WEDNESDAY 5 DECEMBER 2007

Mr Valentin Almansa de Lara

  Q537  Chairman: Thank you very much for finding the time to come and assist us in our inquiry. I will say a little bit about who we are and what we are doing. We are a Sub-Committee of the European Select Committee of the House of Lords. We are conducting an inquiry into the Health Check but also looking slightly beyond the Health Check at the future shape of CAP and how it is likely to evolve. This is a formal evidence session so we will be taking a note of the evidence and you will have every opportunity after the meeting to get a copy and you can make changes or revisions. The best way forward is if we have a conversation across the topics that I have outlined. The Commission's Communication on the Health Check really suggests a number of policy areas that could be improved in the light of the changes since 2003. Looking at Spain, what has been your experience of the 2003 reforms? I come from Scotland, which I have to mention in that context because Scotland has gone slightly differently from England and Wales. Are there differences in the autonomous communities in how the impact of the 2003 has gone? Basically, what has happened to Spain after 2003?

  Mr Almansa de Lara: We are trying to maintain the same system in the whole country. We have 17 autonomous regions and they have full competence in agricultural matters. We try to maintain from central government a more or less similar approach in the whole country otherwise we would have problems because the trade between the regions is free but if you apply different systems in different regions you could have distortions in competitiveness or the market. We try to maintain the same system and we have done that with success up to today. Now, in Spain the system is the same for the whole of Spain in general terms. The only point where we maintain a difference is we do not allow the selling of Single Payment rights between autonomous regions. Single Payments are allocated in one region and remain in that region. This is the only limitation we put on the system. The rest of the system is the same for all. We apply the same decoupling system in all areas, the same deadlines, the same dates. The rest is the same. In relation to our experience, it is too early for us to have made a definitive conclusion. We applied the reforms in 2006 and for the first year nothing is new because the people need more than one year to adapt to the new situation and normally farmers are very conservative so they try to change as little as they can. In the first year nothing changed in Spain and the new decisions had not been taken so people maintained their inertia. This is the second year and in this year we have had various strange market situations with these incredibly high prices for cereals, milk and other commodities. We are not able to know exactly what the impact is of the 2003 reforms. We have not had the time and now we have a very difficult situation in the market and we do not know if the situation we have now is because of the reform or the change in the market. We cannot establish any conclusions now. We may need two or three years more and a normal market situation, let me say, to see exactly what is happening. In other Member States which have applied the reforms since 2005 they have more experience than us but it is too early for us to obtain any conclusion.

  Q538  Chairman: That must make it very difficult looking forward.

  Mr Almansa de Lara: Yes, of course. The Commission has presented us with this new Communication and thinks we need to move forward and we have said okay but we do not know where we are now so we need to have more figures, more dates, more information and more time to see clearly where we are going with our reforms. We did not apply the reforms until 2006 in Spain and now we are trying to change again. In relation to the Health Check Communication we think we need to separate two questions. Some are technical arrangements and we are okay with those, we were in favour of adjusting and this so-called fine-tuning of the 2003 reforms. We have detected some problems in this application and we are open to discuss these. To touch key elements of the 2003 agreement, such as decoupling, modulation, elimination of some of the market tools, intervention tools, this transition to a regional system being more or less compulsory, we think we need more time and more debate about it. We need an impact assessment, impact analysis. We want to know exactly what is happening and then we can discuss where we want to go. It is difficult for us to think about the future if we do not know where we are now exactly. This is the general approach we have in relation to this situation.

  Chairman: I think we are going to push you a little bit on the Health Check.

  Q539  Earl of Arran: I see exactly what you are saying as a new entrant in the whole organisation. This is nothing to do with the Health Check particularly because I think you have answered where you are on that, but in general—I know little about your agriculture and your farming in Spain—is it sufficiently good and the industry sufficiently buoyant to be attracting many new entrants into the agricultural market? Are the youth wanting to play their part in the agricultural market when in England it is very much on the decline, sadly?

  Mr Almansa de Lara: It depends on the sectors. If you speak about livestock, in my opinion we are in a very good position to compete. In pork, our increase in the last ten or 20 years was very good. We are selling a lot in Russia and other third countries, also in the Union. It is the same for beef where we have more than doubled our production. In general in the livestock sector we have more problems with poultry but with the rest we are okay. On the agricultural side, olive oil is working well, fruit and vegetables is working well, cereals is a poor sector but the problem with cereals is the rain and there is nothing we can do to solve this problem, we have no rain so our yields are very low. It is not a problem of lack of competitiveness. We think we can compete in the market but we need to know the rules to compete and after that we can discuss the European standard quality system.