Common Agricultural Policy (Hansard, 17 July 1997)

§ 8. Mr. Baker
To ask the Minister of Agriculture, Fisheries and Food what progress is being made towards securing reform of the common agricultural policy. [7282]

§ Dr. Jack Cunningham
I am delighted that the European Commission yesterday published proposals for common agricultural policy reform, which in most respects reflect the Government's own ideas and priorities.

§ Mr. Baker
Does the Minister agree that, although the announcements from the Commission are broadly welcomed by the agricultural sector and the wider environment, there is concern about the possibility of a cap on the proposed ceiling for direct payments to farmers? Will he undertake to resist any proposals for a cap on our farms, which are generally two or three times larger than those elsewhere in the European Union, as that would be detrimental to farmers in my constituency of Lewes and elsewhere in the country?

§ Dr. Cunningham
The hon. Gentleman is referring to what in Euro-jargon is called modulation. I can assure him, as I have told the House before, that I am opposed to the introduction of modulation in the CAP.

§ Mr. Lawrie Quinn
Will my right hon. Friend please outline how he intends to consult communities in peripheral rural areas such as the North York moors and his own constituency in Cumbria before the proposed reforms come into effect?

§ Dr. Cunningham
My hon. Friends the Minister of State and the Parliamentary Secretary and my noble 514 Friend in the other place are already involved in regional consultation on a regular basis, as are all right hon. and hon. Members. I can assure my hon. Friend that, having represented such a constituency for 27 years, I shall ensure that the voices of farmers in the hills, the dales and less-favoured areas are heard.

§ Mr. Alasdair Morgan
Given that the Government have already stated that the reform of the milk quota system is tied up with reform of the CAP, and as many dairy farmers are advising their sons and daughters not to follow them into the industry, but instead to enter the milk quota brokerage industry—assuming that they have also qualified as lawyers or accountants—will the Minister address the reform of the milk quota system as a matter of urgency so that young people are once again encouraged to join the industry?

§ Dr. Cunningham
The answer is yes. I favour the abolition of milk quotas, as that is the only realistic reform that should be on the agenda. I intend that that issue, among others, will be on the agenda during the United Kingdom presidency. In general, I support the points made by the hon. Gentleman.

§ Mr. Davidson
Does the Minister accept that the CAP has forced up food prices in Britain and elsewhere and represents a substantial transfer of resources from urban areas to rural areas? Why should the urban poor subsidise wealthy farmers? Would we not be much better off if the system were reformed so that prices were reduced substantially?

§ Dr. Cunningham
It is true that the rural poor as well as the urban poor have to pay high prices—sometimes even higher prices—for their food, so the CAP has been of disadvantage to British people generally. We all pay more than is necessary for our food. I can think of few, if any, other policies that cost £30 billion a year and infuriate the farmers and the consumers alike.

§ Mr. Paice
Although we welcome the reduction in price support contained in the proposals published yesterday—indeed, I welcome the remarks that the Minister has just made about them—does he agree that they would increase the cost of the CAP to the taxpayer by some £3.5 billion, yet at the same time reduce the income to arable farmers by some £330 million, in addition to the fact that cereal prices this year are already some 30 per cent. down on last year? Why should British farmers believe that the Minister will negotiate firmly on their behalf for proper compensation for further price reductions when he still refuses to commit himself to applying for the £350 million in compensation that is already on the table as a result of the revaluation programme.

§ Dr. Cunningham
The hon. Gentleman is right: the proposals—we are still examining them in detail—involve increases in expenditure. The Government have certainly not signed up automatically to that. I also recognise that, if we are to get away from support for production—that is our basic position—there will have to be transitional arrangements for farmers.
As for compensation to farmers, principally because of the movement in sterling, I can tell the hon. Gentleman and the House that I have an open mind on that subject. I have not made up my mind one way or the other.