WEDNESDAY 17 OCTOBER 2007

Baroness Young of Old Scone, Ms Aileen Kirmond and Ms Hannah Bartram

  Q171  Chairman: Welcome and thank you very much for coming. Perhaps you would like to make an opening comment and then we can get on to questions and answers.

  Baroness Young of Old Scone: We have only one flippant comment and one serious comment to make. One flippant comment is that it feels a bit like an exam. Natural England comes in and then we come in, and we hope our answers are relevant!

  Q172  Chairman: I am going to stop you there straightaway, because when we had a look at the evidence from your two organisations, in the context of an exam, we thought that there had been a little bit of plagiarism!

  Baroness Young of Old Scone: Collusion perhaps, rather than plagiarism. I think that it is true to say that, through the Land Use Policy Group, we do work very closely with Natural England and indeed with some of the NGOs on these issues, because they are so large that they can only be done by harnessing the resources of all of us. That was one point, therefore. The more serious point is that, though the Health Check is important, our slight concern is that there is quite a lot of political focus on the Health Check rather than on the longer-term review of CAP. We would be very anxious to make sure that people are clear about what the vision for the future is, and indeed what land is for in the future. I know that the Government is prompting a foresight study into what land is for, and we think that is an extremely valuable exercise, because we are asking a lot of the land these days.

  Q173  Chairman: We are very happy to look at the longer term rather than just the immediate issues that arise in the context of the Health Check. Let us make a start. I suppose the first question is what progress do you think you have made in securing your goals through the 2003 CAP reform, and to what extent has decoupling led to a change in farmer behaviour in directions favourable to the environment? In other words, what has been the effect, from your perspective, of the 2003 reform?

  Baroness Young of Old Scone: It is probably a little early to tell, because many of the provisions did not actually start in earnest until 2005; and of course many of the things that land management delivers take a bit of time to run through into environmental outcomes. They are also masked to some extent by a range of other factors, and so it is sometimes difficult to see the cause-and-effect impact—regulatory issues, consumer demands, the weather. We have had two years of drought and one year of floods, and so all of those are having an impact on outcomes. However, our belief is that some of the measures are worthwhile. Cross-compliance, we believe, has brought an increased focus on basic environmental management standards on farms. Compulsory modulation, of course, has brought additional funding; so we are pleased about that. We see decoupling as a step on the route to a longer-term future of CAP as a system of payments based on delivery of public benefits generally. At the moment, with the Single Farm Payment, other than through the cross-compliance regime, it is quite a worry that, as some of the market signals are getting stronger, particularly with the price of wheat and with the future buoyancy of biofuels, we could in fact find ourselves in the position where we have a fairly weak set of instruments to deliver the public goods, and the decoupling mechanism no longer acting as an influencer of the response to the market. Those are the sorts of issues, therefore. Generally speaking, cropping area up; livestock numbers down. There are a load of differential impacts that we could go through. More sheep in the lowlands, having come down the hill; larger dairy farms, and worries about that because of the pollution impacts of the dairy sector; block cropping and simplified crop rotations, which are not good for habitat diversity. However, there are some positive impacts: the reduced impacts on grassland; greater use of buffer strips around watercourses. I think that it is a mixed picture, and it will only be over the next few years that we will see the full outcome.

  Q174  Chairman: You argue that a future EU rural policy replacing the CAP should provide support for rural land management in all economic sectors active in rural areas. What are the public benefits of supporting businesses because they are situated in rural areas? There is a definitional problem. How do we start defining and drawing lines on maps on what are rural areas and what are not? And I live in Banchory!

  Ms Kirmond: The thing that we are arguing for is this long-term picture. Rather than constantly revisiting CAP, to argue for an upwardly funded EU rural policy that addresses issues across the whole rural economy of the UK; not just picking a bit, looking after it and trying to make it healthy at the cost of something else. I think that is quite important, because the rural environment is not just about farming; it is about the health and welfare of our rural communities. As we well know, although we have lots of problems in urban communities and we tend to focus on them, there are a lot of issues in rural communities as well, about rural poverty, unemployment, immobility, and a reduction in rural services. There are some interesting issues there about how sustainable farming supports rural communities, and that agriculture is a really important component of that healthy rural economy. A healthy rural economy has agriculture at the heart of it. However, I think that there is some very interesting work that colleagues in the Countryside Council for Wales have undertaken on what benefits flow to rural communities from investment, through things like the environment payments and so on, which means that you get more money being paid locally; local businesses are supported because people are staying on the land; they are doing something on the land; they are associated with it. There are indications out there in reality, therefore, that you can maintain people on the land; you can maintain a healthy rural economy—or you can help to maintain it—by directing funding at healthy farming, because benefits flow from it.

  Baroness Young of Old Scone: Could I add to that? At the moment, we already have Axes 1 and 3 putting funding into improving competitiveness and diversification of the rural areas. We think that there is scope for more of that. I have just come from seeing a very good anaerobic digestion system for mixed pig slurry and "dead" Marks & Sparks sandwiches—

  Q175  Chairman: That must have been a very rewarding experience!

  Baroness Young of Old Scone: It was rewarding and redolent—I think the word is! There was an example of grants for anaerobic digesters for on-farm slurry disposal and processing, to produce energy for the grid and a more readily available nitrogen source for spreading on fields, and solving a food waste problem at the same time. That sort of thing is not farming per se but it is an extremely useful adjunct to farming.

  Ms Kirmond: Certainly we are seeing rural land use diversifying and we are looking at things like bio-energy production, recreation, lots of access issues to the countryside. It is not just about paying farmers to stay on the land and spending money like that; it is looking at profitable farming providing net environmental benefit as well, because that is a very valuable commodity. It is also about building competitiveness in farming. It is enabling people to do things for themselves, rather than just being paid to do it, which is quite important. Coming back to my colleague's point about Defra's commitment to land use and a land use policy, we certainly welcome Defra's commitment to that land use strategy. We will have to take in both urban and rural; we will have to have a partnership with the CLG as well as Defra to look at the context of land use and what land is for in the future, across all our communities, not just rural. It is a great opportunity that we have a commitment to a foresight study starting very soon, to start looking at what land could be used for in this country in the 21st century.

  Q176  Lord Plumb: Could I ask whether you see this built into Pillar II? I think we would readily agree that there has to be a switch from Pillar I to Pillar II in terms of the use of resources. Some of the things you have suggested would have an appeal right across rural areas, but will that be an addition to what already exists in Pillar II? If I may, perhaps I could use the example you have used. I am a great believer in farmers putting in anaerobic digesters. There is methane gas coming from a lot of animals. I speak from experience when I say that we could heat the whole of the buildings, the house, the dairies and all the rest of it—or we did, before we had to give up milking cows. So there is tremendous scope for these things on farms, which need broad thinking about the whole of rural policy rather than just what exists at the moment, to assist in the development of some of those rural areas.

  Baroness Young of Old Scone: The likelihood is that it will have to be Pillar II but, alas, the risk in the long-term review of the funding of agriculture under the Common Agricultural Policy and under the EU budget, is that we will continue to see pressure on Pillar II. Even if it grows, it will not grow fast enough to do everything that is needed. We think that a more fundamental review is required that produces a new rural policy and a new rural funding mechanism, rather than simply trying to force more out of Pillar I into Pillar II, because I think that will always be a bit of a struggle, quite frankly, and it does involve co-financing. It is bad enough in this country, trying to get money out of the Treasury; in other countries, it is even more difficult. I suspect that we will be stuck with trying to shoehorn it into Pillar II, but it would be nice to think that we could, in a longer-term perspective, get away from that.

  Q177  Lord Greaves: Can I start off by referring to your comments in your written evidence that cross-compliance has been implemented in different ways in different countries? Would you like to expand on that, explain some of the differences and perhaps some of the ways in which the effectiveness of it has differed?

  Ms Bartram: Helen Phillips has alluded to this already but, as you know, cross-compliance comes in two parts: the Statutory Management Requirements (SMRs), the regulatory aspects, and then Good Agricultural and Environmental Condition (GAEC). When you look at SMRs, the standards tend to reflect the status of implementation of the relevant directive in each Member State. What we have seen, through some research we funded through the Land Use Policy Group, was that defined actions taken at the farm level were more harmonised in relation to these directives than to Good Agricultural and Environmental Condition. It depends on how each SMR is being interpreted, but it is more standardised because they are very explicit. When it comes to GAEC, the details are much more at the Member States' discretion. Some have implemented a relatively large number of standards, and standards that go beyond what is in GAEC. Helen alluded to the requirement for English farmers to have a two-metre margin from the centre of their hedgerow or alongside a watercourse, for example. Farmers are also required to complete a soil protection review in England. In France, there are additional standards relating to the use of water. However, what we found was that many more Member States appear to have focused on only some of the standards or issues and that key requirements have been so loosely translated that they cannot or will not be adhered to, because of the way they have been presented. There is some evidence from Bird Life International to suggest that we are still seeing the removal of landscape features across Europe. The level of environmental protection varies therefore, according to the number and the scope of the standards that have been adopted by each Member State, which means that there is inconsistency. However, it is very important to stress that we do not want to throw the baby out with the bathwater. While we have Pillar I and Single Farm Payments, we are seeing cross-compliance beginning to encourage adherence with environmental legislation. It also sets that environmental baseline that we have been calling for for a long time. From the farmers' point of view, we feel that it provides a clear planning framework for them and they can then build the requirements of cross-compliance into their business planning, so that they have a much clearer framework that they can go forward with. Those are the advantages that we see from it, therefore.

  Q178  Lord Greaves: You seem to be saying that we are beginning to do it reasonably well in this country but some of the other countries are not, particularly as far as the discretionary side of it is concerned—the good environmental standards.

  Ms Bartram: Yes.

  Q179  Lord Greaves: I presume that there is somewhere we can all look to, that somebody has done the research on this and we can have a look at it, and perhaps you can tell us where that is. However, where in Europe is there practice which is good practice, which we can learn from and which is perhaps better than we do here—or is there not any?

  Ms Bartram: Barbara has already set out that the reforms only came into place from 2005, so cross-compliance is still very much in its infancy. It is therefore hard to see the translation of what is on paper into what is happening in the environment. On the whole, though, certainly within England—and each UK region has interpreted cross-compliance slightly differently, certainly when it comes to GAEC—we are considered to be one of the most demanding regions of the EU when it comes to cross-compliance. That is not to say that we should rest on our laurels and not look around Europe to see where good practice is being delivered.

  Baroness Young of Old Scone: Even within that, however, we are not absolutely as pure as the driven snow. At the moment, there is an intense debate between this country and Brussels on Nitrate-Vulnerable Zones, where we are regarded as dragging our feet and not being sufficiently extensive in declaring Nitrate-Vulnerable Zones, or having a sufficiently tough enough set of policies that would enable them to be delivered. I think that it is therefore a pretty mixed picture, to be honest. It is always the problem with cross-European comparisons, in that some countries are good at some things and bad at others, and nobody is a kind of shining star—which makes it quite a complicated process to do the comparison.