HL Deb 13 July 1994 vol 556 cc1816-8

2.55 p.m.

Lord Bruce of Donington asked Her Majesty's Government:

Whether they have considered an article by Mr Knud Munk entitled The Rationale for the Common Agricultural Policy and the European Communities Sectoral Policies; and whether they will give their views on the radical reforms proposed to the common agricultural policy.

The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Earl Howe)

My Lords, the Government consider that the cost of the common agricultural policy is too high. Our objectives for further reform of the CAP include reducing support prices so that supply and demand come into better balance; removing supply controls such as quotas and set-aside; phasing out compensatory payments; and targeting remaining support more closely—for example towards structural and environmental objectives. Our aim is to secure a more market-oriented CAP under which British farmers, with their relatively efficient structure and proven flexibility, would prosper.

The article by Mr. Munk contains many ideas which reflect the Government's approach. I welcome its contribution to the important debate on the future of the CAP.

Lord Bruce of Donington

My Lords, I am glad that the Government have evidently considered it possible to read and understand the document. Is the Minister aware that the population of the United Kingdom is fed up to the teeth with the common agricultural policy, which means an extra burden on taxpayers of £2 billion per year and £20 per week on each family of four?

Will the noble Earl give the House an undertaking that in the Reflection Group of the European Council, which is to meet to discuss the inter-governmental conference proceedings in 1996, Members of the Government will give serious attention to the necessity for reforming the common agricultural policy out of existence, root and branch?

Earl Howe

My Lords, the Government are already making their views very clear in Brussels. We are taking three principal steps. In the short term, we are pressing hard for price reductions in this year's price fixing. My right honourable friend the Minister will continue with those efforts next week. We are also pressing for the reform of those sectors not covered in the 1992 reforms —notably, wine, fruit and vegetables, olive oil and sugar. Looking ahead, yes, we shall press for support prices to be reduced still further and we are making known our views at every suitable opportunity.

Lord Mackie of Benshie

My Lords, is it the Government's view that British farmers are spoilt, too rich or incompetent? Will the Government replace the CAP by providing a fair deal for the agricultural community, which is responsible for feeding the British public up to the teeth?

Earl Howe

My Lords, the Government firmly believe that UK agriculture must prosper if we are to protect the countryside and if we are to have a healthy rural economy. But it is possible to imagine that without the high levels of production-related support which currently exist. To reduce that support will not be straightforward because we do not wish to see either the UK or indeed the Community placed at a competitive disadvantage on world markets.

Lord Marlesford

My Lords, can my noble friend give us any idea when we can expect an assessment of the financial success or otherwise of the 1992 MacSharry reforms? What kind of sum has been paid out to British farmers for set-aside in the first year? Does the Minister have any idea of the fall in production which resulted from the 15 per cent. set-aside?

Earl Howe

My Lords, the cuts in support prices and the increase in direct payments, such as set-aside, which arose from the 1992 reforms will result in consumer savings but increased taxpayer costs. The main point is that the overall resource cost will be lower than it would otherwise have been in the absence of reform. When the reform is fully implemented, annual costs imposed by the CAP on consumers should be around £1 billion lower in the UK and around £8 billion lower for the EC as a whole. However, that calculation did not distinguish between individual years.

With regard to the last part of my noble friend's question, I believe I am right in saying—although I shall check the figure—that, across the Community as a whole, in 1993 cereal production was some 2 per cent. lower than it was in the previous year.

Lord Cledwyn of Penrhos

My Lords, can the Minister assure the House that the Government have the support of the French Government in the changes that they have in mind?

Earl Howe

My Lords, we enjoy the support of the French Government in many areas. We talk regularly to our opposite numbers in the French Ministry of Agriculture. I believe that there are signs that a note of realism is creeping in to French thinking which, of course, we welcome.

Lord Stoddart of Swindon

My Lords, despite the encouraging remarks that the noble Earl has just made, is he aware that every time the Government make such remarks the cost of the CAP seems to increase even more? Indeed, it is now running at the rate of £30 billion a year. Does the noble Earl agree that the CAP policy was formulated to suit a peasant agricultural system in a world of food shortages? As we now want a modern farming system and there is no world food shortage but a world glut, should we not work to abolish the CAP?

Earl Howe

My Lords, whatever its original aims and objectives, there is no doubt that the CAP is no longer fulfilling the role that it should. As the noble Lord rightly pointed out, the world has moved on. The budget for 1994 has been set at the level of the guideline, but the latest estimates indicate that expenditure will be well within it. The Commission is expected to propose an amending budget to reduce the CAP budget by around 1 billion ecu.

The Lord Privy Seal (Lord Wakeham)

My Lords, I am afraid that we must now move on to the last Question on the Order Paper.

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