The Impact of Common Agricultural Policy Reform on UK Agriculture

Written evidence submitted by George Lyon MEP (CAP 29)

European Parliament - Cap Reform 2013.

The European Parliament voted through its first opinion on the reform of the CAP 2013 in July 2010 and since then the Commission have published their communication in November 2010.

Both reports identified the key challenges of a growing worldwide demand for food against a background of real production constraints in the future such as scarcity of land, water and energy making global food security a key issue for the future.

The European parliament report focussed heavily on the need to move away from the old model of agricultural production based on high inputs of cheap energy to a more sustainable model in response to the potential impacts of climate change.

The Parliament report also focussed heavily on a fairer distribution of the budget between Member States and fair trade in the food chain. It also recognised the importance of local food production continuing in those areas with substantial natural disadvantage and the need for fair trade with our highly subsidised trading partners such as the United States, Japan etc.

It also highlighted the dramatic change in the CAP over the last 25 years when in the past the majority of the budget was spent on export subsidies and intervention whereas today it spends less than 1% on export subsidies and hopefully they will be phased out completely by 2013. It also highlights the dramatic reduction in the CAP’s share of the EU budget from over 80% in the past to around 40% today and declining.

The Parliament wants to see a radical reform of the direct payments by introducing the concept of a targeted payment recognising that future budgets will be reduced.

The model outlined in the Parliament report was firstly a basic area payment conditional on meeting X compliance measures including activity criteria, a top up payment linked to delivering climate change action and incentivise a more sustainable and competitive agriculture, and a third top up for the Less Favoured Areas. There would also be the option of limited coupling of payments within WTO rules as allowed under Article 68 in current CAP.

The Commissions favoured option is very similar with the addition of a small farm scheme aimed at the 6million EU farmers who receive less than 2000 Euros/ year.

In Rural Development the 3 main priorities of the Parliament were firstly tackling biodiversity loss with a target to have the majority of EU land covered by Agri -Environment schemes, secondly modernisation, promoting innovation and encouraging green growth through small scale renewable's such as biogas, bio waste, hydro, creating jobs and alternative income sources.

The third Rural Development priority is to improve food quality and add value.

The Parliament is now drawing up its opinion on the Commission communication and it will be published in advance of the Commission’s detailed legislative proposals due in July.

January 2011