Common Agricultural Policy (Hansard, 6 November 1997)

§ 1. Mr. Bill O'Brien
What plans he has for speeding up reforms to the common agricultural policy. [12609]

§ The Minister of Agriculture, Fisheries and Food (Dr. John Cunningham)
I expect the Commission to propose detailed CAP reforms early next year. Making progress on discussion of those reforms will be a priority for the UK presidency of the Agriculture Council.

§ Mr. O'Brien
It is pleasing to note that from 1 January next year the EU presidency will be with the Labour Government. As one of the EU's objectives is to help small farms, will my right hon. Friend make every endeavour to ensure that the UK's large farms do not suffer under any CAP reforms? Will he also make every endeavour to assure us that the benefits of any CAP review will be felt by UK customers in the form of lower food prices?

§ Dr. Cunningham
Yes, I can give my hon. Friend assurance on both those points. First, I would not support any form of modulation which discriminated against the UK or our efficient farmers. There are arguments for reducing expenditure on the CAP, but the argument that expenditure should be targeted at less efficient farming does not appeal to me. As for directing the benefits of any change towards consumers, I can assure my hon. Friend that we expect consumers to benefit quite significantly from changes to the cereals, beef, and—if we could achieve them—the milk regime too.

§ Mr. Walter
The Commission's proposals for reform of the CAP are outlined in Agenda 2000, but does the Minister agree that they make little concession towards enlargement of the EU, that they are probably unacceptable to the World Trade Organisation and that the financial outcome will be that they cost the taxpayer more rather than less?

§ Dr. Cunningham
I can partially agree with the hon. Gentleman. Some of the proposals will help us to conform with the likely requirements of the next round of WTO talks, and some will help us to develop a successful enlargement of the EU, which is the policy of Her 378 Majesty's Government, but proposing that milk quotas should continue until 2006 will not help us to achieve either of those two objectives.

§ Mr. Blizzard
When considering the effects of European policy on British agriculture, farmers in my constituency are rather keen on the single European currency. Was not the Chancellor's statement on the euro last week in the best interests of British agriculture, while the stance taken by the Leader of the Opposition does a disservice to farmers and shows that the Opposition are completely out of touch with the countryside?

§ Dr. Cunningham
Exactly so—for a party which claims to be in touch with what is happening in the agriculture and food industries to suppose that that is not the case just shows how out of touch with reality it really is.

§ Mr. Charles Kennedy
Will the Minister acknowledge that one of the potential benefits that can accrue to the United Kingdom through the coincidence of his custodianship of the Council of Ministers in the first half of next year and the CAP reform agenda is that he will be in a position to resist the understandable political temptation to speed up reform and, if he judges it correctly from a British as well as a wider European interest, he can ensure that time is taken to get the matter right, not least in the light of the implications that were acknowledged by the hon. Member for Waveney (Mr. Blizzard)?
In that context, given the uncertainty against which UK agriculture is operating with the agenda before us, will he take this opportunity to clarify or amplify the remarks made in the Chamber earlier in the week during the rural affairs debate as to the immediate, early, specific and targeted steps that he can take to alleviate some of the income difficulties being experienced, particularly in the less favoured areas, with regard to hill livestock compensatory allowances?

§ Dr. Cunningham
There were several questions there.
I broadly support the proposals for agricultural reform in Agenda 2000. As I have said before, some of them do not go far enough for me, but we must be realistic about the coalition for change that it is possible to build in the Agriculture Council.
The right hon. Member for Fylde (Mr. Jack) has said that £200 million is available to me because of an underspend on sheep annual premium, but that is not the case. If that money were available to me at no cost to the United Kingdom taxpayer, there would be no sensible reason for me not to take it. It is not available.
I recognise that the real problem on the hills at the moment is in the beef sector, given that last year sheep producers had a record year for the price of their lambs. This year, beef producers will benefit directly from £450 million of support. In addition, over the next couple of years we shall spend £2 billion dealing with the consequences of BSE. I recognise that the hon. Gentleman has not made any unrealistic demands for cash, but I put it to him that there is a limit to how much the taxpayer can spend on these problems. The answer is to restructure the beef sector.

§ Mr. Jack
May I take the right hon. Gentleman back to the answer that he has just given, in which he dismissed 379 the claim that I made in the debate on Tuesday that there was an underspend on the sheep annual premium? Will he confirm that he has received advice that there is an underspend on that budget? Will he also confirm that, in the light of that underspend, if he were to maintain the current levels of spending on hill livestock compensatory allowances, he would not breach his Department's public expenditure survey limits, which have already been set? If he cannot defend the interests of hill farmers—who are some of the hardest pressed farmers in this country—by giving me a positive answer, will he confirm that the truth of the matter is that the Treasury already has the money?

§ Dr. Cunningham
The truth of the matter is that that was the same rubbish that we heard from the right hon. Gentleman on Tuesday evening. I can confirm that the sheep annual premium is a demand-led scheme and is fully funded by the European Community. We make estimates of expenditure under the scheme, but there is no specific provision for that. To suggest that, because there may be less in sheep annual premium this year than last year, the difference is available to me to use for hill livestock compensatory allowances is absurd nonsense. If the right hon. Gentleman does not know that, let me tell him that hill farmers know it and they know that he is bogusly trying to raise a scare.

§ Mr. Ieuan Wyn Jones
The Minister referred to the priority that he is giving to reform of the common agricultural policy. Will he enlighten us on the ways in which that reform could take place? Does he acknowledge that one way would be to reduce headage payments and to spend more money on agri-environmental schemes? Are the Government of the view that that is one way forward?

§ Dr. Cunningham
Yes, I agree with the hon. Gentleman. That is one of the positive opportunities for reform that we should grasp. We should decouple CAP expenditure from production. I should like to see reductions in support—with, I emphasise, transitional support for farmers—so that we move towards market prices for commodities. We should transfer some of those resources into agri-environment schemes and into rural economies generally.
It is obvious that expenditure on agriculture and farming alone will never solve the problems of rural areas, the uplands or anywhere else. We must take other measures. It is also obvious that the policies pursued by the previous Administration for 18 years, far from solving the problems of rural areas and uplands, made them worse. I agree with the hon. Gentleman that we need new policies: he is absolutely right.