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New farming deal
20/11/2008
The Common Agriculture Policy (CAP) Health Check should help ensure more flexibility for farming policy in Scotland in the months and years ahead.
Following a challenging set of talks at the November Agriculture Council in Brussels, the deal reached this morning signals additional flexibility to match the measures in the CAP to Scotland's needs and a more level playing field across Europe for Scottish producers.
Speaking from Brussels after a settlement was reached, Cabinet Secretary for Rural Affairs and the Environment Richard Lochhead said:
"This deal should be good for Scottish agriculture and on key issues our voice has been heard loud and clear given that we have retained the freedom to deliver policies tailored to our needs. I am delighted that the joint efforts of the Scottish Government and the industry have paid off - the final outcome is much improved from what was initially on the table.
"It is in Scotland's interests to have a European farming policy that supports sustainable production rather than over-production and in that context the CAP Health Check moves in the right direction.
"Importantly, our valuable livestock sector will welcome our success in securing the ability to continue our Scottish Beef Calf Scheme if we choose to do so.
"Our farmers also wanted to see more of a level playing field emerge from these talks and the deal delivers that. The increase in modulation brings other countries more in line with our own position - but without increasing the burden on our farmers. We would have liked the deal to have gone further but are pleased the gap has narrowed.
"Many farmers will also breathe a sigh of relief given that the proposal to crudely cut payments to hundreds of our bigger farming enterprises has been watered down following strong representations from Scotland and other countries. The maximum cut will be four per cent, compared with the 45 per cent suggested by the Commission a year ago and even this cut will be largely offset by Scotland's higher level of voluntary modulation so few farmers should feel any impact.
"The deal clarifies beyond doubt the fact that the dairy quota system will be disappearing. However, the overall picture for the dairy sector is complicated so we clearly need to consider the implications for Scottish producers.
"The CAP Health Check was only ever intended to be a mid-term review rather than wholesale reform. Even if the stakes weren't as high as in a full-blown reform, it was still important to achieve the right outcomes and to set the right tone for the more fundamental negotiations to come on the future of the CAP post-2013.
"We will now need to sit down with stakeholders in the days ahead to digest the detail of the agreement and ensure we understand fully what it means for Scotland. We can then decide how to implement the Health Check including how to make use of the various flexibilities we fought hard to win."
In summary, the mid-term review of the 2003 CAP reform will mean the following for Scotland:
- Freedom to decide how best to proceed with the Beef Calf Scheme, including the option to keep it unchanged for the coming years
- A more level playing field on "modulation", the rule which top-slices farmers' payments and transfers the money into rural development programmes, bringing other countries more closely into line with Scotland
- A fairer deal on decoupling, reducing the distortions created by the 2003 reform
- Avoiding the threat of excessive subsidy cuts for larger holdings through so-called "progressive modulation"
- Avoiding the threat of imposed disruption to the Scotland Rural Development Programme
- Avoiding being obligated to change the basis of Single Farm Payments, from a historic to flat rate payments
- Clarity for the first time that the milk quota system will definitely be abolished.
- Political agreement was reached in the Agriculture and Fisheries Council today. Formal adoption of the agreement will not take place until the full legislative texts have been drawn up - probably in December or January. Detailed implementing rules will then be drawn up by the Commission and most of the provisions will enter into force from 2010. The future of the CAP post-2013 will be discussed during the forthcoming EU budget review and the negotiations on the budget for 2014-2020.