Examination of Witnesses (Questions 628
WEDNESDAY 6 MARCH 2002
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.
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
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
(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
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.