Memorandum by The Rt Revd John Oliver
OVERVIEW
Q1. The long-term objectives of the CAP
should be to guarantee an adequate level of food production in
the member states of the EU; to sustain a viable rural economy
(in social and cultural as well as economic terms); and to safeguard
the environment with due regard to the conservation of the landscape
and of biodiversity. These objectives have to be pursued in a
world of increasing population, mounting pressure on water resources,
and the uncertain threat of climate change. The title Common Agricultural
Policy is an apt one, although recent enlargement of the EU has
made it more difficult to maintain in practice the same degree
of commonality as has prevailed in the past.
THE REFORMED
CAP
Q2. The 2003 reforms were welcome and necessary,
and the principle of de-coupling is right. Farmers are taking
time to adjust to the new agreements, and to work out what changes
in production are advisable. The degree of continuity in the UK
is in some ways surprising, but farmers are by nature fairly conservative
and prefer to stick with what they know they can do well. Fluctuations
in commodity prices are difficult to predict, and radical change
will come only slowly. But there can be no doubt that, in the
European context, financial support for agriculture is right and
proper, and should continue, subject to periodic review.
THE SINGLE
PAYMENT SCHEME
Q3. The SPS is a good basis for the future
of agricultural policy, but its implementation has varied widely
within the EU; some member states have handled it well, others—notably
England—very badly indeed. This has caused very considerable
and totally unnecessary anxiety and distress. But even if the
administration of the scheme were to be faultless, there are ways
in which, in the UK, it should be changed. There should be a minimum
area below which no entitlement should exist, unless a strong
case can be made on the grounds of the use to which small parcels
of land are put: eg some horticultural
enterprises occupying a small area may be entitled to receive
the Single Payment.
The most important change which the Family Farmers'
Association wishes to see is the introduction of a system of tapering
benefits, which would ensure that adequate help was given to small
and medium-size farms, but very large payments would not be made
to those farming very large areas. This system will become increasingly
important as the entitlement to SPS moves progressively in England
towards an area basis.
In all EU member states the rules governing
entitlement should be kept under review, and each member state
should retain some flexibility in matters of detail.
MARKET MECHANISMS
Q4. The suggestions made by the Commission
should be followed up. In particular, set-aside is much resented,
and in a world where food and fuel-crop production is likely to
be increasingly competing for limited areas of fertile land, it
makes little sense to maintain restrictive rules over set-aside,
unless such land is earmarked for specific environmental projects.
RURAL DEVELOPMENT
Q5. It is in principle right that Rural
Development is seen in wider terms than agriculture. Small rural
businesses of a non-agricultural nature, some forms of tourism,
rural infrastructure (notably schools and transport) need strategic
support. Farming in Europe is inextricably connected with other
social, economic and cultural aspects of rural life, and with
the maintenance of an attractive, semi-natural physical environment,
which must itself be regarded as a common good.
Q6. Higher levels of EU financing of rural
development are probably not necessary; in the past such expenditure
has actually damaged the physical environment, which in most European
countries is fragile and under threat from too much development,
or development of an inappropriate nature. Insofar as there is
modulation from Pillar I to Pillar 2, it should be at the same
level for each member state, and should be compulsory. Voluntary
modulation imposed by particular member states puts their farmers
in an unfavourable position, as UK farmers are presently discovering.
WORLD TRADE
Q7. There is a common perception that the
CAP represents an expensive—and some would say immoral—form
of protection for EU agriculture, and that in any present or future
WTO negotiations the EU should be willing to reduce significantly
the level of support which it offers to its farmers. This view
should be resisted; the 2003 reforms represent the limit to which
EU negotiators should go, and the present arrangements are entirely
defensible in terms of preserving the high standards of animal
welfare, food hygiene and environmental protection which EU producers
and consumers demand, and which are not achieved by many competitors
on the world stage.
It is a sweeping and simplistic criticism to
allege that the CAP damages developing countries. Under the Generalized
Scheme of Preferences, the agreement with the ACP countries, and
the "Everything but Arms" agreement, the EU is already
offering substantial trade preferences. It can rightly be said
that the EU could be doing more to help developing countries to
build their capacity to take advantage of these existing trade
preferences.
Expenditure on export refunds is now at an historically
low level and continuing to fall, and no further concessions in
WTO negotiations are necessary or desirable at this stage.
ENVIRONMENTAL PROTECTION
AND CLIMATE
CHANGE
Q8. The system of cross-compliance is a
blunt instrument, and of fairly limited environmental benefit
unless it is accompanied by Entry Level or Higher Level Stewardship
(or the equivalents in the devolved UK administrations), but it
is beginning to yield some results. Farmers are in many cases
finding it quite burdensome, and resent yet another round of paperwork
and inspections. It needs to be allowed to bed in, but it is certainly
the case that it should in due course be more closely integrated
with other EU policy requirements.
Q9. There is a potential for the CAP to
contribute towards the mitigation of climate change by encouraging
a reduction in CO2 emissions from agriculture. On-farm bio-gas
schemes offer a simple and relatively cheap means of reducing
methane emissions and the need for electricity from the grid,
usually from fossil fuel sources.
High hopes have increasingly been placed in
recent months in the potential of bio-fuels to help in the mitigation
of climate change. Caution is needed, and the environmental equation
may be more complex than is generally understood. Bio-diesel produced
from eg oil-seed rape does offer possibilities, provided manufacturing
plants are not too far from the point of growth of the crop. Co-firing
of certain energy crops, such as miscanthus or coppiced willow,
in conventional power-stations is also possible (in place of imported
wood pellets). But there are issues of economic viability, of
the cost and CO2 emissions of long-distance transport of bulky
energy crops and food crops, all of which need careful consideration.
Practice varies widely between member states
of the EU, and it is important that there is no large-scale development
of bio-fuel plants in Europe which depend on imported energy crops
grown in places which as a result suffer from deforestation and
severe environmental degradation.
FINANCING
Q10. There are very great uncertainties
about the post-2013 budget. At present with levels of support
as they are, the budget is just adequate. But if newer EU members
are to receive equitable treatment, the budget will have to be
increased. The most important point to be made in response to
this question is that, despite widespread criticism that the CAP
budget is excessive in relation to other EU expenditure, it is
in fact the only common policy, and in view of the enormous importance
of food production, and of the wider issues mentioned in the answer
to Q5, there should be no reluctance to mount a robust defence
of present budget levels, and of any further necessary increases
in the future.
Co-financing should be resisted; the CAP should
remain a common policy, UK farmers, and small farmers in particular,
are very reluctant to place any trust in the wisdom and benevolence
of the Treasury in relation to the support of agriculture.
15 May 2007
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