The New Commissioner’s plan
Phil Hogan, the Irish nominee for membership of the European Commission and the president-elect Jean-Claude Juncker’s preferred candidate for appointment as Agriculture Commissioner, skilfully navigated his way through the hearing into his suitability by the European Parliament’s Agriculture Committee and received the support of 80% of the members. So, assuming Jean-Claude Juncker’s proposed team of Commissioners is approved by the European Parliament, as seems likely after the replacement of the Slovenian nominee, a defeated elected head of state who unsurprisingly did not have the support of the victorious opposition, Mr Hogan will take office for a 5-year term.
Mr Hogan enthused the Committee with a plan to the deal with the complexity of his predecessor Dacian Ciolos’ Common Agricultural Policy reforms, especially the greening element, and said that he intended to review the regime after a year to establish "whether it is designed in a way which is being properly applied in practice", and to see how errors in EU spending could be reduced. His proposed review will not take the place of the mid-term review of the new regime already agreed for 2017, so we have the prospect of more or less constant review.
Mr Hogan, as might be expected of a Commissioner from a stock farming country, also said that the mid-term review would include a look at the controversial sheep Electronic Identification rules and that he was committed to protect food production standards in any trade deals, such as that proposed between the EU and the USA.
One subject which Mr Hogan will have to deal with immediately is the consequences of the Russian ban on food and drink imports from the EU. In the late summer the Commission put in place schemes to pay for private storage of dairy products and to help fruit and vegetable growers who had lost their markets, but both these have been hijacked by opportunistic member states and have had to be closed. 83% of the storage aid was snaffled by Italy which saw it as a golden opportunity to mature a lot of Parmesan cheese, and Poland asked for €145m for fruit and vegetable growers, which was more than its total exports to Russia in a year. The need for help has not gone away, and so Mr Hogan will have to come up with something more sophisticated.
Mr Hogan promised the Agriculture Committee that he would visit each member state within a year. He will know of UKIP’s plans for US style counter-cyclical payments or a Canadian crop price insurance scheme in addition to a Single Farm Payment, but will find that there is a solid majority of farmers who wish to see the UK remain an EU member. There was little rural support for ‘Yes’ in the Scottish independence referendum – hardly surprising in the view of the doubts about Scotland becoming an EU member in its own right. Farmers in England, Wales and Northern Ireland will be equally wary of plans to leave the EU.
Agriculture European Update
The Downside of the European Union
UK farmers who value their Single Farm Payments – and there are many whose accounts would not look well without them – may not be keen to see any change in the UK’s membership, but there could be an increasing number who think differently. Not because of any enthusiasm for the politicians who argue for the UK to leave, but because of the threat to their businesses posed by the EU approach to plant protection.
Three EU policies pose commercial threats – the complexity of the process for obtaining approval of a product for use within the EU, the Water Framework Directive as implemented by national governments and the recent restrictions on neonicotinoid seed treatments.
Member states used to be responsible for approving pesticides for use in their own countries. That changed in 1993 when an EU Directive came into force, requiring any active substance (including those then approved) to meet specific safety and efficacy criteria before it could sold within the EU. The number of approved substances shrank dramatically and only those whose potential market justified the expense remained approved, and even those just for a limited period.
In 2011 a new EU Regulation came into force which fundamentally altered the basis for approval, by changing the assessment from risk based to hazard based. The eye of the approval needle has become even smaller. Any exposure to a ‘hazardous’ substance is now unacceptable. If coffee was submitted for approval, it would be banned because caffeine is harmful if taken in sufficient quantity; that it has been used for centuries with small exposure and little or no risk would be irrelevant. So products previously approved may no longer be.
The Water Framework Directive and its "daughters", the Drinking Water Directive and the Groundwater Directive, require rivers, lakes, ground and coastal water to reach good ecological and chemical status, limit the amount of pesticides and chemicals in drinking water and protect groundwater. The standard is 0.1 microgramme per litre, the equivalent of one paracetamol tablet in an Olympic sized swimming pool. Additionally the WFD requires that the quality of water for drinking should not be allowed to deteriorate and require additional treatment.
The combined effect of these Directives and the actions of member states to implement them may lead to severe reductions in available pesticides, especially in the UK where more land than in many other member states is under-drained, thus leading to pesticides moving quickly into drains and then watercourses before breaking down in the soil.
In December 2013 the EU prohibited the use of three neonicotinoids as a seed dressing for flowering and spring planted crops. These systemic insecticides were used to treat 70% of the UK crop of oil seed rape in 2012. Studies have suggested that they have led to a decline in the bee population, but others have found no effect when used in normal field situations, leading to claims that the EU Commission has not reviewed all available data.
Agriculture European Update
November - The Consequences of the EU Pesticides Regime
The recent report on Crop Protection Technology has been attacked as "special pleading" by those opposed to the use of pesticides and genetic engineering because it was commissioned by the National Farmers Union, the Crop Protection Association and the Agricultural Industries, but what if the research undertaken to inform the report is even half right?
The list of plant protection products that may not be available or be subject to restrictions on use, due to EU policies and the resulting commercial disincentive to the suppliers of the products to market them in the EU or develop new ones, is long, 40 in total. The consequences are already being felt by the growers of oil seed rape, and may go far further. The control of weeds, disease and pests will be more difficult, and because fewer products will be available, the risk of resistance will increase. Yields will fall.
It is suggested that 22% less oil seed rape will be grown, 50% less carrots, 40% less onions, 30% less apples and no peas for processing at all. The future for the smaller, family owned farms will be challenging, and larger businesses that can cope with the changes may be less willing to spend on maintenance of the landscape or improving biodiversity – a perverse outcome for the "greening" required by the reformed Common Agricultural Policy.
The demand for labour may increase, especially in the horticultural sector which will have to resort to increased hand weeding and grading.
Given the difficulties the farmers face in finding labour, their need to rely on workers from outside the UK and the increasingly fraught social and political consequences, this is not a happy prospect.
Shortfalls will be made up with increased imports. If there are enough commodities available in European or world markets to make them up, there will be little public concern about the reduction in self-sufficiency in the UK, and farmers will not be able to mobilise support for a less restrictive pesticide policy.
The price of some crops might increase; if the EU grown crop represents a significant proportion of a world crop, overall availability will decrease and the price will rise.
There would be consequences too for the biofuel industry which is becoming an important customer for UK oil seed rape, sugar beet and wheat.
If there are less of these available, the price goes up, as do imports, with unfortunate consequences for the cost of the fuel compared with coal and for the credibility of national energy policy.
And yet the demand for good land in the UK continues unabated, and not just from those taking advantage of the benign Inheritance Tax regime for farmland.
Agriculture European Update
December - The Consequences of Devolution
Though the UK Government seems intent on devolving more powers to the governments in Edinburgh, Cardiff and Belfast, one thing that it cannot devolve is membership of the European Union. It continues to be a source of resentment that the ministers in the devolved governments have no direct voice in Brussels, though they will, no doubt, be glad that the EU has adopted an innovative, if rather convoluted, approach to the long running saga of the ban on growing GM crops in Europe, which will allow different policies to be adopted in Scotland and Wales.
It has been apparent for years that there was no chance of the 28 EU member states reaching an agreement to permit the growing of GM crops. At last the Commission and Parliament have approved a proposal that GM crops should be permitted but member states may decide otherwise. Evidently the opt outs can be made on a regional basis, so Scotland and Wales, as EU Regions, can decide, as they apparently intend, that GM crops should not be grown, and England that they should be.
The lack of uniformity in the UK over GM will be mirrored for a while in the administration of the reformed Common Agricultural Policy. Despite having five years to make appropriate arrangements, the Welsh Government has failed to formulate an acceptable scheme for apportioning EU Basic Payments between lowland, upland and moorland farmers; it has had to withdraw its proposals after a challenge in court by moorland farmers, an embarrassing step which will only add to the difficulty it has already admitted in making timely payments to farmers next year.
It has also had to postpone the introduction of regulations for the electronic tagging of sheep, which is now compulsory for sheep going to slaughter in England; if Welsh farmers wish to sell in English markets, they will have to tag.
The Scottish Secretary for Rural Affairs, Richard Lochhead, also has concerns of a different kind about uniformity. He has been complaining that, if the UK were to decide to leave the EU, the £20bn which UK farmers are due to receive in EU Basic Payments in 2015-2020 will be put in jeopardy – no mention, we note, of the SNP’s claims in the independence campaign that Scotland would remain a member of the EU in its own right. The Secretary of State, Liz Truss, when pressed at the Oxford Farming Conference, refused to say what the UK Government would do about the level of payments, on the grounds that it was hypothetical and the preferred option was to remain a member of the EU.
How dairy farmers must wish that they had the comfort of Basic Payments like arable and livestock farmers. It is ironic that the abolition of EU milk quotas, designed to limit production, should coincide with a collapse in the market for EU dairy products, due in part to lack of demand, for differing reasons, from China and Russia.