Hansard

Having recently left the Rural Affairs, Climate Change and Environment Committee, I would like to start by saying how much I enjoyed serving on that committee and on its predecessor, the Rural Affairs and Environment Committee, over the past three-and-a-bit years, and to wish the committee well in its future deliberations. Unfortunately for the cabinet secretary, I am turning up like the proverbial bad penny in this debate.

This is a time of important negotiation in the EU. The common fisheries policy is up for renegotiation, as the common agricultural policy will be, a year later. As others have said, this is also a time of great fiscal uncertainty in Europe. Indeed, I think that today sees the beginning of the restarting of discussions on the restructuring of the Greek debt.

We do not know the extent to which that will affect the EU budget, and therefore the way in which funding is distributed across the EU’s programmes. The Commission currently intends to freeze the budget for the CAP, which—as other members have said—will amount to a real-terms cut of around 9 per cent. It is difficult to predict how the financial problems throughout Europe will affect those allocations in the longer term, and what the knock-on effect will be for the budget streams within the CAP.

Fiscal austerity concentrates minds more than ever on the purpose of public subsidy, and the nature of the public goods that subsidy should support. In the early days, the CAP’s purpose was to support food production: in the end, that emphasis led to beef and butter mountains and wine lakes. The reaction to that overproduction led to schemes such as set-aside, in which farmers were paid not to use their land at all.

More recently, there has been a recognition of the important role that agriculture plays in preserving and enhancing our rural environment. In many parts of Scotland, the countryside that we love and consider to be nature is in fact the result of centuries of farming. On our hills, grazing by sheep and cattle plays an essential role in preserving habitats and biodiversity, and agricultural activity such as crofting helps to support communities in some of the most remote and fragile areas of our country.

The relationship between agriculture and the environment is recognised in the current CAP through schemes such as cross-compliance, in which farmers who are in receipt of single farm payments and other forms of direct support are required to demonstrate good agricultural and environmental conditions.

The nature of the public goods that are to be supported and the extent to which each receives support are central to reform of the common agricultural policy. Because agriculture is very different across the 27 EU members states, the policy must be sufficiently flexible to allow member states and devolved Administrations to make the appropriate choices for farming and the environment in their areas.

With an increased focus on concerns over food security, food production is an obvious public good, although there must be an emphasis on preventing food wastage and on the sustainability of food production—no one wants to return to the days of overproduction. As Scotland’s climate is—shall we say—less benign than that in much of the rest of Europe, there is perhaps a greater recognition here that agriculture needs more direct support. That is why some of us in this Parliament have been a bit more enthusiastic about the retention of pillar 1 direct payments than have some of our colleagues at Westminster.

I welcome the Commission’s intention to retain direct support, and its proposals that will end the support for agricultural activity that is no longer taking place, or so-called slipper farming. Claims in 2014 will have to be linked to activity in 2011, other than for new entrants into farming. Whether the proposed link is strong enough must of course be considered; NFUS and the Scottish Crofting Federation propose that it should be strengthened.

The successor to the less favoured area support scheme within pillar 2 is to be welcomed, although—as other members have said—it is not yet clear how the proposed natural constraints payments, which will be linked to eight biophysical criteria, will work in practice. It is quite likely that some areas of Scotland that currently receive LFAS will not be eligible for the new payment. That will be hard on those areas, but it must be right that those parts of Scotland where crofting and farming are most difficult because of the terrain and climate should be the main beneficiaries of those particular funding streams.

Activities that address climate change have for the first time been included in the CAP reform proposals. As Graeme Dey mentioned, agriculture is a major source of greenhouse gas emissions, and it is right that support is offered to encourage practices that reduce those emissions. Specific funding streams within pillar 2 are proposed, along with new standards of good agricultural and environmental condition—for example, protecting wetlands and carbon-rich soils. However, as other members have said, there are some concerns about the proposals on permanent pasture.

Rural development remains key to the CAP, but restructuring around the six priorities is intended to make it more flexible. I, like David Stewart, am particularly interested in the potential of placing a priority on the promotion of social inclusion, poverty reduction and economic development in rural areas. There is a great deal of potential there, and such programmes must be developed to make a real difference to some of our more disadvantaged rural communities.

I wish the committee well in its deliberations. I am certain that it will not be possible to achieve consensus among stakeholders on some aspects of the proposals, and on whether they go far enough or possibly too far, but there are many positive aspects to the reform proposals. I hope that the current difficulties and financial problems in the euro zone will not derail the CAP reforms.

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