Common Agricultural Policy (EUC Report)

My Lords, I serve on Sub-Committee D on Environment and Agriculture. I declare an interest as a farmer and landowner. I must also declare that for more than 20 years I have been lobbying to get the CAP reformed so that it addresses the problems of rural areas and represents all their population and not just the farmers. Even in the predominantly rural regions of the EU, agriculture’s share of gross value added is only 5.8 per cent. On average it is even less, and if you include the more urban regions it is much smaller still. I believe that government should not interfere with the management and control of the nation’s businesses. That is not efficient. An administration trying to control aspects of agriculture in 27 countries should limit itself to regulation and ensuring fair competition. However, the sad thing is that far too many people on the Continent treat agriculture as part of their cultural heritage rather than a business, and believe that every farmer should be protected because what he is doing is part of some sort of sacred duty. In reality of course he is no more part of the cultural heritage than the village cobbler, the butcher or the baker, who get no support. The landscape might be part of our culture, but not the farmer, so let us buy the product and not subsidise the man. That particularly applies to our less-favoured areas, where farming is mainly about landscapes, and landscapes are mainly about farming. In these remote and often mountainous parts, it is important for social and environmental reasons that land managers of some sort are encouraged to stay in place. Anyway, as a result of this near spiritual approach to farming in some continental countries, when the Commission approaches the reform of the CAP it is as much a political exercise as it is a rational examination of the future needs and requirements of a massive, and massively diverse, food industry. The question that should be asked, and is really not, is: ““What do we want from our agriculture in 10 to15 years’ time, and how do we ensure that we get it?”” The answer should be that we want to have an environmentally sustainable industry, which produces high-quality, good-value and sufficient food in a way that does not endanger the environment or the needs of future generations. The way to get there is to improve the infrastructure and help create a competitive industry that responds to market signals and not to political ones; an industry that is not dependent on taxpayers’ financial support, or on protection from the rest of the world; and an industry that does not utilise 40 per cent-plus of the EU’s budget in order to keep it as it is now. In other words, agriculture desperately needs the commercial pressures in order to keep it constantly changing in tune with market signals. That is how it will thrive and produce the food that Europe needs. However, the Commission, and now the Parliament, has to consider the vested interests. I might say that these vested interests do not only include farmers. It was interesting that when New Zealand did away with its agricultural subsidies in the 1980s fewer than 4 per cent of farmers went under, while I believe that over 50 per cent of its Ministry of Agriculture staff were made redundant. I will not go further down that road. Suffice it to say that these vested interests seem to have political clout, and even when you get some reform a new set of vested interests seems to appear. Real reform is thus very slow. One of the more interesting interviews that we had during our inquiries was with the European commissioner for financial programming. As noble Lords might imagine, she can think of a lot of better things to do with 40 per cent of the budget than to give it all to farmers. One of the things she said in passing which caught my attention was that in giving eastern EU farmers their very small equivalent of the SFP, we were only really helping the Chinese and Japanese economies. She paused like I am pausing now. She went on to explain that this is because many of the small farmers were just using this money, which was new to them, to go out and buy TVs and microwaves which they had never before been able to afford, while just carrying on farming in the way they had always done. So one has to ask: ““Is this money helping them modernise their industry or making them more efficient in producing more and cheaper food for the EU taxpayer, or is it just the start of getting them hooked on a way of life dependent on government handouts?”” Furthermore, if that is a justifiable question applying to them, might it not also be true in connection with western EU farmers? What does the single farm payment actually achieve for EU taxpayers outside the less favoured areas? There is no doubt that in eastern Europe farmers need help in restructuring their agricultural industry, but at present Pillar 1 is remarkably badly equipped to do this. Certain rural areas in western Europe also need help, but why pick only on farming as the conduit for support? The CAP could be described as being monotheistic in that it blindly worships farmers at the expense of others in the countryside. However, if we want to create wealth and employment in the countryside let us foster new cutting-edge businesses which will not need ongoing support once the right infrastructure is in place such as more commercial workspace or good broadband and transport links. If you want landscapes or habitats, then by all means pay farmers to produce them, but leave the food market alone. Encourage co-operatives, and above all encourage or even pump-prime insurance schemes so that both farmers and consumers can cope better with the bad years, but do not go down the route of the disastrous recent French proposals to make the EU food industry even more protectionist. That is reverting to the failed policies of the 1980s and will ultimately lead to an inefficient industry where the supply of food is gradually reduced and becomes more expensive than ever. As I have said in other speeches to your Lordships, we are going to need a really competitive and productive European food industry in years to come. There could be world food shortages and it is inevitable that at times food prices will go up. However, as has been said, food as a percentage of the household budget in much of western Europe has fallen during the past 50 years from more than 30 per cent of household spend to some 10 or 11 per cent now, so here at least there is some slack in the system. I believe that farmers and food would be so much more appreciated if the market was not distorted by the political interference of the CAP. I also believe that farmers in Europe can in future supply the food that Europe needs, and can even keep others further afield well fed, but only if they are exposed to the realities and pressures of the marketplace and not cocooned by the comfort of the present CAP. Meanwhile, a well funded Pillar 2 could do so much more for our countryside and those who live there.