Richard Lochhead – Cabinet Secretary for Rural Affairs and the Environment
Speech at NFUS Conference
Developing Greening Options for Northern Europe
Tuesday May 1, 2012
Good morning ladies and gentlemen. I’m very pleased to join you here today at the Moredun Research Institute; a fine venue for such an event given the Institute’s important links to farming.
I would like to thank the NFUS Board for inviting me to take part in this conference on CAP greening.
I know from speaking to some of you at last night’s dinner that you agree it’s been a very timely and necessary event that addresses some fundamental issues relating to the future of Scottish agriculture, and indeed European farming.
The issue of greening certainly encapsulates some of the debates at the heart of the debate over the new CAP in particular the need to avoid a one size fits all approach, and the need to introduce simplification into European farming policy – two subjects that are close to all our hearts in Scotland.
And given the international presence at this event, there is clearly common cause with other countries on these issues.
Indeed, only last week I was in Luxembourg for the EU Council meeting, speaking to fellow EU Ministers.
And, while greening wasn’t the only topic, we had a full and frank discussion about what the Commission proposals mean for farmers in our countries.
Today, people are concerned not only about having enough food, but also about the way that food is produced - and the impact that production has on their own well being, and on the health of the planet.
And no one needs a healthy environment more than food producers.
So now the CAP has a far more complex set of objectives.
The Commission’s rationale
And, in light of this, the European Commission has reached the clear conclusion that the CAP has to be greened.
Now, of course, traditionally, Pillar 2 was the home of environmental issues in the CAP.
But, in order to justify expenditure on direct payments, the Commission is committed to greening Pillar 1.
Indeed, as speakers referred to yesterday, greening is a budget issue. The Commission’s own budget proposals set out that 30% of direct support would be conditional on greening.
We can’t ignore the fact that Pillar 1 consumes the bulk of the money.
If the CAP budget is approved as proposed, the next 7 years would see over 300 billion Euros of taxpayers’ money spent on Pillar 1 direct payments.
That’s over 40 billion Euros a year on Pillar 1 compared with around 14 billion Euros on Rural Development.
And we know public opinion says people want to see value for money from the CAP.
As it happens, we have our own gauge of public opinion, hot off the press - our Scottish Government consultation on the CAP proposals finished last week.
There was also a solid amount of support for greening as a concept – and not just from environmental NGOs.
And where there were concerns, they were more about the detail of greening than the concept itself.
Across Europe, the public gives similar messages.
So I understand the Commission’s motivation to green the CAP.
So we accept the principle, but the prescription needs a lot of work.
What problems is greening aiming to solve?
There are genuine issues across EU farming that do need to be resolved.
Issues like monoculture, loss of biodiversity, and water pollution.
We know, for example, that monoculture is associated with high pesticide use and soil depletion. And where monoculture thrives, biodiversity tends to suffer.
However, I think it is important to remember that not every country in Europe is starting from the same place.
Down the generations, Scottish farmers and crofters have worked with nature and respected the environment around them.
Indeed, Scotland is in many ways a naturally green country.
Grazing on our hills, for instance, benefits our environment and that is a far cry from the huge swathes of arable mono-culture prevalent on other countries which would appear to be the Commissioners’ target.
In Scotland, we have a good record to be proud of.
We have over 2.2 million hectares of High Nature Value farming.
Scotland has seen some notable improvements in farmland biodiversity. For example, although there have been fluctuations, the farmland bird index has increased by 25% since 1994.
And when it comes to the Water Framework Directive, Scotland is ahead of the game in terms of managing our water environment.
These are remarkable achievements, and we must make sure Europe knows it.
But none of this means we should be complacent.
The key point is that farming Scotland can be proud of its environmental performance, but there is room for improvement.
And there is room for agriculture to player a bigger role in tackling other challenges.
And there is no bigger challenge than climate change.
Climate change doesn’t just mean higher average temperatures. It also means more extreme weather events.
In the past, we’ve tended to think that extreme weather only happens in other countries.
But the heavy snow we’ve had two winters running and last year’s gales will be etched on our memories for years to come. The unseasonal gale we had last May followed the warmest Spring for 100 years.
And we don’t have to look too far afield to see the effect that a prolonged dry spell can have on agriculture. As you all know, farmers in many parts of England – seventeen counties at the last count - are having a tough time.
These events are becoming more commonplace.
Scotland experienced more storms this winter.
According to NASA scientists nine of the 10 warmest years in the modern record have occurred since 2000.
So society has to tackle climate change. And agriculture has to play its part. Because agriculture and related land uses account for about 20% of Scotland’s greenhouse gas emissions.
Problems with the Commission’s proposals
Climate change, biodiversity, water quality – it’s easy to list the kind of environmental issues we need to address.
Finding workable solutions is where the difficulty lies.
So, yes, I support greening the CAP – including Pillar 1 provided we can ensure any greening measures are sensible, workable and flexible enough to meet individual Member States’ needs.
I think we’d all agree that the Commission doesn’t have an easy job, but with the current ill-thought proposals it is making life even more difficult for itself.
And more importantly, if the current proposals were to become law, life could become very difficult indeed for Scotland’s farmers with very little benefit for the environment or food security.
I’m sure we all accept that Europe has to establish a set of standards that can be applied across the whole of the EU.
The playing field has to be level, after all.
But, nearly everyone I speak to, including other Member State ministers, thinks the Commission’s proposals, as they stand, don’t come up to scratch.
Quite frankly, given the strength of feeling with farming ministers, farmers and environmental NGOs all opposing them, I simply can’t see the current set of proposals staying on the table for much longer.
As I sit in the Council of Ministers, I can feel the increasing sense of frustration as meeting after meeting Ministers complain about the greening proposals but the proposals stay the same.
Believe me, Ministers, including this one, and indeed my UK colleagues, as you heard yesterday, are desperate for the Commissioner to move from listening mode to responding mode.
The proposals are immensely complicated, a kind of legislative quicksand that threatens to swamp us all.
We need genuine simplification.
We need proposals that are simple to apply, and don’t tie us up in green tape.
I have to say that if we think the current CAP is complex and bureaucratic, it is a walk in the park, compared to the new proposals.
And as the Minister who will have to implement the new CAP in Scotland, some of the current proposals are capable of causing my officials and myself to break out in a cold sweat in the middle of the night!
Even the European Court of Auditors was critical in its recent report – both on the complexity of the proposals in general, and on the greening obligations in particular.
You’ve been hearing about this in detail throughout the conference, so I won’t go into great detail. But you’ll be familiar with the main concerns.
The 'crop diversification' proposal could undoubtedly improve the environment in parts of Europe with serious mono-culture problems.
But for the rest of us, it’ll harm production to no great benefit.
The “permanent pasture” proposal seems, on the face of it, to disrupt traditional rotations. We first flagged this up nearly a year ago, and the Commission has told us that’s not the intention.
But if those reassurances aren’t backed up by the words on the page, which one should we believe?
And the “ecological focus area” proposal is a great example of how we must be clear about what benefits we hope to deliver, and whether they are enough to justify the bureaucracy involved.
It would be a travesty if areas on a farm holding already developed to deliver environmental and bio-diversity benefits didn’t count as greening because they were not currently part of the arable area.
Ecologically focussed areas are one thing. But we can’t afford to lose focus on food production.
With the world facing the stark reality of growing populations and shrinking resources, we need greening proposals that help the environment not hinder food production.
So, I am sure at this conference we can all agree that the Commission’s current greening proposals are likely to, and deserve to be rejected, by Scotland, and indeed, many other countries.
But as I said before, the principle is a good one even if we disagree with the proposed prescription.
So, what alternatives have Member States come up with?
Some Member States have said that compliance with GAEC should be enough for farmers to get their greening payment.
GAEC has certainly served us well up till now. But perhaps it’s not visible enough to the public at large. Maybe greening should be strengthened and in turn be made more transparent.
Some Member States want greening to be optional.
But that is something the Commission is strongly resisting – it wants to ensure that greening is applied across the EU.
And I expect the public wants that as well.
Surely, all agricultural activity in Europe should support our environment and that’s one outcome we should all support.
Some want to expand the so-called “green by definition” category. They say that if organic farmers automatically qualify, others should too.
That is a proposal which may be worth further investigation but the definitions of what would be exempt would have to take into account diverse farming practices across Europe and ensure a level playing field.
So, if we go down this road, we must also get the main greening rules right.
That’s one thing I’ve made clear to Defra ministers.
You heard from Caroline Spelman yesterday, and I’ll be meeting with her and her whole ministerial team later this week.
Yesterday, Caroline Spelman set out her 6 Principles for greening and I don’t think any of us would argue against any of them.
I am pleased that on the issue of greening, right across the UK, there is complete agreement about the flaws in the current proposals.
However, one way or another, the UK Government’s approach comes down to the same thing: a strong Pillar 2 at the expense of Pillar 1 and that worries me slightly.
My view is clear.
Just as we have to resist the Commission’s current proposals for greening Pillar 1, so we also have to guard against any Government that thinks that Pillar 1 is too difficult to green so we should cut its budget and just stick to Pillar 2.
Whether it’s transferring funds between Pillars or giving exemptions for agri-environment schemes, everything in Defra’s approach betrays their fundamental view that the future CAP shouldn’t have a first Pillar at all.
The Scottish Government recognises the challenge in greening Direct Payments but we also believe that direct payments are also justified by the role they play in maintaining viable farming in Scotland, and therefore food production.
We should find ways of greening the CAP rather than using the greening debate to undermine direct payments.
Fortunately, on this issue, the UK’s is a minority view in Europe.
I’m all for increasing Scotland’s share of Pillar 2 funding to spend on more environmental schemes. After all, we currently have the lowest Pillar 2 share in Europe. But, if we can avoid it, this mustn’t be at the expense of Pillar 1.
Indeed, by focusing so much on the argument that Pillar 2 can be boosted by transfers from Pillar 1 may send out the signal that we have given up on persuading Europe to increase Scotland’s pitiful low rural development budget.
So I urge you too, as you engage with the UK government on the technical details, to remember their underlying agenda.
I’ve challenged them on that consistently, and will continue to do so.
What I’ll be saying to them on greening, is this.
SG Vision on greening
The Scottish Government’s vision on greening aims to improve the proposals in three ways.
First, we need much more flexibility. Something echoed by many of yesterday’s speakers.
I know the Commission’s had a tough job trying to find a short list of measures while maintaining a level playing field. I acknowledge what a difficult task that is. But the proposals as they stand strike the wrong balance.
We have to have an approach that allows countries to tailor greening in a way that best suits their own circumstances.
With such an approach, countries could choose from a menu of options, that farmers would have to comply with.
In a Europe of 27, and soon 28, Member States, this has to be the way forward.
Secondly, we need to get the details right within the greening measures in the final package. Again, a point many of you have raised in this forum.
This means exploring every detail of every potential measure.
Should the 3ha threshold for crop diversification be increased?
Should upland farms with only a field or two of cropping be exempt from crop diversification altogether?
Should the permanent pasture measure differentiate between types of land? Should it focus protection on the most environmentally valuable semi-natural grassland?
If so, what implications would that have for how we treat more intensively-managed permanent grass?
How exactly would we implement the Ecological Focus Area Measure ?
And how would we ensure a balance between red tape and disruption to farm operations on one side, and environmental benefits on the other?
All these issues and more, we are addressing in detail.
And, thirdly we need to look seriously at bringing climate change into the mix.
Given that climate change is the dominant environmental challenge of our time, should this not be at the heart of any greening proposals? Moreover, as our Farming for a Better Climate initiative shows, climate measures can also boost farm efficiency, save money and improve the bottom line.
I can see the big benefits of making participation in carbon reduction schemes and energy efficiency measures an option to qualify for payments. This might not be without its challenges but there are huge win-wins to be had here.
Environmental benefit; more efficient use of resources; and bigger farm profits. If a measure like that can be brought into greening, it seems to me we’d be foolish not to do so.
We hope that Scottish stakeholders in the room will help us develop those plans. And that those of you from elsewhere will take the message back home, and put your own weight behind it as the CAP reform negotiations continue.
With greening, the trick will be to find the right balance.
Our task is to ensure the Commission proposals include sufficient flexibility to make them work for Scotland and Scotland’s farmers.
And the negotiations are now in full flow in Europe.
As ever, Scotland will have to be fleet of foot. We must press our ideas where we’ve identified better options than the Commission proposals.
But at the same time we mustn’t neglect engaging with the Commission’s proposals themselves, to address the flaws in them – because at this stage it’s impossible to know for certain what will or won’t be in the final package.
We are already working on a number of fronts.
In particular, I had a useful meeting with the Cypriot Agriculture Minister in Brussels last week.
We talked about greening and we both agreed that simple measures and flexibility were key. And this view has been echoed by many other Member States.
As you probably know, Cyprus takes over the Presidency in July so it was very useful to be able to put Scottish views across at an early stage and maintain Scotland’s high profile.
The following Presidency is Ireland. I know my Irish counterpart, Simon Coveney, well, and look forward to working with him and his team in their Presidency.
And I’m pleased that NFUS invited MEPs to this event.
The Parliament has a greater role than ever before in this CAP reform. As a government we’ve stepped up our engagement with MEPs, and we’ll want to work closely with them too.
It’s vital we use every opportunity to get our message across.
And that message is:
That it’s right to green the CAP.
That if Pillar 1 is to continue being the backbone of the CAP, as we think it should, then it must play a part in that greening.
That the Commission’s proposals as they stand are wrong for Scotland but we will work to develop measures that are right for Scotland.
That any such new measures must help the environment but not hinder food production.
And perhaps most importantly of all, the good environmental work farmers already do must be recognised – whether at individual farm level, or for a nation like Scotland with such a proud environmental record.
If we can get that message across, then together we can produce a package that will give the CAP a sustainable future.
Congratulations to NFUS for arranging this important conference, and I hope you enjoy the remainder of the programme.