WEDNESDAY 5 DECEMBER 2007

Mr Valentin Almansa de Lara

  Q560  Viscount Ullswater: You have talked a lot about how to maintain the community in fragile rural areas. I am wondering whether the CAP should be the driver for this or whether it is European structural funds, regional funds, of which Spain is a big recipient. Do they lie nicely closely together? Do they overlap or are there gaps between them? The more modulation takes place the more money is going to be shifted into Pillar II and I wonder how you feel those two sit together.

  Mr Almansa de Lara: We are trying to avoid this overlapping. It is a very strange name in Spain, I do not know if it is okay in English. We have built what we call a National Reference Strategic Framework for all funds, so there is a framework built in Spain where all reforms are involved. We try to maintain co-ordination between the actions of all reforms inside this National Framework. This involves all structural and rural development funds. On the rural development side, every programme we build must have a part which demonstrates it has a complementary relationship with the actions of the other funds. I am not sure if we are succeeding in this exercise but we are doing our best. We build a National Framework first where all the funds are involved and then every programme for rural development is obliged to demonstrate that it is complementary with other actions of other reforms. We are trying. I am not an expert so I do not know if we are succeeding in this exercise but we are doing our best. If they start overlapping we will lose money on this issue.

  Q561  Lord Plumb: I know there is growing interest in turning wheat into ethanol and there are one or two Spanish companies that are very interested in this development. Is this helped financially by government? Building the plant, of course, is quite an expensive business. Is this a development that you are going to encourage?

  Mr Almansa de Lara: I am not sure but I think they have big tax advantages because if you produce ethanol you have tax advantages, but I am not sure. In Spain at this moment these plants are not working because with the price of cereals it is not profitable. We have very big plants which are closed because with these prices of cereals they cannot work. I still think in pesetas, it is difficult for me to think in euros. They need lower prices. I think it is the biggest one in Europe that opened in Salamanca last year and it closed one month later because the prices were not low enough for them.

  Q562  Lord Plumb: That is why I asked the question. I have been to that plant. There is a proposal to build a plant elsewhere in Europe.

  Mr Almansa de Lara: Perhaps they have based that on the prices of cereals in the past. Nobody thought in 2003 that we would have these prices for cereals. We do not know what will happen in ten years, we will see.

  Q563  Chairman: Could we just finish off by looking at climate change because it does seem to me that you are part of Europe that is vulnerable to climate change and the agricultural industry may face major problems of adaptation as a result of climate change in the future, just no rain. How are you responding to that at the moment?

  Mr Almansa de Lara: In agriculture?

  Q564  Chairman: Yes.

  Mr Almansa de Lara: The bigger problem is the water, as you know. Traditionally we have spent a lot of money on irrigation and in some parts we have very old irrigation systems and we are spending a lot of money to rebuild the irrigation systems to make better use of the water. We felt we were losing a lot of money because we made bad use of it. Now we are spending a lot of money from the Agriculture Ministry on the rebuilding of the irrigation systems. In times past they used—I do not know the term in English—the irrigation system when you only opened the water and covered the soil, which was the normal system, but it is difficult to see this kind of system now and we are going to build a good system for trees, for fruit and vegetables more and more. We are improving a lot. Our main concern at this moment is the use of water because it is our worst scenario.

  Q565  Chairman: Where does the money for that come from? Is it national exchequer or coming through funds?

  Mr Almansa de Lara: It is national plus Community funds. It could be under rural development but I am not sure. I can check that if you want.

  Q566  Chairman: It would be interesting to know how you fund that.

  Mr Almansa de Lara: I will check but I do not know. We are spending a lot of money and we have a national programme because it is a high priority for us.

  Chairman: I think that is it. Thank you very much for all the help you have given us.