00.01 WEDNESDAY 15 JUNE 2005


Tomorrow, Tony Blair, Jacques Chirac and the other EU heads of State meet to thrash out details of the EU budget for the next seven years.

High on the agenda will be spending on the Common Agricultural Policy (CAP) which currently absorbs almost half of the EU Budget.

In a report published today the House of Lords calls for future agricultural funding to be focused towards the new less developed Member States and for direct payments to farmers to be phased out from 2013.

The Chairman of the inquiry Lord Renton of Mount Harry said:

"The stark reality is the current CAP doesn't meet the needs of the EU-25."

"Farmers in new Member States need help modernising and restructuring their antiquated farms. This should be provided for through a rural development policy which is independent of agricultural objectives." 

"But direct payments to farmers should be phased out from 2013. Such payments should only be seen as transitional tools to prepare farmers for a market focused future for European agriculture."

In the context of the upcoming G8 Summit and growing support for the Make Poverty History campaign, the Lords' report is a timely call for a timetable to be set for phasing out the current CAP, which supports export subsidies to guarantee prices within the EU.

"Even though the number of farmers in the EU has soared following enlargement in 2004, the amount of direct funds available to farmers remains static."

"The CAP is near breaking point and this tension will increase when the EU grows to 27, or even 28 or 29 Member States. Drastic changes to the CAP are necessary if the European countryside is to remain a beautiful, productive home for working families."

The Committee recommends that:

  • A long-term plan for the CAP can no longer be avoided. A timetable should be agreed at the mid-term review in 2008 in order to phase out the current system from 2013.

  • The single farm payment should be phased out and a separate environmental fund established to recognise and reimburse farmers for the non-production benefits their activity brings to society.

  • The restructuring and modernising needs of the new Member States should be provided for under a single rural development policy completely separate from agricultural objectives.

  • The EU should push to eliminate all its market support, intervention and export subsidies as soon as possible.


1. The inquiry was conducted by Sub-Committee D (Environment and Agriculture) of the European Union Committee. The members of the Sub-Committee are:

Lord Cameron of Dillington

Lord Christopher

Countess of Mar

Lord Haskins

Lord Lewis of Newnham (Chairman)

Lord Livsey of Talgarth

Baroness Maddock

Baroness Miller of Chilthorne Domer

Earl Peel

Lord Plumb

Lord Renton of Mount Harry

Lord Sewel

Member since 25 May 2005

2. The report is published by The Stationery Office: The Future Financing of the Common Agricultural Policy, House of Lords Select Committee on the European Union, 2nd Report, Session 2005−06, HL Paper 7, ISBN 0 10 400672 2, price £12.00.

3. The Committee heard evidence from a wide variety of witnesses including Dr Franz Fischler, former EU Commissioner for Agriculture and Rural Development, The Rt Hon Stephen Timms MP, former Financial Secretary to the Treasury, and Lord Whitty, former Farms Minister. 

4. At the 16-17 June European Council, 25 Member States will attempt to reach agreement on the EU budget up to 2013. A significant proportion of the budget has traditionally been spent on the CAP, both in direct subsidy and through rural development.

For embargoed copies of the report or requests for embargoed interviews with Lord Renton of Mount Harry (on Tuesday 14 June) please contact:

Jillian Bailey, Press and Publicity Officer (Committees) on 020 7219 8659.

For further information please contact:

Suzanne Todd, Clerk to the Sub-Committee on 020 7219 4579.