15. What recent discussions she has had on reform of the common agricultural policy; and if she will make a statement. (47210)

At this precise moment Lord Henley is attending the Agriculture Council, representing the United Kingdom. I hope Members will appreciate the presence of a full team of House of Commons Ministers here to answer oral questions. However, I have spent two full days this week in Brussels, where the Environment Council discussed CAP reform. I met Members of the European Parliament—including the officers and rapporteur of the Agriculture Committee —to discuss CAP reform, as the European Parliament has the power of co-decision.

Let me begin by drawing Members’ attention to my declaration of interest.

Will the Secretary of State confirm that the negotiating position that she intends to take on CAP reform is different from that of the last Government, and that food security is at the heart of all decision-making processes?

Yes, I can confirm a change from the traditional stance taken by the last Government. Calling for direct payments to end forthwith was unrealistic. Our farmers need those direct payments at the moment, although I can envisage a time when, given rising food prices, they may not be necessary. The new, more realistic position means that we are a player at the negotiating table, part of an important alliance of member states that want CAP reform so that we can confront the serious challenges presented by the need for food security and by climate change.

According to farmsubsidy.org, the number of CAP millionaires rose by 20% in 2009 to 1,212, and they pocketed a total of €4.9 billion. Does the Secretary of State agree with those who say that there should be a cap—if Members will excuse the pun—on maximum payments to individual recipients, and that there should be far more transparency across Europe in relation to who is receiving such payments?

We are calling for a substantial reduction in single farm payments, but we do not share the Commission’s view that a cap should be introduced. The capping of farms whose size made them eligible would result in the fragmentation of farm structures, which would prevent agriculture from becoming more competitive and market-oriented.

The CAP has two key roles: ensuring security of food supply and environmental management. On 17 December, The Daily Telegraph reported a secret stitch-up between the Prime Minister and President Sarkozy of France: no reform of the CAP in return for French support for the British rebate. Yet the right hon. Lady the Secretary of State told the Oxford farming conference in January:

“Now is the time to make very significant progress towards reducing our reliance on direct payments”,

but her colleague the Farming Minister, the right hon. Member for South East Cambridgeshire (Mr Paice), contradicted her in the Farmers Guardian saying:

“Farming could not survive without direct payments…we will be suggesting a long, long transition from the current CAP system.”

We know the Prime Minister has full confidence in all his Cabinet Ministers, but who is in charge of CAP negotiations?

I think the hon. Lady should rely a little less on speculation reported in newspapers. She has been a politician for long enough to know that we should take what we read in the papers with a pinch of salt. She obviously was not listening when I very clearly set out our position. Her Government’s position on the CAP over their 13-year period in office was, frankly, not credible: they suggested that direct payments should end immediately. If the hon. Lady does not know enough about farming in this country to know that farmers cannot manage at this point in time without their direct payments, she has a lot of learning to do. Our new position is much more realistic: it is to look forward to the time when subvention will not be required, while in the intervening period helping the industry to adapt so that it is more competitive and market-oriented.

OECD reports show that UK food prices have risen by more than 6% in the last year, and families across the country are feeling the pain. The Foresight report says we need to increase production not just to feed the UK, but to meet growing demand for food across the world. The Environment Secretary told her officials she wanted to be briefed on the price of a loaf of bread. Can she tell the House by how much the price of a loaf has gone up in the last six months, and why does her newly published sustainable development strategy make no mention at all of the CAP, food or farming?

I am sure the hon. Lady does the household shopping in the same way that I do, and it is interesting that the hike in world food prices has not yet fully translated through into the cost of the grocery bill. This issue is a concern not only in the UK, but in other countries. It was also a concern to her Government during the last price hike in 2008. She should also be concerned about the farm-gate price of food: farming input costs are rising, making it extremely difficult for farmers to provide us with food at a reasonable price. That is one of the reasons why we made it a priority in our business plan to support British food and farming in a way that her Government did not.

I am grateful to the Secretary of State for that answer. I call Simon Kirby. He is not here. I therefore call Yvonne Fovargue.