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EU: Farming Support

Volume 699: debated on Tuesday 19 February 2008

asked Her Majesty’s Government:

Whether they will discuss further financial reforms of the European Union farming support system at forthcoming meetings with the Governments of Germany and France.

My Lords, yes. The Government will be having a number of detailed discussions about reform of the European Union common agricultural policy with France, Germany, other member states and the European Commission as part of this year’s CAP health check.

My Lords, has the Minister noticed that, even in those two countries with their traditional views, the feeling is growing among opinion-formers that the old-fashioned subsidy system will fade away by 2013 and that a new modern system of support needs to be put in place? Is the Minister optimistic that the combination of not driving farmers into mass penury but ensuring that the countryside is properly looked after is manageable within any future solution?

Yes, my Lords. I am even more confident after yesterday, when I attended the European Union Agriculture Council on behalf of the Government and spoke with all 26 member states and the Commission on the future of the health check. By the end of May we will have a document relating to the health check of the CAP on which we can consult well in advance of future reforms. The meeting was very optimistic; there was a little backsliding—some people want to turn the clock back—but by and large the benefit of decoupling production and subsidies, while maintaining a vibrant countryside and a landscape within the European Union, was a view that everyone shared.

My Lords, at the centenary dinner of the NFU last night, the Prime Minister used the phrase, “the food security challenge”, which is the first time that the Government have used that phrase to raise that issue. Does the Minister consider that Europe will now start to concentrate on this area of future food security, or does he believe that it is just a transitory concern for agriculture?

My Lords, I cannot comment in detail. I was working for Britain in Brussels yesterday and was not at last night’s NFU dinner, which I regret I had to miss. I have not seen a transcript of what the Prime Minister said, although I understand from my visit to the NFU centenary conference this morning that his speech was incredibly warmly received. Food security is an issue but it does not mean what some people think—that is, that we as taxpayers pay for production targets if they are not met. It means ensuring that we are self-sufficient but within a world market for food. This issue will not go away; it is very important because the world’s population is growing. There is a big debate about the technologies that will be used to produce food, let alone the water that will be needed.

My Lords, does the Minister not agree with the conclusion of the European Select Committee in a paper produced, I think, two years ago that agricultural policy would be better repatriated to member states than being left with the European Union?

My Lords, I do not know about that document but I do not agree with its conclusion, and nor do the Government. I do not think that that is what people wish. We have benefited enormously from being a member of the European Union and there will always be a CAP of some kind within the EU. It will vary, and it is changing enormously now with the decoupling of payments from subsidies to stop the wine lakes and food mountains so that public money is better used. The way that the CAP is organised at present does not make good use of public money, which is partly what the health check and future reforms are intended to remedy.

My Lords, I am sure that the Minister will agree that these are changing times for British agriculture. Notwithstanding the health check, what sort of changes in the administration and determination of farm support are likely to be consequent upon the Lisbon treaty?

My Lords, to be honest, I want to avoid that at present because I do not have an answer. The point is that we are dealing with the health check and the consequences of the 2003 reforms, which decoupled payments and brought in the single farm payment, and we are trying to operate that at present. With regard to future reforms, as I said, we will receive a document from the Commission about the health check at the end of May, I think, and there will be a 12-week period of consultation on it. During their presidency, the French are committed to bringing the health check to a conclusion before the end of the year so that it does not get mixed up with other changes, such as co-determination, which will come about as a result of the changes being made in the way that the European Union is governed.

My Lords, what is the Government’s view of the production and consumption of food in the world? For example, in some cases the price of grain has nearly doubled this year. There is a shortage, which looks as though it will continue, and therefore some stability is needed because it is probable that better prices will continue to be seen.

My Lords, that may be so but this morning a speaker at the NFU conference drew attention to a book published some 10 years ago that asked what would happen if China could not feed itself. That is a possibility, and therefore, as the noble Lord said, the push for production and these prices may be sustained. That could change the face of the organisation of food production in the world, and, as I emphasised, change the technologies used for that food production with a growing population. I am not going to refer to “cheap food” and so on. It is better that people stay close to the market but it must be a genuine and not a manipulated market.

My Lords, according to Treasury figures, membership of the CAP costs every family in this country £18 per week. Might it not be better if we followed New Zealand and Australia, repatriated the CAP and had a free market in agriculture?

My Lords, my answer to my noble friend—I still consider him to be that—is the same as the one that I gave earlier. While we are in the EU, there will always be a common agricultural policy of some kind. However, he is right that the average cost of the CAP to an EU family of four is around €950 a year. Only €20 of that is spent as EU money on targeted environmental programmes. In other words, we are paying out money for the wrong thing. Whether the amount of money stays the same is not the issue, but we are not paying out enough for environmental programmes and therefore there has to be a change. Of course, the CAP takes up some 40 per cent of the total EU budget for one industry and that is quite unacceptable.

My Lords, does the Minister agree that one of the biggest wastes of food—almost an immoral waste—is the growing of food crops for fuel?

No, my Lords, I do not accept that. If you talk to farmers in East Anglia who grow sugar beet, which is now going into the first biofuel plant in the country, you would see that that is not so. However, digging up land that is primary forest to grow biofuels does not make sense. The use of biofuels is not a clear-cut issue. That is something for a future debate.