Hansard

I am pleased to open for Labour in the debate.

I welcome the Rural Affairs, Climate Change and Environment Committee’s work in considering the CAP reform proposals and in including a chamber debate as part of the inquiry.

CAP reform is complex and wide ranging, and the level of scrutiny that the process is being given in Scotland is welcome. I thank all the organisations that have provided us with briefing material for the debate. In the time that I have, it will be difficult to refer to every organisation, but I will try to raise the key issues that they have identified. I also welcome the series of engagement meetings that have been taking place with the farming sector and the inclusion in the CAP reform reference group of RSPB Scotland and Scottish Environment LINK among others.

The way forward in Scotland is about balancing the needs of our farmers—who play a key role in food security, supply world-renowned produce, operate to high animal welfare standards, support the rural economy and maintain Scotland’s land—and the need for sustainable farming in the future, environmental protection, responsible stewardship and growth in our rural communities in a way that promotes responsible and sustainable agriculture. The way forward is really about integrating those demands, and we can do that successfully in Scotland. Reform of the CAP is important if we are to embed those values into farming practices and build confidence in the use of public money to support a vital sector. The key to our discussions is getting the best deal for Scottish farmers, but it is also about addressing the challenges that we all recognise. The European Parliament, which must agree the new regulations, identified those challenges as the need to respond to future food security issues, rising energy prices, climate change, environmental protection, land abandonment and the economic crisis.

In Scotland, as a result of previous reform and the introduction of the rural development programme, we have seen a change in the way in which we support our agricultural sector in delivering environmental benefits as well as sustainable production, but we are dealing with a complex and bureaucratic system that too often works counter to what it is trying to achieve. I refer, for example, to the difficulties that new entrants face in gaining enough support, the perverse creation of slipper farmers, a regulatory system that lacks flexibility, and inequalities in the distribution of support across member states. Those are just some of the challenges that reform must address.

In the reform proposals, there is a desire to further develop and embed environmental benefits into the CAP, principally through the proposal to green pillar 1—although, given the significant budgetary pressures that the EU faces, that is partly a recognition that no more financial support will go into pillar 2, whose support levels have been cut. Indeed, the Scottish Wildlife Trust raised concerns about the domestic cuts to the agri-environment budget. I understand that the Scottish Government has said that the budgets are reducing due to a lack of demand. That is surprising. Perhaps the cabinet secretary will say more about that in his closing speech.

There is support for greening pillar 1 measures. In evidence to the committee, the NFUS said:

“we do not have a problem with the general direction that the European Union is taking”.—[Official Report, Rural Affairs, Climate Change and Environment Committee, 23 November 2011; c 401.]

However, there are real concerns that the measures are not suited to the Scottish farming sector and about the proposed rules on maintaining permanent pasture and crop diversification not being flexible enough to deliver the best benefit for Scottish farming or our environment. Alongside those concerns is a strong body of opinion that we need greater greening of the CAP, whether through reform of pillar 1 support or, as Scottish Environment LINK, the Scottish Wildlife Trust and the RSPB argue, through the progressive transfer of support to pillar 2 and agri-environmental benefits.

The cabinet secretary says that he has no objection to the principle of greening, so we need to retain the principle but argue for alternatives that meet the demands of Scottish farming. There is a commitment to that approach across different interests. Scottish Environment LINK said in its evidence to the committee:

“We need to make pillar 1 work hard and deliver for the environment in ways that are compatible with running a farming business.”—[Official Report, Rural Affairs, Climate Change and Environment Committee, 23 November 2011; c 407.]

We must try to influence the debate on greening in our interests. There is potential for direct support to provide increasing environmental benefit. We must have a strong pillar 1. Many in our farming community rely on direct support to remain viable and to expand sustainably, but we should also strive to recognise and reward through an alternative pillar 1 greening programme what farmers already do.

There are debates about greening; about how support is distributed and whether it should be focused on more productive areas or concentrated on more vulnerable farming areas; about how areas of natural constraint will be identified; and about how far resources will shift. Those examples illustrate the discussion around what we want CAP to deliver in future.

There are opportunities. Historically, the UK’s funding allocation from pillar 2 has been low and we must push for a fairer distribution of that funding throughout the EU. We must also work to ensure that Scotland gets a fairer share of UK funding, because historically Scotland has received a lower per-hectare share. CAP reform gives us an opportunity to address that issue.

The significant financial challenge is the EU budget. In June last year, the CAP budget for 2014 to 2020 was announced, delivering a 9 per cent cut over that period. The assumption that everyone has been working to is that the budget will stay the same and that redistribution will happen within that envelope, but increasingly there are concerns that the budget will be cut further. Prior to the announcement in June, the UK and German Governments argued that the CAP budget must fall significantly within an overall declining EU budget. There is now such instability in the EU that there are growing concerns that there will be a further cut.