HC Deb 31 January 2003 vol 398 cc1069-70W
Tony Worthington

To ask the Secretary of State for Environment, Food and Rural Affairs what her policy is on the inclusion of a specific objective in the European Commission's Mid-Term Review that CAP reform should work in the interests of poverty reduction and food security. [87567]

Mr. Morley

We estimate that the Common Agricultural Policy costs the average family of four in the United Kingdom between 8 and 9 per week through higher food prices and taxes. We believe reform is necessary to reduce this cost and contribute towards our wider poverty reduction objectives. Similarly, reform of the CAP would assist objectives of poverty reduction in developing countries, by increasing access for their agricultural produce to EU and third country markets.

The CAP was originally introduced in 1962 to address a strategic need for food security in Europe. However, as production responded, surpluses became chronic and required increasingly heavy expenditure. Food security is now less of a policy driver, and we would prefer to see producers rewarded for delivering public benefits focussed on the environment and wider rural economy, rather than over-production.

Mr. James Wray

To ask the Secretary of State for Environment, Food and Rural Affairs what reform of the Common Agricultural Policy has taken place since 1997; what recent discussions have taken place with European colleagues on this matter; what proposals she has for future reform; and when they will be submitted to the EU. [93577]

Mr. Morley

The Agenda 2000 reform package, agreed at the March 1999 Berlin European Council, brought EU cereal, milk and beef prices closer to world levels, and gave member states some flexibility to use CAP money for environmental schemes. It represented a significant shift from price support to direct payments and it reduced some of the economic distortions of the CAP, enabling the formulation of an integrated EU rural development policy.

On 22 January 2003 the Commission issued its draft legislative proposals for the 'Mid-term Review' of Agenda 2000. The Government has welcomed these proposals, believing further reform of the CAP to be necessary for both domestic and international reasons. In particular, we were pleased to see formal proposals to break the link between subsidy and production ('decoupling'), which will give producers greater flexibility to exploit market opportunities. However, we also have concerns over some elements of the proposals. For example, the proposed mechanism for transferring funds to support rural development is complex, would be hard to administer and would unfairly impact on larger farms; and we are disappointed at the proposed extension of milk quotas.

The first formal discussion of these proposals took place at the Agriculture and Fisheries Council meeting on 27 and 28 January. Further Council discussions are planned for the coming months. In addition, my right hon. Friend the Secretary of State regularly meets her EU counterparts bilaterally to discuss this issue. Since the start of this year she has met both the French and Greek Agriculture Ministers.

Geraldine Smith

To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on the reform of CAP. [92003]

Mr. Morley

The Government welcomed publication on 22 January of the European Commission's formal legislative proposals for reform of the CAP. In particular, we were pleased to see formal proposals to break the link between subsidy and production (decoupling), which will give producers greater flexibility to exploit market opportunities. However, we have concerns with some elements of the proposals. For example, the proposed mechanism for transferring funds to support rural development is complex, would be hard to administer and would unfairly impact on larger farms; and we are disappointed at the proposed extension of milk quotas.