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Common Agricultural Policy

Oral Answers to Questions — Environment, Food and Rural Affairs – in the House of Commons at 11:30 am on 11th March 2004.

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Photo of Hugh Bayley Hugh Bayley NATO Parliamentary Assembly UK Delegation 11:30 am, 11th March 2004

If she will make a statement on the prospects for further reform of the common agricultural policy.

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

Following the historic reform of the common agricultural policy last June, the European Commission has proposed reforms of the cotton, olive oil, tobacco and hops regimes. We hope that Agriculture Ministers will agree them on 22 March or thereabouts. We are looking at options for reform on sugar, and hope to see proposals this summer.

Photo of Hugh Bayley Hugh Bayley NATO Parliamentary Assembly UK Delegation

As we reach the end of Fairtrade fortnight, may I ask whether my right hon. Friend agrees that there is no chance of our achieving global justice in trade unless the rich world reduces the absolute level of its agriculture subsidies? She has made great progress in shifting emphasis to non-trade-distorting subsidies, but to secure a deal at the World Trade Organisation meeting the European Union will need to table further proposals for reducing the overall burden of subsidies.

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

I hear what my hon. Friend says, but dealing with trade-distorting subsidies is the key to achieving fair trade. There are separate issues. As my hon. Friend knows, we are addressing the issue of what support is given to the farming community, and on what basis, by pursuing reforms that have been agreed. I do not consider it helpful for those who want a successful outcome, and a trade deal that will benefit developing countries in particular, to continue to focus on what is happening to non-trade-distorting subsidies. Let us keep our eye on the ball and try to secure as good a deal as we can for developing countries. We can indulge in philosophical speculation on ideal worlds at a later stage.

Photo of Theresa May Theresa May Shadow Secretary of State for Environment and Transport

Farmers will be sceptical about further reform of the common agricultural policy unless the Secretary of State and the Government get the current reforms right. The Secretary of State's answer to valid questions about the impact of her payments for severely disadvantaged areas was very disappointing. My hon. Friends the Members for Maldon and East Chelmsford (Mr. Whittingdale) and for North Shropshire (Mr. Paterson) have written to her asking whether they can bring a delegation of hill farmers to meet her. Will she now give a commitment to meet that delegation, and also a commitment to review the payments for severely disadvantaged areas, with a view to changing them to ensure that the 5,000 farms that are expecting to go out of business as a result of those payments will not do so?

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

I note that yet again Conservative spokespeople are calling for more funds to be invested—

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

If the hon. Lady is not asking for more funds, she must be asking for funds to be taken from someone else.

When resources are redistributed—although in this instance the total is about 13 per cent. and it will happen over eight years—there is bound to be disappointment and concern, and people will want to make sure that the full impact on their own circumstances has been taken into account. As I have said, we are giving careful attention to the concerns that are being expressed. I cannot give the hon. Lady the undertaking that she seeks—I can only say that we will continue to keep these issues under review. We believe—and I think most people in agriculture believe—that the steps we are proposing are taking farming in the right direction. We are trying to employ a manageable time scale so that people can make decisions that are right for their own businesses.

Photo of Theresa May Theresa May Shadow Secretary of State for Environment and Transport

I am sorry that the Secretary of State is not willing to agree to meet that delegation of hill farmers and hear directly from them about the problems that her proposals will cause. Farmers need to have confidence in the system that the Government are introducing. The Rural Payments Agency has only about nine months in which to establish a radically different system. Given the Department's track record—the cattle passport scheme lost 100,000 cattle, and the fallen stock scheme has been delayed yet again—what confidence can farmers have they will receive their single farm payments at all, let alone receive the right amount, on time?

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

The hon. Lady referred to correspondence that I have yet to receive. When I receive it I will of course give it consideration, as the hon. Lady and the House would expect.

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

In my experience, people frequently claim to have sent letters that have not actually been dispatched yet. I say to the hon. Lady that it would be quite wrong to give the impression—I am sure that she is not under such an illusion—that hill farmers as a group are all bound to lose. That is not the case. Indeed, some may well benefit considerably.

The hon. Lady referred to the track record of my Department. I freely confess that the information technology systems available required considerable investment, and that no parts of the IT systems in the new Department could talk one to another. As I said, a huge amount of investment is going in and much work is being done. When she says that the scheme that the Rural Payments Agency has to administer will be radically different, that may be true to a certain extent, but let us not forget that in the first year there will be only a 10 per cent. shift in payments, so the great bulk of the payments in that first year—not until 2005—will be made on the same basis as those today.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

First, may I congratulate my right hon. Friend on her recent statement on CAP reform? It was welcome and took a significant step forward. It came as something of a surprise that, on this occasion, the French agreed to the reforms. I wonder whether that might be a good augury for the future, and that more rapid progress might be made towards the eventual dissolution of the CAP and the return of agriculture policy to member state level, which would be a great step forward.

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

With great respect, I fear that one of the things that would not help us achieve further reform of the CAP is creating the impression that we were about to move to its dissolution. I also tell my hon. Friend that it would be more accurate to say that my colleague the French Agriculture Minister accepted the reform rather than agreed to it. I accept, however, my hon. Friend's basic assertion that there is a great need for reform of the CAP. We accept that and I believe that everyone in the British Parliament accepts it. Most people recognise that the steps we have taken will take us further in the right direction. To be fair, successive British Governments have sought to follow that direction, but the present Government are delivering.

Photo of Bob Spink Bob Spink Conservative, Castle Point

But does the Secretary of State accept that the reforms have neither reduced the costs of the CAP nor helped to reduce protectionism in Europe? If the Government are serious about promoting international development and helping consumers in this country, should not the Secretary of State accept that the CAP is now well past its sell-by date and that it is time to get out of it?

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

It has been a long-standing aim of successive British Governments to curtail expenditure in this area, but the hon. Gentleman will know that under the agreement there is now a ceiling, which will not be exceeded. If expenditure tends to drift above that ceiling, it will be brought back. One aspect that is now completely different—many people believed that we would not be able to secure it—is that resources will be made available to secure what the public want, such as landscape protection, improvements to the environment and so forth, rather than merely to subsidise an industry.