NFU Cymru gives House of Lords Committee initial response on CAP Health Check‏

The EU Commission's proposals for its 'Health Check' of the Common Agricultural Policy will take the CAP in the right direction, but doesn't go far enough in streamlining and simplifying the policy. This is the message NFU Cymru gave to the Environment and Agriculture sub committee of the House of Lords when presenting oral evidence today (21 November 2007).

The Health Check is intended as a series of interim adjustments to the CAP, designed to reinforce the 2005 reforms and prepare the way for the further radical reform due in 2013.

NFU Cymru President Dai Davies informed the House of Lords committee, "In terms of the main pressures on the CAP, we believe that the budget will continue to be an issue. With the ever increasing size of the EU the diversity of Member State interests and needs will be a challenge in policy terms. Demands for greater subsidiarity to meet Member States' differing interests have the potential to distort competition, and maintaining production levels to take advantage of expanding markets whilst respecting environmental obligations will be testing.

"NFU Cymru supported proposals to decouple payments from production during the 2003 CAP negotiations on the basis of an historic approach. This has now provided farmers with greater freedom to farm and make market prices more transparent, but has placed the EU in a stronger negotiating position in terms of the World Trade Organisation.

"NFU Cymru is however concerned that EU Commission proposals released yesterday now suggest that we should move away from payments on historical receipts towards a flatter rate system. We have witnessed the chaos that this approach has caused elsewhere and do not want a repeat of it in Wales."

Referring to the EC's reaffirmation that the milk quota system will expire in 2015, Dai Davies told the House of Lords committee, "This will enable those who want to expand to do so, but NFU Cymru agrees with Commissioner Fischer-Boel that this must be done without cutting the legs from under the market.

"I informed their Lordships that we at NFU Cymru are interested in the Commissioner's reference to assistance for areas, especially but not exclusively, in mountainous terrain which depends heavily on dairy production. In this context NFU Cymru could see Wales' Less Favoured Area milk producers as being prime targets for assistance."

The other issue NFU Cymru raised with the House of Lords Committee was that of modulation. Dai Davies said, "This is an issue of some contention in Wales due to the fact that farmers feel they are being unfairly treated with regard to the imposition of voluntary modulation."

"We are however heartened to see that the EC is suggesting that we make annual increases of 2% to compulsory modulation, to take effect in budget years 2010-2013, but that any increase in compulsory modulation would be matched by a reduction in voluntary modulation in those members states that applied it. This is precisely the message I conveyed to the Commissioner when I met her recently."

NFU Cymru acknowledges that the EC's communication is designed to kick start the debate on the Health Check and that it will be Spring 2008 before legislative proposals are tabled for discussion by agriculture ministers, with possible agreement by the end of the year.