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

Examination of Witnesses (Questions 1080-1099)



  1080. Would you accept that a large part of the task is not about CAP reform but of DEFRA reform and culture change?
  (Lord Whitty) Partly, yes, but it is also true that some of the individual allegations of over-regulation and over-bureaucratisation do not actually stand up in terms of what actually operates in other countries, in that there is, for example, in the meat hygiene area, at least a greater degree of regulation in France as there is in the UK. It may be conducted in a slightly different manner but in terms of actual bureaucracy we are not by any means out on a limb in bureaucratising what are already bureaucratic procedures when they emanate from the EU. Nevertheless, we do recognise it is one of the major tasks to get this on a more user-friendly basis and one which does not get in the way of farmers making proper economic decisions.

  1081. Do you think the broad, shallow scheme would be a Pillar II scheme?
  (Lord Whitty) Yes.

  1082. If it was available to everyone?
  (Lord Whitty) If it was available to everyone or even if it there was some restriction on it, it is primarily a Pillar II scheme. There is a parallel here about cross-compliance as long as we have the production subsidy regime, so that we could green some of Pillar I in the transition.

  1083. You can certainly see some arguments that this is just going to be another handout to farmers with another name, unless there is rigorous qualification, which of course implies more bureaucratic processes to achieve that. Do you feel that if we did have a shallow scheme it should be a degressive scheme which reduced in value over time, if it is essentially a sort of bottom plane for farming quality and a subsidy for really being in the business at all?
  (Lord Whitty) If the main support for farming is to deliver the environmental and land management values we are looking for, then we do not necessarily need to reduce the total amount of money going into that. It is a different question as to whether you want to ratchet up what that minimum access level should be. Over time we would hope we did indeed ratchet up—

  1084. Which may have the effect of reducing its cost.
  (Lord Whitty) Indeed. Of course, you are talking about an approach to the totality of the CAP where we want some degressivity built into the total quantum.
  (Margaret Beckett) With great respect to the Chairman and his dislike of the words, if you are looking at something that is there to support public goods, there is not an automatic assumption that it is degressive.

  1085. No, unless you take the view that there is a finite level for farming support of any kind, which we may seek to reduce over a period of time. I think you were hinting that that might be the case and that, therefore, broad, shallow schemes of this kind might be among those that would be affected by that.
  (Lord Whitty) Yes. We put a high priority on the broad and shallow scheme, so within an overall reduction of the quantum of CAP we would tend to keep the broad and shallow scheme as a priority expenditure.


  1086. I have to say that I can quite understand the point that you want to make payments to people in order to get them from point A to point B, for example, to build hedges or to establish footpaths, or to put in trees and put protections around the trees and that sort of thing. There comes a point where nature, to some extent, looks after itself, and I think it may be difficult five years down the road to continue to justify a fixed level of payment for schemes once whatever you wanted to see happen has happened. I make that as an aside.
  (Margaret Beckett) I accept that, and that may sometimes be true, but it depends a little bit on the nature of the scheme. Even under Countryside Stewardship what tends to happen is people come in—

  1087. But you are moving then towards support, are you not? We are finding different mechanisms for the same purpose.
  (Margaret Beckett) If I can just go back a second to the nature of your question, it all depends on whether you accept the argument—and to a certain extent I do—that one of the reasons we have the landscape that we have in many parts of the UK is because it is a managed landscape. If you leave a managed landscape to itself after X years it will revert, it will not stay as that landscape that you want to see. If, for example—and it is only an example—what you are supporting is the facility to manage that landscape so that it stays in, broadly speaking, that condition—whether it is wetland or whatever—then it may be something that you would want to continue to support. It may not, but I think we can all rest assured that the Treasury will keep a beady eye on it at some stage, and so I do not think one could rule it out.

  1088. If you want to keep cattle, say, in North Yorkshire in uplands then you have got to maintain your hedges as part of your normal business management. Sir Don Curry recently got rather irritated at what he thought was the slow pace of things. I think he referred to these environmental schemes as the "salvation" of agriculture. Would you use that word? If you would not use that word, what word would you use?
  (Margaret Beckett) I do not know that I would use the word "salvation". Destiny, maybe?

  1089. That depends on destiny being good or bad. I think Sir Don was rather implying that this would help farmers.
  (Margaret Beckett) If I can go back to your proposition, I am aware of many, many attempts by different journalists to get Sir Don to say how impatient he is with the pace of change, and to get him to say how disappointed he is that there was not more in the budget, when he said at the very beginning that he never expected there to be anything in the budget.

  1090. Let me rephrase that question. Are they going to make the difference between a healthy agriculture and an agriculture which is in crisis? Or does the heart of the argument rest upon the efficient production and competitive production of food, for which the environmental payments may well be a helpful and useful cashflow and, if you like, a core purpose? However, without the pre-core purpose of food production, they are not going to save or bail out agriculture by their own weight and volume.
  (Margaret Beckett) It is the latter. It is only being competitive and profitable that is a viable future for UK agriculture, but I think Sir Donald would be the first person to say that.

Mr Borrow

  1091. We touched earlier on the issue of the linkages between the World Trade Organisation's discussions and CAP reform and certainly the Uruguay Round assumed that production subsidies for agriculture would be phased out and I think there was a date fixed for that, but that seems to have become somewhat fuzzy now. To what extent do you think that the Agriculture Council of the EU have adopted a substantially radical negotiating position in the WTO current Round on agriculture?
  (Margaret Beckett) Well, it was before I was a member of the Agriculture Council, but of course the negotiating mandate for Doha was that, as was agreed, we should phase out export subsidies, production subsidies, trade-distorting subsidies and so on, so to that extent the Agriculture Council did take what was quite a radical view. Having done so, I think it would be only fair to acknowledge that there are some who now perhaps are less enthusiastic than they might be, but there was unanimous agreement, as I understand it, to that negotiating mandate, and that is the basis on which we are in the European Union approaching the Doha talks. Andy, you were there.
  (Mr Lebrecht) I think there was a big difference between the way the Community is approaching the present Round as compared with the Uruguay Round where basically in the Uruguay Round it tried to resist change almost all the way through. What it has agreed for the present Round is that it is prepared to get engaged in reductions in production subsidies, it is prepared to negotiate on reductions in exports and it is prepared to negotiate on increased access to imports. The other side of the coin as far as the European Union is concerned is that there must be some movement of what are called "non-trade concerns", which is basically recognition that parts of the world, like Europe, do have wider anxieties about the contribution that their farming makes to society than just the multi-functionality issues and, therefore, what the European Union has said is that it is ready to get engaged in all these issues and to negotiate seriously and that is a step change from where we were last time round.

  1092. If the WTO negotiations are successful and the negotiating position taken by the EU is very much in line with the eventual outcome of those negotiations, would that imply changes to CAP in the EU?
  (Margaret Beckett) Well, the two go hand in hand to a certain extent, but yes, it could well.
  (Mr Lebrecht) I think the answer is it is inevitable. I think the movement on the production subsidies, the import access and the export subsidisation would all require reductions in Pillar I support, but the other side of the coin is that acceptance in the WTO of the importance of the non-trade concerns would accept recognition of the importance of Pillar II, so the two are very much hand in hand.

  1093. I know we touched on it before, but I would just like to explore it a little more, and that is the repercussions of the US Farm Bill. I find it difficult to reconcile the situation where the US Government in the WTO discussions is seeking a radical outcome involving the elimination of production subsidies while obviously having a domestic regime which is totally at odds with that. Whilst the Administration may be able to separate those two positions, my assumption would be that it would make it very difficult to persuade any other countries within the WTO to go along with such radical changes that the UK Government would want and the US Government would say they wanted.
  (Margaret Beckett) Well, as I said earlier, it is certainly helpful to those who would rather resist change, but earlier this year I spoke in the States to some people who were the prime sponsors of the Farm Bill in Congress and in the Senate. Congressman Stenna, I think it was, was refreshingly frank. He said, "We are going into these negotiations in the Doha Round. We are committed to trying to phase out subsidies. You, the European Union, subsidise your agriculture far more than we do", and there was an argument about that, "and, as far as we are concerned, we know there is room for manoeuvre in the budget, there is a certain amount of headroom, it is money we can assign and we think that if we put up the money, we are certain to find to the maximum amount to take account of the headroom that we have in the budget, then it strengthens the United States' negotiating hand because we can negotiate down more than you will be able to if we were not putting that much in". One can say, "How disappointing", but that was his approach. The more we have at the moment, the better our platform for negotiating down, and I accept the underlying case he was putting, that of course it makes the environment political, but his argument was, "At least we have a better platform from which to come down and a more comparable platform from which to come down to the European Union than we had before", so we are really helping the Administration in its negotiations, but the Administration is grateful. Well, that was his argument. We know that it is an election year in the United States and that the states which are marginal are farm states.

  1094. I find it somewhat difficult to accept an argument which says, "We are seeking radical reform and elimination of subsidies, so we will increase our subsidies to the maximise in order to strengthen our negotiating position". You will understand that the initial position is one of giving away as little as possible.
  (Margaret Beckett) I can assure you that I endeavoured to persuade him of the error of his ways, but I merely report to you what his argument was.
  (Mr Lebrecht) There is just one point and that is just to recall that the United States is a major exporter of agricultural products and its interests are not just in respect of getting countries to reduce their domestic support, but they also want to get them to reduce their export subsidies and to improve market access, so the United States does have material objectives to achieve in those areas and presumably will have to make concessions elsewhere if it is going to achieve them.

Mr Simpson

  1095. Secretary of State, one of the criticisms that we have heard from a wide variety of groups who have given evidence here is a degree of frustration that every area of DEFRA is continually being reviewed and there is a plethora of policy groups and across government there is the impression that activity is mistaken for action. When we look in your own area, we see that from September 1999 there have been three Red Tape Working Groups examining "unnecessary regulation" in agriculture. In December 1999 the Government's "long-term strategy for the future development of [the] agriculture industry", and the England Rural Development Plan was launched. In March 2000 the Prime Minister chaired a summit that launched an "Action Plan for Farming". Hills, Inputs and Milk Task Forces were established in December 2000 as a result of the Action Plan for Farming. The Report of the Policy Commission on the Future of Farming and Food was published at the end of January 2002. Those are just the main ones and there is probably a plethora of task forces that even you might have forgotten about. The point about this is that one understands that government has to review policies, it has to reach out and involve large numbers of people, but, as a consequence of all of this, has your Department now actually established a strategy for UK agriculture and is that about to be published?
  (Margaret Beckett) Not about to be and we are working on that project now. When I say "not about to be", not for the summer recess. If I can just pick up one of your underlying points, you say that there has been a lot of activity and not action, but I do not think you could say that the ERDP and the development of the ERDP is not action. There are quite a lot of schemes now under way and I think making a useful and valuable contribution, but it is certainly the case that in the aftermath of a series of disease outbreaks that we have had, the Government did decide that it was right to have the Policy Commission and to take a much more long-term view, and of course we are very mindful too that the mid-term review would be coming up this year and that there would be pressures with the WTO Round and so on, so we agreed that it was right to take a look at the long-term future of agriculture and to try and draw the strands of what has been a very wide-ranging debate together. Now, we are in the process of not consulting about the Report itself in the sense of what it said, but consulting with a whole range of stakeholders as to how we actually could implement the kind of vision of those kinds of proposals. We have had eight regional consultations and we have the others scheduled to run into the summer. Larry is about to work with a contact group to draw the strands of that together. There will be other more detailed, separate consultations and so on and the whole idea of all of this is indeed to produce a long-term strategy proposal in the autumn of the Government's approach to agriculture policy, so that is where we have got to. Now, I take your point to some extent, but I think in a sense you put your finger on part of the answer yourself. Everybody recognises that there are problems in UK agriculture, and most people would like those problems to be addressed, but it would be just as irritating if the Government went off and did it on its own and then came back and said, "Here you are. This is what you do". People do want to be engaged in those discussions and they are.

  1096. I can fully appreciate that, but are you able to give the Committee some indication of the core elements of this strategy?
  (Margaret Beckett) Well, the core elements will be much the things that the Policy Commission have identified. We will be of course pursuing CAP reform separately and we shall be looking to see what proposals we can make about the broad and shallow scheme, and we have not completely decided yet whether we make proposals in the absence of CAP reform or how we will address that issue in terms of what the Policy Commission said about modulation and so on, but basically the key will be to try to identify ways in which we can help put British farmers more back in touch with the marketplace. We know that we have already facilitated the setting up of the Food Chain Centre and the English Collaborative Board has, I think, had its first meeting or is about to have its first meeting, so we will be going in that continued direction to try to open up British farms to the marketplace and to encourage them to be more competitive and profitable.

  1097. And will this be a departmental paper or will it come out as a consultation document to be consulted further on?
  (Margaret Beckett) My inclination is that it will be a departmental paper. I accept part of your case that one can consult forever and the hope is that we will have reached a sufficiently clear amount of common ground to be able to put something forward and make it work.

  Mr Simpson: Secretary of State, can I congratulate you on that. It is nice to see a Secretary of State putting their head above the parapet. It is an old-fashioned term and it is called leadership, not management.

  Chairman: I think I am supposed to berate the Committee at that point!

Mr Simpson

  1098. Can I move on to Sir Donald Curry's Policy Commission to which you have already alluded. He obviously was involved in the meeting of the 26th March when the Prime Minister called together a wide range of interested parties to "map out the way to a more sustainable future" and "to start delivering on the recommendations" of the Curry Commission Report. You yourself are credited as saying, "We are urgently taking forward work in a number of areas". Could you perhaps tell the Committee what this work consists of which is now being urgently taken forward?
  (Margaret Beckett) Well, I have referred to the process of discussion over the summer which leads to the discussion document and that is a great bulk of the work, but the things which we announced on the 26th March, and we can send the Committee a note fleshing this out if it would be helpful to your work, is the launch of the Food Chain Centre. We have started work on it and already had quite a good large-scale meeting of people to discuss action on illegal imports and we have commissioned a risk assessment which we expect quite soon, the end of May, I hope, because one of the things which came out of that session was that everybody agreed that the prime tool that we needed was a high-quality risk assessment to know where best to direct efforts. We could guess, but we would like more information, so that is under way. We have instituted some Agriculture Development Scheme grants to try to help improve marketing and that is about £5 million. We were able help to secure access to a DTI scheme to improve competitiveness so that there is a DTI grant for the red meat sector of about £1.5 million to help them to improve competitiveness. We have announced the development of the Food and Farming Action Plan and that too, I hope, will be published in the not too distant future, and on regulation, to try to get a better joint approach to regulation. The Collaboration Scheme, the English Collaborative Board, that is an industry-led proposal and that again is something that we have encouraged and we are looking at and we hope to try to be able to establish a pilot for the demonstration farms proposal, which Sir Don and his colleagues put forward, by the end of the year, so those are the things that we did as a kind of starter which we were able to do, which we had the freedom to do at that stage. Now, obviously we are looking in the long term in this process of consultation.

  1099. Following on from that and your very careful phrase about the freedom to manoeuvre which you had to take forward because these are important issues, of course the core element, which I am sure you would agree, and certainly Sir Don Curry in his evidence to us outlined, is the actual funding. The core element of the funding that Sir Don Curry identified of £500 million which I think the Committee, as a consequence of its questioning of Sir Don Curry, recognised is that this was a base sum because many of his other proposals were not funds, and the £500 million is the baseline. Has your Department costed out the whole of the proposals and would they be available to the Committee? Secondly, without of course expecting you to prejudge the Spending Review, could you give some indication to the Committee of the arguments you have put forward to the Treasury in support of Sir Don Curry's proposals?
  (Margaret Beckett) A very neat way of trying to get me to explain our spending bill, which I feel I ought to resist, Mr Simpson, because it has always been my view that exposing these issues to the light of day does not always help you with the Treasury and, to be honest, at the moment, deeply though I admire and respect you on this Committee, my attention is more taken up with being nice to the Treasury than being nice to you.

  Chairman: He is going to say that he admires you for that as well!

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