the CAP appears to have allowed the maintenance
of beneficial farming practices in valuable High Nature Value
(HNV) areas and other cultural landscapes at danger of abandonment
(such as Alpine meadows and the Spanish dehesas). The issue is
not only one for continental Europe: maintenance of grazing in
some habitats in England (most particularly low-intensity meadows
and heaths) has also been assisted by the CAP incentives to keep
livestock. Although these benefits are not intrinsic to Pillar
I they have been associated with it and strategies for managing
the change in policy context should be set out in the Vision.
10. The Vision states that "liberalisation
will not necessarily result in the loss of the systems. In fact,
in some areas the CAP has been insufficient to maintain the viability
of particular systems". This is insufficient. It fails to
register that retaining these HNV areas and other cultural landcapes
(which cover large proportions of some Member States) is crucial
to maintaining the Natura 2000 network and to the success of the
2010 target for biodiversity. We hope that many such sites in
England could be retained through agri-environment approaches,
however, we question whether there is evidence to support the
statement (paragraph 2.48) that specific environmental outcomes
can be acquired through agri-environment schemes at much reduced
cost in HNV areas. If decoupling reduces further the viability
of farming activity and infrastructure in these areas, the costs
of securing appropriate management and retaining landscape character
may rise (we return to this issue in paragraph 17). In addition,
we would highlight the implication in paragraph 2.42 that High
Nature Value areas, with their very different socio-economic structures
may not be amenable to conventional agri-environment approaches.
The Vision for the CAP needs to understand the socio-economic
context for these important environmental areas better, and quantify
the actual extent of the environmental resource that needs to
be maintained.
11. Some other EU Member States, notably
France, promote the view that that price support through the CAP
has provided cost-effective support for a multi-functional agricultural
and rural economy. They regard traditional High Nature Value farming
with the associated social outputs as a key component of this
multi-functional agriculture. The UK vision for the CAP will need
to provide reassurance that these benefits can be retained, or
of the merits of alternative scenarios. UK arguments for further
reforms will also need to be underpinned by a much clearer understanding
of both the UK- and EU-wide environmental impacts of CAP reform.
This is particularly important in the context of the New Member
States and the applicant countries which generally have large
tracts of areas of High Nature Value and other cultural landscapes
linked to low intensity farming practices. Access to CAP Pillar
1 income support is seen as important in these Member States,
some of which are choosing to top this up with funds from their
rural development budget.
12. Decoupling of support will have implications
wider than High Nature Value areas. All commercial farming decisions
will be made in the face of a more uncertain market and hence
actual choices about crops and livestock enterprises may change
more rapidly than previously. Work for Defra by GFA-RACE[12]
on the Potential Environmental Impacts of CAP reform work highlighted
the very variable impacts that decoupling might have. It could
result in intensification in response to high prices, and running
enterprises with limited inputs in response to low prices as well
as simply changing enterprises more quickly. This will mean that
the measures needed to secure appropriate environmental management
may be very different—and need to change in response to
market changes much more quickly than has been the case historically.
The Vision will need to spell out how these changes will be addressed
to secure environmental benefits. This may not be a straightforward
process but is likely to entail step-changes in farm enterprises
and require much more responsive environmental schemes.
13. Interestingly the Vision does not address
the impact of the 2003 "decoupling" of farm payments.
Assuming that in the longer term the Single Payment Scheme is
largely production-neutral, decoupling should remove a large proportion
of the incentive for over-intensive production. This suggests
that the reliance in the Vision on the argument that the CAP leads
to over-intensification may rapidly look dated and the emphasis
will need to shift to a critique of Pillar I as it now operates
if we are to convince EU partners of the need for continuing reform.
Paragraph 1.30 implies that once the Single Payment Scheme operates
as a truly decoupled support the chief objection to the CAP will
be overcome but this requires that the Vision needs to set out
a more robust critique of the Single Payment Scheme. This offers
the opportunity to present a case that the Single Payment Scheme
is a highly inefficient mechanism for securing the multifunctional
benefits that other member states claim to be seeking. In respect
of the environment, it cannot support beneficial management methods
by definition as it is decoupled from particular sorts of agricultural
practice. At the same time, although the UK will not be making
the case that the CAP should act as an income support, it is likely
that in other Member States the income effects of support will
continue to be a key issue. There is a also strong case to be
made that the Single Payment Scheme is a highly inefficient income
support, and that targeted support through Pillar II could be
more effectively used to help underpin rural economies and rural
incomes, whilst delivering the environmental benefits that Europe
seeks.
14. The fact that many Member States (eg
France) have not adopted full decoupling and are likely to resist
further decoupling complicates this situation and raises important
issues over the political landscape of further reform.
COMMENTS ON
THE EXTENT
TO WHICH
THE PROPOSED
CHANGES TO
THE CAP WOULD
RESULT IN
A LOWER
LEVEL OF
TAXATION (THROUGH
REDUCED PUBLIC
SPENDING ON
THE CAP)
15. The Vision contains an assumption that
CAP reform will necessarily yield a public expenditure dividend.
We consider this assumption premature for a number of reasons
explained below.
16. The Vision acknowledges that even after
abolition of Pillar I of the CAP there will be a continuing need
for non trade-distorting intervention to ensure more sustainable
land management: this will be required to underpin the delivery
of agreed and legitimate EU environmental objectives for climate
change, the Natura 2000 network, the European Landscape Convention
and the Water Framework Directive. The cost of securing these
objectives remains to be determined, but is likely to be substantial
and will need to be addressed if a more detailed vision for Pillar
II is developed as we propose.
17. There is considerable uncertainty about
how costs of agri-environment schemes will change as a result
of different levels of agricultural activity. Whilst the cost
of securing less intensive production may fall, the cost of securing
positive grazing outcomes on marginal land may rise steeply since
farming infrastructure itself may decline significantly. This
is likely to be a particular issue for countries with large areas
of HNV and Natura 2000 land where grazing will be needed to secure
favourable conservation status. Furthermore if the "income
foregone" model were to shift towards payments for benefits
delivered this might have a significant impact on the costs of
securing these outcomes. The Land Use Policy Group, of which we
are members, is proposing to undertake work on this issue.
18. Pillar II can be used in ways that encourage
sustainable farming and land management to become more competitive.
Such activity needs to be integral to viable business activities,
and the sort of non-distorting support that might help develop
these could include identifying niche markets and helping develop
the capacity to fill them through environmentally linked food
products, as well as linking farming and land management businesses
to tourism and leisure services, and facilitating the development
of proposals that can secure commercial finance. There is considerable
potential for CAP reform to encourage the building of environmental
payments into thriving rural businesses and imparting an environmental
competitive edge to rural businesses. A socio-economic report
on agri-environment schemes in Wales to the Welsh Assembly Government
and the Countryside Council for Wales (2005) has highlighted that
for many farms such funding is now an essential part of their
farm business.
GLOBAL ISSUES
19. If sustainable land management is to
be made central to the Vision as we argue, this will need to be
done in the context of other Government objectives, notably global
trade and competition.
20. We agree that "reform will mean
changes in patterns of production" (paragraph 1.27) and that
many of these could be desirable. There is a need to avoid exporting
environmental production problems (particularly in respect of
environmental issues such as climate change and global biodiversity).
Free trade will not in itself result in the most "sustainable"
production patterns (paragraph 1.27): such a benefit would need
a global approach to setting environmental production standards
and real-cost pricing of fuel. Whilst for reasons outlined above,
we support the argument (paragraph 3.59) that "using high
levels of agricultural support . . . as an instrument of environmental
protection is likely to be highly inefficient and ineffective"
this needs to be accompanied by a commitment in the Vision to
ensuring a WTO framework that addresses the issue of food imports
produced cheaply at the expense of environmental degradation.
This should also help convince partners that the UK is seeking
an agricultural model that is genuinely sustainable. We consider
that the Vision needs to assess global environmental issues: doing
so is essential to underpin the case for reform.
21. We would like the Vision to draw a distinction
between competitive distortion—which we agree must be avoided—and
equal treatment for landowners in all Member States, which cannot
be achieved since Member States may legitimately want to use different
approaches. Different states (both within and outside the EU)
will have different domestic policy priorities for intervention.
In England this is likely to include the desire to secure particularly
high environmental benefits. This requires that there should be
nothing to stop individual Member States differentially supporting
farmers and land managers in a non-distorting way if they choose
to. Such a stance would reinforce the UK position that individual
Member States can modulate the Single Payment at different levels
and speeds, even if this results in unequal treatment, so long
as it does not lead to competitive distortion. If differential
reduction of the Single Payment is shown to have a distorting
effect, the payment itself must be scrutinised, not the attempt
to modulate it.
COMMENTS ON
HOW THE
REFORMS PROPOSED
IN THE
REPORT COULD
BE ACHIEVED
IN PRACTICE,
AND HOW
THESE CHANGES
RELATE TO
THE ONGOING
DEBATE SURROUNDING
THE FUTURE
FINANCING OF
THE CAP
22. The dichotomy between the Government's
Vision and what was actually achieved in the 2005 EU budget deal,
and the resistance of many Member States to adopt full decoupling,
indicates that it could be very difficult to persuade other Member
States of the benefits of further CAP reform. Whilst much resistance
to reform may be linked to distributional issues or a desire to
see the 2003 reforms "bed in", there is also scepticism
that the environmental and other benefits of the Pillar II model
being developed in the UK will be replicated elsewhere. Convincing
EU environmental and other groups of the benefits of reform is
thus essential. For the next reform the UK needs to demonstrate
to a European audience that environmental and other benefits will
be delivered and enhanced through its alternative model for the
CAP, and present more convincing evidence that CAP reform can
be achieved whilst maintaining Europe's rural economies and distinctive
landscapes. A debate on a common framework for the delivery of
a high quality European environment, with all the social and economic
benefits this will bring, could enable a broader coalition of
support to be built across the EU for CAP reform. Natural England
will want to be central to making that case.
23. The Vision at this stage does not put
forward a clear model for an alternative agriculture and land
use policy for Europe, or demonstrate how it will more effectively
deliver the multifunctional objectives that many Member States
believe have been delivered through the failing Pillar I model.
The "Vision for the CAP" needs to be developed further
if it is to become the main cornerstone of the Government's approach
to further CAP reform. In order to deliver environmental objectives
it needs to become a Vision based on the positive delivery of
public goods in rural areas rather than the (current) model which
considers environmental benefits to be a by-product of agricultural
production. This will require development of a parallel "Vision
for sustainable agriculture, land management and the rural environment
in Europe" alongside the Government's Vision for the CAP.
It is important to avoid any assumption that dismantling the CAP
and freeing CAP resources for other (largely non-environmental)
purposes is an end in itself.
24. The Vision hints at this in suggesting
(paragraph 1.32) that EU spending should "be based on the
current Pillar II". But the Vision for Pillar II needs to
be better elaborated at this stage to make a clear case for continuing
European intervention in land management in order to address European
environmental commitments. These include the pressing challenge
of reversing biodiversity decline, implementing the Water Framework
Directive and addressing climate change, along with the issue
of maintaining the characteristic landscapes, wildlife and settlements
which underpin tourism and the cultural identity of Europe. At
the same time it needs to demonstrate how the commitment to removing
barriers to agricultural globalisation, trade and growth can be
done in a sustainable way.
25. Natural England will want to work closely
with the Government in articulating this next stage of the Vision,
both to ensure the maximum environmental benefit is secured from
CAP reform, and in helping to convince environmental, land management
and other rural stakeholders in the rest of Europe that the UK
has a vision for Europe's environment and rural areas that represents
the best way forward.
February 2006
10 A Nature Conservation Review, ed Ratcliffe (CUP
1977). Back
11
England's best wildlife and geological sites (English Nature
2003). Back
12
http://statistics.defra.gov.uk/esg/reports/capreform3/default.asp Back
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