Allister makes submission to Commission on CAP Health Check
12 September 2007
Jim Allister has written to Mariann Fishcher Boel, setting out his views on what the forthcoming Health Check should achieve.
The submission is as follows:
12th September 2007
Commissioner Mariann Fischer Boel
Re. Submission on CAP Health Check
Dear Commissioner,
As the Commission prepares to publish its proposals in November on the future shape of the CAP, I enclose my own submission on the approach I believe should be taken this time round.
Firstly, I share your view that change should, in the main, be confined to improving the CAP system that is already in place. I too am in favour of what is popularly known as ‘technical’ simplification, as opposed to pursuing any fundamental overhaul in policy. Radical reform could erode any sense of stability and certainty which is needed within European agriculture between the already established 2007-2013 period of CAP in its current guise.
I do, however recommend a number of changes be introduced.
Firstly, I would point to the matter of modulation, and the unfair political decision made under the United Kingdom Presidency, to enable voluntary modulation deductions of up to 20% to be taken from farmers Single Farm Payments. This has had the effect of re-nationalising this element of the CAP, to the detriment of UK and Portuguese farmers.
In Northern Ireland, farmers will be forced to contribute £163 million in total modulation deductions into the Rural Development Programme. This represents a significant portion of the £500 million Programme. In return, only £43 million will go directly into Axis 1 and assisting the industry to modernise. Meanwhile, £100 million will go directly into Axis 3, which has received much criticism for being broadly irrelevant to primary producers.
I would appeal for your support in abolishing the option of voluntary modulation to be used by any Member State, in favour of a harmonised rate of compulsory modulation, if, indeed modulation has to remain at all. This must be accompanied by a compulsory requirement of National Match Funding.
Modulation monies must not be permitted to be directed to non-agricultural beneficiaries as at present. Instead, these funds should be utilised by ensuring adequate protection against likely increased market volatility due to higher exposure of trading on a World stage, which will become ever more prevalent in a World Market trading situation.
I would also add my voice in support of the Single Farm Payment, as an important tool to enable the ongoing sustainability of agriculture within the EU. Without this payment, the ability of farmers in Europe to produce and meet higher legislative requirements would be seriously eroded.
I am aware of the Commission’s recent efforts towards simplification of the Common Agricultural Policy, in tandem with efforts to reduce bureaucracy. I would assert that this must be widened out to effect change to the spirit in which the CAP operates, in order to re-engage the support and confidence of the farming community.
In practice, I would urge the Commission to introduce a more tolerant approach to genuine human error, for example in relation to Single Farm Payment application errors.
In 2005, duplicate claims under SFP applications was handled in an extremely draconian matter. Where duplicate claims were found to have been made, the assumption was that this must have been as a result of fraudulent intention. The ‘Obvious error’ mechanism was not sufficiently wide to redress many genuine cases of honest mistake. My Office was personally involved with endeavouring to resolve some of these cases, with much difficulty. The outcome of such a narrow interpretation resulted in farmers being penalised, with the alienation between farmers and the Commission having increased significantly as a result.
A greater spirit of trust and co-operation with farmers should also be applied to Cross Compliance rules. On the basis that a far higher percentage of farmers are working part-time, it makes sense on practical grounds to review this approach. I would also note the erosion of relations between farmers and the competent authorities in charge of administering Cross Compliance checks, simply as a result of lack of flexibility built into the rules at a European level.
Proportionality between infringements and sanctions must be instated immediately. Also, new measures should be introduced in a progressive manner, to comply with the doctrine of intent. It is unfair, and I would assert illegal to penalise farmers without them being fully aware or understanding of what the legal requirements are that they must meet.
Also, minor infringements should not give rise to financial penalties. Importantly, National implementation of rules should be monitored to ensure these are not more draconian than the EU rules require. The inconsistent implementation of EU rules remains a point of contention, and is something which needs to be addressed.
In relation to your insistence that milk quotas will end post-2015, I would ask you to justify your arguments. In Northern Ireland, there has been significant investment by farmers over the years to purchase milk quota from Great Britain, in order to remain competitive through economies of scale. I am concerned that this investment could go unrecognised in the event of a liberalised domestic market place across Europe.
I am also in favour of retaining the private storage mechanism for cream and skimmed milk powder, to act as a safety net in the volatile world of milk production. Of course, I would echo comments that any savings resulting from the implementation of the mini milk package must be ‘ring-fenced’ to be used for marketing support and nutrition awareness.
I believe the retention of Market support instruments, particularly with the prospect of huge reductions in incomes via an anticipated WTO agreement, and more exposure to the World Market is important, and merits full consideration.
The Health Check should ensure the CAP is fully aligned to the 1st Pillar. While Rural Development may be a worthy objective, the modern climate of rapidly rising feed costs and static returns from the marketplace for livestock producers, will, I believe result in food security becoming the major issue of the day. Domestic production of food for low returns can no longer be taken for granted.
Consideration must be given to competing demands for arable land for bio-energy requirements, as well as food, and the extra demand for EU produce from the huge emerging economies such as China and India. As grain stocks and supplies of other agricultural commodities are at an all time low since any point in the last 25 years, this issue needs to be taken into consideration via the Health Check.
The re-definition of Less Favoured Areas away from social criteria presents the challenge of taking a fresh look at ways of securing farming within Europe’s marginal areas.
European agriculture is facing a sustainability crisis, with the intensive sectors struggling to realise an adequate return as a case in point. Europe is in danger of losing its pig and poultry sectors, not to mention a large section of beef production, should decisive action not be taken.
Financial sustainability must be a primary consideration for the CAP Health Check.
I would also ask that beef be recognised as a sensitive product in World Trade negotiations.
The original objectives of the Common Agricultural Policy remain relevant today: to ensure a fair standard of living to the agricultural population; to stabilise markets; to guarantee regular supplies; to ensure reasonable prices to consumers; to increase agricultural productivity. I believe the CAP’s objectives can be condensed into ensuring economic, social and environmental sustainability of EU agriculture.
The CAP will play an important part in determining the fortunes of European agriculture in forthcoming years. However, other factors including the imbalance of power in the supply chain in favour of larger supermarkets dictates the unsustainable prices farmers receive for their produce. In Northern Ireland, a handful of large supermarket chains hold the balance of power as being the dominant interface agents between farmers and customers. The grossly undervalued position of farmers within the supply chain needs to be addressed within the confines of the Health Check.
The CAP has shifted over the years, from being almost exclusively focused on increasing production post-World War II, to taking into account wider considerations, including environmental and social criteria.
The Health Check must grasp the opportunity to redress fundamental inequity within the supply chain, between producers, processors, retailers and consumers. Producers must be given real support to increase their production and marketing infrastructure to ensure their collective negotiating power is increased. I would support a more market-orientated approach to enable producers to identify and capture new markets, to avoid over-reliance on either commodity trading or in supplying to only a handful of large multiple retailers.
The CAP has acknowledged it does have a wider role to play, particularly in relation to sustainability –including economic, environmental and social considerations. Restoring balance within the supply chain is an essential part in fulfilling true sustainability according to the aforementioned criteria.
The CAP must focus on distinguishing EU product in compliance with the highest production standards, with Non-EU imports produced to a much lesser standard. The current anomaly in differing food safety and animal health requirements being imposed on EU producers, compared with imports from non-EU countries, in particular around GM feed and traceability standards e.g. Brazilian Beef is deeply unsatisfactory. Mandatory labelling clearly marking that product which meets high Quality Assured standards is needed to distinguish EU quality from cheaper imports.
I support COPA COGECA’s assertion that EU citizens must be better informed of the superior standards of food safety and ‘sustainability’ of EU production systems. Full use of the media must be permitted, and necessary funding provided by European authorities to get this message across. If EU agriculture is to be distinguished by its quality, then consumers must be aware of the differences in production standards. Sustainability should be given due recognition as an important tool to be used to influence consumer choice.
In relation to the Budget, any pressure to reduce EU budgetary expenditure on agriculture under Pillar 1 must be resisted by the Council. Also, on Budgetary matters, a number of inequalities need to be resolved. Northern Ireland farmers continue to receive a far smaller portion of the EU budget for Rural Development than their counterparts in the Republic of Ireland (approximately one tenth). Furthermore, they are further penalised via voluntary modulation deductions, which equates to further eroding farming’s ability to compete. I ask that you will intervene to rectify this situation.
Decoupled payments, and Single Farm Payments remain crucial to enabling EU producers to compete in the absence of adequate returns for farmers from the market place. In light of the public goods being delivered by farmers, I subscribe to the notion of terming decoupled payments not as subsidies to farmers, but as ‘sustainability payments’.
The important functions farmers provide in maintaining the countryside, in producing high quality food, and by way of social cohesion is understated.
I trust the CAP will embrace the importance of farming to society, and provide for its future in a sustained way in the fullest sense of the term.
I would appreciate a response to my submission.
Yours sincerely,
Jim Allister MEP
