As someone who reads the Scottish farmer every week the last few editions have clearly indicated that I should be pretty apprehensive about being here and making this speech. But I am actually very pleased to be here.
I came last year as shadow minister of agriculture and enjoyed it immensely so I wanted to come again now that I have the “proper job”. I also wanted to come to set the record straight having read some very odd assertions recently about our policies.
I started my career in farming and I learned my public speaking in Young farmers, I have been in and around farming all my working life. Now that I have the job I have always wanted in politics I am not about to let down the industry which I know and care passionately about.
Nor however am I going to pretend that things are not going to change and that somehow a caring Minister can shelter farming from the inevitable.
And I want to say one other thing by way of introduction; I care about farmers all over the UK. I know there are tensions, and there are obviously going to be times when the Scottish Government or the Welsh or Northern Irish disagree with Westminster; after all the three ministers are all from parties seeking independence. As far as I am concerned I want to do what is right for the whole of the UK and that is the basis of how I and Caroline Spelman are negotiating.
I have many friends in Scottish farming and family here too. There is far more about farming that unites us than separates us.
Two weeks ago the Government chief scientist published the Foresight Report about food supplies and distribution in decades to come. It makes both worrying and exciting reading. I must emphasise that this wasn’t some report produced in the bowels of Whitehall, it was produced by an international body of scientists and specialists including the UN, the World Bank and the Food and Agriculture Organisation.
It looks at the combined effects of population growth, increasing prosperity in the emerging economies and the impact of climate change and reducing resources.
It shows how maize prices will double in the next forty years and that the price of other foods will rise significantly as supply comes under pressure. Whilst costs will rise also the stimulus for increased production from those parts of the world where is can be grown will increase too.
This report is just the latest in a range of prophecies about the future and whilst they may not all agree on detail there is general agreement that food security is of increasing importance and that prices will rise.
So that is the background against which the next round of the CAP is being negotiated to take us to 2020. 27 countries with massively varying farming systems and climates trying to agree not only as Ministers around the table but in the European Parliament as well. It will take a long time and no country will get everything they want.
The Commission’s proposals so far are vague. There are three basic options, the status quo, and a radical movement to the free market are the extremes and the central one which the Commissioner favours is somewhere in the middle. He tells us that he wants a simpler CAP and that it must be competitive, he wants to support small farms though he doesn’t define them and he wants to cap payments to larger farms though he doesn’t say how large.
It won’t surprise you to know that we entirely agree with the need for simplicity both for the farmer and for the governments who have to run the system.
We oppose capping payments to larger farms because it discourages innovation and will make money for lawyers as they try to split farms.
We also oppose using the CAP as some sort of social security system for very small farmers in Eastern Europe.
It may surprise you however to know that we also support the continuation of a two pillar system for this next round of CAP. You wouldn’t think so from some of the stuff which I have read.
I spoke earlier about the inevitable. I have believed for a very long time that the day will come when farming operates without any form of direct or market support.
I don’t know when it will be but it will happen and I meet many farmers who would prefer to farm without subsidy. It is where this industry should be. Proud to hold its head up and say we are competing with the best.
But we cannot do it now which is why we know that we cannot abandon the single farm payment in this round. But we do have two options: we can accept that the support for farming will decrease as it surely will and use the time available to concentrate on helping the industry prepare itself or we can hunker down and argue that we need more in the full knowledge that it won’t happen and that in the run up to 2020 we will say the same thing again and watch payments fall further.
So let me turn to the budget. Before the CAP is negotiated the overall EU budget will be decided and in the serious financial situation facing most member states there is no appetite from those who are net contributors to increase it or even maintain it.
Don’t forget that a consequence of the new member states is that more of the old countries are net contributors.
So there will be no mass of extra money which is why the CAP budget will and should be under pressure. We will be arguing for a reduction not only because there are new issues which have to be addressed such as climate change but because of that changing scenario which I described. We believe that the background for this CAP round provides us with the opportunity to start planning for that day when direct payments will cease as the market itself will be sufficient to provide an income.
That is why we also wish to see a shift of resources from pillar 1 to pillar 2. Whilst it will be your Government which decides how to spend pillar 2, I can tell you that in England we will use a lot of it to help farmers invest for the future and become increasingly competitive, as well as continuing to fund our various environmental schemes.
Now I read a couple of weeks ago that we have no chance of either moving more money to pillar 2 or increasing the UK share. I am certain that we have a very good chance. We are working hard to build alliances with other countries which have similar views and we know the commission wants to move the payment basis away from historical references which will help the UK. It was actually on offer in 2005 but Tony Blair blew it. The fact that the coalition has adopted a much more realistic policy means we have a place at the table. I do believe that it is through transparent payment for public benefits from pillar 2 that we can continue to justify money going into farming.
That brings me to the commission’s proposals for pillar 1 which appear on the face of it to be complicated. It proposes a three tier system of a base payment, a green top-up and a further payment for disadvantaged areas basically our LFAs. But it also proposes environmental payments from pillar as at present and also more LFA payments.
Because there is so little detail it is difficult to comment but when it was discussed at the Council of Ministers there was little support for a green top-up because it seemed it was either going to pay for something already being done or it would be difficult to administer.
The situation with LFAs is similar, it is unclear why they should be in both pillars. But let me assure you that the UK Government fully supports the need for help to go into LFAs which I know are so important in Scotland.
I spoke earlier about creating the environment for farming to succeed so I also want to tell you about other things we are doing to help.
Firstly a supermarket ombudsman or actually adjudicator as he or she will now be called. The coalition is committed to it and we hope to see legislation in this session of Parliament. It is right that there should be a rebalancing of the power between farmers and supermarkets so the adjudicator will not only be dealing with complaints about breaches of the code but will be able to investigate complaints from third parties about supermarket behaviour if it shifts unacceptable risk to the supplier.
Secondly; food labelling. To label something as British just because it had something minor done to it here when it primarily came from somewhere else is deceitful and must stop. I know that Scotland is proud of its food and you are entitled to be but the consumer must know that what appears to be true is true. So we have seen our food industry, supermarkets, manufacturers and even the hospitality industry sign up to a tough code for most livestock products.
In Europe the Food Information Regulations are in progress and will result in mandatory country of origin labelling for meat and certain meat products.
Finally. Government procurement. If we lay down standards of how our farmers must produce food it is plain wrong to then use taxpayers money to buy food which has not been produced to those standards.
So next month we will introduce mandatory government buying standards which will require central government to only buy food produced to UK assurance scheme standards providing it can be done for no extra cost and we now have a list of case studies where schools, hospitals etc have done deals for local food and saved money as well.
All of these steps are designed to help us to adapt to a changing world, but also to actively shape the future, and be a winner in the changing world.