Conclusions and recommendations |
Strategic Direction of the CAP
1. We support the Commission's broad goal that CAP payments be a method for improving environmental outcomes across Europe but we note that the lack of detail available about the Commission's specific proposals makes it difficult to make precise assessments of their potential impact and value.
2. We are concerned that the Commission is pursuing a greening agenda as a way to justify the continuation of direct payments, rather than as a means to deliver genuine environmental improvements across the European Union.
3. We recognise the need for a common policy to regulate aspects of the single European market, however, for policy areas such as the environment and rural development any policy must take account of the local circumstances: a one-size-fits-all approach will fail to deliver the desired outcomes.
4. We recommend that Defra continue to press the Commission to develop a less rigid approach to 'greening' that would enable individual Member States the flexibility to decide measures that work best in their local environment.
5. We recommend that Defra make the argument to the Commission that it should set the high-level objectives for a greener CAP and allow Member States the flexibility to determine how best to achieve those objectives. Such delegation has been proposed within the reform proposals for the Common Fisheries Policy and we recommend that Commissioner Ciolos consider how such an approach could be applied to the Common Agricultural Policy. We accept that complete decentralisation of these policy areas may be impossible to achieve within this round of CAP reform but we urge the Government to make the case that greater flexibility and increasing local decision-making should be the strategic direction of the CAP.
6. We consider it highly improbable that the Commission's proposals will deliver a simpler CAP. We recommend that Defra ensure that, as the negotiations continue, the Commission does not lose sight of the absolute need for a system of CAP payments that can be implemented and audited efficiently. The Commission must balance the often conflicting pressures of designing a policy that will deliver positive environmental outcomes with the need for a policy that can actually be implemented and delivered for a reasonable cost.
7. The capability and capacity of the Rural Payments Agency will be critical to the successful implementation of the reformed CAP. Defra must ensure that the agency has the financial resources and expertise to deliver the new regime.
8. Whatever the form of the final mandatory 'greening' measures, Defra must not gold plate 'greening' through imposing more demanding measures on UK farmers than apply elsewhere.
9. The principal purpose of the CAP is to support food production and, in the long term, the goal for the CAP must be delivering sustainable food production. In developing these proposals the Commission appears not to have considered food security and how 'greening' will interact with efficient farm production. In our view the Commission has missed the opportunity to encourage sustainable intensification of food production.
10. The competitiveness of UK farmers will be reduced if they are exposed to higher modulation rates than their European counterparts. We therefore recommend that Defra does not set modulation rates higher than other Member States that receive similar single farm payment rates.
11. We conclude that it is important that the two Pillars work together rather than at cross purposes to one another. However, increasing the burden on Pillar 2 is unlikely to be politically achievable, not least because of additional co-financing that would be required.
12. We conclude that the 'greening' proposals will have a significant impact on the competitiveness of UK farmers. We urge Defra to continue to press the Commission to enable farmers to opt out of prescriptive mandatory measures in favour of those schemes that deliver environmental outcomes and do not diminish competitiveness.
13. We recommend that farmers that do not carry out 'greening' activities should not receive the 'greening' top-up payment but should not be subject to additional penalties. We recommend that, if a farmer chooses not to carry out 'greening', that that farmer's share of the Pillar 1 'greening' fund should able to be transferred to Pillar 2. Any Pillar 1 funding transferred to Pillar 2 under this approach would not be subject to the co-financing requirements.
14. The Commission's crop diversification measure may have environmental benefits in some areas of some Member States. However, in the UK, the measure will have perverse consequences and will be considerably less environmentally beneficial than crop rotation. The measure will deliver minimal environmental benefits to the UK while placing substantial costs on UK farmers and administrators, as well as risking distorting the market for produce. We recommend that Defra seek to remove this measure from the Regulations.
15. If the measure remains in the Regulations, we recommend that Defra consult with the industry and other stakeholders to determine the appropriate definitions that give the most flexibility to farmers and communicate the outcome of that consultation to the Commission. It is critical that the Commission provides more details about how the measure will be defined, particularly in relation to the definition of a crop, prior to the Regulations being adopted. We further recommend that, Defra press the Commission to amend the Regulations so that only very large farms will have to meet the crop diversification requirement.
Retention of Permanent Pasture
16. The requirement to retain permanent pasture is likely to have unintended and perverse consequences. The Regulations will not target protection at areas that provide the most environmental benefit and are inconsistent with allowing farmers to respond to market signals.
17. We recommend that Defra press the Commission to adopt a definition of permanent pasture that takes account of the differences in environmental value of improved and semi-improved pasture versus semi-natural grassland. Defra should argue that the Regulations protect semi-natural grassland while providing farmers with flexibility over the management of lower environmental value pastures.
18. We recommend that Defra urge the Commission to make funding available to Member States to map their semi-natural grasslands, which would inform policies such as monitoring biodiversity, planning decisions and deployment of agri-environment schemes. We further recommend that Defra commission a comprehensive grassland inventory for England.
Ecological Focus Areas
19. We note the lack of evidence to support the Commission's proposal for 7% of land to be given over as an Ecological Focus Area. We recommend that the Commission set out the basis for, and evidence supporting, the 7% figure. We are far from convinced that applying a formulaic percentage of area at farm-level is the most effective or efficient method of delivering the Commission's environmental objectives.
20. There is insufficient detail in the Commission's draft Ecological Focus Area proposal to assess whether it will deliver the desired environmental benefits. We do not believe that the UK Government should agree to these measures in the absence of those details. We recommend that Defra ensure that the Regulations include a definition of the landscape features that will count towards an EFA. We further recommend that such a definition should include landscapes or areas managed under appropriate agri-environment schemes.
21. We recommend that the Commission consider how Member States might implement EFAs in such a way that would enhance environmental interconnectivity. We recommend that Defra explore how projects and funding streams allocated to the implementation of the Natural Environment White Paper might be integrated with Commission's EFA measures to deliver ecological networks across the country.
22. We recommend that future agri-environment schemes should include measures to incentivise farmers to manage their EFAs for biodiversity and other environmental benefits, for example through sowing pollen and nectar seed mixes or through locating their EFAs so as to create a coherent network.
23. We recommend that Defra make the argument to the Commission that tenant farmers should only be required to comply with the EFA measure in relation to any non-productive land within their holding.
24. If Defra identifies difficulties for tenant farmers or commoners in accessing agri-environment schemes we would expect the department to respond positively and identify solutions so that those farming groups are not disadvantaged.
25. We recommend that Defra emphasise to the Commission the important role of tenant farmers in UK agriculture and ensure that any negative outcomes from this round of CAP reform do not disproportionately affect them.
26. The United Kingdom's agri-environment schemes are among the best in Europe at delivering meaningful environmental benefits. We are concerned that the Commission's 'greening' proposals will have a chilling effect on the UK's existing, successful, agri-environment schemes. This round of CAP reform should do nothing that would diminish those schemes effectiveness or extent. We conclude that the Commission's initial proposals failed to recognise the benefits accrued by the UK's existing schemes and as a result would disadvantage farmers that participated in such schemes.
27. We welcome recent moves by the Commission to enable participation in an agri-environmental scheme to be taken into account when assessing a farmer's obligations under the 'greening' proposals. However, those amendments to the Regulations are yet to be agreed. We therefore recommend that Defra continue to make the case in Europe that membership of an approved agri-environment scheme should be included as an alternative measure under 'greening', so that farmers can choose whether to carry out the three 'greening' measures or join an approved agri-environment scheme in order to receive their 'greening' payment.
28. We seek assurances from Defra that farmers currently in agri-environment schemes will receive no penalty for leaving schemes should either the design of or payments under those schemes alter as a result of 'greening'. We seek Defra's assurances that farmers who leave their agri-environment scheme contract due to changes resulting from the implementation of 'greening' can do so without penalty or requirement to repay money at any point between now and either the implementation of the post-2013 CAP or the publication of the conditions for the post-2013 agri-environment schemes, whichever is later.
Defra's points system and recent developments
29. We are surprised that Defra decided to introduce its idea for a points system at too late a stage in the process to enable the critical scientific assessment of the proposal across the European Union to be conducted. We consider it unlikely that the UK's points system will be embraced by Member States or the European Parliament. On the other hand we welcome the apparent openness of several Member States and some in the European Parliament to a more flexible approach to 'greening'. We urge Defra to redouble its efforts to explain to all parties to the negotiations the diverse benefits greater flexibility and local tailoring would provide.
30. As we have noted in previous reports, it is critical that Defra engage proactively with the Commission, other Member States and the European Parliament. In order to achieve the necessary level of engagement Defra must ensure that its EU-facing policy teams are properly staffed, trained and resourced. In response to this report we recommend that the department set out how it has ensured that it is bringing the appropriate resources to bear on Europe; the staffing of EU negotiating teams; how they have altered over the past two years and the impact of the department's re-organisation on those teams.
31. We consider environmental enhancements under the CAP to be beneficial. UK farmers have delivered significant environmental improvement through agri-environment schemes and the Government must ensure that those benefits are not diluted by the imposition of mandatory 'greening' measures that would create perverse and contradictory outcomes.
32. We do not recommend that Defra oppose the concept of 'greening' Pillar 1, but rather that it should focus on the practical effects of the proposals. Defra must focus on securing a system that gives enough flexibility to the UK to work within its existing system of agri-environment schemes. There is still time for the proposals to be improved and Defra must ensure it has the resources to find, engage and secure reliable allies across the European Union and effectively and persuasively to put the UK's case that the CAP should support both the agricultural sector and provide environmental protection.