Common Agricultural Policy

– in the House of Lords at 2:58 pm on 23 November 2005.

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Photo of The Earl of Dundee The Earl of Dundee Conservative 2:58, 23 November 2005

asked Her Majesty's Government:

When they expect their current proposals for further reform of the system of agricultural subsidies and food import tariffs to be implemented.

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Department for Environment, Food and Rural Affairs, Parliamentary Under-Secretary (Department for Environment, Food and Rural Affairs) (Farming, Food and Sustainable Energy)

My Lords, the European Commission's proposals for reform of the CAP sugar regime are being negotiated this week. The commission has also made a conditional offer on reducing agricultural subsidies and import tariffs as part of the World Trade Organisation negotiations. Under the EU future financing negotiations, the Government have proposed a debate on the whole EU budget, including the common agricultural policy, leading to a review in the next few years. Implementation dates will of course depend on the outcomes of each of these negotiations.

Photo of The Earl of Dundee The Earl of Dundee Conservative

My Lords, I thank the Minister for his reply. Does he accept that the European Union's current failure to deal properly with high agricultural tariffs presents a major threat to wider trade prospects with developing countries? In the latter context, what balance will now be struck in a reform of sugar prices in Europe, to which the Minister referred, and in cotton prices in the United States?

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Department for Environment, Food and Rural Affairs, Parliamentary Under-Secretary (Department for Environment, Food and Rural Affairs) (Farming, Food and Sustainable Energy)

My Lords, on the noble Earl's first point, I agree that dealing with the distortions that the CAP system has set up puts at risk the wider world considerations. But I remind the noble Earl that a great deal has been done to address some of the worst aspects of the common agricultural policy. The reforms of 2003 and 2004, introducing the single payment scheme for farmers and breaking the link between the bulk of subsidy and production, is a great improvement for Europe and particularly for farmers in the UK. It is likely to make them much more competitive than they have been in the past.

I am afraid that I am not in a position to answer his second question about the link between sugar and cotton in the United States. All that I can say is that the sugar regime is one of the most outrageous examples of the subsidy system and has gone on for much too long.

Photo of Lord Barnett Lord Barnett Labour

My Lords, I ask my noble friend to ignore the advice recently given by the noble Lord, Lord Lawson of Blaby, and indicate—as I hope we have indicated—that we would be willing to phase out our rebate, provided that there was a complete phasing out of all the food subsidies.

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Department for Environment, Food and Rural Affairs, Parliamentary Under-Secretary (Department for Environment, Food and Rural Affairs) (Farming, Food and Sustainable Energy)

My Lords, I can only repeat what my noble friend Lady Royall said from the Front Bench a few minutes ago. We agree that the abatement is an anomaly, but it arises because of another anomaly caused by the imbalances on the expenditure side of the current budget. The Prime Minister has made it clear that if there were a serious effort to correct those imbalances the abatement would be on the table. I cannot do better than to quote my right honourable friend the Foreign Secretary who said, on 1 November:

"The current abatement is an anomaly, but it is an anomaly on an anomaly, and the most profound anomaly is the structure and funding of the common agricultural policy".—[Hansard, Commons, 1/11/05; col. 708.]

Photo of Lord Livsey of Talgarth Lord Livsey of Talgarth Spokesperson in the Lords, Welsh Affairs, Spokesperson in the Lords (Agriculture), Environment, Food & Rural Affairs

My Lords, does the Minister agree that, in the light of the reforms which he referred to that took place in 2003, with single farm payments coming in only this year, the fact that the sugar regime is about to be radically reformed and that we can go to the WTO in Hong Kong in early December sure that the reforms that we have already made will make an impression, it is time for the agricultural industry to settle down and absorb those reforms before further reforms take place?

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Department for Environment, Food and Rural Affairs, Parliamentary Under-Secretary (Department for Environment, Food and Rural Affairs) (Farming, Food and Sustainable Energy)

My Lords, the reality is that the reforms that are proposed will not come into force for some time. We have asked for a review during the middle of the next financial perspective. If the noble Lord is saying that agriculture is going through a time of tremendous change and difficulty, I of course agree with him. I very much admire the way in which individual farmers and the National Farmers Union are reacting to what are, in some cases, difficult changes.

Photo of Lord Williamson of Horton Lord Williamson of Horton Convenor of the Crossbench Peers

My Lords, while I strongly support the need to move forward on agricultural reform, does the Minister agree that the enormous changes in the use of the EU budget away from intervention measures towards direct payments to farmers, linked to environmental and similar objectives, are well under way, and that the Government are to be congratulated on that? The Government should not hide their light under a bushel; they should let it shine out on the noble Lord, Lord Pearson of Rannoch, and elsewhere. Would the Minister confirm that that is the situation, and that, because of the changes, the great majority of the budget goes on direct payments, while a very small percentage of it goes on market intervention, export subsidies and so on?

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Department for Environment, Food and Rural Affairs, Parliamentary Under-Secretary (Department for Environment, Food and Rural Affairs) (Farming, Food and Sustainable Energy)

My Lords, I am very grateful to the noble Lord. As he knows, this Government are modesty itself, and it sounds more effective when the noble Lord, from where he sits, says what he did. He is absolutely right; but the balance is perhaps not far enough in that direction. We need to increase and improve the rural development aspect, which will mean that farmers get paid by subsidy for public good—in other words, for agri-environment schemes and other schemes that are good for the environment—and that farmers, as they will be able to, find a market for what they produce—and British farmers produce the best.

Photo of The Duke of Montrose The Duke of Montrose Spokespersons In the Lords, Environment, Food & Rural Affairs, Deputy Chief Whip, Whips, Spokespersons In the Lords, (Also Shadow Minister for Women & Equality- Not In the Shadow Cabinet)

My Lords, I declare my interest as a farmer. Is the Government's aim in the current EU Ministers' meeting on the sugar regime to achieve a price of £20 per tonne? What reduction in European production do they hope to achieve at this price level?

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Department for Environment, Food and Rural Affairs, Parliamentary Under-Secretary (Department for Environment, Food and Rural Affairs) (Farming, Food and Sustainable Energy)

My Lords, our aim as president is to broker a compromise agreement that satisfies member states in the European Union. That is the role of the presidency. Of course we will protect British interests as well, but my honourable friend the Secretary of State, Margaret Beckett, is at this moment negotiating what we hope will be a deal for the whole of Europe. That will mean various parties having to make some sacrifices.

Photo of Lord Carter Lord Carter Labour

My Lords, my noble friend referred to the deal by the European Union heads of government in 2003 on agricultural support, which is supposed to last until 2012 or 2013 with a review in 2008. Are we sure that that deal and that timetable are secure? Are they on the table of the renegotiation?