LORD WHITTY has told farmers to adapt their businesses and seize the opportunities offered under reform of the CAP to succeed in the new era of UK agriculture.
Speaking at the Oxford Farming Conference on Tue (Jan 5) the junior DEFRA minister said that he was aware of farmers” complaints that “the environmentalists have won” under the CAP reforms.
But he insisted that the cross-compliance measures producers objected to were the minimum requirement for billions of taxpayers” euros to continue to be paid to farming.
“Without those conditions there is no compact with the rest of society and no publicly and electorally defensible justification of continued societal support,” he said.
Lord Whitty urged farmers to ready themselves for the future saying that DEFRA was working hard to administer the single farm payment as smoothly as possible. “
I understand and indeed share the frustration of farmers at the time some of this is taking and at the detail we are obliged to go into in what is supposed to be a liberalisation and a simplification of the scheme,” he said. But he added the “prize is great if we understand the fundamental nature of change and the opportunities it presents”.
Lord Whitty added that further changes to the CAP were inevitable. Initially this would centre on reforming the tobacco and sugar sectors. However, negotiations on sugar are to be delayed until June when the EU will hear the result of its recent appeal against a World Trade Organisation ruling.
The EU is also pressing the WTO hard, to include animal welfare standards in the new agreement on agriculture. Many countries are concerned that the EU will use such measures to prohibit imports on animal welfare grounds, but the EU is standing firm.
Warning was also given of future budgetary pressure, with Lord Whitty suggesting that the EU would hit the financial ceiling set in Berlin by 2008.
But the biggest long-term challenge, said Lord Whitty, will be the effect of climate change, something the UK government will highlight during its presidencies of the G8 group of leading economies and the EU.
Responding to Lord Whitty”s comments, NFU president Tim Bennett said the minister was realistic about the inevitability of further reform, but felt he was pessimistic on the timing.
“He is talking about budgetary pressure earlier than either we or the EU Commission would anticipate it,” he told FW. “There are still many unanswered questions, for example the impact of including Romania and Bulgaria in the EU, the actual cost of sugar reform and, most importantly, the future euro/dollar rate.”
But Mr Bennett welcomed remarks that the government would be watching relationships in the food chain closely. “There is so much consolidation going on, such as Allied and Cargill, Arla and Campina. It”s not just about supermarket pressure.”
Francis Mordaunt of consultants Andersons described Lord Whitty”s speech as an “honest assessment” of the challenges facing the industry. “It is up to farmers to get on and accept the market is growing in importance.”
The minister was making the right noises about the need to protect the EU from imports from countries with lower standards, though getting the WTO to accept these non-trade issues was the real challenge, he said.