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[First 4 Pages to Be Created in Assembly Font by Publications Team] Rural Development Sub-Committee Inquiry into the Reform of the Common Agricultural Policy July 2010 The National Assembly for Wales is the democratically elected body that represents the interests of Wales and its people, makes laws for Wales and holds the Welsh Government to account. An electronic copy of this report and others can be found on the National Assembly’s website: www.assemblywales.org Copies of this report can also be obtained in accessible formats including Braille, large print; audio or hard copy from: Rural Development Sub-Committee National Assembly for Wales Cardiff Bay CF99 1NA Tel: 029 2089 8153 Fax: 029 2089 8021 Email: [email protected] © National Assembly for Wales Commission Copyright 2010 The text of this document may be reproduced free of charge in any format or medium providing that it is reproduced accurately and not used in a misleading or derogatory context. The material must be acknowledged as copyright of the National Assembly for Wales Commission and the title of the document specified. National Assembly for Wales Rural Development Sub-Committee Inquiry into the Reform of the Common Agricultural Policy July 2010 Rural Development Sub-Committee The Rural Development Sub-Committee is established by the National Assembly for Wales to consider and report on issues affecting Rural Development. It is a sub-committee of the Sustainability Committee and its remit is to scrutinise the Welsh Government on the Government’s areas of responsibility that the sub-committee considers impact on rural development. Powers The Committee was established on 5 July 2007 as a Sub-Committee of one of the Assembly’s Sustainability Committee. Its powers are set out in the National Assembly for Wales’ Standing Orders, particularly SO 12. These are available at www.assemblywales.org Committee membership Committee Member Party Constituency or Region Rhodri Glyn Thomas Plaid Cymru Carmarthen East and (Chair) Dinefwr Joyce Watson Labour Mid and West Wales Brynle Williams Welsh Conservative North Wales Party Kirsty Williams Welsh Liberal Brecon and Democrats Radnorshire The following Member(s) were / was also a member of the Committee during this inquiry: Mike German Welsh Liberal South Wales East Democrats 2 Contents Chair’s Foreword........................................................................................................ 5 The Committee’s Recommendations ............................................................... 7 1. Introduction and Background .................................................................. 10 Origins of the Inquiry..................................................................... 10 The Reform of the CAP post-2013 .............................................. 10 Terms of Reference .................................................................... 11 Report ........................................................................................ 11 2. The Welsh Government’s Position ......................................................... 13 Key Objectives ............................................................................... 13 Budget........................................................................................... 14 Structure........................................................................................ 14 Instruments ................................................................................... 15 Direct Payments ......................................................................... 15 Market Intervention .................................................................... 16 Rural Development Plan.............................................................. 16 A Common Policy........................................................................... 17 Influencing Negotiations................................................................ 18 Stakeholder Engagement ............................................................... 18 3. Stakeholder Viewpoints .............................................................................. 20 Key objectives................................................................................ 20 Budget........................................................................................... 22 Structure........................................................................................ 25 Instruments ................................................................................... 29 Direct Payments ......................................................................... 29 Market Instruments .................................................................... 32 Rural Development Plan.............................................................. 34 Less Favoured Areas................................................................... 36 A Common Policy........................................................................... 38 Stakeholder Engagement ............................................................... 39 3 4. Conclusions and Recommendations..................................................... 40 Key Objectives ............................................................................... 40 Witnesses.................................................................................................................... 53 List of Written Evidence....................................................................................... 55 4 Chair’s Foreword To appreciate the importance of the Common Agricultural Policy (CAP) for Welsh farmers, one need only look at the bare figures. The annual budget for CAP is currently €55 billion annually and accounts for 40 per cent of the total EU Budget. Of this budget, Wales receives approximately €330 million in Single Farm Payments (SFP) annually- accounting for almost 90% of average farm income in 2008- 09. On top of this Wales also receives €376.7 million for the Rural Development Plan under Pillar Two for the period 2007-13. This is a crucial additional source of income for farmers, as well as providing investment in our wider rural communities. The debate around the future of the CAP post-2013 is therefore of fundamental importance to the Welsh agricultural industry and rural Wales more generally. The Committee therefore felt a duty to get involved in the discussion at an early stage, so as to influence the debate for the benefit of everyone in Wales. This report seeks to do so both by setting a marker for the Welsh Government regarding how it should be representing Wales’ interests during the negotiation process, and by helping to inform the decision-makers at the EU institutions of the needs and desires of Welsh stakeholders. For the period after 2013, we are almost certain to see a move to area- based payments which will be a fundamental reform of the SFP. This change will have to be handled very carefully allowing the longest possible transitional period to enable farmers to successfully adjust. The discussions about how the CAP will look after 2013 is also certain to involve a debate about the policy’s core aims and objectives. Some would like to see the original objectives of the CAP reformed to include additional objectives such as the provision of environmental security with the policy moving towards being a land management policy focussed on the delivery of social and environmental goods. The Committee has come to the view that there is no inherent conflict between the ‘old’ and the ‘new’ objectives. Food and environmental security go hand in hand, and are in many ways dependent upon each other. By contributing towards both farmers can both increase and diversify their income particularly in areas considered to be less 5 5 favoured. As the one of the main mechanisms for providing positive incentives for good environmental behaviour, CAP has an important opportunity to deliver on many of the social and environmental goals of both Wales and the wider European Union. It is because of the importance of this opportunity that the Committee wants to see agri- environmental and less favoured areas schemes sit alongside the SPS in a new, enlarged Pillar 1 encompassing all of CAP’s land-based measures and funded from the Community budget. We believe this would be an important step in moving in the longer term towards an integrated policy, ensuring food and environmental security for Europe. We also believe this would provide an income for farmers, which reflects their indispensible role in the achievement of those objectives. I hope very much that this report will provide a useful starting point for the debate in Wales on the future of CAP and that the Welsh Government will take the Committee’s findings on board. As always, this report would not have been possible without all those organisations who gave of their time to contribute written and oral evidence to the Committee, and we are very grateful to them for doing so. Rhodri Glyn Thomas AM Chair, Rural Development Sub-committee 6 6 The Committee’s Recommendations The Committee’s recommendations to the Welsh Government are listed below, in the order that they appear in this Report. Please refer to the relevant pages of the report to see the supporting evidence and conclusions: Recommendation 1. The Welsh Government should ensure that ensuring food security and an adequate income for farmers remains at the core of the CAP. (Page 41) Recommendation 2. So as to make the CAP’s aims more relevant to current challenges, and to secure new sources of income for Welsh farmers for
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