Written evidence submitted by the Welsh
Assembly Government
The Welsh Assembly Government welcomes the opportunity
to respond to the Environment, Food and Rural Affairs Committee
inquiry into the European Commission's proposals for reform of
the Common Agricultural Policy (CAP) after 2013.
Unfortunately, the Commission's proposals lack detail
and consequently our paper sets out our initial views only, but
the importance of the CAP to Wales cannot be overstated with our
farming sector depending on CAP payments and support to trade
profitably. In addition to the paper my brief responses to the
Committee's specific questions are as follows:
How will the Commission's proposals affect the
ability of Wales' agriculture to be competitive in a global market?
The proposals suggest an increased focus on innovation
which we welcome as we are already encouraging innovation in Wales,
underpinned by a greater focus on sound research and advanced
by efficient knowledge transfer. Overall we believe that the
proposals will support Welsh agriculture and help us achieve our
objectives.
Do the proposals ensure fair competition for British
agricultural products within the European Union?
We see a continuation of voluntary coupled support
as an anathema and contrary to fair competition. Coupled payments
are divisive and unfair as they do little to encourage farmers
to make market based production decisions and also lead to competitive
advantages and disadvantages between Member States. Linking direct
payments directly to production, whether for specific sectors
or regions would be turning back the clock towards a less efficient
agricultural industry. Further the "top-slicing" that
would be required to fund coupled payments is consistently rejected
by our industry.
The emphasis in the document on support for small
farmers is understandable, given that the vast majority of EU
farmers are very small by British standards, but we need to see
the detail of this proposal as well as that on the proposed capping
of larger Single Payment recipients.
Will the proposals achieve the correct balance
between productivity and sustainability?
Maintenance of the two Pillar structure is the best
strategy to achieve that balance. However in our view increased
greening of Pillar 1 is not the best way to go about this. Cross
compliance / GAEC has established an important environmental baseline
which has been steadily refined following the CAP Health Check.
Introducing additional requirements such as maintaining minimum
areas of permanent pasture, green cover, crop rotation and ecological
set-aside would inevitably add to the complexity of administrative
processes for administrators and farmers alike. Where farmers
are asked to provide environmental enhancements these more properly
belong to actions under Pillar 2 and in Wales the new Glastir
scheme has been built on the Commission's "New Challenge"
agenda, to provide funding for farmers' sustainable land management
actions.
Do the proposals place the UK in a good position
to help meet future food supply challenges?
The communication states an intention to maintain
production across all Member States and regions and this is important
for Wales. The alternative would be production gravitating to
areas of best advantage, whether climatic, closeness to markets
or areas with the lowest production costs. Food production without
CAP support is unprofitable in Wales and while the situation is
improving through our policies targeting innovation, business
efficiency and knowledge transfer, the support regime remains
a lifeline.
Will the proposals redress the imbalance in support
to different sectors created by the historic basis of payments?
In Wales we can accept that the historic basis to
Single Payment is no longer appropriate as it is now some 10 years
since the base period and farming then bears little relationship
to farming activity in individual farm businesses now. We have
modelled the change to a completely area based system and there
will be considerable redistribution of payments and an extended
transitional period will be essential to avoid whole scale disruption
to production and livelihoods.
What aspects of the proposals should be made a
common policy, and which are best left to Member States?
A common policy across EU 27 is essential for Wales
and we do not support renationalisation of the budget in its entirety
or in part. However the principle of subsidiarity is essential
to us as the diversity of agricultural systems, farming and forestry
practices and environmental challenges between Member States and
regions necessitates the level of flexibility that is only possible
through subsidiarity.
Can the proposals be implemented simply and cost-effectively,
within a short time-scale?
Based on the detail available the answer to this
question has to be "extremely unlikely". The Commission's
proposals, and in particular the apparently favoured Option 2,
has the potential to add significant complexity or "green
tape" through the greening of Pillar 1 as well as the possibility
of capping, the focus on "active" farmers, payments
for disadvantaged areas, support for small farmers and coupled
payments.
We are hopeful that the Commission's consultation
and impact analysis will provide more detail on the specifics
of changes which will in turn enable us to determine impacts and
establish the definitive priorities for Wales.
Elin Jones AC/AM
Y Gweinidog dros Faterion Gwledig
Minister for Rural Affairs
17 January 2011
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