Common Agricultural Policy (Hansard, 8 December 1994)

§ 6. Lady Olga Maitland
To ask the Minister of Agriculture, Fisheries and Food what plans he has for the further reform of the common agricultural policy.

§ 8. Mr. Robathan
To ask the Minister of Agriculture, Fisheries and Food what plans he has to reform the common agricultural policy.

§ 12. Mr. Lidington
To ask the Minister of Agriculture, Fisheries and Food if he will make a statement about his policy group on the reform of the CAP.

§ Mr. Waldegrave
I meet my European colleagues regularly to discuss all aspects of the common agricultural policy, including current proposals for the reform of those sectors not covered by the 1992 reform agreement, such as wine. However, in the long term, we will need a more fundamental reform. On 6 December, I announced the names of a group of independent experts who will help the Department and me to develop our thinking.

§ Lady Olga Maitland
I thank my right hon. Friend for his reply. Is he aware that the Leader of the Opposition has said that he will never allow this country to become isolated in Europe? Does he agree that there are times when we must stand apart, be independent and fight for Britain's interests?

§ Mr. Waldegrave
My hon. Friend gives a wise example. Although some voices in the European Community are beginning to support us in regard to fundamental reform of the CAP, for a long time we were alone in arguing for it. In that instance, Britain was right to be alone. The argument that we should never be isolated is very foolish, and would often lead to decisions that were not in Britain's best interests.

§ Mr. Robathan
My right hon. Friend used to be Secretary of State for Health, and I know that he disapproves of the European Community's subsidising tobacco. I understand that the Department of Health spends £20 million on encouraging people not to smoke. 460 What plans will my right hon. Friend present to stop the Community from spending £500 million or more on tobacco growing?

§ Mr. Waldegrave
My hon. Friend is right about both my personal views and the Government's policy. I think it is wrong for us, and some other countries in Europe, to campaign against smoking if the CAP then adopts a regime that subsidises the growing of tobacco. I hope that, over time, we shall win over more allies to the idea that we do not need such a regime.

§ Mr. Lidington
Has my right hon. Friend assessed the likely impact on the CAP of the accession to the European Union of the Visegrad countries of central Europe? Is there any sign that the European Commission and other European countries are taking seriously the gravity of the challenge that that move will impose on the CAP?

§ Mr. Waldegrave
My hon. Friend has put his finger on what will be the cause of further fundamental change in the CAP, of which I am glad. I do not see how the CAP can take on board countries of central and eastern Europe—which, before the war and before the communists ruined their agricultural systems, were extremely powerful agricultural producers—without further fundamental reform. Some parts of the European Commission seem to be beginning to recognise that. Directorate-General II has recently issued a good report, known as the Munk report, that advances many of the same arguments as the Government. In his speech at the Royal Institute of International Affairs conference last Friday, however, Commissioner Steichen did not seem to recognise the scale of the challenge that faces the agricultural part of the Commission.

§ Mr. Stevenson
Does the Minister agree that the sugar sector would be a crucial part of any CAP reform and that any reform of that sector would heavily depend on our commitments under the general agreement on tariffs and trade, which requires the European Community to reduce its sugar exports by about 36 per cent? Does he further agree that the two basic ways of achieving that are to reduce the quota or to reduce price? If those are the two basic elements, will he ensure that any quota reduction takes place in European Union countries whose quotas are in excess of their production requirements and that imports from African, Caribbean and Pacific countries are protected, because they need that protection to develop?

§ Mr. Waldegrave
The hon. Gentleman is absolutely right. By far the best way of reforming the regime would be to bring down the price while protecting imports from ACP countries. The Commission's proposals are not nearly radical enough. Within what the Commission proposes, I shall do my best to ensure that British quotas are not discriminated against—after all, we consume up to the limit of our quota. I do not find anything with which to disagree in what the hon. Gentleman said.

§ Mr. Tyler
Will the Minister confirm that nothing in the current CAP milk regime prevents him from taking action on the spiralling cost of the milk quota, including milk both for lease and for sale? Is that not a home-grown problem rather than a CAP problem? Will the right hon. Gentleman also confirm that nothing in the CAP regime prevents him from using his powers to confiscate unused 461 quota from non-producers who hoard it for speculative purposes? Is he aware that many dairy farmers are on the brink of bankruptcy because of the problem?

§ Mr. Waldegrave
It follows, just as night follows day, that, if the milk price goes up, the quota value goes up—that is what a market is all about. The hon. Gentleman is not right to say that this is a home-grown problem, because part of the problem derives from the fact that the national quota is lower than national consumption. If we could achieve the transferability of milk quota across national boundaries in the European Community, as many people have argued we should, a great deal of good would be done to relieve the pressure on people who are having to pay more for quota than they would like.

§ Mr. Dafis
Does the Department have any information on the degree of equability in the distribution of farm support, both among different-sized farms and among different regions in the United Kingdom? Does the Minister accept that any CAP reform must aim for greater equability in that regard and for the retention of at least the present level of employment in agricultural farming? Will he consider carefully the recommendations in the recent Friends of the Earth report entitled "Working Future" in relation to that matter?

§ Mr. Waldegrave
We have to be careful about this argument because what we call small farms in the UK are large farms in terms of farm holdings in Europe. If we begin to accept the language of bias towards what Europe calls small farms, we shall ruin British farmers, large and small. Although it sounds an attractive slogan, I do not think that it is helpful in terms of British agricultural structure. Nothing will better maintain the welfare of people in the farming sector than the removal of as many quantitative controls as possible, which have grown in the short term, in a more fundamental, long-term reform of the CAP to bring it closer to the market and to allow people who have good products to sell them freely.

§ Mr. Colvin
Will my right hon. Friend use all his influence to try to ensure that CAP 3 takes all the rural economy into account and not just agriculture?

§ Mr. Waldegrave
With my right hon. Friend the Secretary of State for the Environment, I have launched the process that will lead, next year, to the production of a White Paper that will cover the rural economy more generally. I therefore sympathise with what my hon. Friend has said, because when we consider the health of rural areas, we should look not only at agriculture but at a number of other sources of income and constraints on prosperity.