Written evidence submitted by the National
Farmers' Union (NFU)
THE
NFU
1. The NFU is the leading organisation representing
the interests of 55,000 full time, professional farming members
in England and Wales.
EXECUTIVE
SUMMARY
2. The reform of the Common Agricultural Policy
(CAP) is a significant issue for English and Welsh farmers especially
since farmers derive a significant proportion of their income
from CAP support. The single most pressing issue for the next
reform of the CAP is to help get farming to a place where it can
be substantially less reliant on public support at the same time
as ensuring the farming activity is environmentally sustainable.
3. This requires a strategic approach to policy
making that promotes a more competitive, market orientated agricultural
sector at the same time as addressing underlying flaws in the
operation of food supply chains that prevent farmers from achieving
a fair share of added value. Measures to improve environmental
performance and secure delivery of public goods will remain important
as part of the CAP but should be delivered through the flexible,
targeted instruments operated under the second pillar of the CAP.
4. The proposals, especially those in relation
to direct payments, represent a tactical, rather than strategic
move that could harm competitiveness, undermine simplification
efforts, fail to achieve environmental benefits and entrench direct
support rather than helping farmers become more market orientated.
As such they largely fail the key policy tests set out in the
NFU's policy document on CAP reform.
How will the Commission's proposals affect the
ability of UK agriculture to be competitive in a global market?
5. Whilst the Commission Communication stresses
the importance of EU agriculture becoming more competitive, the
measures that it outlines could undermine competitive farming
in the UK. Direct support payments, which help EU farmers offset
higher production costs, are maintained. However, the proposal
to "green" a component of direct payments could result
in less market focus. Furthermore, the proposal to cap payments
and target more support towards small farmers would discriminate
against the UK with its relatively large average farm size as
well as discourage businesses from seeking to become more competitive
through seeking economies of scale.
Do the proposals ensure fair competition for British
agricultural products within the EU?
6. The proposals promote a common policy framework
albeit one with a degree of national flexibility. Member states
are bound to exercise some discretion in the design of "greening"
measures. Furthermore, optional coupled supports could create
distortions across the EU. Such schemes must be restricted and
very tightly defined. The ambition to strengthen the position
of farmers in the supply chain is laudable but it is important
to ensure that measures are achievable in all member states and
do not distort the single market.
Will the proposals achieve the correct balance
between productivity and sustainability?
7. The NFU supports the direction of reform pursued
by previous agriculture Commissioners which sought to encourage
farmers to become more market orientated whilst sensibly enhancing
support for public goods through the second pillar of the CAP.
Some proposals, such as introducing knowledge transfer into rural
development programmes, could be beneficial. However, we are concerned
that these proposals would not achieve the targeted delivery of
environmental benefits that are secured via agri-environment schemes
(indeed the proposals could harm the attractiveness of such schemes).
Moreover, in driving farmers into more environmental conditionality,
the proposals could undermine agricultural productivity.
Do the proposals place the UK in a good position
to help meet future food supply challenges?
8. The proposals ensure that farmers have a platform
to continue to invest in production through the retention of direct
payments and through the focus of rural development programmes
on innovation and climate change. At the same time, the greening
of direct payments may reduce the productivity of agriculture
through, for example, forcing farmers to take land out of production
for ecological set-aside. This would undermine the UK's ability
to respond to future food supply challenges.
Will the proposals redress the imbalance in support
to different sectors created by the historic basis of payments?
9. The creation of a basic income support payment
that is more uniform within a region or member state should reduce
differences in support between sectors. At the same time, the
proposals indicate that member states may continue to deploy voluntary
coupled payments which may counter-act the benefits that could
come from full decoupling in terms of market orientation. Finally
the key challenge for aid distribution in the next reform is to
achieve a more equitable distribution across the EU. It is not
evident from the Communication that the Commission has met this
challenge.
What aspects of the proposals should be made a
common policy and which is best left to Member States?
10. The NFU strongly supports the maintenance
of a common EU agricultural policy and funding framework. We believe
that the measures that are deployed under the first pillar of
the CAP (direct support and market measures) should continue to
be determined at EU level, whereas we see some scope for subsidiarity
in respect of the second pillar. This can be deployed more flexibly
in order to prioritise actions to given member states or regions.
However a common framework for rural development programmes is
necessary to ensure balanced programming.
Can the proposals be implemented simply and cost-effectively,
within a short time-scale?
11. Some of the proposals, especially in respect
of rural development programmes, offer some opportunity to simplify
the operation of the CAP and improve deliverability of EU support.
However there are significant problems caused by the proposals
in respect of direct payments. Moving towards a tiered approach
to payments, combined with additional but variable conditions
for greening and the prospect of further GAEC and cross-compliance
conditions, suggest that a policy implemented along the lines
set out by the Commission would cause significant additional bureaucracy
and opportunity costs for farmers and be simply unworkable for
many member states.
December 2010
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