Greening the Common Agricultural Policy

Written evidence submitted by the Royal Association of British Dairy Farmers (RABDF) (GCAP 19)

Introduction

· RABDF is the only UK wide organisation representing solely the interests of the dairy farming industry. Our membership comprises both primary producers (dairy farmers, herd managers etc.) and those who supply them, be it Vets, the agricultural supply industry or Consultants.

· The current EU proposals to green the Common Agricultural Policy (CAP) after 2013 could have far reaching implications for the dairy sector but much remains unclear in these initial draft proposals.

· It is important to recognize that the UK dairy farming sector is significantly different to that in the majority of other Member States, particularly in respect of herd size. It is vital that if the UK is to be competitive that dairy farmers in this country are treated on the same basis as their European counterparts in the distribution of direct payments.

· Direct payments, be it in the form of the current Single Farm Payment and/or agri-environmental payments are now making a significant contribution to the bottom line of UK producers. Quite simply without such payments the future profitability and sustainability of the sector becomes much more marginal due to the continuing problems of low milk price and increasing costs of production.

· The emphasis of the Commissions proposals is largely directed towards environmental issues and political legitimisation of CAP expenditure. There is very little in the package that actually assists the UK dairy farming sector in meeting the challenge of maintaining and improving its competitiveness in an increasingly globalised market.

Q1. Will the proposal to green direct payments generate significant environmental benefits?

· The current proposals are too loosely worded to ensure significant environment benefit and indeed could have the potential to create significant environmental harm. For example, it seems a perverse incentive for farmers to plough up permanent grassland before the reference date of 2014, whilst the current definition of permanent grassland still allows member states to include annually reseeded or intensively fertilized grass in the permanent grassland category. This makes the greening mechanism completely meaningless for promoting bio-diversity.

· The approach on crop rotation in these proposals will not suit UK dairy farmers and will add further complexity. For example many farmers will be all-grass but grow a few acres of forage maze. To introduce a third crop would on many farms be completely impractical.

· We would suggest that there needs to be a clear differentiation between high nature value permanent grasslands and low nature value intensively managed and reseeded pasture. Both have their place and both can maintain bio-diversity. We also would hope that other ways of creating bio-diversity such as ponds, trees and hedgerows appropriate to an area could be recognized and rewarded. Many UK dairy farmers encourage such features on a voluntary basis.

Q2. The impact of additional greening requirements on food production and the competitiveness of the agricultural industry?

· Food production is central to any agricultural policy. We fully support the concept of Sustainable Intensification which should allow competitive food production to co-exist with green measures.

· RABDF would support specific and significant investment through the CAP into research on and dissemination of robust production systems for sustainable intensification.

· Our fear is that the proposals as they currently stand will negatively impact on milk production and the competitiveness of the UK dairy industry.

· Farming practices are increasingly driven by the market and the consequential need to achieve production efficiency. Greening as it currently stands could compel farmers to take actions that otherwise they would choose to do voluntarily or add complexity and thus create an unsustainable system. For example, the whole approach on permanent grassland seems to misunderstand that for increased milk output from grassland, which of itself is to be encouraged at cheapening the costs of production and relying less on imported feedstuffs, grass will need reseeding every 5-8 years. Permanent grassland is inherently less productive than properly managed new grass leys. Any final regulation needs to recognize the diversity of practices used on dairy farms across Europe.

· It is not clear from the Commission’s proposals if the Greening criteria is mandatory on all farmers if they wish to receive direct payments. If the 30% is linked to Greening then farmers must be given the choice of whether to participate or not and should be offered a menu of options which would allow them the ability to respond to market requirements.

Q3. Consistency of the Greening proposals with the CAP simplification agenda?

· These Commission proposals seem wholly incompatible with the simplification with the CAP. The Greening proposals as they stand seem to add complexity as they would have to be accompanied by an appropriate inspection and verification regime.

· The CAP should be as simple as possible but recognizing regional variations.

Q4. How Greening pillar 1 can be made coherent with agri-environment schemes?

· Agri-environment schemes alone are insufficient since they are voluntary and underfunded. If pillar 1 does include significant, specific, clearly defined Greening measures this should allow well targeted agri-environmental schemes and budgets to address specific regional and ecological measures.

· As the proposals currently stand if the Greening requirements for ecological focus areas (ECA’s) are removed from existing agri-environment schemes, then it may no longer be attractive or viable for dairy farmers to participate in these schemes.

Q5. Recommendations for improving the Greening proposals

· The current proposals seem very crude and do not take account of the specific needs of regions or the existing achievements made and thus are not the best way forward to achieve environmental benefit.

· Any policy needs to differentiate between intensively and extensively managed farmland.

· We are pleased that the Commission proposes to continue to pay farmers for environmental services on the basis of income foregone and additional costs. This has shown itself to be an effective policy instrument for achieving targeted environmental objectives whilst gaining farmer engagement.

Q6. Other elements of the CAP proposals

· We are pleased that the Commission intends to maintain a number of market management mechanisms to cover extreme price volatility and thus welcome the Commissions acknowledgement that the CAP still has role to play here.

· The proposals mention a lot about Pillar 1 funds. There is little or no mention on the allocation of Pillar 2 funds.

· RABDF is strongly opposed to the capping of direct payments to large farmers as although this is unlikely to affect many UK dairy farmers at present it does seem to set a worrying precedent that could penalise the larger UK milk producer.

· We also welcome the Commissions efforts to define active farmer but it is important to recognise that on many dairy farms it is the younger generation actually farming whilst the farm may still be trading under the previous generation’s name. This is why the oft-quoted average age of British dairy farmers at 57 is so misleading.

· Finally we are pleased that the Commission is looking at introducing a Young Farmers Scheme but the current proposals as they stand will not encourage much uptake in the UK due to the capping proposals.

We hope that these few comments will be of interest. RABDF would be happy and very willing to elaborate on this submission.

16 November 2011