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Common Agricultural Policy

Volume 405: debated on Thursday 15 May 2003

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If she will make a statement on the mid-term common agricultural policy review and its implications for British farmers. [113299]

Although we would have preferred the Commission proposals to be more radical, they do represent a considerable improvement and we will be working hard to secure a positive outcome to the negotiations this summer. Our analysis of the proposals concludes that overall, they would have a positive impact on UK farmers and farm incomes.

I am grateful to the right hon. Lady for that reply. Her Department is aware of the closure of Brandon's turkey factory in Dalton, near Thirsk, in the Vale of York, because of the impact of substandard imported turkeys from Brazil. Her Department is hiding behind the fact that currently, no EU action is being taken to prevent these sub-standard imports into this country. Can she give us an assurance today that in terms of sub-standard turkey imports and cheap sugar imports from Brazil, this House will be consulted before the final agreement is reached in the mid-term review, possibly before the end of June, in Greece?

Well entirely, but apart from the issue of the mid-term review and the decisions being taken, it is currently against the law for people to import material from elsewhere that does not meet EU standards. So although I understand and recognise the hon. Lady's concern, the position that she describes needs to be addressed by means of enforcement of the current rules.

I hope that my right hon. Friend will bear it in mind in the negotiations that many of us do not want the current system, through which farmers are subsidised for production, to be replaced by one which subsidises them simply because they own a piece of farmland or—even worse—because they once happened to be farmer. I know that she has been pushing hard for fundamental reform at European level, but I hope that she will bear in mind those concerns and press for as much funding as possible to be transferred to true rural development, rather than continuing with the current subsidy culture in another form.

I understand that entirely, and well recall the Select Committee expressing anxiety that we would be in danger of simply transferring money from one area in which we subsidise to another. I share my hon. Friend's view that it is very important that we make the best possible use of public funds, and that the purpose is to provide public benefit. It is desirable to support the wider rural economy as well as agri-environment measures.

Does the Secretary of State accept that there is an urgent need to establish what happens to the right of entitlement to the single farm payment in cases where the land has changed hands or tenancy during the reference period? If the decision is to devolve the matter to member states, will she ensure that the Government's intentions are clarified as soon as possible, and that a detailed consultation is held?

I can certainly assure the right hon. Gentleman that the Government are very conscious of some of the serious and genuine practical problems that existing proposals raise. I cannot give the right hon. Gentleman the answer that he seeks at present, but we believe that the talks and negotiations remain on course for basic decisions by the end of June. Once we see the shape of those decisions, we will know what impact they will have. However, I assure the right hon. Gentleman that we have received many representations about the points that he makes, and that we take them very seriously.

The mid-term review proposals to decouple payments do not sit easily with the Curry commission's recommendations on modulation—10 per cent., and then 20 per cent. Is my right hon. Friend confident that, in the light of that, the broad and shallow entry scheme can be funded?

My hon. Friend is entirely right that the Curry commission proposals go further than the generality of the mid-term review reform proposals would suggest. That lends a particular importance and urgency to our efforts to have that position recognised and taken account of in the negotiations. I assure both my hon. Friend and the House that there is nothing that the Government want less than to abandon the steps that we have already taken or the plans that the Curry commission rightly put forward for further steps in the UK.

Although much of the language is impenetrable to members of the public, the Secretary of State is aware that momentous decisions need to be made very shortly. What will she do to secure a deal and face down the German and French pack to protect the viability of small family farms, ensure that the nation state is able to distribute the top-sliced modulated rural development funds and, above all, significantly reduce the overall common agricultural policy budget?

I shall answer the hon. Gentleman's final point first. He will know that there is already broad agreement about the nature of the financial framework for the future use and structure of the CAP. I share his view entirely that much of the language is impenetrable, but the numbers at least are not. In addition, we have been, and will continue to be, engaged in extensive talks, bilaterally and in small groups, with other member states and the Commission. The course of action that the Commission is pursuing is that the proposals put into the public domain by Commissioner Fischler remain on the table. It is engaged in extensive dialogue with individual member states about the concerns raised by the proposals. We anticipate that there will be further extensive discussions at the next Agriculture Council, which I think is to be held next week. However, the proposals that remain on the table are the proposals with which the House and the farming community are familiar.

What estimates has my right hon. Friend made of the effect of CAP reform on the sectors that are currently unsupported, such as fruit and vegetables? Is there not a danger that some farmers will take single-farm payments, move into those sectors with a competitive advantage, and distort markets that are currently very finely balanced?

My hon. Friend raises another serious and valid point, which has been raised with this Government, with the Governments of many other member states, and with the Commission. I can assure him that we are mindful of the danger. We do not believe that it is as serious as some of those engaged in the sector believe, but we accept that we have to examine the position and take it into account as the final proposals begin to emerge.

Does the right hon. Lady believe that a national scheme for modulation is necessary, in addition to the European modulation scheme proposed by the Commission?

As the hon. Gentleman will know from what I said to my hon. Friend the Member for Sherwood (Paddy Tipping) a few moments ago, we are mindful indeed of the fact that our voluntary modulation—some other member states are also pursuing one—goes further than the Commission's initial proposals. We are discussing with the Commission how best to handle that in terms of the transitional scheme, which is particularly relevant to the United Kingdom.

But does the right hon. Lady not accept that the Commission's current proposals already discriminate harshly against British agriculture, which will be expected to shoulder a much greater share of the costs of common agricultural policy reform than would be borne by farmers in France or Italy, for example? Imposing a domestic scheme on top of a European scheme would weight the scales still further against the competitive interests of British farmers. What they want is a fair deal out of Europe. Can the right hon. Lady guarantee that she will be able to deliver that in June?

I can certainly guarantee to fight tooth and nail to secure a fair deal for British farmers. We have no wish to see British farmers placed at a competitive disadvantage. However, the hon. Gentleman will have observed that even the Commission's current proposals on the criteria of modulation funding—we are pressing to remedy some of the unfairness that has been Britain's lot in some of the negotiations in the past—would benefit the UK by 9 to 10 per cent. That compares with 3.5 per cent, now, but I accept that aspects of the proposals are unfair and we are making that plain to the Commission.