Secretary of State Margaret Beckett's
statement to the House of Commons on CAP reform
1.15 pm, 26 June 2003
With permission, Mr. Deputy Speaker, I wish to make a statement on the outcome of the final negotiations on the reform of the Common Agricultural Policy, which concluded in Luxembourg at 6:35 this morning UK time.
We approached the negotiations with two clear objectives:
- first to get the best settlement we could for UK farmers, consumers, taxpayers and the environment; and
- second to get an agreement which could lay the foundations for a successful outcome at the WTO negotiations in Mexico later this year.
In pursuit of these objectives, we set negotiating goals:
- to simplify the CAP, reducing the burden on farmers;
- to provide for a substantial shift of support from production to a wider range of rural and environmental activities; and
- to give the EU a strong negotiating stance in the WTO negotiations that reach a key point in Cancun in September.
I am happy to say that the agreement today delivers what we wanted - real change.
The key points are:
-
breaking the link between farm subsidies and production in order to reconnect farmers to their markets, reduce damaging environmental impacts and reduce bureaucracy: this is at the heart of our approach to sustainable food and farming;
-
cross compliance to make subsidies dependent on meeting standards in key areas like environment, and animal health and welfare;
-
support prices for butter, and rice are reduced, bringing them closer to world prices to the benefit of consumers;
- and there is a new financial discipline which will trigger action to reduce subsidies if CAP expenditure looks to be in danger of exceeding the agreed ceilings.
And the deal includes elements that were not even in the January package:
- national envelopes which will allow us to develop targeted schemes to promote sustainable and environmentally friendly farming;
- We have secured a further switch of resources to the 2nd pillar and an earlier start date for modulation. The package we have secured is over a third larger than was available in the January proposal. For the first time, modulation applies on an EU-wide basis, switching support from production subsidies to targeted support for environmental and rural development objectives.
- And we have succeeded in protecting UK farmers from the immediate threat of an unfair settlement as part of the financial discipline process.
I will be placing a detailed summary of the agreement in the Library of the House.
The most radical and most important element in the package is the new Single Farm Payment which we can use to replace the plethora of existing direct payment schemes - schemes such as:
- Arable Aid;
- Suckler Cow Premium;
- Beef Special Premium;
- Slaughter Premium;
- Extensification premium; and
- Sheep Annual payment
To name but a few! This will greatly simplify the bureaucracy associated with all these schemes, but more important, because that payment is no longer linked to production, farmers will be free to produce for the market rather than the subsidy.
Farming, consumer and environmental interests have all strongly supported a move of this kind. We will, of course, consult on the detail of how to proceed, especially with use of the national envelopes and the important new provisions for cross compliance.
Decoupling also is particularly important in the WTO context. This deal enables the EU to meet - indeed, better - the domestic support targets that have been proposed in the WTO negotiations. The reforms will reduce the distortions in world markets that the CAP has caused and will accordingly contribute to a successful conclusion of the Doha Development Agenda. I hope our trading partners will recognise the scale and importance of this change and respond positively to it.
It is hard to over-state the importance of this morning's agreement, in transferring the core elements of the CAP, and laying down a new direction for its future evolution. Giorgios Drys said we needed to get agreement for a new CAP - and we have.
This has required an immense and united effort and I want especially to thank our dedicated team of officials, my many Cabinet colleagues who have actively engaged in support of our discussions and of course our colleagues in the Devolved Administrations, who have been closely involved throughout. It shows what we can achieve by working constructively with colleagues in the Agriculture Council.
A summary of the agreement is available.
Page published: 26 June 2003