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A few Members spoke about the young farmers’ proposals, but, again, this is another example where one size does not fit all. The Commission’s proposal is simply that if young farmers—I say “young”, but new entrant young farmers can be up to 40 years old—have some entitlements, they will be able to get a 50% premium on them for a certain number of years. That would represent a small increase in their income, but it would bear no relevance to the size of the business and, as the hon. Member for Banff and Buchan pointed out, it would ignore the fact that they probably would not have any entitlements anyway, because of how the system operates. Virtually every Minister at Council agrees that we should help young farmers; there is no debate about that. However, it should be left to individual member states to decide the best way forward, which is how we address the issue of access to capital.

No one mentioned this afternoon the Commission’s proposals for small farmers. The only reason why I want to mention them is that the Commission is proposing that small farmers could opt for a small farmers scheme, in which they fill in a form and get the money with no questions—I will not go quite so far, but that is the impression as to the proposal. The key thing about the Commission’s proposal is that small farmers will be exempt from the greening requirement, which we oppose. We are quite happy with the idea of a simplified scheme for small farmers, as that makes sense, but to exempt them—and we are talking about a massive swathe of farmers across Europe— from the fundamental greening obligations facing other farmers would be wrong.

There was a lot of discussion about pillar two. The Government’s position, which has not changed since we took office, is that we would like to see a bigger share of CAP funds put into pillar two, and that any reduction in the funding should primarily be at the expense of pillar one. We believe that, because through pillar two it is possible to make targeted payments for public goods, whether they are existing ones or new ones that we can develop under the ecological assessment that DEFRA published last year. For example, we could start to fund farmers in the hills for what they do for water or carbon retention. That is how one could target payments through pillar two.

The hon. Member for Ogmore asked me about agri-environment taking a bigger share of pillar two, but given that it takes more than 80% now, I am not sure that it should take an even bigger share, because—I come back to answer the question asked by my hon. Friend the Member for Thirsk and Malton—of competitiveness. We believe that pillar two is the best way of enhancing competitiveness, and we have already started to do that. In the past few months we have launched three different schemes in the existing rural development programme for England to fund, grant-aid and help farmers and other rural businesses to invest for the future. That investment may be in plant. For example, there will be £20 million, which I announced—I hope I have announced that; I think I have just announced it; I just have, if I had not.

Huw Irranca-Davies: Tweet it.

Mr Paice: Yes.

We will have a £20 million scheme for skills and training. My right hon. Friend the Secretary of State for Environment, Food and Rural Affairs announced

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last week £60 million for large schemes, and I have previously announced another £20 million for smaller schemes of up to £25,000. That is how one can help farmers to become more productive and competitive, to work together, develop new skills through the training funding and face the big challenge lying ahead.

As for the Commission’s other proposals that have not been discussed much, we are quite happy to see market support remain as an instrument, whether it is intervention or private storage. However, it has to be right down at safety net level; it must never again become part and parcel of the marketing structure, which is what it became in the ’70s, ’80s and ’90s, when people were openly producing just to go into intervention. It was madness, and those days must never return.

Linked to that, the Commission is proposing a global crisis fund, about which we have some reservations. Our biggest concern is that the Commission is proposing that it should be outside the budget. We do not support off-budget measures, and if the Commission is to have such a fund, the fund must come within the budget. That applies equally to the proposals on risk management.

We believe that research is central to the issue of competiveness and improving the industry’s ability to compete and become more sustainable, a key point highlighted this afternoon. We therefore support in principle the Commission’s doubling of the money for research and the development of the European integration partnership, although we need to see more about that.

I will now try to pick up points raised in the debate. Several hon. Members, including the hon. Member for Banff and Buchan, talked about regulation, and my hon. Friend the Member for Tiverton and Honiton kindly referred to the work that we have already done on that. The hon. Member for Ogmore is right to say that not every regulation is bad. What we have tried to do through the Macdonald process—we have discussed this and Richard Macdonald has been to the Commission to promote his proposals—is not to say, “We just have to get rid of regulations”, but to look at how we implement and enforce them in a way that causes minimum burden on business while achieving the standards that we are trying to achieve. We will continue to press that approach.

We have said over and over again that the groceries code adjudicator is the responsibility of the Department for Business, Innovation and Skills, but I am hopeful that the relevant Bill will be introduced shortly.

Huw Irranca-Davies: The Minister has expanded on many points, for which we are grateful.

One of the things that we and successive Governments often struggled with was the complexity of the EU and its machine. Regulations will come from the least expected direction. They may not come from the Agriculture Committee. They may come from the Environmental Committee, from somewhere else, or, nowadays, from other parts of the institution entirely. In light of the MacDonald proposals, has the Minister or the Department developed anything about that early warning system where, at the earliest possible moment, it is flagged up that it might arrive on the Minister’s desk in five or six years’ time from the least-expected direction?

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Jim Sheridan (in the Chair): Before I call the Minister, may I remind hon. Members that I wish to leave five minutes for the Chair of the Select Committee to conclude?

Mr Paice: Thank you for reminding me, Mr Sheridan.

I will not say that we have developed a rigid blueprint system, but if the hon. Gentleman reads the response to the MacDonald report, it is clear that we understand fully the point he rightly makes; indeed, it is a point that I made when I was in his shoes in opposition. We need that early warning. The general thrust is that the whole industry—DEFRA officials, and other Departments’ officials for that matter, which is something that we are discussing in government, or other arms of the industry, all of whom who have their Brussels people working out there—feeds this back and knows, together, the moment that some official has what they think is a bright idea.

The hon. Gentleman and others mentioned Food 2030. It is fine—a good document. However, I think he would be honest and agree that it was pretty vague on how to deliver. That is why we have set up the green food project, which we announced in the “Natural Environment” White Paper last year. The green food project is bringing together all the different interests to try to see how we meet that big challenge of increasing food production and productivity, while doing so sustainably. It is about producing more and impacting less, and sustainable intensification. Whatever phrases we have been using, the green food project will produce its first report in the middle of this year. It has set up a number of working parties and is working through different themes and food products. I am hopeful that we can build on the Food 2030 document.

The hon. Gentleman asked about moving from pillar one to pillar two. For the life of me, I cannot remember why he asked me that. However, it is currently 10% in the proposals. He asked why export refunds are still there. I agree with him. As he rightly said, the EU had agreed to phase out refunds as part of the offer on the table for the Doha talks. We agree with that, which brings me on to sugar, an issue he also raised. We have made it clear that, while we support the Commission’s proposals to do away with sugar quotas, we do not agree with its idea that we should retain all the barriers around the EU. The issue of Tate & Lyle and raw cane sugar imports is very important for the whole country, not just for the 1,000-odd people who work in the refinery. We are determined to continue to press forward on that.

The hon. Gentleman’s final point was about producer organisations. He is entirely right. There is a great deal of noise about their importance, and we share that view. We would like to see many more farmers working together in producer organisations. Britain has a chequered history of producer organisations, co-operatives, farmer-controlled businesses, or whatever we call them. The only carrot being held out by the Commission is that of being exempt from competition law. That prompts two questions. Is it a carrot? For most producer organisations, it is not. The idea of having 20% of their market—where most competition law clicks in, or even higher—is pie-in-the-sky wishful thinking. It also prompts the question: is it actually right to exempt farmers, co-operatives or producer organisations from competition law? The most

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reasonable answer to that is no. Why should they be any more exempt than any other? Why should they not comply with competition law?

The EU’s proposals have a long way to go. We think that it will be at least a year, probably more, before we secure a final outcome. As several hon. Members have said, there will be a lot more discussion. The proposals will evolve through the European Parliament and the European Council. We have already made our commitment to keep the House informed as much as possible as that goes forward. I, for one, foolishly—I will regret saying this—will welcome further debates, as we go forward, to keep the House informed and to help the Government decide on new positions. I hope that is helpful.

5.24 pm

Miss McIntosh: I thank everyone for contributing to the debate. I thank the Minister for being so generous in updating the Chamber this afternoon. I particularly thank my colleagues on the Select Committee—we work very hard. The saying is, “You wait for a bus and then they all come along at once.” We, as has the Department, have been occupying ourselves with reform both to the common agricultural policy and to the common fisheries policy.

The hon. Member for Banff and Buchan (Dr Whiteford) brought with her the experience north of the border. I am sure there are many similarities between her constituency and mine. I am sure she will have received some comfort from the Minister’s remarks this afternoon.

My hon. Friend the Member for Camborne and Redruth (George Eustice) came through with some novel ideas about dismantling the CAP in its existing format. The difficulty always is that if we move away from direct payments, or, eventually, any support for farming, it will be too attractive for whichever party is in power to dismantle support, for the reasons given by the Minister. The farmers in my constituency would like to be less dependent on farm subsidies, and be allowed to go out there and do the job. Whether state aid rules on their own would be sufficient to achieve a level playing field, I am not sure.

We have benefited greatly from the contribution by the shadow Minister, the hon. Member for Ogmore

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(Huw Irranca-Davies), who has had the opportunity to participate in previous debates as a Minister. I hope that the Minister of State welcomed the opportunity—he was gracious enough to say so this afternoon—to participate. It is some time since he has responded to a debate, but this afternoon he has had the opportunity to reach a wider audience.

A lot of ideas have coalesced around the need to simplify and reduce regulation. I add my congratulations to those that have been expressed. I think the Department is the first to have embarked on something on the scale of the MacDonald report. That is very welcome indeed and I hope that other Departments will take courage from the work that the Department has done in that regard. I hope that we will perhaps be a little more ambitious. While we welcome the “one in, one out” rule that seems to apply at the moment, where there are opportunities to dismantle more than one regulation, I hope that we will seize the opportunity to do so.

The arguments for subsidiarity and regionalisation are well made, for both CAP and common fisheries reform. I hope that we have given the Minister some arguments to deploy. The previous Committee had the opportunity to consider the Food 2030 report, which was published right at the end of the previous Parliament and the tenure of the outgoing Government. I applaud and welcome many of the announcements and policies that the present Government have rolled out. I particularly welcome the announcement from the Minister this afternoon—I do not know if it is new or recycled. He graciously met some of those who have benefited from the previous rural grants and funding. My own area will welcome the announcement of the investment of the additional money in training and skills. He will be aware of the ONE scheme in my constituency, which gained support from the Churches, as well as others in the wider community. I hope that there will not be any loss of continuity. I thank all of those who have participated in the debate, and all of those who have contributed to the report and helped to put it together.

Question put and agreed to.

5.29 pm

Sitting adjourned.