12 January 1996

Green policy shift motion is carried

"This house believes that the public purse should not subsidise agricultural production." Philip Clarke reports from the Oxford Union Society

FARMERS have voted convincingly in favour of a shift in taxpayer support away from agricultural production and towards environmental policies.

In a special debate in the Oxford Union Society last week, (held as part of the 50th Oxford Farming Conference), secretary of state for the environment John Gummer claimed the days of production support were numbered.

Speaking for a motion that "the public purse should not subsidise agricultural production" he said such support could no longer be justified on the grounds of a need to avoid food shortages. That had applied after the Second World War, but not in the 1990s. Tax payers realised this, and this made the old policies unsustainable.

But any move away from production support should be done gradually, with taxpayers money re-deployed to social and environmental policies. "Most people in Britain do not want to see a denuded countryside," he said. As such, more cash should be targeted at schemes such as the Environmentally Sensitive Areas and Countryside Stewardship, to help keep people on the land and the countryside in a condition the tax payer wanted to see it.

Closer to market

With this kind of support, politicians would be able to get rid of quotas and set-aside that prevented farmers from expanding their businesses.

But speaking against the motion, former Scottish NFU president John Cameron said there were a number of myths about production support which needed to be dispelled.

The first of these was the cost. The Common Agricultural Policy accounted for less than 2% of total public expenditure in all EU countries, and less than 1% of their Gross Domestic Product. "Furthermore, the budget has now been capped so it cannot increase in the same way it did in the 1970s and 1980s," he said. "This is an important discipline that gets no publicity at all."

Government figures suggested the cost of the CAP to the average UK family was £20 a week. But the OECDs figure was more like £4 a week, compared with £31 on social security and £52 on health.

Food mountains were another myth, said Mr Cameron, with most stores now empty and the Commission having to tax cereal exports to try and keep EU prices below world prices.

"The CAP has eliminated the spectre of hunger for 370m people," he added. "But there is still a thin line between plenty and shortage. Food stability is not an outdated issue."

Production subsidies also maintained the social fabric of rural areas. In Scotland every full time job in farming created three and a half jobs in the associated industries. If the CAP went, it would be a lot more costly to support these people by other means.

Mr Cameron was joined in his argument by Irish agriculture minister, Ivan Yates.

"The CAP is the one policy that has worked," he said. The EU had moved from being a net importer of food in the 1960s to becoming self sufficient today. Indeed, every developed economy had seen fit to support its agriculture since the Great Depression.

Farming was not alone in being protected. Manufacturing industry also benefited from common import tariffs, while other sectors got massive support, for example in the form of training grants. "There is no such thing as a free market. Why should agriculture be an exception?

Surpluses and shortages

"Furthermore, it is not possible to turn the supply of agricultural produce on and off like a tap," he said. As such, the free market would lead to spot surpluses and shortages.

But these arguments were opposed by head of Northern Foods, Chris Haskins. Forming an unlikely partnership with Mr Gummer, this long standing member of the Labour Party claimed: "The Common Agricultural Policy is the Achilles heel of all those in the country who passionately believe in Europe."

It had led to absurd values being attached to quota and land which effectively prevented young people coming into the industry. Export subsidies had wreaked havoc on other peoples markets. The inherent protectionism had led to poor economic growth and international tensions. And subsidies had all too often fallen into the wrong hands.

"Why do farmers fear the free market anyway?" he asked. "For the first time in history, there is real world demand for food." The new middle classes of south east Asia had the means to pay for food and the problem for the future would be how to produce enough.

Like Mr Gummer, he also believed there was a need to convert production subsidies to environmental payments.

And that was the view of most of those present in a packed chamber. In a House-of-Commons-style division at the end of the debate, some 253 voted in favour of the motion, with just 154 against.

Ayes to the left, as environment secretary John Gummer claims the days of production-based subsidies are numbered. Nays to the right, as Irish farm minister Ivan Yates says the CAP is the one policy that has worked.