European Standing Committee A
Wednesday 10 December 1997
[Mr. Eddie O'Hara in the Chair]
Reform of The Common Agricultural Policy
10.30 am
Mr. Jack: On a point of order, Mr O'Hara. It is evident that the Committee has attracted a large number of Members. Is it possible to move to a larger Room for the comfort of all?
The Chairman: I do not think that that will be possible. [Hon. Members: ``Why?''] If we had had more notice that so many people intended to attend, we might have been able to do something about it. The meeting is scheduled for this Room and I do not know whether we would be able to find a larger Room within the time allotted.
Mr. Forth: Further to that point of order, Mr. O'Hara. Can you guide us on how you intend to conduct the meeting? It is obvious that many colleagues who may wish to catch your eye are unable to sit in the body of the Committee. If you are unable to organise another Room, Members would appreciate guidance on how they can participate in our proceedings when space is at a premium.
Mr. Townend: Further to that point of order, Mr. O'Hara. I understand that Room 10 is available.
Mr. Quentin Davies: Further to that point of order, Mr. O'Hara. I have sat on European Standing Committee B for two Parliaments. Our principle has always been that any Member of Parliament can turn up to express a view on his constituents' behalf or in the national interest. There should be no artificial constraint on Members' ability to take part, and such constraint would be quite contrary to the principle on which the European Standing Committees were set up seven or eight years ago. It would be a shocking precedent and would make nonsense of our system for scrutinising European legislation.
Mr. Duncan: Further to that point of order, Mr. O'Hara. As one who must stand because I have no chair, I invite you to cite the precedent by which Members are required to give notice that they intend to attend a meeting?
The Chairman: I am not aware of any such precedent.
Mr. Duncan: Further to that point of order, Mr. O'Hara. That rather goes against what you said earlier.
Mr. Jack: Further to that point of order, Mr. O'Hara. Might the Committee adjourn to allow you time to consider this matter, or to take up the practical suggestion of my hon. Friend the Member for East Yorkshire (Mr. Townend) and move to Room 10?
The Chairman: I was about to suggest that we adjourn for five minutes to clarify the situation. We will adjourn until 10.38 am.
10.33 am
Sitting suspended.
10.38 am
On resuming--
The Chairman: During the Committee's suspension I checked whether Committee Room 10 was available. It is not dressed, and the recording console is not yet in order, but that is being dealt with. If Committee Members currently have a bottle of water in front of them, they should take it with them to Committee Room 10. The Committee will formally reconvene and commence its proceedings at 10.45 am in Room 10. We shall go on until 1.15 pm, which is the latest that we can sit, but that will give us the full two and a half hours.
10.39 am
Sitting suspended.
10.45 am
On resuming--
Dr. Vis: On a point of Order, Mr. O'Hara. Your flexibility in re-arranging our proceedings from Room 9 to Room 10 in such a short time was admirable.
The Chairman: I am not sure that that is a point of order, but its expression is appreciated.
Mr. Jack: May I associate myself with the previous point of order, Mr. O'Hara?
Mr. Swinney: On a point of order, Mr. O'Hara. May I also associate myself with the comments made on the re-organisation of events?
We have only one hour for questions. Will those of us who are members of the Committee and attend as often as we can be accorded preference in the selection of questioners, or will we be treated the same as the Johnny-come-latelys who have arrived this morning?
The Chairman: All Members of the House are entitled to attend the Committee, ask questions and express their views, but only members of the Committee are entitled to vote.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Jeff Rooker): I too would like to thank the Officers of the House for the speed with which they changed rooms. I was involved in a similar incident some years ago. I do not want to cause embarrassment, but I am happy to debate the matter if other hon. Members arrive wanting to participate in our proceedings--I am quite happy for them to sit either side of the Committee--even if that means adjourning to the Chamber because there is insufficient room here.
My initial comments will be brief, as is required. We are discussing a wide issue, although it may be somewhat narrowed by the interests of hon. Members. ``Agenda 2000'' covers the Commission's proposals for reform of the common agricultural policy and I shall make some preliminary points about three or four of the sectors affected.
We can expect pressure on the CAP from the increasing trend towards liberalisation of world trade. We all know that the prospect of enlargement of the European Union will add to that pressure, as is made abundantly clear in the documents from the Select Committee and the Commission.
A more pressing concern are the structural market imbalances which can be seen in major sectors such as beef and dairy. It is essential that the EU act to address those mounting problems by moving to a more market-oriented common agricultural policy, with less emphasis on production-related support and more emphasis on protection of the environment and the wider rural economy. We can all support that in general.
The Government welcome the direction marked by the proposals. They will help to reduce food prices and the massive--some would say catastrophic--bureaucracy associated with the CAP, but they do not go far enough. I shall refer briefly to four sectors.
The Government's view is that the Commission's proposals for the arable sector are a significant step in the right direction, although we would have preferred to go further in some areas. A 20 per cent. price cut is proposed, which seems about right to bring European prices in line with world levels and to remove export subsidies, at least for wheat. European food producers must compete in a world economy, which they are prevented from doing.
We agree with the Commission that the rate of area aid should compensate only in part for the price cut. There has been overcompensation in arable aid in the past. That is not something that people like to discuss openly because such overcompensation is never returned.
We would also prefer set-aside to be abolished rather than set at zero.
There are proposals for the beef sector, and Opposition Members may wish to discuss them. The Commission proposes significant reductions in support, not least because the problems of structural surplus in the sector are all too apparent; as is the cost of surplus disposal, which means a write-off given the World Trade Organisation constraints on subsidised exports, which are vast.
We do not entirely share the Commission's analysis of the market prospects for the sector, which anticipates a return to 1995 consumption levels and therefore suggests that intervention stocks could be run down between now and the year 2000. There is a difference of opinion on that matter, and hon. Members may wish to raise that issue.
Given the expansion of the suckler herd and the continuing downward trend in consumption, stocks could increase significantly between now and the end of the decade if action is not taken soon to reduce support prices, hence curtailing production.
I would like to discuss other matters, but I am somewhat restricted by time. I will touch on the proposals for the dairy sector. The Commission proposes to extend the quota regime to 2006, and gradually to decrease support prices by an average of 10 per cent. over that period. The Government view those proposals as disappointing and wholly inadequate. The proposals effectively leave the quota system intact for the next nine years, without knowledge of what will happen afterwards. Our proposals to improve the flexibility of the dairy regime and to simplify it have not yet been outlined.
The 10 per cent. price cut is insufficient to achieve the kind of market orientation needed in the dairy sector: a cut of at least 30 per cent. is needed.
We will look very carefully at the proposed yearly compensation payment for the cut in support prices, and at the level at which it will be paid. Payments should assist farmers to adjust to lower prices, and over-compensation must be avoided. Payments should be time-limited, degressive and decoupled from production. They must not discriminate against United Kingdom farmers.
Finally--because of my limited time--I shall touch on agri-environment and rural development issues. Agriculture has a great influence on the countryside, wildlife and conservation. All hon. Members know that, whether they represent urban or countryside constituencies. The distinction between the representation of the countryside and of urban areas in the House is less clear than it used to be--more countryside constituencies are now represented by Labour Members than by Opposition Members. [Hon. Members: ``Where are they?''] The Government will ensure--
The Chairman: Order. No interventions are allowed during the Minister's first, short statement.
Mr. Rooker: It is a short statement, and I am coming to the end of it.
The Government will ensure that measures targeted to help the environment have a high priority within a reformed CAP, together with measures for rural development. Our long-term aim must be the phasing out of production-related support. That should mitigate some of the environmental problems currently associated with the CAP, such as over-grazing of sensitive areas.
The Commission's proposals for greater integration of rural development and agri-environment measures make good sense. We wish to establish a more defensible Community framework, which encourages farmers and other rural entrepreneurs to create wealth and provide jobs in rural areas, whilst preserving and enhancing our countryside.
The Commission's proposals lack detail at present. The formal legal texts should appear in the early part of next year, which should put flesh on the bones. [Laughter.] Not having those texts makes it difficult for this House and for others to comment on the proposals in detail, but the texts should be available in February or March. Hon. Members will understand what I mean--the Commission will put flesh on the bones, and I am not in the least touchy about that issue.
Only once those legal texts are available will the House and United Kingdom industry be fully able to grasp the Commission's plans to reform the CAP. That reform is long overdue--it is costing British families the best part of £16 to £20 per week in increased food prices, which they should not have to pay. Those increased food prices are the result of the crazy system that we are locked into, and we will do everything that we can to unlock Britain during our presidency, and to set the reform agenda on an unstoppable progressive road.
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