Further evidence submitted by Natural
England (CAP 19a)
KEY POINTS
1. The key points that we would like to
bring to the Committee's attention are as follows:
— Natural England agrees with the critique
of Pillar 1 of the Common Agricultural Policy (CAP) in the "Vision"
document. State support for agriculture has had major adverse
environmental consequences in England during the past 50 years.
Recent reforms to Pillar 1 have greatly reduced these impacts
and the introduction of Single Farm Payment promises further improvement.
However, this part of the CAP still produces relatively little
positive benefit. Good Agricultural and Environmental Condition
is based largely on the minimum standards already required by
regulation. We recognise that the impact of Pillar 1 payments
has varied across Europe and that in some areas they have helped
to maintain small-scale traditional farming.
— Natural England is concerned that
the "Vision" does not go far enough in describing the
mechanisms by which competitive, market oriented agriculture can
be combined with the effective stewardship and conservation of
the Natural Environment.
— The "Vision" assumes the
environment can be safeguarded through a combination of the free
market, regulation and the current modest level of expenditure
on Pillar 2. We are not convinced that this will work.
— We think that a strengthening of
Pillar 2 will be needed alongside the running down of Pillar 1
payments. This is mainly in order to ensure that the environment
is protected whilst farmers either adapt their enterprises to
seek new markets and increase competitiveness or choose to allow
land to lie unmanaged. This will require large-scale public support
for a considerable period, certainly beyond 2013. We do however
believe that it should be possible to make some financial savings
from reform and we will be working to quantify these.
— Our faith in the effectiveness of
Pillar 2 is based mainly on the proven track record of agri-environment
and forestry schemes, which have delivered a range of tangible
environmental benefits in England since their introduction in
1987.
— Although we believe that a progressive
shift from Pillar 1 to Pillar 2 is in the interests of all member
states, we recognise that not all countries need or are ready
to make this journey at the same rate. We consider voluntary modulation
to be a vital tool for allowing the member states to make the
same journey but at different speeds. Without it, the effectiveness
of the next Rural Development Programme for England will be seriously
compromised.
— Although we think voluntary modulation
will be a vital tool in the short to medium term, we hope that
it may gradually decline in importance as other member states
agree to higher rates of compulsory modulation.
— We think that there may also be a
role for Pillar 2 in helping to support the structural adjustments
that farmers and land managers will need to make to comply with
a suite of new environmental obligations and standards. This could
be a focus for the use of Axes 1 and 3 within the Rural Development
Programme.
WHERE HAS
NATURAL ENGLAND
MOVED SINCE
SUBMITTING ITS
ORIGINAL WRITTEN
EVIDENCE?
2. Our position has evolved rather than
fundamentally changing. In consequence, it is not necessary to
rework much of the detail of our original evidence. The original
written evidence was however submitted before Natural England's
statutory Purpose was finalised and before our Strategic Direction
was agreed.
3. Natural England is now clear that it
wants to work toward a new social contract between farmers and
the rest of society, where farmers see one of their primary roles
being to manage the environment, including its landscape, biodiversity
and natural resources, and where the public sees farmers as guardians
of the environment and agrees that they are happy to pay farmers
for these "public goods" through taxation. This contract
would also involve farmers moving towards more environmentally
and economically sustainable production of food that consumers
want to buy and for which they are prepared to pay a fair price.
4. This evidence has a sharper focus on
key messages, and presents a solution which we believe would work
in England whilst standing some chance of being acceptable across
Europe.
COMMENT ON
THE RESULTS
OF THE
INFORMAL AGRICULTURE
COUNCIL MEETING
HELD ON
28 SEPTEMBER
5. We accept the Commissioner's view that
the 2007-09 "health check" is unlikely to lead to the
dismantling or radical restructuring of the CAP, and that a strong
CAP is likely to be in place well beyond 2013.
6. We fully agree with her continued drive
to encourage member states to decouple payments from production
and to review mechanisms such as export refunds and other forms
of market distorting intervention.
7. We are encouraged by her recognition
that budgetary pressures mean that there will need to be some
policy changes as part of the health check process. The changes
she is reported to have talked about, including compulsory modulation
and aid capping would be consistent with the solution we are promoting.
We think voluntary modulation could play a significant short to
medium term role in helping to prepare the ground for higher rates
of compulsory modulation.
8. We are also encouraged by her description
of the mid-term financial review as "one vision, two steps".
Clarity over the long term strategy and direction would be particularly
useful for the multi-speed model we are proposing. It would help
some member states to go faster than others, by providing some
reassurance that other member states were at least travelling
in the same direction.
A SUMMARY OF
OUR CONCERNS
OVER MODULATION
9. We have concerns relating to voluntary
modulation at both the European and National level:
— At the European level we fear that
the combined effects of the requirement for a single rate of voluntary
modulation for each Member State, the franchise, and the requirement
to split the proceeds of modulation across all three axes will
leave us with insufficient funding for our Programme. We also
fear that wrangles with the European Parliament will result in
serious delay in agreeing the Regulation on voluntary modulation.
If this means we have to suspend the issuing of new agreements,
this could lead to a serious loss of confidence and goodwill by
farmers and land managers.
— At national level we are concerned
that the Government will set a rate too low to fund a Rural Development
Programme that is adequate to meet the scale of need. This fear
is compounded by uncertainty over the rate of co-financing that
the Treasury will agree to.
October 2006
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