12 January 1996

Subsidy pledge:

Labour

DIRECT food production subsidies would continue under a Labour government for hill farmers and those farming in less favoured areas.

Shadow farm minister Gavin Strang told the Oxford conference that the future of the rural economy rested on those livestock subsidies.

But Dr Strang was adamant that the present "negative" EU set-aside policy and arable area aid system would not have Labours backing despite support from environmental groups, such as the Royal Society for the Protection of Birds.

Abolish set-aside

"We want to abolish set-aside from day one. The president of the RSPB may say it is good for the environment. But if people want bird habitats, lets have a clear, direct payment to encourage more birds. Farmers should be paid for positive and clear objective aims, which are value for money," he added.

Dr Strangs views on direct hill subsidy support was at odds with the conference debate, which voted by a majority of 99 that the public purse should not subsidise agricultural production.

Dr Strang called for an overhaul of the CAP, saying it accounted for more than half the total spending of the EU, was ill-targeted and wasteful and should be discussed at this summers Inter-Governmental Conference.

"We want to see a total reappraisal of the objectives and operation of the CAP, putting fair support for agriculture alongside wider investment in rural areas, to stimulate new jobs and investment to benefit the rural economy and environment."

Among other changes that Dr Strang would like to see are the abolition of both intervention and export subsidies. He was particularly critical of last weeks decision by the Intervention Board to open storage facilities for beef for the first time since 1993, claiming it was costly for the taxpayer and severely affected beef quality.

High cereal prices

Commenting on the current high cereal prices, Dr Strang said he did not feel the global shortage would last longer than two years. But it was a reminder the supply of agricultural commodities at reasonable prices could not be guaranteed in the short-term.

His views on radical reform of the CAP were not shared by EUfarm commissioner Mr Fischler, who said it was only three years since there had been a major overhaul, which had seen a move away from price support as the main backing for farmers.

Mr Fischler said that many people in the UK expected a radical shake up of the CAP when Central and Eastern European countries joined the EU.

"I cannot agree with such a view. Enlargement to the East will take place in a restrictive framework of international rules and obligations. There is no question of simply extending the old CAP to new members," he added.

Shadow farm minister Gavin Strang backed direct production subsidies and hill income aids.