Select Committee on Agriculture Minutes of Evidence


Examination of Witnesses (Questions 200 - 219)

WEDNESDAY 7 MARCH 2001

MRS JANET PURNELL AND MR BILL DUNCAN

  200. Let me pin you down on one specific thing. If my memory serves me correctly, if you take the Arable Area Payment, the United Kingdom had its own, seemingly unique, approach to deciding what the area of a field was and this was different from that which other Member States had. When you have got an Arable Area Payment scheme it seems to be very straightforward. You plant an area in a field and if you plant so many hectares of it you get so much—constrained by yield areas and all the other things that are very familiar to you. How was it we had a unique approach developed within the United Kingdom for what is the area? How did we have so much latitude to do something which it seems was uniquely British?
  (Mr Duncan) I think I can probably help with that point. From time immemorial farmers in the United Kingdom have used Ordnance Survey field numbers and areas for making claims to the government for subsidies, since 1947 certainly. When we got into negotiations and practicalities in 1993 of the IACS Regulation we wanted to preserve the ability of the farmer to have a simple approach to this which was to use their field identifiers and their field areas to claim for their subsidy. We were successful in getting the IACS Regulation amended to give us the ability to do that in the United Kingdom.

  201. Was that in the form of a derogation?
  (Mr Duncan) It is not a derogation, it is in the Regulation itself. That really recognised the situation that existed in the United Kingdom for British farmers. Otherwise we are talking about cropped area. We did have an experience in 1992 of cropped area under the old transitional Oilseed Scheme. Farmers did find it quite difficult to determine what the cropped area actually was. That is the background to that. We have a good Ordnance Survey mapping system (or cadastral system, as they call it in Europe) in the United Kingdom and that forms the basis of our field register. I may say a bit more later about how we are going to move on to a different field register shortly but that provides us with a sound base. The farmer understands that and has done from time immemorial.
  (Mrs Purnell) Can I go on from there—

Chairman

  202. From time immemorial?
  (Mrs Purnell) I will not go on quite as long as that. As I am sure the Committee will be aware, this became a high-profile issue last year with what was called the two-metre rule. Again, it is an example of where we have to balance the need to comply strictly with scheme requirements and the needs of the industry. Mr Duncan has explained to you why we managed to get that provision in allowing farmers to claim on the full area of their fields so long as the field is "fully utilised", is the phrase in the Regulation. As well as the Regulation there is quite a lot of what one might call "soft law" in terms of Commission guidelines which give extra recommendations as to how we should interpret and implement scheme rules, and one of those was if we were going to allow farmers to do that then the uncropped areas around the margins should not exceed two metres. We were under some pressure on this and we did advise farmers that we would be restricting margins to two metres the following year with the results I think you are all aware of.

Mr Jack

  203. Is that an example of a complexity which you might argue you wanted to pursue in the interests of British farmers for the historic reasons that Mr Duncan outlined a second ago, but which then requires you to have a complex set of instructions to farmers to enable them to understand what is a uniquely British position? What you have just said is quite complicated in its own way if you do not follow the history of the logic of it.
  (Mrs Purnell) We did put instructions in but as this had the result it did it became a very high profile issue and people became very worried about the potential for damage to the environment. We were eventually able to, first of all, agree a stay of execution and now more recently a change to that part of the Regulation which allows our farmers to go on claiming full field areas and in some cases to exceed the two metres.

  204. Let me take you to a document we have had from the Republic of Germany which you may have seen. On pages 8 and 9 there is a very interesting sentence which says: "Further, there is not an insignificant degree of uncertainty in the way inspectors interpret Regulations". That is talking about Commission inspectors. Then they say at the top of page 9: "In many cases several submissions are necessary before the Commission has a real understanding of the question at issue." Do you have similar experience and in terms of this process is it right to say "interpretation" or "translation" into United Kingdom procedures. Mrs Purnell mentioned this interesting thing about guidance from the Commission. In other words, there is a soft area in there where there is a certain amount of give and take but you have also got to have a tight regulatory framework and, on the other hand, we have got a certain amount of movement. And here is another Member State who says, "When we are evolving in these matters it is quite difficult for them to understand what we are going on about." What I am seeking perhaps is a commentary on the interaction between flexibility on the one hand and the rigidity of an administrative structure on the other.
  (Mrs Purnell) I think there is that tension and the answer is that we do have to try and stay very close to the auditors and stay very close to the people in Mr Slade's unit so we can have an on-going dialogue and resolve these problems before they become major issues. It is not always easy.
  (Mr Duncan) I would like to say that I think you are right, there is quite a lot of commonality between ourselves and our European colleagues in Germany and France on issues like this. I think it is our view that, very much as the Germans say, it does take time to get responses to black and white questions, if you like, because life is, as you quite rightly say, not like that. When you get out in the field, whether it is in Germany, France or the United Kingdom, there are things that do not quite fit the scenarios that have been set. What I would say is I think the Commission are becoming increasingly flexible, certainly working towards simplification, and I think there is a whole raft of these issues. Mrs Purnell and I are going over to Brussels tomorrow to an Experts Group on Simplification and these are the kinds of issues we want to bring out. We are very active with our European colleagues in the Experts Group. There is a lot of commonality. It is certainly true that the Commission are getting many more questions either through MEPs or direct from national groups than they have ever had before and they do find these issues difficult and I think that will help the simplification process.

  205. In terms of the regulatory burden on farmers, when Agenda 2000 came in and you were translating that into United Kingdom speak, how much of that exercise was taken up by saying "Let's look at the burden this new set of Regulations is putting on farmers. How can we make it simpler, better, easier? How can we follow, for example, the edicts of the Better Regulation Task Force in terms of the way we are implementing this set of Regulations?" Were you effectively as administrators involved with the policy teams in MAFF in the process of translating, and how much did the practical side of your work inform and challenge the administrators who, on the one hand, may have said, "This is how we think it should be done", and how much and in pursuit of a better deal for farmers did you challenge them and say, "No, we can do this in a better, simpler way?" How was it done?
  (Mrs Purnell) I have a policy responsibility for IACS and I am also responsible for the Central Unit of the Paying Agency, so I have two roles which helps me to keep an eye on both things. We did consult the industry on how the Agenda 2000 settlement should be implemented and I do not think there was that much of a difference between, for example, the staff in our Beef and Sheep Division who have the horizontal responsibility and the staff in our Livestock Schemes Division who look at implementation, and ourselves, and I think it is pretty seamless. We are very much aware that we have got to implement these schemes in a way that places as small a burden on farmers as we can consistent with the rules. I think everybody agrees that what came out of Agenda 2000 could hardly be called "simplification", it did complicate things enormously, and the implementation of that outcome through a revision to the basic Commission IACS Regulation 3887/92 took a long time. There used to be an Article 10; it now goes from 10 to 10 K, or something like that, with all the various levels of penalties and procedures for administering these new schemes. I do not think any Member State was very happy with the outcome. These rules were agreed right at the end of 1999 because they had to come into force on 1 January 2000. That is why we will be going across tomorrow for the first of several Experts Groups to try and streamline all this because it is not clear, it is far too complex. The other point you will have seen from Mr Slade's evidence—and this is something I have discussed with him at length and I think has now been accepted—is that the way to simplify at least the administration of various cattle schemes is to, first of all, run them from the cattle database (which once that is fully operational you can halve the inspection rate anyway) so that you can judge farmers' entitlement and it should not be necessary for them to submit forms at all. You would just say, "You have got these animals, you have had them for the right length of time, we will give you your payment." That is one way of simplifying it. The other way as far reducing the burden on farmers is concerned is to say instead of selecting them for inspection individually on all of these schemes and having ten per cent of inspections for each scheme, you look at the overall risk, and that is probably to do with whether they are keeping their registration with the cattle database up. If they have done everything they need to do in terms of notifying cattle births, deaths and movements to the cattle tracing system, then once we are sure that is the case the risk of making a fraudulent application is virtually zero.

  206. What about the Better Regulation Task Force? Lord Haskins as a farmer in his own right has not written to you complaining about all this, has he?
  (Mrs Purnell) No. I think his report was mainly to do with environmental regulation of the agricultural industry. It was not directly to do with IACS.

  207. Did you look at the way you work on IACS and say, "Is there anything we can learn from that which would help make life easier for the farmer?"
  (Mrs Purnell) Yes, I think we do. On the environmental side it is a little different in that you have got Directives you are trying to transpose and you have got IACS regulation which is fairly black and white but, yes, we do take this into account very much. I did provide the secretariat to the IACS and Red Tape Group under Don Curry, and that was very much to the fore.
  (Mr Duncan) I think we do take account of recommendations such as the Haskins one. In fact, the whole process of handling IACS applications and how we better regulate them is one of the driving forces for our new Agricultural Paying Agency which is being set up on 1 April, especially in that we will be looking at how we do our current processes. Our current IACS computer system has lasted now for the last six or seven years, it does need modernisation, and that is recognised by the better use of IT which is properly developed and user-driven which we think will help to tease out the real issues.

  208. One last question as we have just touched on the implications of Agenda 2000, I think it introduced quite a complex concept in the context of cross-compliance. Have all the provisions to achieve the objectives there laid out now been introduced into the system?
  (Mrs Purnell) Under the horizontal regulation there are various actions that a Member State can take on cross-compliance and we could introduce some very general provisions which would apply to all farmers. That has not been done. Ministers have not so far decided to do that. We do have some cross-compliance conditions already on our livestock schemes where there are provisions to penalise farmers who over-graze land or use unsuitable feeding practices and those provisions are there and they are cross-compliance conditions but they are existing cross-compliance conditions, and then on the arable side we have our management conditions for set-aside land, but at the moment that is the extent to which we have applied cross-compliance.

Mr Todd

  209. We have had comments made that obtaining comparisons as to the way in which IACS is implemented in different countries is extremely difficult. We heard from the NFU that it was shrouded in secrecy. You would have thought based on your description of working with other experts from other states that this would not be true. Is that so?
  (Mrs Purnell) I think it depends at what sort of level we are talking. We go out to these IACS Experts Groups. The meeting goes on for most of the day, it starts at 9.30 and goes on until 6.30 and we have two or three hours in the middle for lunch, and for most of the time we are in formal session so we are not able to discuss, but we do do a lot of talking in the margins of that and that is where we get some useful contacts. However, that is general questions like "How are you implementing this? What are you doing?" and it does not give us an overview of their systems. There are ways we can do that. One is by participating in these conferences of the paying agencies that take place every six months where, quite often, there is a particular topic. It may not concern the farmer schemes we deal with under IACS, it may concern export refunds or private storage, it is not always everything that is of interest to us, but that is a place where we can talk to others about how they do things. I have been to three of those now and I find them extremely useful. The third possibility is we go and have a look. We have had quite a few visits. I think you may have had details of a presentation I gave in Ireland last October. That was three days in Ireland and I spent a lot of time talking to my Irish counterparts and others as to how they applied various parts of the IACS system and I found that very revealing. Bill, you have been to Sweden and Denmark.
  (Mr Duncan) In the last 18 months I have been to Sweden and Denmark, I have been to France. I regularly attend the Experts Group, as Mrs Purnell says. I find the visits very good. There is no element of secrecy there at all.

  210. So there is no evidence that people are trying to do something which they would not be quite happy to disclose in public if asked?
  (Mr Duncan) No, I do not think that is the case.

  211. So what have you learned from these exchanges and experiences? You have been to Ireland and we have certainly had some comment about the very substantial apparent differences in the Irish system. Have you come away impressed?
  (Mrs Purnell) I was very impressed by the Irish system, yes. Obviously they have had the opportunity to modernise their computer systems ahead of us—

  212. When you say they have had the "opportunity" to do that, what are you saying there? That sounds like a choice, not an opportunity.
  (Mrs Purnell) I think perhaps they were given the resources we have now been given and perhaps they were given those resources slightly earlier and therefore their systems are to that extent more up-to-date than ours, particularly they already have a geographic information system. But it was not just their computer systems. Listening to their head inspector and others I thought they had got some very good people who were obviously doing a very thorough and efficient job. I would say that although they have got their GIS system and they have got it ahead of us, they are now having to re-engineer it because they want it to be browser-based so that it is useable over the Internet, which is something we would want to do. So even though they are ahead of us this technology does not stand still. Whenever you put a system in place in a short period of time you have to think of how you are going to move it on because things will have moved on and new things will be possible.

  213. Would you say that from the visits both of you have done that British farmers are at a competitive disadvantage to other Member State in the time and effort they have to put into completing the processes that you insist they follow?
  (Mr Duncan) I am not sure I would say that. From what I have seen of the three Member States I have visited in the recent past, there are lots which compare very well with what is happening here. The French system is quite similar.

  214. Yes, we have seen that.
  (Mr Duncan) The Swedish one, of course, is different altogether because they had the benefit of not joining the European Community until 1995 and could approach things from a slightly different way but, nevertheless, the issues that are here for us such as on-the-spot inspections, the filling in of the forms et cetera, are very, very similar. What I saw in both Denmark and Sweden was a more mechanistic approach to the handling of applications which is something that we are now starting to develop. It is quite easy in Sweden because they were able to do this from 1995 onwards and they did have a little bit more lead in time in terms of preparation. I have been on inspections there and they are very similar to ours.

  215. In the Irish example do you think there is a competitive advantage Irish farmers have in terms of the speed with which they can complete various processes?
  (Mrs Purnell) Obviously there are differences to the extent that the form is shorter and one would think that would mean much less time. I think we have to bear in mind that in the United Kingdom we have some very large and complex farming operations and we have a much greater number who are filing very large claims for Arable Area Payments with us, where they have got to be able to tell us about some really very complex cropping patterns both in terms of what is being done in the current year and previous years, whereas the vast majority of the IACS forms that are lodged by Irish farmers are really only for the purpose of declaring forage areas to support their claims for livestock payments. They have comparatively few arable area claims and they are smaller and less valuable in terms of the potential payment, so that does make a difference, whereas in France they obviously have these large arable areas, so that again is a difference.

  216. Are you confident that there are no differences emerging across the United Kingdom with devolution as there have been in other areas.
  (Mrs Purnell) Agriculture always has been devolved. We are responsible for implementing schemes in England and we have always worked with our colleagues in Scotland, Wales and Northern Ireland. Really it is not much of a change for us and we do keep very closely in contact. Colleagues from Wales and Scotland will be coming with us to Brussels.

  217. You have not noticed any material difference from devolution as yet?
  (Mrs Purnell) No.

  218. Is that a statement of lack of knowledge or a definite no?
  (Mrs Purnell) I would say it is a definite no. Obviously the rural development plans are different but the Rural Development Regulation was designed to allow that sort of regional difference, so the fact we have got different rural development plans with different measures in them is not really due to devolution, we could have done that under a unified system anyway.

  219. These various meetings you have attended, can you think of an example where a British practice has been adopted with enthusiasm by other Member States and people have said, "That sounds an excellent way of doing things, we will do it that way too"?
  (Mrs Purnell) I cannot think of one immediately but I can say we have been pretty proactive in looking to the future and trying to develop or to simplify. I went across to Paris last June and we agreed a note on simplification which was then taken forward by the French Presidency.



 
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