WEDNESDAY 11 JULY 2007

Dr Mark Avery, Dr Sue Armstrong-Brown and Mr Harry Huyton

  Q60  Viscount Ullswater: From grazing the land?

  Dr Armstrong-Brown: Yes.

  Mr Huyton: Throughout Europe there are high natural value habitats which depend upon a certain level of grazing throughout the Continent.

  Q61  Viscount Brookeborough: You highlight in your paper that the enlargement of the EU has brought in Members with important environmental assets, and it is not surprising because they are very much behind, less developed and less intensive than we are. Your evidence suggests that these may be at risk if the CAP is applied in these regions and you have given the examples in your evidence of Spain and Portugal. I think it would be quite interesting to hear how they have suffered, in your opinion, since their accession. But could you describe these assets in the areas of the new Member States and how they are integrated at present with their domestic economies and what new risks you see to them?

  Mr Huyton: I think the new Member States, particularly Central and Eastern European Member States, bringing with them the kind of burden of general biodiversity you would associate with traditional farming practices, have a real wealth of biodiversity. I have a couple of figures here. Corncrakes—91% of the EU's population in the new Member States, so 152,000 pairs compared with the 800 pairs we have in the UK and the five pairs we have in England. So it is an absolutely massive disproportionate concentration of Europe's biodiversity—100% of Aquatic Warblers; 75% of White Stork. A project the RSPB was involved in recently was mapping the biodiversity hot spots of Europe and it looked at the species richness of farmland birds across the Continent. I do not know whether you can see this. It is quite small. We have copies that we can leave, but you can see the big red blotch over there on Eastern Europe, which represents the species richness relative to the rest of the Continent. That is a hugely important asset, but what we are seeing at the moment is that the new Member States are essentially playing catch-up on agricultural development, quite understandably, and they are capitalising on the available Pillar I subsidies and the Pillar II subsidies to develop in the way we have developed our agriculture. Of course, with that will be the negative impacts on wildlife which we have already seen here and in the EU15. We and other organisations compile a farmland bird indicator for across Europe and, if you look at the indicator for the EU new Member States, you will see it is significantly higher than here. Now it is beginning to tail off already as this investment happens through the money coming in from the CAP.

  Dr Avery: One of the things that maybe it is worth saying is that we framed quite a lot of our answers in terms of farmland birds because that is what we know most about. But, if you go to Eastern Europe—and I do not know Eastern Europe well—it is amazing, the landscapes and the richness of the countryside for wildlife which, when you come back to the UK, you can only find remnants of, and you tend to find it on nature reserves. So the RSPB's nature reserves in Cambridgeshire, on the Nene washes, is the closest you can get to the wildlife richness of Eastern Europe. You can stand there and hear Corncrakes singing and Black-tailed Godwits singing, and that is about 20 miles from where I live. I go there often because it is so fantastic. Now, if that place disappeared, my next port of call to have that experience would be Eastern Germany. We are talking about birds here, but there is also the landscape, the quality of life and the richness of the countryside—it is only when you travel abroad from the UK that you realise how much we have lost in this country, and if we had kept more of it we would value it very highly. So, if the Accession States go down the same route over a much longer period of time than we have done in this country, the effect of the CAP could be to wreck Europe's wildlife in the Accession States, and that does not seem to be a very sensible way to go.

  Q62  Viscount Brookeborough: If, as you suggest, the CAP were to evolve into a Rural Development Policy, to what extent do you think such a policy might address these risks? In your paper you use fairly extreme terms, "However, the task presented is huge and urgent and this requires a whole set of political and financial commitments." Will this not ultimately mean that, although the CAP may have changed into a rural policy, we will actually be putting more money into maintenance of the land than we are currently into the CAP?

  Dr Armstrong-Brown: I think one crucial thing to recognise is that starving these areas of funds will not necessarily guarantee the continuation of that biodiversity. It might, but it would not necessarily be the most obvious way to do it. So allowing European money to flow into these areas does not seem to be a bad thing, but allowing it to flow in the wrong way and incentivising the wrong behaviour does. We believe, and there is evidence to show, that if you put the emphasis as an area develops on some of these non-commercial aspects to simply bring them up alongside the economic and quality-of-life social benefits that people are seeking, the role of the CAP needs to be through these rural developments which already exist to keep up with the change and ensure that the environmental benefits maintain pace with the changes—which are going to happen, and we accept them. We do not want to see these areas fossilised, but we do need to see a new development model so that they can develop in a more sustainable way. We would also see social benefits, we believe. At the moment these areas are gearing up quite a big rural depopulation issue. People will move out of farming. They will not be able to find jobs there any more if they follow the Western model. If rural development policies are used to boost eco-tourism to find the kinds of niche food and added value of other agricultural products which have been described already, there is a far higher chance of thriving rural communities being sustained in some of these areas, even though they will not look exactly like the ones that are there now.

  Q63  Viscount Brookeborough: You believe it can become sustainable, because it is such a massive task and the population is already moving out of those areas? To a certain extent you are denying them the social advancement that the EU has promised.

  Dr Armstrong-Brown: That is an incredibly important point and the last thing we would want to do is to say, "Choose birds not jobs." For a start, it is not that argument anyway. Agri-environment schemes are linked to higher levels of rural employment than Single Farm Payment areas anyway. We have various examples of that. We do recognise there will be a change, but you are right to highlight the urgency and the importance of this. It is going to be quite difficult. We do have decades of history of the wrong sort of development to draw on and not all that much experience of the right sort. We have one decade of learning about good agri-environment schemes and the types of schemes that are now in Axes 1 and 3, but we need to bring all that and apply it as fast as we can. Otherwise, as you say, it will be too late.

  Q64  Viscount Brookeborough: Would you say something about Spain and Portugal as to what has changed since their accession and how it has been detrimental to the environment? Secondly, because you are particularly involved with birds, what about the extensive shooting of songbirds in other countries of Europe? I notice that we were blue on your chart, which seemed to be for the lowest preservation levels. I come from Ireland and you had us especially low.

  Mr Huyton: I am afraid Ireland is particularly blue!

  Q65  Viscount Brookeborough: But after all the damage which is done day by day in farming—and I am not protecting it at all—there is extensive shooting of songbirds throughout a lot of the rest of Europe?

  Dr Avery: I can deal with the shooting of songbirds, to give my colleagues some time to think about the rest of the answer to the question. The shooting of songbirds is not a good idea and quite a lot of it which has come about in Southern Europe and the Mediterranean is illegal, and it is illegal under the Birds Directive.

  Q66  Viscount Brookeborough: But they do not do much about it?

  Dr Avery: Well, there has been progress, but not enough progress. We would certainly say that the spring shooting, in particular, of birds like Turtledoves, which are migrants—Turtledoves are farm birds in this country but spend the winter on the other side of the Sahara—by the French in South-West France and in other parts of Southern Europe is bound to decrease the population. Having said that, all the research which has been done actually shows that it is changes in farming which have driven the big decline in Turtledoves right across Europe. They are dependent upon seeds during the summer, particularly Fumitory, which used to be a fairly common weed and is now a rarer plant. So, even if the bird is shot illegally—and we are against that—the thing which has actually driven its decline is these big land use changes right across Europe.

  Mr Huyton: I can comment a little on Spain, but before I do, if you do not mind, I would like to add quickly to what Sue was saying earlier because of the difference between Pillar I and Pillar II. I think the way to look at it is that Pillar I is essentially financing capital-intensive agriculture, whereas Pillar II is financing employment-intensive agriculture, and we have got an increasing body of evidence of that. We are involved in a study of the agri-environment in Wales, Tir Gofal, for example, which looked at the social and economic benefits of this scheme, and it found that this scheme, which costs the Welsh Government £11 million a year, is generating an additional expenditure in the Welsh economy of £21 million a year and is helping to create an equivalent of 385 full-time jobs because these need more manpower to deliver than the Single Farm Payment, and such like. That was just in addition to what we said before. On your question of what is happening in Spain and Portugal, in Spain we have continued to see a decline in the agricultural area as the more marginal areas, which are also some of the best areas for biodiversity when they are managed appropriately, are being abandoned. So low-intensity, un-irrigated arable land, for example, has been abandoned. I think the figure is that between 1996 and 2006 the utilised agricultural area has declined by 10%. That overall figure masks the big expansion in the area under permanent crops, which is predominantly irrigated and usually in the areas that are most water-scarce. A similar pattern, I understand, is happening in Portugal, which of course is using, like Spain, its rural development money to finance an ever-growing programme of irrigation. I think that is all I can say on those countries.

  Dr Avery: Irrigation is certainly one of the big problems in both Spain and Portugal.

  Q67  Viscount Brookeborough: They have had several drought years in Portugal and Spain, have they not?

  Dr Avery: They have, but the last decade or so has allowed irrigation schemes to be put into areas of low intensity agriculture which were phenomenally important for wildlife, such as the Steppes areas of Extremadura which hold globally threatened species of birds like the Lesser Kestrel and the Great Bustard. You go back to areas which were rich in those species and you find that there is wheat growing there, or tobacco, or other crops, because irrigation has been put in place. That is understandable, but it is going to eat away at the tourist industry and you wonder whether the bottom will fall out of that means of farming, but it will have done the damage in the meantime.

  Mr Huyton: These countries actually really show quite clearly the different results you get through investment in agri-environment and through funding intensive practices like irrigation and such like. In Portugal there is a fantastic example of an agri-environment scheme in an area called Castro Verde, which has helped to protect the Great Bustard, which is declining everywhere in Portugal apart from where this agri-environment scheme covers it. There are all sorts of associated benefits relating to eco-tourism, if you want to go out and watch them. Meanwhile, you have the ongoing investment in irrigation infrastructure in areas which are suffering from water scarcity and that water scarcity will only continue to get worse in the future with climate change.

  Dr Avery: Just briefly, it may be worth saying that we are clearly keen on agri-environment schemes, I am sure that shines through! We are partly keen on agri-environment schemes because our experience of them in the UK is that the UK has brought in good agri-environment schemes—not perfect agri-environment schemes, we would like to see them done better and we would like to see more money in them, but they have worked. They have delivered much of what was intended and we can envisage how, with tweaks to the system, they could deliver even more for public money. There are other examples across Europe where agri-environment schemes have worked well, but there are some spectacular examples of where they have worked really badly, and that is where Member States have introduced agri-environment schemes which could never work. They were not well-designed. So we are in favour of them partly because we think they are a good idea and partly because we have had good experience in the UK. But that does not mean that they have been perfect everywhere they have been put in place.

  Q68  Baroness Jones of Whitchurch: But is it not inevitable that they have to be subsidised? Are there any agri-environment schemes which can just be profitable in their own right? Or are the schemes you are promoting inevitably going to be subsidised?

  Dr Armstrong-Brown: Could you clarify that? We were actually talking about the fact that the scheme is a subsidy and it is a payment for a specific purpose rather than a general subsidy, but they can lead to farmers being more profitable. So there is quite a lot of examples with some of the rural development grants of people setting up farm shops, people setting up business parks on their farms in disused farm buildings where people can tele-work, and so on, which then do lead to a more often viable bottom line for that farm, and that would be an ideal situation.

  Q69  Baroness Jones of Whitchurch: The question is, in relation to the schemes which are being funded by this money, is it inevitable that they have to be subsidised or could you envisage a situation where they would be economical in their own right? Or is the whole of our funding project for ever more going to be based on some subsidies to make the environmental balance worthwhile?

  Dr Avery: One example, I guess, is organic farming, where the environmental benefits from organic farming are reasonably well-documented and clear. The RSPB would say that generally speaking on biodiversity grounds organic farming is a good thing. It is clearly more complicated than that, and I am not going to say anything about whether organic food tastes better or is safer for you. But in terms of biodiversity benefits organic farming does deliver benefits. There is public money going into that, but the market is providing a lot of the support and the incentive for more farmers to go organic. So that is an example of where there is a shift in the way a rather small but growing proportion of farmers are farming their land and they are absolutely making money out of the environment, if you like, by farming in an environmentally-friendly way. That is probably the best example.

  Q70  Baroness Jones of Whitchurch: Yes. Could you envisage using that money as a sort of seed corn, and then people will stand on their own two feet in five or ten years' time?

  Dr Avery: I suppose another example, which you might be surprised to hear the RSPB say, would be management for game shooting. The best types of pheasant and partridge shooting, which are done to deliver an income from the shooting, do have environmental benefits for wildlife. That is absolutely true. A lot of farmland birds benefit from that type of management. So that is another. We are clearly struggling to think of a long list of ways where you make money from doing environmentally the right thing without public support, but those are two. Organic farming is not without any public support, but it is not completely dependent upon public support.

  Dr Armstrong-Brown: I do think it is quite important to recognise that a lot of the time we are dealing with a market failure, so we do strongly believe that there will need to be some sort of public support—not for everything, and examples in addition to those are rare things which will make money in their own right. But basically it is not usually going to be in any producer's interest not to produce if his business is production. But if the environmental benefit you are after depends upon not producing on a little bit of the land, there is always going to be a market failure there and the only two ways you can address it are through regulation or through some sort of incentivisation really, unless the market changes in such a way that it recognises the efforts being made. I know some supermarkets are very interested. We were speaking to some of them about how some of those benefits to the consumer can be paid for through the consumers rather than through policy, but I cannot really see a way in which these sorts of incentives will never be required. So I do not think we will get to that golden market system which delivers us all the farmers' requirements, clean water, all the climate changes, et cetera, that we want from the countryside just on its own.

  Q71  Lord Cameron of Dillington: I would just like to follow up a little bit on the Chairman's question on cross-compliance with a couple of other questions. From what you say about the application of cross-compliance in other countries it has been fairly lax in some areas. Does that mean you see that the future of cross-compliance should involve a greater degree of prescription from Brussels? And, if so, how does that equate with the statement you made earlier about the dangers of having EU-wide policies when you have got different topographies, different habitats, different climates, and so on?

  Mr Huyton: As we said, I think it is clear it is not working at the moment, so the approach we have at the moment is too far on the subsidiarity scale towards the Member States, but at the same time we need the flexibility because obviously the environmental situation between Member States and between regions varies widely. So we need to maintain some broad flexibilities. We need to bring it back a bit more towards the control of Brussels or the EU, but the way we think this could be done is through a programme of approach similar to what we get under the rural development programmes at the moment. So, the EU sets a strategic framework, Member States submit their proposals and the EU does a final sign-off to make sure that the different proposals coming from all different Member States adequately meet the requirements and reflect a similar level of environmental protection. I think that would be a good model because that retains the flexibility. Member States still write their own programmes, they still look at how this applies to the Member States, but there is this check to make sure that they are ticking all the boxes and they are not missing anything out.

  Q72  Lord Cameron of Dillington: My second question relates to that. Reading your evidence, reading between the lines, I get the feeling that you are slightly torn between the benefits of cross-compliance, which is in a way like regulation because everyone is going to take Pillar I money and therefore will apply to all farmers, compared with if you put all the money into Pillar II and you only have environmental schemes, which were kind of acting in competition with food production in the marketplace and it would only be taken up by some farmers. Is that a true analysis of the dilemma you find yourselves in?

  Dr Armstrong-Brown: We do not really see it as a dilemma, actually. We feel quite calm about this one. We do feel the need for a common baseline for everybody, you know, there is a speed limit in towns! There is a clear argument for that. Whether or not it needs to be delivered through cost-compliance or some other route is open to question. Actually, if the Single Farm Payment were to be phased out you would not have anything to hang your cost-compliance on, so you would need to have another way. That baseline can be envisaged and is necessary, and every hectare of land should be at a certain standard for the environment.

  Q73  Lord Cameron of Dillington: So, even if Pillar I disappeared, you would want to see an introduction of regulation to apply?

  Dr Armstrong-Brown: We would like to see some way of establishing good farming practice, how to manage land on behalf of yourself and others to a minimum standard. But we do recognise that to go beyond that—you cannot require everybody to be self-funding, to make a huge effort, if it is not in their business interests, unless there are some further enhancements on top. But we do see the need for both of those approaches, the baseline and the extra thing which not all farmers may choose to go into. But we do see a baseline that everybody should adhere to as being necessary.

  Q74  Lord Plumb: You abolish the Single Farm Payment and you introduce regulation, because you would have to introduce regulation to make sure you have got suitable environmental practices by farmers. You have got a market out there working away which is sending pretty strong signals to farmers. With that sort of combination, what do you think the impact would be on European agriculture in terms of its shape and numbers?

  Dr Armstrong-Brown: The economists would argue that we already are there. It is not necessarily a view that any of us completely believe, but with decoupled payments in theory they do not impact on farming choices because they are not attached to them. Now, we all know that is not actually the case and there is recoupling going on at the level of the individual.

  Q75  Chairman: You are almost having your cake and eating it, are you not, with your argument? One minute you say you want to get rid of the Single Farm Payment and the next minute you are saying, "Well, it's decoupled and it's not -

  Dr Armstrong-Brown: We will have our cake and eat it when we can keep all the money and its all in Pillar II, and that is what we are aiming for. But your question, I think, was about the changes to European farming and I think we can see some of them already. What we are seeing now is a continuation of some of the trends that already existed. So abandonment was going on and intensification was going on. Decoupling has released some of the restraints on both of those processes and now there is an adjustment to a freer market. What we would like to see is the bit of the equation which has not yet been put fully into place, which is alongside the decoupling rural development schemes which provide that market for the public good that does exist in some ways but not entirely yet. If that were to be the case, then what European farming would look like would depend on your development policy if you were incentivising through the new CAP. What we would like to see it do is allow profitable farming to integrate a lot of measures that look after the environment alongside those activities, so we would probably see some abandonment continuing. That might not always be a terrible thing, but we would like to see, in high nature value farming areas, abandonment stemmed through those rural development policies and those traditional farming customs which deliver such high quality environmental goods retained. Where it is sensible to have more intensive agriculture, where the market will dictate that that is the case—East Anglia is a good example, and the West Country for livestock farming—we would like to see those rural development policies ensuring the delivery, alongside production, of the environmental goods that we seek to get from those areas. That is how we would see it changing from the system we have now, if what we would like to see were to come to pass. Without strong rural development policies and well-funded agri-environment schemes, we would probably see this polarisation that Viscount Ullswater was talking about earlier continuing. We would see more abandonment. We would very likely see much more cyclical behaviour in the markets, which is already starting and will happen anyway, and the perturbations which Lord Plumb was raising earlier. We would anticipate those would happen anyway, but it could be moderated a little bit through the rural development programme if that were seen to be desirable, which we think it would be.

  Q76  Lord Cameron of Dillington: It would seem appropriate if I ask some questions on the budget at this stage. You obviously want, as you were saying—and all the money is going to Pillar II in the long run—that money to be spent achieving good results from what you were talking about as market failures. How do you see this evolving? At what level? Do you get Parish Councils asking for what they particularly want in terms of their local habitat and environment? I am talking about Axis 2, I know, but you are very keen on Axis 2 and you are probably not the right people to discuss the other Axes with. But is it at District Council level, Local Authority level, Regional level? And what criteria would be applied from Brussels, because it has to be a European-wide policy?

  Dr Armstrong-Brown: Are you talking about the specific delivery priorities? Or are you talking about the overall policy objectives, because I think you could come at it from either end, and you probably need to do both?

  Q77  Lord Cameron of Dillington: I am taking the overall policy objectives as given, because you want to improve the countryside in terms of habitats and the environment. There are lots of different things and you are particularly concerned about habitats and the way wildlife is managed and looked after. Other people might go for landscapes, but let us take the policy objectives. It is actually the delivery and how you would ensure that there was an even spread of funds across Europe, because you have got to have a single market. At what level would you apply these policies in terms of delivery?

  Dr Armstrong-Brown: That is a very good question. The more local you get, the more fine-tuned your delivery can be, but there needs to be a good overview. We do have a fairly good understanding of some aspects, especially for the farmland birds, where the real hot spots are and where you can do some good, and where some basically are not there, so there is no point in targeting agri-environment measures, if we are talking about Axis 2. One of the reasons why schemes have failed in the past is that they have simply been targeted at things that are not there and therefore have not delivered them. You do need to have that knowledge. It does not necessarily have to be done at a Council or District level, because those data are held at different scales by different organisations and in different countries as well. There certainly has to be local involvement. There is actually a consultation process going on now for England, delivering the environmental stewardship scheme, which is broken down by government office region, which is one of the places you could start. But it would rather depend—if you are talking about a very rare moth, you might need to go incredibly local. If you are talking about lapwing, nationally we have a fairly good understanding of pretty much where you would be likely to deliver a benefit if you targeted a measure for them.

  Q78  Lord Cameron of Dillington: So in your vision of the long-term future you would probably divide the funds up, give some locally and have some sort of national policies? Is that how you see it? Perhaps you have not worked out the details?

  Dr Armstrong-Brown: We have not got the detail, but to answer your question at a sort of headline level, there has got to be a common acceptance of the headline objectives of the Pillars, otherwise it is not a common policy. How to actually deliver those in specific places will rely on the knowledge of individuals who know where these things are. I do not really think national and local finances would be the only way to do that.

  Mr Huyton: Part of the way we see this thing delivered is the system of having a basic entry level scheme available to everyone. That would ensure that some funds are going everywhere, so that every farmer who wants to do something more for the environment and join this scheme can, and that money should be available across the EU. But then there are these kind of more advanced schemes which target specific environmental priorities, be it a specific species or a specific environment problem. So it may be a catchment area which is particularly prone to water pollution, and such like. I guess the targeting of those more advanced measures would be based on your environmental priorities.

  Q79  Lord Cameron of Dillington: Can I just step back then to the middle term. In your written submission you talk about having Pillar I co-founded by Member States. Why are you suggesting this? And how would you retain a single market if you did have co-funding?

  Dr Armstrong-Brown: That is almost a necessity because, if you were to start putting all the money from Pillar I into Pillar II, which is co-founded, the budget would double. So, if you switched the co-funding requirements away from exclusively falling on Pillar II and make the remnants of Pillar I co-funded, you could contain the overall budget. It would also be a very interesting test for how committed Member States really were to Pillar I payments. At the moment there is resistance to change.