Select Committee on European Communities Report



58.  PROPOSAL FOR A COUNCIL REGULATION (EC) DEROGATING FROM REGULATION (EEC) NO. 1765/92 ESTABLISHING A SUPPORT SYSTEM FOR PRODUCERS OF CERTAIN ARABLE CROPS AS REGARDS THE SET-ASIDE REQUIREMENT FOR THE MARKETING YEAR 1999-2000 (9408/98)

Letter from Lord Donoughue, Minister for Farming and the Food Industry, Ministry of Agriculture, Fisheries and Food, to Lord Tordoff, Chairman of the Committee

  On 10 June, the European Commission formally adopted a proposal that the rate of compulsory set-aside for arable crops for the 1999 harvest should be raised to 10 per cent. I enclose an Explanatory Memorandum on this proposal.

  As you will appreciate, it is vitally important to European farmers that they have early notice of the rate of set-aside that will apply, as sowing can begin as early as August in the year before harvest. Equally, however, the Commission prefers to have reasonably sound estimates of the current year's harvest before making a proposal to the Council of Ministers about set-aside for next year. These two factors mean that national Parliaments, the European Parliament and the Council of Ministers itself tend to have only a limited time to reach a view on the rate of set-aside proposed.

  The Council asked the European Parliament to consider the Commission proposal under its urgency procedure, so that the Parliament's Opinion can be given on 19 June, ahead of the Agriculture Council on 22-23 June. At its Plenary Session on 16 June, the European Parliament agreed to this request.

  It will be in the interests both of the UK Presidency, and of European farmers, if the Agriculture Council is in a position to reach agreement on the Commission proposal at its 22-23 June meeting. This will give timely notice to farmers planning their sowing operations and will help the UK Presidency to achieve a settlement of a number of matters outstanding in the Council.

  I am therefore writing to let you know that, if I judge it to be in the United Kingdom's best interests, I will be ready to give the Government's agreement to a decision on the rate of set-aside for the 1999 harvest next week.

  I hope you will understand why, on this occasion, it may not be possible for me to withhold the UK Government's agreement to a settlement of this point until your Committee has completed its scrunity of the Commission proposal.

18 June 1998

Letter from Lord Donoughue, Minister for Farming and the Food Industry, Ministry of Agriculture, Fisheries and Food, to Lord Tordoff, Chairman of the Committee

  I wrote to you on 18 June enclosing an Explanatory Memorandum on the European Commission proposal to raise the rate of compulsory set-aside for arable crops to 10 per cent for the 1999 harvest. In my letter I explained why, on this occasion, I was ready to give the Government's agreement to a decision on this proposal at the June Agriculture Council before your Committee had completed its scrutiny, if I judged it to be in the UK's best interests.

  In the event, the Agriculture Council reached agreement last week on a broad package of measures, of which the rate of set-aside was one element. As part of this overall compromise settlement, the Council adopted the 10 per cent rate of set-aside proposed by the Commission by qualified majority, with the UK amongst those voting in favour.

  As stated in the Explanatory Memorandum, the Government would have preferred the rate to have remained broadly at its current level of five per cent. However, we were faced with a situation in which some Member States wanted to see an increase to 12 per cent or more, and in which the "default" rate of 17.5 per cent would have come into effect, if the Council had failed to reach agreement. In these circumstances, I decided to accept the Commission proposal for a 10 per cent rate in 1999 as part of the overall compromise. This means that farmers now have early notice of the set-aside which will apply when planning their autumn sowing operations.

  I should add that, alongside adoption of the 10 per cent set-aside rate for 1999, the Council agreed three additional points on set-aside which will form part of the same Council Regulation. These are:

    (i)  a further one year suspension of penalty set-aside;

    (ii)  a one-year extension of an existing provision reducing the financial penalties which apply to overruns of the irrigated area ceilings in some Member States; and,

    (iii)  a continuation of the existing 1 per cent additional rate of set-aside applying to transfers of set-aside between producers; transfers for environmental reasons are exempted from this additional rate.

  All three provisions applied last year and are being extended for another year.

  I hope this explanation is helpful.

3 July 1998

Letter from Lord Tordoff, Chairman of the Committee, to Lord Donoughue, Minister for Farming and the Food Industry, Ministry of Agriculture, Fisheries and Food

  Sub-Committee D considered this proposal at its meeting last week and lifted the scrutiny reserve. In fact, the proposal was submitted to the House (Thursday, 18 June) only shortly before it was considered and agreed in Council (Monday, 22 June). While I acknowledge that you wrote to inform me of the short timetable and its consequences, it is most unsatisfactory that such a key piece of agricultural legislation should be denied the opportunity for parliamentary scrutiny. I would be grateful for an explanation of why there was a delay of eight days between publication of the proposal and submission of the memorandum. I would also be grateful for clarification of whether the Government was aware of the Commission's intention before 10 June.

  Despite the inutility of such retrospective comment, the Sub-Committee would like me to convey their opinion to you. The Sub-Committee is opposed in principle to set-aside, as it is to all production-linked subsidies and has often urged their phase-out. The Sub-Committee notes that Agenda 2000 proposes to set the set-aside rate at zero per cent from 2000. It therefore seems illogical and inconvenient to raise the rate in the interim, whatever the reason. The Sub-Committee finds it extremely unsatisfactory that the farming industry cannot directly prepare for the coming zero rate. A worse transition could not have been devised.

17 July 1998

Letter from Lord Donoughue, Minister for Farming and the Food Industry, Ministry of Agriculture, Fisheries and Food, to Lord Tordoff, Chairman of the Committee

  Thank you for your letter of 17 July and for lifting the Scrutiny reserve on the above proposal.

  In your letter you asked for an explanation of why there was a delay of eight days between publication of the proposal and submission of the explanatory memorandum (EM). As I explained in my letter of 18 June, the European Commission formally adopted the proposal on 10 June. Full details of the proposal were received here on the afternoon of Friday June 12. Officials then studied the document and produced the EM at the earliest opportunity. This was enclosed with my letter of 18 June which notified you, before Council, that an urgent decision was expected to be reached, possibly prior to consideration by the Select Committee.

  You also asked for clarification as to whether the Government was aware, before 10 June, of the Commission's intention to propose a 10 per cent obligatory set-aside rate. We understood that the Commission was likely to propose that the 1998 obligatory set-aside rate of 5 per cent be increased for the 1999 harvest. However, it was not until the Commissioners took their decision on 10 June that we became aware that the proposal would be for a 10 per cent set-aside rate.

  The Government, as I am sure you know, is as opposed to the use of production control measures such as set-aside, as is the Sub-Committee. We also agree that it is inconsistent to increase the set-aside rate for 1999, when under the Agenda 2000 proposals the obligatory rate would be set at zero per cent. However, as explained in my letter of 18 June, I felt that, on balance, it was advantageous to our farmers to agree to the overall package of measures, of which the set-aside proposal was only one element. That is why the UK voted in favour of the package at the June Agriculture Council.

  I hope this explanation is helpful.

31 July 1998


 
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