Scottish Beef Cattle Association Annual Conference

He claimed that this was very true of the current situation in the industry. CAP reform, capping and timetable of implementation.

“Never before have so many uncertainties been in this one critical melting point requiring sound economic decisions.” He lamented the UK Minister's difference of opinion from that of the Scottish Beef Industry.

Douglas Bell, Senior Agricultural Policy Consultant at SAC presented on “Planning profitable beef enterprises beyond Single Farm Payments. (SFP).

25% of farmers in Scotland produce beef. Beef is the number one red meat consumed in UK. He demonstrated that Beef & Sheep farmers were very reliant on SFP – possible 50% of income.

With the removal of production subsidies SFP has replaced this when LFASS and LMC the comparison for 2010 to 2005 shows an increase.

Douglas Bell told delegates that making money out of beef production was going to get very difficult. Producers need to become smarter. Making significant profits without support regimes is very difficult and critical.

Alyn Smith MEP, a member of the EU Agricultural Committee gave an address on CAP reform and the politics of Beef in Europe.

He was critical of the UK view on agriculture. “We can get more done in Brussels than we can in Whitehall.”

Alyn has written to Caroline Spellman (see below) expressing disbelief of the UK position. He does not understand where the line has come from with its extreme statements. The Pack Report on CAP reform was praised in the presence of the UK Minister by EU representatives. – “the equivalent of a slap in the face.”

The four ministers in the UK cannot agree with Scotland, Wales and NI in contrast to UK thinking, yet sCarline Spellman has the job of speaking at EU level on behalf of the UK. Global food supply chain is unstable and could collapse in the same way the financial sector so it is even more important that we must maintain a profitable agricultural sector.

Keith Redpath of SBCA outlined the penalties for non-compliance deducted from farmers. In 2009 the highest penalty was £96,999 and three others were over £20000. These were all livestock farmers for over registration of land area. The limit is only 0.5% of land area claimed i.e. more than a hectare wrong. Largest businesses seem to be targeted.

Drew Sloan of Scottish Government explained the EC audit procedure. The Scottish Government interpreted 2005 regulations and guidance with a light touch but 2009/10 position was influenced by EC audits. Government face EC penalties if not operating correctly.

DEFRA policy direction on EU Common Agricultural Policy reform

I write in a personal capacity to express my puzzlement at the apparent policy direction of your department and to request a meeting with you to attempt to thrash out such differences as may exist between your department's apparent policy and my views.

As one of the few full UK members of the European Parliament's Agriculture Committee I am concerned that your statements to date seem very much out of line with mainstream European thinking on CAP reform and you risk marginalising your, and hence our, influence as we enter crucial talks. I am also personally curious that they seem to be quite at variance with my understanding of Conservative Party policy before the UK election.

When the Conservative-Liberal Democrat UK coalition took office last year I had high hopes for a significant change in direction from the previous administration. From my perspective, Labour took little notice of farming's concerns, adopting a lax assumption that everything food-related could be safely left to the market alone, and frequently used our farming communities as a bargaining chip in European and global negotiations. While I am clearly not of your party, I have enjoyed constructive working relationships with UK Conservative MEPs, and have a decent track record of working with other parties where common ground exists.

I fear there appears to be rather less common ground than I thought. I appreciate that it takes time to change a departmental policy, but I must conclude that such a shift has emphatically not occurred. Instead, however, we MEPs continue to receive briefings from your civil service in advance of Agricultural Committee meetings with no discernable shift in tone from the previous administration. This was most apparent from DEFRA's advice concerning the Report on CAP Reform in July 2010, which mirrored the Labour “Treasury Paper” of 2005 in calling for the abolition of direct support to farmers.

More recently, the speech you gave to the Oxford Farming Conference repeated the demands of the previous government for an eventual end to Pillar I direct to farmers, with the financial resources being shifted to environmental activities in the Rural Development Fund (Pillar II). This was quite a surprise to me, but also to Scottish hill farmers, whose business model is, regrettably, absolutely reliant on the Single Farm Payment. Many would be out of business if the changes you propose were to be implemented. In my view this would see tremendous damage to our food security, land management of fragile remote environments, and the economic viability of rural communities. I do not know, but it is certainly my understanding, that your comments were also something of a surprise to your Conservative colleagues in the European Parliament and in Scotland.

I am genuinely struggling to fathom the apparent difference between my understanding of Conservative Party Policy and these statements. I simply do not see your claim that farmers will be rewarded with higher prices as being borne out in the markets. It is true, we have seen large rises in consumer prices but producers can barely cover their costs of production which are at record highs.

In addition, the global backdrop to these crucial talks on the future shape of the CAP is unstable and increasingly uncertain. Food security is a vital issue, which will not be helped by the abolition of public subsidy in a time of volatile and adverse market conditions. Western food stocks are also as historically low levels. The global food market depends on cheap energy prices and functioning transport networks, both of which are far from being guaranteed long term. There is also the potential reduction of good farmland and water supplies in developing countries due to climate change, and the impact political instability may have on the global food supply.

Finally, I noted your recent comments on the desirability of an international prohibition on food export bans. While export bans are not ideal, I feel that to even call for sanction of any country taking such a step is simply unrealistic given even the World Trade Organisation has allowed for the possibility of temporary export bans in extreme conditions.

I would be obliged if you would give these points serious consideration, and I would reiterate my willingness to meet with you to discuss. Negotiations in the EU have to focus upon finding common ground and shifting coalitions of interest, and I fear that your apparent current extreme policy trajectory will leave you without allies.

Yours aye
Alyn Smith