Country Land & Business Association

16 Belgrave Square, London SW1X 8PQ

                                                                                                                                                                                          tel: 020 7235 0511    www.cla.org.uk

NEWS RELEASE                  Date: 26 June 2003

                                       

CAP REFORM MEANS MORE UNCERTAINTY FOR FARMERS

There must be strong doubts now that the watered-down deal agreed early this morning by Agricultural Ministers in Luxembourg will deliver the international trade, market orientation and environmental benefits hoped from the reforms. 

Commenting on the announcement by the Commission today of agreement on far reaching reforms to the Common Agricultural Policy, CLA President Sir Edward Greenwell said

"The CLA has argued for many years that payments should be decoupled from production, this would simplify the system, give farmers the ability to produce for the market, and reduce accusations that our policy was distorting world trade. This agreement to introduce optional partial decoupling dilutes and delays these benefits and introduces a good deal of uncertainty about the fairness of a different policy operating around the EU.

"We expect and hope that the UK will reject the messy partial decoupling in the arable, beef and sheep sectors.  We will want to look closely at the option for an-environmentally focussed national envelope.  We also will want to see if the settlement allowing the UK to continue with its national arrangements for the roll out of Entry Level Stewardship across the country in 2005 are adequate.  However, there are real problems in the detail, both for the short and long term", he added:

"The short term position of both tenants and landlords, and all those who have changed the size of their holding since 2000, remains deeply uncertain, and this uncertainty may not be removed until 2006.  Applications to the National Reserve for these transition cases will take time to resolve, and cause major problems for businesses in the process of restructuring.  In the meantime the decision to allow payment entitlements to be marketed separately from the land may sow discord in landlord -tenant relations for the coming years.  These were avoidable problems had CLA advice to link payments to land been followed.

"In the longer term, we remain anxious that continuing support for land managers should deliver both thriving rural businesses and improvements in the delivery of environmental public goods and services:  We will be scrutinising carefully the detailed regulations that DEFRA will be consulting on over the autumn to make sure they work for members." promised Sir Edward.

Ends

NOTES FOR EDITORS

Media correspondents are invited to the CLA seminar at the Royal Show, to take place at 2.15 for 2.45 in the Wolfson Theatre, Avenue M, Map ref K18 on Monday 30 June, where Prof Allan Buckwell, CLA Chief Economist, Oliver Harwood, CLA Chief Surveyor, and Duncan Sigournay, CLA Senior Legal Adviser will speak on the subject:

"THE CAP SETTLEMENT: TRIUMPH OR DISASTER" (rsvp Sarah Thompson: email saraht@cla.org.uk  fax 0207 235 4696)

Prof Buckwell is available today for media interviews and further comment:
Telephone 0207 235 0511
Email allanb@cla.org.uk

The broad outline of the settlement includes:-

7       a single farm payment for EU farmers, decoupled from the need to produce, which should reduce overproduction and assist farmers to become more market facing: However, member states have discretion to maintain limited coupled elements to avoid abandonment of production,

7       this payment will be linked to compliance with environmental, food safety, animal and plant health and animal welfare standards, as well as a requirement to keep all farmland in good agricultural and environmental condition ("cross-compliance"),

7       a strengthened rural development policy with more EU money, new measures to promote the environment, quality and animal welfare and to help farmers to meet EU production standards starting in 2005,

7       a reduction in direct payments ("modulation") for bigger farms to finance the new rural development policy, as originally proposed by the Commission, meaning that the UK will be disproportionately affected owing to our larger farms

7       a mechanism for financial discipline to ensure that the farm budget fixed until 2013 is not overshot, which will reduce the amount paid to farmers over time, particularly to meet the costs of accession of new member states, and for further reform of the Milk and Sugar sectors

7       revisions to the market policy of the CAP:

o       asymmetric price cuts in the milk sector: The intervention price for butter will be reduced by 25% over four years, which is an additional price cut of 10% compared to Agenda 2000, for skimmed milk powder a 15% reduction over three years, as agreed in Agenda 2000, is retained,

o       reduction of the monthly increments in the cereals sector by half, the current intervention price will be maintained,

o       reforms in the rice, durum wheat, nuts, starch potatoes and dried fodder sectors.

For further information, contact Professor Allan Buckwell, CLA on tel: 020 7460 7937, e-mail: Allanb@cla.org.uk.