WEDNESDAY 5 DECEMBER 2007

Mr Yves Madre

  Q500  Chairman: Food independence?

  Mr Madre: Yes.

  Q501  Chairman: What does that mean? It does not mean having an EU pineapple regime, does it?

  Mr Madre: It means we have the same idea as our American friends on the topic. Food is a tool, a political tool and if you have a shortage of food you will be weak.

  Q502  Lord Plumb: Does that mean re-nationalisation?

  Mr Madre: I am speaking about European policy.

  Q503  Lord Plumb: I know you are, but if you are going to have independence do you mean independence around borders?

  Mr Madre: No, European.

  Q504  Lord Plumb: Around Europe?

  Mr Madre: It does not mean that we have to produce 100% of what we consume, it means we are in an open market and we will be in an even more open market tomorrow than we are today, which is normal, or we hope that it will be. We must avoid being dependent on other countries for all that we need, only for the very minimum necessary, and producing in our own European territories. We know that food production will be quite a topic in the future concerning wealth creation and growth, the growth of our wealth creation considering what they will eat in Asia tomorrow. There is one aim for a Common Agricultural Policy. A second one is to participate in the world markets, in world trade and to help the world market to be balanced. The third one could be to ensure that the balance between territories within the European Union will not be destroyed and in all regions we will keep enough people, enough agricultural activities. The last one, of course, is agriculture has a main role to play when you are thinking about climate change and the environment. We are thinking about four main aims for the CAP in the future.

  Q505  Chairman: That is very helpful.

  Mr Madre: Those are only broad outlines. After that, if you ask what kind of tools and regional quotas I will not be able to answer today.

  Chairman: That is fine. That is very, very helpful indeed. Thank you very much.

  Q506  Earl of Arran: Like your country, we have many different terrains and many different types of soil which can lead to disadvantaged areas, of which we have quite a few back home. What approach does your country favour to the problems of these disadvantaged areas and how far might their difficulties be met by Pillar II policies rather than product support?

  Mr Madre: We have quite a lot of less favoured or difficult areas. That is perhaps why in 2003 we decided to keep some coupled payments. At the time we thought activities in agriculture were needed especially in these areas in order to maintain the landscape, for instance, but also to maintain jobs in those areas, to maintain the fields because in a lot of these areas we have farms producing food and without farms there are no fields and then no more jobs. In France, the whole of the agricultural sector represents 14% of the total net French employment.

  Q507  Chairman: 14% of employment?

  Mr Madre: Yes.

  Q508  Chairman: What does it represent in terms of GDP, do you know?

  Mr Madre: I do not know exactly. I know the balance for exports. The first is agricultural goods and food and after Airbus and planes, et cetera.

  Q509  Lord Plumb: Could I just ask whether the 14% includes people involved in the whole of the food industry?

  Mr Madre: It is the whole of the food sector including the food industry, from the land to the consumer.

  Q510  Lord Plumb: I just wanted to be clear.

  Mr Madre: In 2003 we decided to keep direct payments just because we thought at that time that without production there are no farmers and without farmers there is no more activity in the region, no tourism and no more beautiful landscapes. Tomorrow, what will we think about Pillar II. Pillar II is useful, but we are afraid that Pillar II is not enough. If we want to maintain agricultural activities the best tool is Pillar I and if tomorrow you tell me, and maybe you will not tell me, that direct subsidies have to decrease and we have to imagine something else or be fully decoupled, why not? If you tell me such a thing, I am afraid some of us will be even more fragile. We need to help them in a very specific way to keep the basic activities and we need Pillar I and Pillar II. There is no problem with Pillar II as we have direct payments. Pillar II benefits from Pillar I and Pillar I benefits from Pillar I and the efficiency is good.

  Q511  Lord Greaves: This is a slightly different question but it relates to mountainous areas. I have got a specific interest in part of the French mountains in the Pyrenees in the PNP—the Parc National des Pyrénées—and I am fascinated to see that, as far as I can understand, some of the support which was given, for example, to the maintenance of traditional alpine-type hay meadows appear to be through very locally organised and locally administered schemes, which I assume came from CAP funds but were very much decentralised and organised at a local level, at a national park level, and perhaps even groups of communes within the national park, which is quite different from the way schemes are organised in England. Is this type of decentralisation of the administration of support typical in France or is it something that just happens in that part of the Pyrenees?

  Mr Madre: It is quite specific not only to the Pyrenees but to regional parks. We have such parks in the Pyrenees and in the Alps and because they are natural specific regional parks we try to manage with very specific rules to make sure that everything is very efficient. It is very specific indeed.

  Q512  Lord Greaves: So the actual schemes and the things that are supported might be quite different in different places?

  Mr Madre: Yes. The other schemes we have in France that are financed by Pillar II are schemes defined at national level and some of them at regional level, but they are wider than the schemes that you have mentioned.

  Q513  Chairman: President Sarkozy has proposed that the CAP should continue to stabilise markets in agricultural goods. The question that obviously follows is what form of market intervention has he in mind?

  Mr Madre: That is a very, very clever question. I hope that you have the answer because I have not! When President Sarkozy suggested that today, and tomorrow as well, agricultural markets have to be stabilised and we have tools to stabilise such markets, we should be very clear that it is not a question of defining a price, saying we will define a price for the next few years of wheat or meat, no, we know because of the weather, because of world markets and world prices in the European Union prices are going up and down and it will be even higher or lower than today because of climate change. The aim is not to avoid the variations but to be sure that tomorrow farmers will be able to deal with the variations and able to avoid very, very high prices or very, very low prices because that is not good for the industry or for farmers. The aim is to be clear that we do not like the CAP we had before 1992 for instance. It means that we have to work on crisis management tools, to discuss with all Member States and to define what kind of tools would be acceptable for European agricultures, because there is not only one. As of today everything has to be defined and that is why in September my minister asked all stakeholders to work on that topic. We know that the Commission is working on that topic and we have to share our thinking on that and our experiences. Spain has some experience and we have the experience of the United States where there are some crisis management tools which, despite the name they gave to the tool, some are efficient, some are not and some are just a way to waste money.

  Q514  Chairman: We are just coming up to the decision on the wine regime and there you have a crisis management tool that has become a permanent feature, crisis distillation. That is the difficulty with crisis management.

  Mr Madre: Concerning wine—

  Q515  Chairman: I am just using that as an example.

  Mr Madre: Today in the proposal we have very good tools but tomorrow we hope that we will have some better tools. When we are thinking of crisis management tools they must be used in a very exceptional way. You mention distillation and I hope, and France wants, if ever Member States use distillation tomorrow or in the future it will not be the same as in the past. We know in the past what the result of that was, it was not a good one and that is why we reform the CMO and tomorrow it should be a crisis management tool but not a permanent market tool for some countries.

  Q516  Lord Cameron of Dillington: I wanted to ask you a couple of detailed questions on the Health Check. For instance, on milk quotas the idea is to phase them out eventually. Would you support the Commission's proposal that you do this by just increasing the amount of quota? Do you as the government support that? How do the French farmers see that? Do they also support it?

  Mr Madre: One year ago French farmers would have said, "No way", and that was clear. They are still considering the question of what will be the result for the French dairy industry and considering as well what other Member States think about that. We have to consider the proposal of Mrs Fischer Boel concerning the end of the milk quota and the Presidency will be very happy to consider the positions of all the Member States and then I think we will find a solution which will not be too difficult. The proposal from Mrs Fischer Boel—

  Q517  Lord Cameron of Dillington: Will your solution involve the abolition of milk quotas?

  Mr Madre: I have not got a crystal ball, but I think that the abolition of milk quotas is very high on the agenda of the Commission and a lot of Member States and we are open-minded and realistic.

  Q518  Lord Cameron of Dillington: Moving on to the idea of capping the Single Farm Payment for large receivers of Single Farm Payment, we have just heard from both Germany and Denmark that they would be against that and your President has said that he could accept it under certain conditions. I just wondered what these conditions might be.

  Mr Madre: Just before answering this question concerning capping, can I comment on the last one concerning milk quotas. Mrs Fischer Boel suggests very, very progressively increasing the milk quota. We are very open-minded and we will consider that but one thing has to be underlined and that is this very, very slow, very progressive move is good and could be necessary for Member States where the values of quotas are quite high, so that means for the Netherlands and Denmark. In France the value of the quota is not so high, it is quite low. We are open to discuss this. We are open to go more progressively or less progressively, we will see. Concerning capping, as with all other subjects, there is no taboo for us and if ever capping is decided some of our farmers will be affected by this measure. We understand perfectly well that it is mainly a topic for Germany, the United Kingdom and the Czech Republic, for instance, Denmark indeed. We will act as the Presidency. That was what was meant by Mr Sarkozy on that subject, that we have no taboos and if it is not the final decision and if in order to have a compromise if the answer is no capping, we will consider this and if the answer is some capping, why not? The question is very open for us. We will be very keen to listen to all of the positions.

  Q519  Viscount Ullswater: Could I turn your attention to rural development and ask you how France sees the split of funding in the EAFRD between perhaps the agri-food economy on the one side, the environment on the other and then the broader base of rural development. You have also said that in the future you are going to need Pillar I and Pillar II, but would you see the gradual shift of money from Pillar I to Pillar II as being the right way forward?

  Mr Madre: That is very difficult. I will give you, if I may, some figures first. In France, concerning Pillar II we plan to spend around 40% in Axis 1, around 45 in the second one, that is Less Favoured Areas and agri-environment, and between 10 and 15% in the third and concerning the LEADER scheme it is 5% and no more.