Putting Food on the World’s Plate: a CAP for the Future
The world’s population is growing, its climate is changing and its natural resources are becoming compromised. This means that the world’s farmers must produce more food using less water, less fossil fuels and less land, and at the same time reduce their environmental impact. The Foresight report on food and farming futures, published in February, made a strong case that this is the most urgent challenge facing the world today. The government is determined to back UK farmers, and to provide international leadership, to ensure this crucial challenge is met.
Globally, we are already seeing the effects of increased demand for food in a changing climate. Food prices are rarely out of the headlines, and the international community is starting to pay attention. The UK government is lobbying for trade liberalisation, and for transparency; for a recognition that nation state self sufficiency will not work.
We are also working with EU member states to develop a united, strong and persuasive voice on the global stage. For the EU to have a strong voice, it needs a strong and competitive agriculture sector.
The Common Agricultural Policy (CAP) was created in the shadow of the privations of World War II: at a time when governments across the world were making food security a priority; but often at the expense of nature.
Since then the world has changed. The population has grown, international trade has grown, and farming methods have become increasingly sophisticated. At the same time the natural environment has been degraded at an alarming rate.
And the CAP has changed too. Successive reforms have largely decoupled farm support from farm production levels, making food mountains a thing of the past. We now have two “policy pillars”. Pillar One provides about 75 percent of the funding as
direct aid to farmers and market measures. Pillar Two uses the rest to support competitiveness, rural development and environmental measures.
However, the world is continuing to change, and the change is speeding up. The CAP must reflect this. It must be shaped to help address the challenges identified in the Foresight report, and Barroso’s EU2020 strategy towards sustainable growth. By the end of this year the European Commission will have published legislative proposals for the CAP post-2013. We are pushing for ambitious, far-sighted reform.
We need a CAP that will enable the agricultural sector to respond to, and earn improved returns from, the global market. Our farmers tell us they do not want to be reliant on subsidies forever. We need a CAP that moves from market-distorting subsidies to helping build the capacity, competitiveness and resilience of EU farmers.
We need a CAP that reflects our knowledge that an abundant food supply can only be truly secure if it is backed by thriving ecosystems; a CAP that rewards farmers for being nature’s custodians.
We need to be constructive as well as ambitious. Only by working with our European colleagues will we be able to drive through the changes needed.
And we need to be realistic about the speed of such change: not scrapping subsidies tomorrow, but setting a clear direction for reform, and encouraging the industry to become more competitive in the transition period.
The future holds many opportunities for farmers, as well as challenges. With Commissioner Ciolos’s proposals imminent, we have a real chance to help EU farmers be ready for both. Waiting until the next round of reforms will not leave farmers enough time to prepare themselves for a very different future. We need to make changes now
Our approach is twin-track. We want to see a greater focus inside and outside of CAP on measures to improve competitiveness, so as to progressively reduce the reliance of farming on subsidy. Pillar 2 will play the central role in this. While Direct Payments will continue during the next Financial Perspective, there should be a clear downward trajectory and a programme of managed transition to prepare for their eventual abolition.
At the same time we must increase the market orientation of the CAP, by decreasing even further our interference in the market. We need to streamline and simplify market measures, ensuring any remaining measures are used only in times of genuine crisis. Instead of relying on government intervention, we need to encourage the development of private sector mechanisms that better enable farmers to manage risks.
The value for money of CAP expenditure must increase, providing more public goods such as environmental measures. This is precisely our aim for Pillar 2 of the CAP. It is the primary tool for delivering meaningful environmental outcomes and driving EU agricultural competitiveness, reducing reliance on subsidies. Within a smaller CAP budget Pillar 2 should receive an increased share.
This is all underpinned by our call – echoed across the EU – for significant simplification for both farmers and administrations. The recommendations made by the independent Task Force on Farming Regulation here in England can be applied to this. Any regulation must pass the test of proportionality, clarity and value for money in the policy-making process.
We have the evidence we need to act now to ensure a sustainable food supply for ourselves and for future generations. We need a CAP that is fit for the future; that will help ensure environmental and human well-being in Europe – and across the world.