Documents considered by the Committee on 31 January 2018 Contents

6Common Agricultural Policy Reform

Committee’s assessment

Politically important

Committee’s decision

Not cleared from scrutiny; further information requested; drawn to the attention of the Environment, Food and Rural Affairs Committee

Document details

Commission Communication—The Future of Food and Farming

Legal base

Department

Environment, Food and Rural Affairs

Document Number

(39294), 14977/17, COM(17) 713

Summary and Committee’s conclusions

6.1As part of its preparations for leaving the European Union, the United Kingdom is considering its future approach to agricultural policy. In parallel, reflections are underway on the EU’s post-2020 Common Agricultural Policy (CAP). The European Commission’s Communication, “The Future of Food and Farming” presents emerging thoughts on the new CAP.

6.2At the heart of the Commission’s vision is a new delivery model whereby basic policy parameters are set at the EU level, while Member States would set the specific requirements that claimants must meet and could develop their own compliance and control framework. To preserve a functioning agricultural internal market, Member States would each establish a “CAP Strategic Plan” covering both direct payments and rural development spending. If agreed, this delivery model would represent a significant devolution of responsibility.

6.3Particular themes include:

Others considerations included are simplification, rural economy, health and food waste.

6.4The Commission’s discussion on the future CAP will be driven at least in part by the budgetary gap left by the UK once the current financial framework has ended.112 If agricultural payments are to remain at similar levels, there will either need to be significant cuts elsewhere or increased overall budget payments by the remaining Member States. The next budgetary framework is already under active consideration in Brussels.

6.5Separately, the UK is also discussing its future arrangements regarding agriculture, including future priorities and the implications of devolution. There is no detail as yet, but the Secretary of State for Environment and Rural Affairs, Michael Gove, made a speech to the Oxford Farming Conference on 4 January113 setting out four areas for change:

6.6The Secretary of State specifically referenced food labelling, food waste, research and innovation as matters for attention within the context of the areas above. On the replacement of the direct payments system, he confirmed extension of the basic payment system until 2024.114 During the interim period, the largest payments would be reduced and, at the end of any post-Brexit implementation period, payments could be made without the need for compliance with existing cross-compliance rules and procedures. A command paper is expected in the Spring setting out further details.

6.7In his Explanatory Memorandum, which was submitted before the Secretary of State’s speech, the Minister for Agriculture, Fisheries and Food (George Eustice) says that no direct implications arise from this Commission discussion document. He notes that much of the discussion about the future CAP will take place while the UK remains a member of the EU but, as the new CAP will not apply to the UK, the Government will not be active participants in the discussions.

6.8The Minister also confirms the expected timetable for future CAP discussions. Legislative proposals are expected before the summer of this year, with a view to agreement between the Council and the European Parliament (EP) before the June 2019 EP elections and the appointment of a new Commission in November 2019. The Minister acknowledges that much of the discussion and negotiation will therefore take place while the UK continues to be an EU Member State.

6.9We note that the Government does not intend to be an active participant in the CAP negotiations. While we understand that the UK will not have a direct stake in the future CAP, we take the view that the direction of EU agricultural policy is relevant to the UK given the intention to continue a strong trading relationship between the UK and the EU. Similarly, the direction of UK agricultural policy will no doubt be of interest to the EU.

6.10We acknowledge that, until the UK has published its own detailed approach to future agricultural policy, it is difficult for Ministers and officials to engage in discussions allowing debate around the respective approaches and the implications of different approaches for the future relationship.

6.11We would welcome the Minister’s confirmation that, once the UK command paper on the future of agricultural policy has been published, the UK will engage with EU colleagues on the future of the CAP and on the UK proposals for future domestic agricultural policy. Furthermore, it would be helpful if the Minister could write to us at that stage with a detailed assessment of the areas of convergence and divergence between the emerging EU position and the Government’s proposals.

6.12On the basis solely of the EU paper and the Secretary of State’s speech, a number of common themes are already evident, including the importance of agricultural innovation for example. On the point of greatest apparent divergence—the Secretary of State’s proposal that direct payments should end—the policy objectives are nevertheless similar. It is proposed that continuing EU direct payments should be conditional on the provision of environmental and climate public goods. While there is an income objective too, the overall effect is similar to an approach of “public money for public goods” as advocated by the Secretary of State.

6.13Another area of discussion between the UK and the EU might be risk management. That is the favoured US agricultural support approach and is included in the EU paper, but it was not mentioned by the Secretary of State in his Oxford speech. UK engagement in discussions at the EU level on risk management might be beneficial as a strong risk management policy may increase pressure for such measures in the UK.

6.14We also note with interest that the EU’s timetable for change is more radical than the UK’s, with change envisaged from 2021 rather than 2024. Clearly, both approaches are to be negotiated and it may well be the case that the UK’s eventual changes are more radical than those of the EU.

6.15We look forward to the requested confirmation in relation to future engagement both at the EU-level and with us. The document remains under scrutiny and we draw it to the attention of the Environment, Food and Rural Affairs Committee.

Full details of the documents

Commission Communication—The Future of Food and Farming: (39294), 14977/17, COM(17) 713.

Background

6.16The Commission’s Communication is the second stage towards the development of the new CAP. The first stage included a public consultation that was launched in February 2017. That consultation underlined the importance of three dimensions of sustainability (economic, environmental and social) and linked them to a broader need to modernise and simplify the policy. During the three-month consultation period the Commission received more than 320,000 replies, mostly from individuals.115

6.17According to the Commission, the consultation found that most respondents wanted to keep a strong CAP at EU level but that it needed to be simpler and more flexible, and more focused on meeting the key challenges of ensuring a fair standard of living for farmers, preserving the environment and tackling climate change.

6.18The Commission’s Reflection Paper on the Future of EU Finances (28 June 2017) called for a shift towards new, sustainable growth that combines economic, social and environmental considerations, along with a stronger focus on the provision of public goods.

6.19Some of the main themes explored by the Commission were:

The Minister’s Explanatory Memorandum of 14 December 2017

6.20The Minister says that no direct implications arise from this Communication, which is a discussion document and does not at this stage make any legislative proposals.

6.21On the UK’s withdrawal from the EU, he says:

“Although much of the discussion and negotiation of the next CAP will take place whilst the UK continues to be a member of the EU, decisions are expected to come after UK exit and the new CAP will not be introduced until 2021 at the earliest. The Government will not therefore be active participants in the discussions relating to a future CAP which will not apply to the UK.”

Previous Committee Reports

None.


112 The UK has agreed to pay its full financial contributions until the end of the current financial framework (31 December 2020).

113 Speech by The Rt Hon Michael Gove MP, Oxford Farming Conference, 4 January 2018.

114 The five-year transition was spelled out in detail in a Q&A session following the speech.




2 February 2018