Hansard

Yes we have, and I will talk about that now because this is a key area for Scotland.

Unfortunately, our negotiator, Owen Paterson, did not want any coupled support whatsoever, never mind the 5 or 8 per cent that we finally got. Given where we have ended up, I can tell Claire Baker that I have written to Owen Paterson to ask whether the 8 per cent limit can apply to the member state rather than to Scotland, because we have had so many mixed messages from different ministers during the past few months. This is all about damage limitation. Fundamentally, the deal on coupled support remains a major disappointment for Scotland, but the deal is now done and we must turn our attention to how we implement it.

The Government has been working on that with stakeholders for several years. We have run workshops, had various groups and done extensive modelling; we also held a major conference this April. As a result, a consensus is emerging about the way forward, which takes various concerns into account. One such concern is how the move to area-based payments will impact on farmers with high payments under the current historical scheme. For example, the more intensive beef and dairy farmers are concerned about that. However, it is inevitable that their rates per hectare will come down. By definition, below average rates will rise and above average rates will fall, but there are tools that we can use to mitigate the impact and, we hope, manage the transition.

In doing that, we must be aware of the impact on farmers who have been excluded from the single farm payment until now, such as new entrants and deer farmers. They must be put on a level playing field as quickly as possible, even if we give other farmers more time to adapt. Of course, we must also keep our eyes open for loopholes. We know that people like loopholes in agricultural legislation, and undoubtedly some people are already thinking that if they have an empty hillside with some deer on it, they can qualify for big CAP payments. The answer to that, incidentally, is no. However, there is always a minority who will try to exploit the system and we need to be aware of that.

Speaking of exploiting the system, under the Scottish clause we must find minimum activity rules that keep slipper farmers out of the system while letting genuine extensive hill farmers in.

We must also look at the impact of the greening measures. Greening presents a great opportunity. I want every farmer in this country to be getting greener over time. Consumers are paying increasing attention to how their food is produced, and Scotland has a great reputation for green and natural food that we can exploit in valuable overseas markets as well as at home. That means that we must be genuinely green. Scotland is not the worst in the class. For example, we do not have the extreme arable monocultures that the three-crop rule is aimed at tackling; other European countries have that. However, at the same time, we must be aware that we have competitors who want to be seen as green and they are catching up with Scotland.

Even in Scotland, we must accept that we face some genuine environmental challenges. Our index of farmland birds has gone down in each of the last three years of data. On water quality, only 60 per cent of our bodies of water are in good condition, which is below the long-term target of 98 per cent, and that has not improved in the past four years. There are many wins to be secured if we get things right. We must address our genuine environmental challenges. In doing so, we can stay ahead of our competitors and ensure that our fantastic natural products succeed in tomorrow’s markets.

To deliver those wins, we have to take many of the important decisions that lie ahead of us. Unfortunately, those decisions will be all the more difficult because of the budget that has been negotiated by the UK Government. In the new CAP, Scotland will probably have lower rates per hectare in both pillars than every other member state in Europe. That is even worse than what we get today. If Scotland had been a member state, we would automatically have got an uplift to €196 per hectare in pillar 1. As I have said before, that would bring in an extra €1 billion up to 2020. We could also have negotiated an uplift in pillar 2, in the same way as 16 other member states have done. Finland got a €600 million uplift, Portugal got €500 million, Slovenia got €150 million, Lithuania got an extra €100 million, and so on. However, the UK Government took the decision not to press Scotland’s case.

If the UK Government was not willing to get us a decent deal from Europe, the least that it could have delivered was a fair division of the funding within the UK. We urgently need agreement on that.