PRELIMINARY discussions began in Brussels yesterday to determine how the Common Agricultural Policy should evolve between next year and 2013.
The last reforms in 2003, labelled a mid-term review by Franz Fischler, the agricultural commissioner at the time, proved to be the most radical in almost 40 years.
The thrust of Fischler's programme was to decouple support from production and to attempt to make farmers more market-orientated.
The reforms became operational on 1 January, 2005, and have worked reasonably well, especially in the Scottish context, where a different deal was struck from that agreed in England. However, almost as soon as she succeeded Fischler as commissioner Mariann Fischer Boel indicated that she would initiate a "health check" in 2008.
This may turn out to be more radical than was first expected. Set-aside will go, and member states such as France, which have maintained a degree of direct support for beef production, will come under pressure to decouple fully.
The CAP has an annual budget of more than GBP 30 billion, but as the EU has enlarged to 27 member states, the cash is becoming increasingly widely distributed. NFU Scotland has already begun working on its own proposals. Andy Robertson, chief executive of NFU Scotland, was in Brussels yesterday with the leaders of other EU farming unions, under the umbrella of COPA, to hear the first outline of the commission's proposals. Robertson and his colleagues met Klaus Dieter Borchardt, the deputy head of the agricultural commission.
Robertson said: "The commission is at pains to stress that it wants to engage with EU farm unions on future CAP reform. We are clear on the short-term goals for next year. They include the abolition of set-aside, which has always been at odds with the freedom-to-farm principle of the 2003 reform. I was pleased to hear there is support for that move.
"Mr Borchardt's concerns over capping of agricultural support are shared by NFUS, although we are acutely conscious that we must be able to justify the levels of support the industry receives. There are also difficult messages for us to consider. Export refunds [subsidies] will reduce and eventually disappear.
"Scotland is not a major exporter outwith the EU. However, clearly there will be an impact as more EU produce will remain on our marketplace as a result. And the commission agrees with our view that there must be a far greater emphasis within support schemes on improving competitiveness and helping farmers to adapt to subsidy reform."
Scotland's 20,000 farmers and crofters receive about GBP 400 million a year through the new single farm payment, which replaced a wide range of previous support schemes. Eligibility for the SFP is based on the average level of support each business received in the three reference years of 2000-2.
However, the SFP will gradually be diluted by modulation, which is the top slicing of support for environmental programmes.
Robertson is confident that wisdom will prevail. He said: "It is clear from the COPA meeting and the discussions with commission officials that support for farming remains strong. Obviously, the process of reform must be policy-driven and not dictated by a desire to cut budgets. The decisions taken next year at the 'health check', and in 2009 when EU budgets are reviewed, and post-2013 will have a huge impact on the Scottish countryside."
CAP reform is inextricably linked to the stalled World Trade Organisation negotiations on the liberalisation of commerce. Many WTO member states, notably in South America and Australasia, want to see all agricultural support dismantled in rapid order.
The EU will not accept that policy, but there are fears that the EU trade commissioner, Peter Mandelson, may give some ground to the WTO. Last week the Irish prime minister, Bertie Ahern, made it abundantly clear that he will not allow Mandelson to exceed his brief. In an interview with the Irish Farmers Journal he said: "I have concerns that the commissioner has tendencies to press to limits that are not within his mandate. I am aware from the past of his abilities to stretch these issues."The Scotsman
