CAP Health Check and Rising Food Prices

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Jane Kennedy: The short answer is yes. We fully recognise the importance of the uplands. I welcome the study by the Commission for Rural Communities into the future of upland communities. I look forward to remaining in close touch with the commission throughout its study so that its findings can contribute to policy making in the Department for Environment, Food and Rural Affairs. We are committed to rewarding upland farmers for the environmental and landscape benefits that they provide, and as a society we probably rely more heavily on them than on other farming sectors. I welcome the hon. Gentleman’s comments in support of that objective and we share some of the concerns that he expressed.
Mr. Michael Jack (Fylde) (Con): I echo the comments made in welcoming the Minister to her new post and also on the role played by her predecessor. The Select Committee certainly benefited from exchanges with him.
The Minister will understand that article 33 of the treaty forms the basis on which the CAP exists. The Lisbon process did not seek to modify that, but does she believe that the terms of article 33 are compatible with the general lines of modification that the health check seeks to achieve when developing the common agricultural policy? For my greater understanding, perhaps she can explain what the Government of this country see as the current purpose of the common agricultural policy?
Jane Kennedy: The health check contains measures that go some way towards achieving our objectives for the common agricultural policy. In my opening statement, I said that we should like to see the complete decoupling of direct payments for production. We believe that public funding should focus on providing environmental benefits for member states. Those are very big objectives for reforming the CAP, and the health check is somewhat limited in its ability to achieve that. Clearly budget issues are further down the line, and those discussions will take place in 2011.
That is a very short response to the right hon. Gentleman’s question, but I know that he will have a number of other questions. The scope of the health check does not include a review of the size of the CAP budget or fundamental reform of the approach taken to the CAP. I have already discussed our view about the changes that need to be made, including the fact that we should move away from pillar one. We could have quite a long discussion about what the CAP should look like and perhaps we will return to that later in the debate.
Mr. James Clappison (Hertsmere) (Con): I, too, welcome the Minister to her new role. I apologise for the length of my question. She will recall that in 2005, the then Prime Minister agreed to the abatement of the United Kingdom rebate in the Budget, in so far as the rebate applied to structural and cohesion spending in the new member states of the European Union. We were told at the time:
“Alongside this agreement we also agreed on a fundamental review of all aspects of the EU budget including the common agricultural policy.”
What is the Government’s objective in the review, and what, if anything, has been achieved?
Jane Kennedy: The principle of subsidiarity states that any EU intervention should be based on a clear and robust justification for EU-level measures, demonstrating added value above the current system at member-state level. I make that opening statement in response to the hon. Gentleman’s question about cohesion.
Structural and cohesion funds should be targeted towards less prosperous member states, which have a greater economic transition to make to achieve their potential than wealthier member states, and have less capacity to fund investments domestically. However, that funding should be seen as transitional aid, not a permanent subsidy. In the longer term, as the less prosperous countries develop, a measure of their success will be their no longer needing the funds, so structural funds in the richer member states should be phased out. Given that aim, the priority should be for “standard” competitiveness and employment funding no longer to be available to richer member states. That is one of the achievements that the hon. Gentleman has asked me to cite.
Mr. David Drew (Stroud) (Lab/Co-op): I welcome the Minister to her interesting new role. It is sad to see the noble Lord Rooker disappear; I cannot say that I always agreed with him, but you always knew where you stood with Jeff. That was one of his great strengths.
It is appropriate that we are in Committee today to debate the health check, because I want to raise an issue about animal health and the continuing threat of animal disease. In the context of the CAP, to what extent is the EU now considering—with particular reference to animal farming at least—the idea of repatriating more and more of it, because of the threat of animal disease? Bluetongue and avian influenza are just two examples of cross-border threats. Is it not time increasingly to consider the CAP in a national context? It has served its purpose as a pan-European policy, because that policy is, of its very nature, causing the threat that some of us think we should bear down on.
Jane Kennedy: The Commission is taking forward work on financing measures as part of the Community animal health policy. Revised arrangements for public animal health provision have been under discussion since before the foot and mouth outbreak in 2001.
I may not give an exact answer to my hon. Friend’s question; one thing that I want to do—and this applies to all hon. Members’ questions this afternoon—is to study today’s Hansard when it is published, to see how well I have answered. If I need to provide further detail I shall be happy to write to hon. Members to follow up today’s discussion, particularly because of the role of the European Scrutiny Committee in this context.
I am very much looking forward to getting to grips with the animal welfare part of my ministerial brief. It is essential that the most appropriate domestic arrangements should be developed for the effective and efficient operation of the UK livestock sector. I am talking about UK farming livestock, which would be the subject of the CAP health check. Simply to wait for the proposals of the European Commission on financing arrangements for epidemic diseases might create the risk of such proposals being unsuitable. Being proactive also strengthens our influence in the Commission and our negotiating mandate.
In that context, it is important to recall that the member states with long-standing cost-sharing mechanisms in place will use the experience of the operation of such schemes to influence the future direction of the European debate. I may not have answered my hon. Friend’s exact point, but I hope that I have covered the area about which he is concerned.
Mr. Paice: I am grateful to the Minister for her earlier answer. I raised the matter because the 2005 document to which I referred stipulated that domestic reduction was not necessary for food security. This summer, the Secretary of State implied that he did see it as necessary, but last week, the Minister stated that there had been no change in the Government’s strategy. She will understand my confusion.
Before some specific technical questions on the proposals, I would like to ask a general question about the role that the Government take when trying to achieve their objectives in the health check debate. The Minister will understand from her previous Government roles that we do not get our way in Europe by turning up at the Council of Ministers and saying, “This is what we will have and what we want.” The process requires weeks or months of discussion with other Ministers and officials. Will she tell the Committee how many bilaterals her predecessors or the Secretary of State have had with other Ministers in Europe, or the Commissioner, about the health check? We will return to whether the Conservative party agrees with the Government’s approach, but from her point of view, how has she been trying to obtain a health check decision that meets the Government’s objectives? Will she give us chapter and verse? If she cannot, perhaps she would be kind enough to write to me with a list of all those bilateral meetings.
Jane Kennedy: I cannot give the hon. Gentleman chapter and verse—I will be absolutely up front about that. However, I am conscious that my right hon. Friend the Secretary of State takes the subject extremely seriously. He has personally attended all the Agriculture Council meetings to ensure that UK interests are represented at the most senior level in Government. I hope that the hon. Gentleman finds that reassuring. I will obtain the figures on the number and level of meetings.
There has been a great deal of progress on the agricultural health check. I was interested to read the debate that took place in June in the other place and the House of Lords European Union Committee’s report on the future of the common agricultural policy—I have taken that as an A-level text to study. I am pleased to quote directly from the Lord Sewel’s seventh report. He said:
“the Government and the Select Committee are not only in broad agreement on the general direction of policy but are also in agreement on many of the policy specifics. We both want a more market-oriented agriculture that is sustainable and makes a significant contribution to the environment, particularly in the area of climate change.”—[Official Report, House of Lords, 5 June 2008; Vol. 702, c. 338.]
The debate that followed was very informative, and I hope that we can approach these issues in a similar spirit and ensure that the shared objectives of this House are followed through in representations made at European level.
Kelvin Hopkins: It was remiss of me not to say first what a pleasure it is to attend the Committee under your chairmanship, Mr. Chope, and to welcome my right hon. Friend the Minister to her new post. Some of us are old hands at talking about the CAP—we go on about it for ever—but it might be new excitement for her.
There are a variety of regressive aspects to the common agricultural policy. It has already been touched on that some of the richest countries in the European Union are those that benefit most from CAP subsidies. Does the Minister agree that the CAP can never be called healthy while that is so, and will she make that case robustly when she goes to meetings in the European Union?
Jane Kennedy: I said earlier that I believe there to be a role for a common agricultural policy that has moved away from pillar one objectives, and refocused the funding that member states provide on environmental benefits and supporting the environmental impact that farming and agriculture have across the European Union. I have also said that with a larger European Union, clear priorities must be set within the overall CAP to assist the economies of those member states that need more support than those of the central 15 member states. The CAP needs further reform, but the health check is a good step along the way. The hon. Gentleman is right that it needs to be based on objectivity, specifically on where the public will benefit from the outcome of the policy.
Tim Farron: With your permission, Mr. Chope, I intend to ask questions on subjects other than hill farming, but I would like to pursue the line that I followed earlier with the Minister. I am grateful for her comments. She referred to the commission of inquiry into the uplands, which is being led by the Commission for Rural Communities and is very welcome. She is probably aware that the Government will shortly be in a position to put to the European Union the proposals for replacing the hill farm allowance with the uplands entry level scheme. The Commission for Rural Communities’ inquiry into the uplands will conclude in about 12 months, by which time if the UELS is in place, it may already have killed the goose that laid the golden egg, before we even get to the end of the inquiry. The Minister talks, quite rightly, about making sure that we reward farmers for the benefits they provide in relation to the countryside, the environment and our ecology. Is she aware that the hill farm allowance currently rewards farmers for doing things that they were already doing, which are fantastically valuable for protecting our biodiversity, access to the countryside and securing food production, and that if the upland entry level scheme raises the bar so high that they cannot get over it, those people will leave the uplands before the Commission for Rural Communities has had time to report?
Jane Kennedy: Although I have not yet been up early enough to catch the debates at 5 o’clock in the morning on “Farming Today”, I have been reading the transcripts. There is an active debate about the future of upland farming and hill farmers, and the difficulties they face. I have already indicated that we appreciate the role that they play in sustaining an environment that many of us enjoy for recreation. I am conscious of that discussion, and from my short introduction to it, I believe that a number of factors are leading to upland farmers leaving the hills. The hon. Gentleman has touched on one or two factors, but this is a complex area and one that deserves examination in greater detail than this short question and answer session can provide.
Mr. Jack: Taking into account her Department’s impact assessment study and the report of the scrutiny Committee, which drew our attention to aspects of sustainability and the environmental impact of the mid-term review, will the Minister say why the word sustainability does not appear in the Government motion for which they seek the Committee’s support? All we are told is that the Government want to
“direct more public spending towards delivery of targeted public benefits”,
which is an ill-defined phrase and does not seem to sit easily with the last comments the Minister was making about the importance of hill farming.
Jane Kennedy: As I said, the scope of the documents was set in 2005. The health check is intended to improve and reinforce the major reforms of 2003, which broke the link between production and direct payments and made payments conditional on meeting a range of environmental and agricultural standards. The intention of the health check is to pursue the principles and direction of travel established then. The word “sustainable” might not be included, but it is implicit in the motion. I can assure the hon. Gentleman—I am not even sure whether it is an oversight—that the motion is perfectly adequate for what we are discussing, and I hope to commend it to the Committee for approval later.
Mr. Clappison: The Minister has told us how the rebate is to be spent, but the abatement of the rebate, which was agreed in 2005, will carry a cost for UK taxpayers, which they would not have had to bear had it not been for the agreement entered into by the then Prime Minister. I appreciate that she may not have the figures at her fingertips, but I would be grateful if she could give an answer at some point in the debate, so that we can put things in context. How much will the abatement mechanism cost the UK in the budget period that we are discussing?
Jane Kennedy: I hope to give the hon. Gentleman the detail that he is seeking when I reply to the debate. As he will recall, the rebate discussion at that time took place in the context of securing an overall deal, which included significant reform of the CAP. Our abatement in the current period remains fully justified. The rebate is necessary because of the imbalances created by EU expenditure policy. Without it, the UK would be paying more than twice as much net as France and Italy, for example, in the period from 2007 to 2013. However, the EU budget review will look at both expenditure and revenue and will report later this year.
Several hon. Members rose
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