NEWS RELEASE  22 JANUARY 2003

FISCHLER CAP REFORM PROPOSALS:
GOVERNMENT MUST RISE TO A TOUGH NEGOTIATING CHALLENGE

The Government must fight hard for British interests in the negotiations on
Franz Fischler's EU Common Agricultural Policy (CAP) reform proposals if the
UK is not to emerge from the process a major loser, CLA President Sir Edward
Greenwell said today.  As drafted, the reforms would impact
disproportionately on the UK and could seriously damage the UK's own rural
strategy.

Sir Edward said:

"Reform of the CAP is inevitable if we are to create a sustainable future
for farming in the EU.  The principle of decoupling support from production
in order to reward good environmental practice, foster rural development and
reconnect farmers with consumers is, we believe, the right one.  However
this must be achieved in a way that is fair across all EU member states,
rather than favouring some over others.   In addition, the reforms must be
bold enough to deliver the substantial change that is needed. 

"Our main concerns are these:

* It is proposed that the deepest cuts in direct payments should be
imposed on larger farms (those currently receiving over 50,000 euros in
production support).  This would result in UK farmers paying a far higher
share of the cost of CAP reforms than those in any other member state, as we
have the largest proportion of farms in the large size category.  The UK
currently receives 13% of total CAP direct payments, but could end up paying
twice this share of the cost of the reforms.  By contrast, France receives
28% of direct payments and could end up paying less than this share of the
reform costs.

* Not only would the proposed means of cutting direct payments
discriminate against the UK, it would also act as a disincentive to
necessary structural reform of agriculture across the EU, as it would be in
farmers' financial interest to keep the size of their operation below the
threshold at which their payments are cut more heavily.  A fairer and more
sustainable option would be a simple flat-rate cut of all direct payments to
enable funds to be switched to Pillar 2 and to provide the funds for further
reform.

* The new proposals retreat substantially on the commitment to switch
from production support towards environment and rural development, compared
with those contained in the July 2002 reform paper.  It is questionable
whether the projected funding to be switched to Pillar 2 would be sufficient
to achieve the hoped-for environmental and rural development benefits.  

* While it makes sense to decouple payments from production, it does
not make sense to decouple them from land.  If real environmental benefits
are to be achieved and the public is to see something for its money, the
payments must be linked to activities on specified land.  However it is
still not clear how the environmental conditions applied to the decoupled
payments will be implemented. 

* The fact that the UK has already gone further in using the voluntary
fund switching than any other member state, and has plans to increase this
in two years when the new stewardship scheme is rolled out, must be
explicitly recognised.  We must not be penalised for being ahead of the
game.

"Our lobbying efforts to date appear to have been successful in seeing off
the unfair and economically irrational payment ceilings as well as
labour-adjusted franchises, which is welcome.  However these new proposals
are still threatening to UK interests.  As a pro-reform friend of the
Commission, the UK might have expected a better deal than this and the
Secretary State will have to argue our case forcefully to make sure we get
it."


For further information, contact Elspeth Henderson, CLA Head of Media on
tel: 020 7460 7932; mobile 07803 017174; email:
elspethh@cla.org.uk.