Select Committee on Environment, Food and Rural Affairs Minutes of Evidence

Examination of Witnesses (Questions 628 - 639)



  Chairman: Thank you for coming. For the record, you are Georgina Dobson, the Rural Policy Officer, and Gregor Hutcheon, the Acting Head of Policy (Rural), for the Council for the Protection of Rural England, and Emily Diamand and Liana Stupples from Friends of the Earth, Research Officer and Campaigns Director respectively. You have heard all the preliminaries, I am not going to repeat them, we are going to start straight in with the discussion.

Mr Jack

  628. Friends of the Earth, you say in your evidence to the Committee that the Common Agricultural Policy has failed. You do not actually define that but you say it in stark terms. Should the CAP be scrapped or should it be changed in some way in your judgment to promote better land stewardship?
  (Ms Stupples) Thank you for that question. Yes, we do think the CAP should be scrapped and that should be replaced by something that is based more coherently on rural development. Let me just backtrack a little bit. We have heard a lot this morning about a number of endangered species but one of the things that I would like to talk about is an endangered species which is called the small farmer, the family farmer, the person who in the UK at the moment is probably currently on a mixed farm. I think what we would like to highlight is not only the deficiencies of the CAP but the risk that, even if we were to be able to put in place some of the green policies that we are talking about, the net effect would still not actually save those people that are up against the wall at the moment. And the knock-on effects for local communities, for rural development, could be quite devastating. I think it is in that context that we are concerned that we identify what our starting point is. Our definition of what sustainable agriculture will be certainly has to include that social component about what is going to happen to our rural communities and even needs to go one step further and include what would the impact be on developing countries, other parts of the world, on our agricultural policy, which just to give you an example comes back to the CAP here of course. The production subsidies and the export subsidies that the CAP comprises at the moment are not only bad here in the UK because they encourage intensive agriculture, they are also having a huge impact on the economies of developing countries overseas in terms of access for their products or in terms of the impact that we are having on them being able to develop their own livelihoods. For a number of those reasons we definitely think that the CAP should be scrapped.

  629. Could you just give us an example of this devastating impact because people talk in shorthand about dumping products and the bad effect it has, just give me a for instance, an example, what do you mean?
  (Ms Stupples) Of course, dumping is about the fact that because the subsidies under the CAP promote over-production that means there is a surplus essentially and that is often put on the world market, sometimes even below the price of production.

  630. Take a country. You have studied this very carefully. Give me a country example of dumping and the effect on the local agriculture?
  (Ms Stupples) I do not have the information before me to be able to give you a specific country example but one of the things I can point to is that Friends of the Earth is an international organisation and we have many groups similar to the ones here in the UK in over 60 countries around the world. Indeed, we are also working in alliance with an organisation called Via Campesina which is a network of small and family farmers around the world and those small farmers and the environment development groups in other countries themselves are calling for this kind of change.

  631. If you are in touch with an informed body perhaps you might let the Committee have an example.
  (Ms Stupples) Certainly.

  632. Because I would find it instructive to understand the effect. In terms of calling for the CAP to be scrapped, what analysis have you done of the mechanism by which if you had a free hand you would unwind subsidised agriculture? Would you put pound for pound all the money that is currently in subsidy into the development of the rural economy for the objectives that you mentioned earlier?
  (Ms Stupples) I do not think anybody has the exact numbers to hand about what would be required in terms of cash to actually deliver sustainable agriculture. I think the principal answer is of the three billion approximately that comes to UK agriculture, we think that is probably about the right ball park and what we should be engineering in the long run is a shift of that money from the current form of support to a different form of support.

  633. Yours is a very pure form of analysis of pulling that money out and you say it could give us the sustainable rural situation that you have mentioned. What analysis have you done about the Mid-Term Review of the CAP to see whether you think that will deliver the objectives you have just described?
  (Ms Stupples) The Mid-Term Review offers a lot of political potential particularly on the issue of modulation, as has been discussed already, and I think we would endorse a lot of what has already been said about modulation being a first step forward and something that could really bring about some changes now. Our concerns, to take one example, are as partly a function of European decision making but also a function of UK decision making, that the modulation that has been proposed in the Curry Report, for example, is a flat rate. What we are concerned about is we already know most of the subsidies under the CAP and there is that old figure, is there not, that 80 per cent of the money is going to 20 per cent of the farmers, that is the bigger farmers, whereas most of the smaller farmers are already losing out comparatively from the current subsidy system. We are concerned that in promoting modulation, which we support, the flat rate will actually give another double-whammy to those small farmers because, again, they will proportionately get less and they are the ones that are often very time poor, you are a mixed farmer, you have got animals and for most of the light of the day you are out on the farm. Just to finish that point, even under the current form there should be a lot more consideration about how we can support those rural communities in the round because basically the restructuring of agriculture, whatever trajectory we take, if we just take a slight change to the CAP or if we take a full free trade scenario, both those scenarios represent a huge restructuring of our rural communities. I think the depopulation effects of that alone could be very significant for all the other things that we are concerned about like rural post offices, schools, etc., and those local economies may actually be the real things that are under threat here.

  634. So to come back to my question, do you think that the Mid-Term Review of the CAP will deliver that scenario? You have referred to the Curry Report recommendations which are not, in fact, some of the items that Commissioner Fischler is currently rehearsing in his mind as part of the CAP Mid-Term Review.
  (Ms Stupples) I think it is fair to say that my analysis of European politics is that at a grass roots level, which is definitely where our membership comes from, there is huge support for CAP reform which would include getting rid of those production subsidies and the export subsidies. I think it is fair to say obviously at government level there is a mixture of whether it be support for that idea or some people are perhaps tending to dig their heels in. One thing that we should say is that the critique we had of the Curry Report, for example, was that basically CAP reform and, indeed, further analysis of the WTO were off limits and they were almost treated as if they are inevitable and we cannot do anything about them. I think what we should be encouraging the Government to do is to see that this nexus of opportunities that are coming up, the Mid-Term Review of the CAP, the Agreement on Agricultural Negotiations under the WTO and, indeed, the discussions about the new round under the Doha Agenda, are all excellent opportunities for the UK Government to show a lead and promote changes within those forums that would really allow local agricultural economies to develop where they need to.

  635. I would like to move to the CPRE. I note in your evidence to us that you felt that further agricultural liberalisation was an inevitability but one of the things under the WTO discussions is this concept of multifunctionality, to which we have just heard reference in a way in terms of the wider rural economy. How do you think that the European Union can reassure other members of the WTO that this is a meaningful concept and not just a way of disguising a subsidy to agriculture via some other mechanism?
  (Mr Hutcheon) Before I address that issue of multifunctionality I wonder if I can just reflect a bit upon what we have just heard from Friends of the Earth because CPRE does actually take a slightly different slant.

  636. As long as it is not too long or the Chairman will pull you up.
  (Mr Hutcheon) We would share certainly that the CAP has been a damaging influence on the quality of the environment and has not delivered very much for farmers. We would share that; we want a diverse farming structure with a range of farm businesses and we want farmers to be rewarded for delivering a range of environmental goods and delivering more for the economy of rural areas and the nation as a whole too. We would not use the words "scrap CAP", what we would be after is some radical and progressive reform of the Common Agricultural Policy, seizing on the opportunities offered by the Mid-Term Review where we think Government should be going for a greater proportion of the rural development regulation, should we actually have the money to support a broad range of positive support of farmers; arguing for the application for compulsory modulation which in the UK sense would help alleviate some of the concerns of the main farming organisations and farming interests; and progressive decoupling of production support and the greening, if you like, of Pillar 1.

  637. That is a very good declaratory statement but have you actually done or seen any economic modelling of what we get by virtue of doing it? This inquiry is about agriculture without subsidy, so we assume there is a pot of money which can be redistributed for various purposes, and I am still struggling to understand what people would like to do with that money. What would you like to buy with it?
  (Mr Hutcheon) We would like to buy a range of public goods, to use the words that have been bandied about this morning. That would include managing wild flower meadows, managing hedgerows, managing landscape features and protecting and enhancing the qualities of the landscape.

  638. Do we know what proportion of the money might buy some of these things? I am trying to get some idea of if we redistribute three billion what do we get, how much of that ends up with the farmer, because either this is a circular argument that we redistribute three billion over time and it still comes back into farming or we reduce the amount of money that is given to farming. I am not clear from those who have given evidence whether they want a total reduction in farm income via public funding or just a redistribution and, therefore, what do we get and what do farmers get?
  (Mr Hutcheon) We would like to see a redistribution. We are not arguing for the eradication of subsidies or support, we are arguing for the eradication of production-related subsidies. What we are seeking is spending that public money in a different way which will deliver a full range of public goods, environmental and wider rural development benefits.

  639. So multifunctionality, do you think we can get away with it or not?
  (Ms Dobson) I think it is vitally important that we do and I think this is one of the problems that has arisen with the World Trade Organisation's Agreement on Agriculture, that people see it pigeonholing farming as just being something that produces basic commodities but that is wrong, there are lots of environmental and social implications to what happens on agricultural land. The way to get around this is by seeing agriculture as something that is performing this multifunctional purpose, that takes into account the provision of those environmental goods. Something that has not come up too much before now is the other goods it can buy, for example the possibility of soil sequestration, carbon sequestration, flood control systems, so that you are getting more sustainable management of the problems that have arisen and complying with various international regulations and ambitions in that way.
  (Mr Hutcheon) We would argue that the whole WTO negotiation should be underpinned by the principles of sustainable development recognising that trade does have environmental and social implications too. One practical thing that could be done would be an environmental assessment of trade policies and trade agreements.

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