One of the, thus far, little mentioned innovations in the Reform Treaty is the potential effect on CAP reform. The treaty extends the European Parliament's legislative co-decision powers to the field of agricultural legislation. In the EU budgetary procedure too, all EU expenditure will be subject to the approval of both the Council of Ministers and the European Parliament. At the moment agriculture is the exclusive preserve of the Council of Ministers. As I pointed out in my article on the Compass website, opening up the CAP and agricultural legislation to the Parliament, in which MEPs divide along ideological rather than national lines, will increase the levels of scrutiny, democratic accountability and should drive reform in these areas.

Another measure to increase transparency in agriculture spending is the decision last week by EU Agriculture Ministers to publish a comprehensive list of all CAP recipients, which was detailed on the Financial Times blog. The Commission and Member States will now draw up guidelines on how much information countries will have to provide - for example, the UK produces a very detailed list including the precise amount the Queen receives in farming subsidy (£769,000 for her Sandringham farm in 2003/4), but there is currently nothing to stop others from merely publishing generic information ie "a grain farmer in Picardy".

Small steps perhaps, but making the ways in which the EU spends its budget more visible and detailing how the money is spent is, nonetheless, a significant step towards increasing transparency and parliamentary scrutiny.

With customary hypocrisy, the Eurosceptic press today criticised the EU for cutting subsidies that could lead to an increase to the cost of Christmas trees. Apparently, imports of the Danish grown Nordmann fir, which has been the most popular tree in British households since the early 1990s because it retains its needles for longer than other trees, are to drop because a ruling by the European Union to scrap subsidies under the Common Agricultural Policy.

About 300,000 Nordmann firs will now be sent to Britain this December compared with the 1.2 million last year.

An interesting story - I hadn't realised that the Telegraph and the Express were in favour of the CAP subsidy! The ingenuity of newspaper editors to shape a story to give the EU a clout never ceases to amaze, but "EU ruins Christmas" is a new one in my book.

British Sugar’s decision to close its factory in York down is obviously a blow to the region and particularly unwelcome to those who will be made redundant.

However, many people have been quick to blame the EU and the Common Agricultural Policy for the closure but as David Wilmott-Smith pointed out, in a letter to the Yorkshire Post, this is wide of the mark.

Godfrey Bloom and other opponents of the EU have consistently complained about surplus farm products as a consequence of high quotas yet, when the cuts are made - as they demanded - they are the first to condemn them.

The Common Agricultural Policy is problematic but it is an issue the EU is working hard to reform. To criticise the EU for making changes long called for is both hypocritical and insincere.

So, what is the line of the chameleon Cameron Conservatives on reform of the CAP? I was interested to read the piece by James Paice, their Shadow Agricultural Minister in the Parliament on it which reads as follows:

"Does the CAP need to be scrapped? No, but further reform is necessary to reduce the overall cost of the CAP to the taxpayer, help producers in the developing world and maintain environmental payments to farmers."

In other words, they support the direction that the CAP has been moving over the last few years and can only be pleased with the recent reforms. But you wouldn't guess that from the Eurosceptic rhetoric that surrounds most Tory pronouncements on the subject!

More from the increasingly wise-sounding National Farmers' Union. Our regional director here in Yorkshire wrote the following in an article for British Farmer & Grower:

"In terms of actual trade flows the EU, far from being protectionist, imports more farm products from developing countries than the US, Japan, Australia, New Zealand and Canada put together and absorbs 70% of the imports from least developed countries while the US takes just 17%. …

"The media delight in emphasising that the CAP represents 40% of the EU budget. This seems high until you take into account that the EU has no responsibility for health, education or any of the main expenditure items associated with government activity. In fact, CAP expenditure in the UK only amounts to some 0.5% of total government expenditure."

I would only add that CAP spending has anyway fallen from nearly 70% of the EU budget to just over 40% and is scheduled to fall to about 30% over the next 7 years, even ahead of the further review due in 2008.

In today's Telegraph, another instance of farmers welcoming the recent reforms of the CAP:

"The National Farmers' Union believes the outlook for sheep farming is positive. CAP reform has forced many producers to scale down their flocks to the optimal size and become more efficient. Yet last year the number of lambs and sheep being slaughtered actually rose."

The National Farmers' Union has spoken up about the myths and misconceptions of the CAP and its effect on world poverty. Its President, Tim Bennett, said at a conference last week:

"The European Commission came under intense bombardment from many sides before Hong Kong: from European farmers, and some governments, who thought it had gone much too far, and from most British commentators and some governments who thought it had not gone far enough. I think the Commission did a very good job. There is no doubt that the 2003 CAP Reform puts us in a much better negotiating position. And the recent sugar reform contrasted starkly with American intransigence on their cotton subsidies.…

"I do understand and accept the principles behind trade liberalisation, but I am exasperated by the way some of the facts and arguments are often presented. Top of my list are those who present the CAP as an immoral attack on poor countries and Africa in particular. Opening our markets, the argument runs, would be the single greatest contribution to making poverty history.

There are several conspicuous flaws in this argument. First, it is normally put forward in ignorance of the fact that Europe already has, since 2001, opened up all its markets by allowing, through the Everything But Arms initiative, duty-free and quota-free market access to the poorest countries, including most of Africa. This is an initiative that other industrialised countries have only just promised -in Hong Kong- to match but have not yet achieved. In terms of the actual trade flows, the EU imports more farm products from developing countries than the US, Japan, Australia, New Zealand and Canada put together and absorbs 70% of the imports from Least Developed Countries while the US only takes 17%."

If you actually wade through the details of the EU budget deal, there are some interesting points which make the deal look even better:

• On agriculture, spending will actually fall by 7.3%. And the new member states will be fitted in under that ceiling - not just the ten who joined last year who are currently being phased in to the CAP, but also Romania and Bulgaria! This amounts to a large reduction (about 20%?) in agricultural spending in the 15 old member states.
• Contrast this with the overall rise in spending in other areas: spending on research (to boost our economic competitiveness - part of what Tony Blair wanted in calling for a more future-oriented budget) will rise by 75% between 2006 and 2013.
• Economic help to less prosperous regions (which will continue to include some UK regions) will rise by about 6%. This means that it, and not the CAP, will be the largest item in the EU budget. Spending on police and judicial cooperation will more than double. External aid will rise by about a third.

Meanwhile, the announcement in Hong Kong at the WTO talks that the EU has agreed to phase out all remainig agricultural export subsidies by 2013 is also welcome news. Coming straight after the summit, it shows that the commitment to further agricultural reform is indeed serious.

Finally, I see that the much-commented-on adjustment to the UK rebate will be phased in over two years in 2009-10, giving the Treasury plenty of time to plan ahead. And as to the equity of the UK's contribution, I note that it will increase by 63%, while French contributions will rise by 116% and those of Italy by 130%. These two countries have the same population as Britain, and the deal means we will henceforth make broadly equal net contributions. As they have slightly smaller economies than Britain, it means their net contribution will be a higher proportion of their economies than Britain's.

In today's Yorkshire Post, Commissioner Mariann Fischer Boel writes an excellent piece on the reform of the CAP - not just what is to happen in the future, but what has already happened:

"It may have escaped people's notice, but despite Britain's clamour for reform at the EU summit in Brussels, the Common Agricultural Policy has just been radically reformed.

"At the start of this year, the way farmers are supported in the 25-nation EU changed dramatically. Unfortunately, attitudes towards the CAP have apparently failed to evolve at the same pace.

"The popular caricature remains of an outdated policy which rewards farmers for producing crops that no-one wants and which pays no heed to environmental concerns.
Nothing could be further from the truth."

It is wrong to say there has been no CAP reform. There has. Reform needs to go further, but much has already been done:

• The beef mountain, butter mountain, wine lake and so on of a few years ago have disappeared as a result of a first round of reform in the 1990s.


• CAP funding has fallen from some 70% of the budget 20 years ago to just 40% now and is scheduled to fall still further.


• The most recent CAP reforms have been characterised as “the biggest revolution in farming since the war” by the NFU. It involves bringing to an end the intervention into agricultural markets to maintain high prices, thereby benefiting the consumer, and instead helping farmers by direct payment to farms in exchange for them respecting environmental, health and food quality criteria. It is more market-based and environmentally friendly.


• Even the 2002 agreement, now under review, to freeze agricultural spending at it current level until 2013 is in fact a significant reduction in real terms as the freeze is not fully indexed to inflation and 12 new member states all have to be squeezed in under this ceiling. This amounts to a reduction of nearly a fifth of agricultural spending for the 15 old EU member states.

On top of that, the government secured a reform of the sugar regime last month. This itself will save €4 billion to consumers. Although there is still an argument about how much we should help Caribbean sugar producers affected by this agreement, it does mean that our internal CAP subsidies will fall now in this field too.

A handy link for those interested in the Common Agricultural Policy and its ongoing reform: figures on CAP subsidies are now available online broken down by individual country.

http://www.farmsubsidy.org

Despite the recent media focus on reforming the CAP and reducing agricultural spending - as one of the trade offs in the mega budget deal being brokered by Tony Blair - I notice that the press has given relatively little coverage to a major step forward in CAP reform achieved last week, namely the reform of the sugar market. This amounts to a 36% price reduction in sugar, bringing in market forces to play in this too-protected area, a significant budgetary saving and an end to the dumping of our sugar surpluses on the Third World.

If the government was really any good at spin doctoring, it would be shouting this from the rooftops. It amounts to another major step in CAP reform on top of those achieved already in recent years.

Sometimes out media and our ministers fail even to point out, let alone take credit for, the major reforms already achieved in the CAP!

The EU's Common Agricultural Policy re-emerges into the public arena every few years for a heated discussion. This year's most-quoted fact is probably the intended "shock statistic" that nearly 40% of the EU budget is spent on agricultural support.

For all their usefulness, statistics are often misleading or downright devious. 40% of the EU's budget sounds a lot, but here's another statistic: that 40% is only 0.4% of the EU's GDP, less than we spend on most other key policy areas which are dealt with at national and European level.

There are two reasons why this tiny proportion of GDP seems to be such a large proportion of the EU's budget:

• The first reason is that the EU's budget as a whole is itself only a tiny proportion of GDP - around 1%, which is mere pocket change in international terms, despite regular attempts by UKIP and the BNP to suggest that the EU budget is massive.


• The second reason is that agriculture is just about the only policy area which is financed entirely out of the European-level budget; other areas of spending are drawn from national-level budgets or jointly. If this were not the case, agricultural spending would be much more comparable to other areas.

Add to this the fact that CAP reform has already brought the figure down from 70% to the current 40% (and this is projected to fall still further) and the situation suddenly looks a lot less pessimistic.

And incidentally, guess what proportion of EU land is used for agriculture? You've guessed it - about 40%.

Columnist Andreas Whittam-Smith recently wrote in the Independent (subscription required) that "every country should subsidise its own farmers".

Frankly, only one thing could be worse than the Common Agricultural Policy – and that would be to have 25 separate agricultural policies, each with its own competing subsidies, each with its own protectionist measures. That would ultimately cost the economy, the tax-payer and the environment far more.

It's far better to pursue further reforms of the CAP – reforms which we have already made a start on, and where we have had a significant measure of success, for the first time in thirty years.

Common wisdom has it that France has always been the motor of European integration. If this is the case, then it has always been a rather stuttering and unreliable engine – and rarely able to rise above first gear.

We wrongly have the image in Britain of France as an enthusiastic leader in the vanguard of the European project. Granted, some major European initiatives, not least the original Coal and Steel Community, were initiated by French statesmen such as Schuman. But this has never been a matter of all-party consensus in France: rather each step in the history of the European Union has been a matter of profound national controversy.

In other words, we should not be surprised by the result of France’s referendum on the new European Constitution. It is in line with a long history of deep-rooted euroscepticism in France.

This history of Euroscepticism goes back as far as the original treaties. These which were ratified by the French Parliament, but by rather small majorities. Then France rejected the European Defence Community Treaty in 1954, plunging the still nascent European Community into its first major crisis. Later, it ratified the Maastricht treaty only by the narrowest of margins.

For ten years, France held up the first enlargement of the original EC to include Britain, Ireland and Denmark. It also blocked direct elections to the European Parliament for almost twenty years.

For six months, Charles De Gaulle boycotted all ministerial meetings in the European Union, trying to bully the other member states into concessions to France on the CAP and on allowing it to exercise a veto even where the treaty provided for majority voting. This led to the notorious ‘Luxembourg compromise’, whereby member states, at France’s insistence, should not vote whenever a matter was defined as an important national interest – and France defined virtually everything to be an important matter for its own national interest!

It is at France’s behest that the European Parliament is legally obliged to move its entire operation from Brussels to Strasbourg for four days a month, at considerable expense to Europe’s taxpayers. Not even Parliament itself supports this ridiculous arrangement – though it usually takes the rap.

France has one of the worst records in doing what it agrees to do at European level. It has been taken to the European Court more times than most other countries for failing to transpose EU agreements into national law.

Looking deeper into France’s internal politics, it is striking that every European Treaty until the 1980s has been opposed by both the far right and the far left, both of which are larger in France than in any other major European country, and by the centre-right Gaullist party. Together, these elements have always constituted over 40% of the French electorate. Every European treaty has therefore required rock-solid support from the remaining centrist parties and the Socialists in order to be adopted. In the early 1990s, the Maastricht treaty was only ratified when Chirac – who then had some wider credibility than he has now – switched to a pro-European position bringing most (but not all) of the Gaullists behind him.

This is not to say that France is universally awkward when it comes to Europe. The country has strongly supported those aspects of the European project from which it benefits – from Parliamentary sessions in Strasbourg to the high level of funding under the Common Agricultural Policy. All that seems to be missing in France’s European outlook is a sense of solidarity with other countries on matters which are not of direct interest to the French!

If the supposed motor of Europe is stuttering, perhaps now is the time for Britain to take the driving seat?

Under the typically hyperbolic headline THE RAPE OF OUR MEADOWS, today's Daily Mail claims that "the EU Commission has offered farmers inflated prices for their products". (The article is on page 13 of today's issue, but it isn't available online.)

The article places the blame on entirely the wrong shoulders. It's not the Commission that has showered taxpayers' money on the farmers - far from it. It's national governments of the EU's member countries who bear responsibility for this matter.

Year after year, the Commission has proposed to cut or restrain agriculture prices. Yet, year after year, the governments in the EU Council have watered down their proposals and agreed on price increases.

It's fashionable to blame the Commission for less popular EU policies. But the Commission can only make proposals. It's governments that take decisions.