Cap

– in the House of Commons at 11:30 am on 30th January 2003.

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Photo of Mr Archy Kirkwood Mr Archy Kirkwood Chair, Work and Pensions Committee, Chair, Work and Pensions Committee 11:30 am, 30th January 2003

If she will make a statement on the latest proposals for reform of the common agricultural policy.

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Environment, Food and Rural Affairs

I welcome publication of the Commission's legislative proposals for reform of the CAP, which were discussed for the first time at the Agriculture Council earlier this week. They will form a good basis for what will be hard negotiations in which we shall be both positive and proactive in pushing for an early, substantial and balanced agreement that delivers a workable and fair deal for farmers.

Photo of Mr Archy Kirkwood Mr Archy Kirkwood Chair, Work and Pensions Committee, Chair, Work and Pensions Committee

While I acknowledge the need for CAP reform, does the Secretary of State share my concern about the present financial viability of cereal holdings throughout the United Kingdom? Does the right hon. Lady accept that the totality of prices available to cereal farmers plus the arable aid do not meet production costs? Later today, Scottish farm income predictions will show that the incomes of cereal producers in Scotland will suffer a further fall. Against that background, cereal producers are worried about the continuing proposals to cut intervention prices and to introduce further compulsory set-aside. Will she be careful to get enough flexibility from the review of the CAP to ensure that the viability of cereal holdings throughout the UK is guaranteed for the future?

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Environment, Food and Rural Affairs

I can assure the hon. Gentleman that we are concerned about getting the right basic package as well as sufficient flexibility to reflect local problems. I confess that I am not immediately familiar with the sort of figures that he expects for the incomes of cereal farmers in Scotland. Certainly, there is a welcome increase in statistics on farm incomes. We expect those to be in the public domain in the near future. While I do not suggest for a second that that will resolve the considerable problems faced by people in the farming community, it is obviously beneficial.

Photo of Paul Flynn Paul Flynn Labour, Newport West

Does my right hon. Friend agree with the Consumers Association's calculation that the average family in Britain pays a £16 farm tax every week and that 80 per cent. of that money goes to the richest 20 per cent. of farmers? If the CAP is to be reformed, is not it essential that the £1 million subsidies paid to huge farming businesses are changed so that those small farmers whose future is seriously threatened get a fair deal?

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Environment, Food and Rural Affairs

There is always argument about specific figures that come out in different studies, but I certainly accept, as most people do, that the CAP's present structure places considerable costs on consumers and taxpayers. Certainly, it must be one of the goals of reform to try to change that and produce a system that is fair, but we would like to see structures and proposals emerge from the reform package that are fair to all farmers.

Photo of Michael Jack Michael Jack Conservative, Fylde

Does the Secretary of State share my concern that French attitudes to CAP reform may undermine Europe's position in the context of the Doha declaration and the World Trade Organisation talks that are to come? Is she in any way building a coalition of support to counter French positions and to ensure that, under the modulation proposals, sufficient money is made available for rural redevelopment?

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Environment, Food and Rural Affairs

It must be a prime goal of the negotiations to ensure that enough money is available on the right terms, with the right flexibility and low level of bureaucracy, for rural development. I entirely agree with that point. With regard to the right hon. Gentleman's initial remarks, I am anxious to ensure that all of us in the EU get the balance of our negotiating approach to the WTO meetings right. I am very conscious of the suggestion that, because Europe was not proactive at a sufficiently early stage in the Uruguay round, we ended up getting the sticky end of the negotiations. There is a strong area of discussion in the Council of Ministers about how we get that balance right.

Photo of John Cryer John Cryer Labour, Hornchurch

Does my right hon. Friend agree that, in years gone by, the CAP brought ruin and despair to many third-world agricultural economies because of the policy of dumping cheap food on those economies, with obvious consequences? Will she do her best to ensure that those policies are not repeated in future, so that cheap food is not dumped on the third world? Does she also agree that, despite the best efforts that were mentioned earlier, there is an increasing feeling that—perhaps partly because of the French position—the CAP is ultimately doomed, which would provide a sort of solution to the problems that many Labour Members would welcome?

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Environment, Food and Rural Affairs

It is many years since I first came to work full time in politics, and one of the first things that I had to do was write a pamphlet explaining the CAP—I have never quite got over it. So I understand the point that my hon. Friend makes about the difficulties that have been caused not only elsewhere in the world, but in Europe, as my hon. Friend Paul Flynn highlighted a few moments ago. Ever since I wrote that pamphlet, I have believed that CAP reform was an urgent necessity.

Photo of David Lidington David Lidington Shadow Secretary of State for Environment, Food and Rural Affairs

Will the Secretary of State say whether the Government share the Country Land and Business Association's analysis that, on the basis of the Commission's current proposals, British farmers, who receive about 13 per cent. of direct payments under the CAP, will be expected to shoulder 26 per cent. of the costs of CAP reform? Will she also say whether the Government consider that that would be a fair outcome for British agriculture and whether she will be campaigning for British farmers to bear a more proportionate share of the costs of reform?

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Environment, Food and Rural Affairs

Without entirely endorsing the precise figures—various people come up with different studies—I can certainly say that we have some concerns about the precise impact of the legal proposals that are on the table at present, and we have concerns about whether they are entirely fair to British farmers. I have made that point already, very forcefully, to Commissioner Fischler, and I can assure the hon. Gentleman that we shall continue to make it in the negotiations.