 Gwebeithdieb wrth gwrs ein Ffruir i'r 20 Dechrau Cymru Ar Llywodrafion Cyngorau Gael i'r awtfyrfiadau cyffinnydd a gwaith iawn. F aviation cyngor i'r awtfyrfiadau cyngorau cyffinnydd a wneud bod yn cyd-dwrwch ei gwaith i'r ystafell yn unig. Rwy'n gweithio i'r zestll ymheil ymddangos i ni wneud o wneud chi'n Creu Chymru, ych yn cyflym o'r fïrthu yn ystafell ar y cyfrifol. Maen nhw'n gweithio i ysgolwg i'r cymdeithasol yn ei ddweud i'r cymdeithasol. Mae'n ddweud o'i digwydd i gymhwm Jim Hulme ac yn ddigon i ddweud o'r cymdeithasol gyda'r ddechrau eu hirion i'r cyfrifolau a'r gyfawr, Jamie McGriggor, a'i ddweud i chi yn ddweud annydd am gyfwyrdd am y Nifrwg. Mae'n ddweud i ddweud i ddweud iddo i'r cyrchio i'r cyfan. One of our own members, I'm not sure, is still to come. And so, we welcome Phil Hogan, and thank you very much for coming to our committee. Perhaps you want to introduce your two sidekicks. Yes. Dermas Ryan, a member of my cabinet, and Tam Tyne, a member of my cabinet. I vote Irish, so don't hold that against him. Well, there's no harm in that at all. Very much welcome to see you here. We're going to try and cover things between now and about five to ten this morning, so we want to keep short questions and short answers, if at all possible. The item one is to, first of all, before we start that, is the decision on taking business in private, and we've got to have agreement about that so that our next meeting on the 24th of June will be dealing with our work programme, and that's something that will be planning a large amount of work to do with land reform and many other things as we move into the autumn. So the second item today is to welcome Phil Hogan and his cabinet members, and to probably question some… Excuse me a minute. I've been suffering from a cold, so I need to do things in order. I have to get you to agree that we move into private in the 24th to discuss our work programme. Are we all agreed? Very good. I thought we might, but I suppose you have to confirm those things. We welcome the commissioner because it is a prestigious highland show that takes place just now, but also it's the time of the bedding in of the new cap and obviously something which Phil Hogan has inherited himself. After I ask a first question, I'm going to bring in Dave Thompson because he has to go soon about a fairly local matter in the highlands, but after that we'll try and go round the houses. Given that you've just inherited the structure of the cap, I don't know what you think about its actual provenance. Do you think that it's simpler? Do you think that it's more complicated? Do you think that it's going to be fit for purpose? What direction is it moving in? Thank you very much, Chairman, for being here. I'm very glad to accept the invitation of your Cabinet Secretary, Richard Lockheed, to attend the Highland show. I understand that it's one of the best and biggest in the UK and perhaps Europe, so I'll be able to adjudicate on that, I'm sure, later on. I'll have to throw a long day. The common agricultural policy is something, as you rightly point out, that I inherited from people that are much more astute than I am in terms of politicians and council ministers and members of the European Parliament who will read all this. Of course, I've never met as many people since that want to make some adjustments to it, but that's understandable. It's the nature of things that not everything worked out maybe as they intended. We are actually in the process of implementation. We've made some changes already to the guidelines, which hopefully will assist in greater clarification on problems that were emerging on the greening element of the CAP implementation. We are going down the road of a more market-orientated policy that takes account more significantly of the environmental issues, promotion policy, quality policy, new market opportunities. This is the type of direction that we're heading in, and we acknowledge the fact that Scottish food and drink industry is outstripping all others in the UK and doing a fantastic job in their export opportunities and also developing future potential for exports, and we have some ideas around that where we may be able to help. I look forward to engaging with the rural stakeholders and the rural community during the course of the day. I've already met farm organisations and key people in the food and drink industry last evening for a discussion, and I'm familiar with some of the teeding problems that the Scottish farmers are having in relation to implementation. We'll try and work together to see whether we can tease those out and resolve some of those issues at least over the coming year. Thank you very much for that opener. Dave Thompson, if you want to ask your questions just now, I know that you've got a pressing engagement. Thank you very much, convener. Good morning, commissioner and colleagues, and apologies that I'll have to go just before half past nine to another meeting. My question is a fairly simple and small thing, I suppose, in many respects, and it's to do with crofting, the crofting agricultural grants schemes for small holders on crofts and so on. The regulations, as I understand it and correct me if I'm wrong in this, I think it's commission regulation 809 slash 2014 article 483, which requires, it's to do with verification, I suppose, it requires that any work that is done is completed and verified before the crofter can actually get the payment. Now, if you're talking about, say, fencing round a croft, replacing fencing and so on, you could be up to several hundred pounds, maybe more, maybe a thousand, and a lot of these crofters don't have that kind of money up front to be able to pay for the materials or pay for someone to do it and then wait a while to get the cash back. I can understand why the verification procedures and all the rest of it require confirmation that work has been done, but I just wonder if there's any way that that can be adjusted whereby money can be paid direct to a contractor or money could be paid to the supplier of the fencing materials directly on supply of those materials to the crofter to do the work or if the supplier could sort of wait rather than the crofter having to do that. I just wonder if there's any way around that. Well, I'm glad to tell you that there is some flexibility. It's up to your national authority. The rural development programme allows you to provide the possibility of 50% of public aid as an advance for investment projects when approving the grant. That is before any costs have actually been incurred for the beneficiary. If the option is included in your rural development programme, so you have to decide whether you want to include in the rural development programme. If so, you'll have a chance of getting 50% in advance, which will help to pay some of the upfront costs that you mentioned, and quite rightly mentioned that a lot of our smaller producers wouldn't have that sort of money in advance. So there's potential there, but you need to talk to someone else. I'll need to rattle Richard Lochner. Perhaps I have a word with him. Get him at the show and go at your word. Thank you very much indeed for that. That's very helpful, very useful. Mike Russell on then Jamie McGregor. Commissioner, welcome. I hope you enjoy your visit to the Highland show today. The new application system, the CAP application system, the computer system that's been introduced this year clearly has been causing a great deal of heartache, and the committee heard from people about that two weeks ago. Scots are a fearfully law-abiding people and their greatest fear in this matter is that they will inadvertently have made mistakes within the system, in a new system, and that Europe, in the person of yourself, will penalise them for those innocent mistakes. I think that the biggest message people will want to hear from you during your visit is that there is a flexibility within the system and an understanding within the system that will not lead to that type of penalty being imposed this year, because if it were to be imposed in the way that people fear, it would not only be bad for individual farmers and land managers, it would also be bad for the reputation of the system. This is a very big issue, and I'm glad that you raised it. I already extended the application time by four weeks to reflect exactly the concerns that have expressed that people in member states were speaking to me about the difficulties in the timelines of the 15th of May in meeting all of the obligations in respect of the application rate. Responding to that, I gave a very generous extension of time. Some people were looking for a week, so I said, well, a week is not that long, so we get four weeks, and hopefully we'll be able to get the controls done in time to allow payments to be made this year. But it is a new layer of information required in many respects because of the greening requirements. I mentioned earlier that I made some changes to the guidelines this year in order to give better clarification so that there will be less of a narrow rate, particularly in relation to hedges and adjacent roads. Options are often taken by the member state and by the Government that have other options and a lot of options that may now have a take-up in terms of equivalence, in terms of the catch crops and protein crops that you're allowed in order to take advantage of the flexibility that we've given to the member state. So, choices in many respects in relation to what options and what road you go down are largely determined by the member state. The European taxpayers, of course, often wonder to know why we give all this money to farmers and the food industry, so we have to do our job to make sure that European taxpayers are satisfied that the money is protected. Therefore, there's a balance to be struck in terms of sound financial management and, at the same time, less bureaucratic system. I do subscribe to exactly what you said in relation to smaller producers in particular who have not a hell of a lot of land, not a lot to gain, I suppose, directly from the CAP, but they have to go through this particular same sort of procedures as a larger producer. So, we're looking at ways maybe over the next year as part of my simplification agenda to try and see can we do something to assist people who shouldn't have to go off and get all of the consultancy and the costs associated with that in order to do a really small job. And the penalties, then, have to be proportionate, and they're not proportionate, in my view, at the moment. So, you will see that my top political priority in 2015 is simplification, but it includes the type of concerns that you've expressed when we have a farmer. I think anybody who, there are three in this room, I think, who've been environment ministers will know that simplification is much required, but it is a difficult thing to achieve. I remember a civil servant saying to me with some frustration once that I did not understand what a complex business simplification actually was. In that term, what can you do in a reasonable period of time, because people often get very frustrated by this, to make sure that their experience of the system is simpler and more direct? Can you, because I know you have attributed this often, to the desire by individual states to have complexity within the system because they have options, many options within the system, how can you bear down upon that within the individual member states to ensure that they are offering a simple set of choices as possible? Can you do that? I certainly cannot do it on my own. I need the legislators, who are the council of ministers in the European Parliament, to agree to it if we have to open up the legislation again. What I'm trying to do this year, what I can do, is to try and, in the second area of secondary legislation and guidelines, make changes that would make it less difficult to understand, but also less burdensome on the member states, as well as the farmer. We have to achieve a number of objectives, but when you're going through the legislative process, 8,000 amendments were tabled to the recent common agricultural policy. It's a much more complex document than the commission proposed, so I'm not pointing the finger at anybody, but this is the way that democracy works. If you want to have objectives achieved, you have to have, and which hasn't happened in the past, in my view, sufficiently, have one eye in relation to how it's going to be implemented, and the concerns that farmers and food industry have in terms of the bureaucracy and the complexity involved in such an implementation. I'm asked now to try and unravel some of the complexity for a policy that just came into effect in the first of January last. It's a major challenge, and people tried it in the past and failed, but I'm going to do my best to try and make sure that particularly the smaller producer is able to cope with the type of scenarios, bureaucracy that's tied up in this particular policy at the moment, which is incrementally developed over time, and on the penalty side to be able to be more proportionate in the event of a mistake being made in line with the observations that you've made about the 15th to June deadline, and I'm sure there was smoke coming out of computers over the last few days in Scotland, and now over European Union to make sure that that deadline was hit, and I'm glad to say that your officials have done an outstanding job in making sure that everybody that wanted to apply were able to get into the system at least, and we hope that they're able to get in nice and cleanly and that there'll be very few errors. Thank you. Jamie McGeager and then Sarah Boyack, because I can see. Thank you, Mr Hogan. When you go to the show today, you'll see some wonderful livestock, particularly the Catalan sheep. Do you think that the new Scottish CAP system is doing enough to maintain or even expand the numbers of Catalan sheep being kept in Scotland, particularly on our hills, where the seed corn for the industry is produced? Despite EU subsidies, which has been going on for a long time now, the numbers of Catalan sheep have been falling, and this is particularly worrying in rather more remote rural areas, which depend on those for their agricultural production. I suppose that we've given flexibility in the latest policy for national authorities and regional authorities to give additional support for people that are farming in the remote rural areas, particularly in upland areas and areas of natural constraint called voluntary coupled support. In addition to the normal direct payments, there is a potential there for member states to be able to give more money if you feel that there's a stress in that particular sector or there is constraints that wouldn't otherwise be in your lowland areas. Already built into the policy is the flexibility for people to do something about it. I do know that the beef sector here in Scotland is hugely important. It accounts for 26 per cent of your total agricultural output. I think it was Mr McLaren that met last night, a chairman of the Quality Mead Scotland, and they're doing an excellent job in relation to getting the high quality end of the beef market into the type of markets and the protections that are needed through geographical indications as well in order to ensure that we have a product from Scotland that is as well-recognised as the symbol of excellence. I applaud you for doing recent reports in order to try and see what we can do better on that. We are giving 4 billion euro to Scotland from the European Union. There is a significant flexibility now for the first time to tailor some additional support to the areas you're talking about if you wish to do so. You have to, again, I suppose a bit like our crofters, you have to maybe have a chat with a few of your people in Scotland to see what can be done and tailor in that flexibility to help people that may be going through a difficult time. I was just wondering if you could outline in any way why you think that despite the fact that there have been increases in EU subsidies, the numbers of livestock are still going down, and is that the same in other European countries? European consumption of beef is going down, so we have to do a little bit better in promotional programmes and quality assurance programmes right around not just the world but in the European Union itself. I have mentioned that I will be sending some officials to Scotland and elsewhere to look at how we can actually draw down some funds that are available on promotion and quality in order to advance the case for Scottish beef in international markets and mutton as well. Well, you only mentioned beef. I didn't like to get into all that. I didn't mention sheep as well. Well, you didn't mention mutton. You mentioned mutton now. My hearing is not bad this morning, you know. Serah Boyack. But there are chances through voluntary couple support and through better promotion funds available to help you there, and it's a market-orientated business we're in, and hopefully we can get better quality markets for Scottish products along the lines you mentioned. Thank you very much, convener, and welcome, commissioner. I wanted to ask a question about the overall objectives of common agricultural policy. When it was initially started, it was about food production, and now we're trying to look at food production and climate change by diversity. If we were thinking about the greening elements of it, I know that there's more being done in pillar one, but when we speak to farmers, that is one of the hardest things for them, is trying to meet a range of different objectives. In terms of where Europe is as a bloc, that makes a food production and climate change are the twin challenges for us going forward. It's how you see common agricultural policy and the changes that we're making are making that easier for farmers. On the ground, a lot of farmers, particularly small farmers, really struggle with the complexity of all the different things that they see that they have to do in terms of ticking the box. I agree with you that it is a complex policy, and I've explained already what I'm trying to do and to concentrate all efforts on trying to make it more simple. That won't be easy. In sporting terms, it's going to be a rolling mall over the mandate of five years to achieve these objectives. However, we have objectives of helping producers to produce top-quality food that we can be proud of for European citizens, but also if we have some food left over which we have, we want to meet the challenges of 2050 of 9 billion population on this planet and who is going to feed them, and we want to make sure that European agriculture and food is well positioned to be able to meet those objectives. We have a moral obligation as well as a commercial opportunity to do so. We have environmental objectives because if we don't have good environmental practice on water quality and soil fertility, we're actually cutting off our nose despite our face for the future, and we will have no agriculture and we'll have barn landscapes, and we don't want that, like they have in many states of the United States of America. And then we have territorial balance required in relation to jobs and rural area, where on the pillar two, we target a significant amount of resources for job creation outside of Farmgate, and I think one of the issues that I think we can do a lot more on is to convey the view of that the CAP is not just for farmers. It's for everybody, urban rural people, because food doesn't appear on the table in the quality that it does now by accident. The traceability regimes that European farmers have put in place are now second to none, and we have now a competitive advantage for the first time vis-à-vis other blocks of countries around the world in that we know that what we say is actually true, and that the farmer to the fork is actually has the systems in place to make sure that those are actually put in place. I want to put food security as the centre of a political dialogue again in the European Union to meet the objectives I've just mentioned. Of course, you have to do that in the context of the new buzzword of sustainable intensification of agriculture and to meet the climate change objectives. So we are working closely. You get a new phrase every year in terms of what we're doing, but the climate commissioner and I are working closely together in the run-up to Paris at the end of the year to try and ensure that we have systems in place to ensure that agriculture is implementing policies that are generating low carbon intensity and also our beef genomic scheme, for example, that you have in Ireland and Scotland is a perfect example of where we're actually planning for the future in terms of breeding programmes that will reduce emissions. But we have a lot of incremental policies in different fragmented areas that we need to pull together in order to acknowledge that climate change is the biggest challenge to society and also how the contribution of agriculture can do that without damaging the prospects of feeding the populations of the world in 2050. So it's a tricky balance and it's going to be interesting negotiations in Paris, but we are working closely to try and achieve that. And again, I've indicated already to Michael that, and I repeat to you, Sarah, that the small farmer is, in my view, needs special attention in terms of the implementation of the present CAP, particularly around penalties. If you have a greater than a 3 per cent rate of penalty in relation to any mistake that you make, a small farmer disproportionately in terms of their income suffers more than a larger producer, and that's not fair or proportionate, and we're trying to do some demotivation. Thanks, convener. If I could just touch on the issue of GM crops, we now have the new EU approach to regulation of the release into the environment of GMOs, and as you may be aware, commissioner, there's some conflict between the UK Government and the Scottish Government's stance on this. Could you give the committee an overview of how the new regime is operating, although it's quite recent, and how do you see it developing over your term in office? Well, this is a very sensitive, political issue, as you rightly pointed out, in relation to biotechnology. We've had a system in place up to now where particularly licensed applications in the United States have, we have approved them up to some years ago, but the last commission decided that they were going to block them even though they were science-based in terms of their application. I'm in favour of a science-based solution to these matters, but President Junker has made it quite clear that there's a societal concern that's been taken into account as much as the science, and that's a solution then that has generated in recent times a decision by the European Commission not to allow the council of ministers to hide behind the European Commission, but we're putting the onus back in the member state, so we're wheeling the scrum, and it has the member state new maker of decision now in relation to whether you want to opt in or opt out. I expect you to have some interest in the base in the UK because you have differences of opinion in relation to that, but it'll have to be done on the basis of each member stating, deciding what's best for his future, but before we get out of the traps at all, the Committee on Agriculture in the European Parliament and the Committee on the Environment would be making their initial views on these matters known in the next month, and my indications are, what I'm feedbacking and getting is that they're going to be against the notion of changing the system for the growth of GM crops or explicitly promoting the notion of biotechnology in the European Union, but the old system then will continue where applications can come in from outside to the European Union in the normal way, and that science will be determined in whether they should be allowed for particularly for animal feed. If we don't have some of those siobene crops coming in as part of our animal feed, we're going to have a 20% increase in animal feed costs, and therefore we make our initiative more competitive than the concerns you have for the beef farmers in the mountain areas who lack sanctuary even more. You're getting hung up on the sheep, but there is certainly likely to be, in my view, no change based on what I'm hearing from the European Parliament, to the council ministers, to the present regime, where we're a little bit politically schizophrenic. We don't mind eating GM crops if the ingredients are imported, but we don't want to grow them ourselves. I understand that. I'm a politician for 32 years. I have a short supplementary on that. The problem is, I think, that it leads on to the question about world trading conditions, really, because the T-tip is in our mind here, but we've got the situation where it's possible for the big suppliers of soya from Brazil to differentiate between what is GM and what is non-GM. Some firms, such as Waitrose, with all its lines in this country, insist on a non-GM source of soya, and they are able to achieve that, but it seems that the vast bulk of supermarkets in this country have thrown in the towel and allowed cargo and other big companies just to give them undifferentiated soya from Brazil. Surely there must be some way in which the European Union can bring to bear its weight to make sure that it's possible for people to buy non-GM soya, if they so choose? Absolutely. It's not my direct responsibility. It's DG Santé, Commissioner Andrea Caithers, that directly deals with this, but I give you my opinion in relation to these matters as well. Labeling is crucially important in terms of dealing with these issues, and we can reform our labeling system to meet the objectives that you have annunciated, and I think that's the way to go. What we can't get away from the fact that it's going to produce what you're asking is to produce a product that's going to cost a lot more. That's the choice that the consumer can make. It's not questionable, no, it's not questionable, because it's a choice that the consumers are entitled to have. If they want to pay a bit more like organic production, that's their choice, but they should know what they're buying. Yes. Sarah Boyack wanted to follow up on that point. Yes. The issue of TTIP has been something that a lot of our constituents have been writing to us about, and your analogy about something that costs much more. We have very high animal welfare standards, and there's strong public support for that. There's always going to be a balance between cost and quality, but the shift to free range eggs was very much a consumer-driven issue. I think that there is a concern that people do want to know where food has come from, and I think that it was very welcoming in your opening remarks that you talked about the strength of the quality of the Scottish food products. We're very keen that we have a fair system where we don't have our producers being undercut by a lack of traceability or different inputs to the agricultural system that are not clear to consumers. I think that there are concerns about human health as well as the people who are working in our food production industry. I think that it's quite an important issue for us to be wondering where we are in terms of the agricultural element to the TTIP negotiations. First of all, as you can see, the United States are finding it very difficult to get agreement at anything at the moment in relation to trade. The fast-track promotion authority legislation is in trouble, they're even in trouble with the Pacific countries under TPP, so we're the third plane on the runway, TTIP, and time is running out between now and campaigning in the presidential election for 2016, and that's the reality. My personal view is that I don't think we'll have an outcome of TTIP that's comprehensive between now and February or January 2016, but we continue to be open because the Europeans should not be afraid of exports. For every euro exported, it creates jobs, not the other way around. We have a flat European economy largely because we're not exporting enough, but I'm glad to say that European agriculture for the first time with the help of Scottish whisky is actually now outstripping all other blocks in terms of exports. We're the highest exporter in the world of food and drink, and the highest importer as well, so we are in a key position, but we're competitive now for the first time in 20 years, and we're now able to take on the challenges of the United States. We're not afraid of them anymore in terms of competitiveness, but we want to be treated as equals, so if we're going to have, I can assure you that the standards of food and drink that are in the European Union will be protected in any deal whenever that deal happens. We are not going to, you know, the sacrifices that farmers have made and the efforts that a national administration has made to provide traceability after foot and mouth and BSE, we're not going to throw that away. We, you know, and we come under pressure from the United States for a hormone beef, and you know, and we resist that successfully. A reason we said that there's only a small amount of hormone free beef that's now in a quota that for Australia, Argentina, Uruguay and the United States, and the United States can often get quite upset that they're not getting more of this quota, but because they're not competitive enough is the real reason, but they want to blame the European Union for not implementing an agreement that's compatible with WTO rules. So labelling and standards of food as part of any particular TTP outcome or any other free trade agreement, whether it is Brazil or Indonesia, you can take it that we will be protecting those standards and also our GIs, I want to also, our GIs, which is very important to Scotland. I said this on two occasions that I've been in the negotiations with the United States. There will be no deal on this, we're satisfied on GIs. So the ball is in their court to satisfy us on that issue. Claudia Beamish and then Mike Russell. Good morning, commissioner and colleagues. You've highlighted the importance of both food production and climate change and biodiversity imperatives, and talked about the balance there, and I wonder the degree to which we can move towards a fusion where all farmers are working for all of it at once. I am an optimist. In that context, I'm wondering about if you have a view, commissioner, on the value or not in the present circumstances of any mandatory on-farm reporting on emissions. As you know, our agriculture emissions form, I think it's 23.4 per cent of our emissions, which were reported last week, and it is obviously about behaviour change, but also behaviour change means taking people with us. I wonder about your comments on mandatory reporting. Also, if you could shed any light on how you think our committee might be able to relate to the forthcoming Paris negotiations, and we're very keen to, if not be there, which we would like to be, some of us, I believe, but also how we can make a contribution as a committee, if you have any thoughts on that. I think the way that your committee can make a contribution to any particular event, but particularly such an important event as the climate change negotiations in Paris, is to ensure that your views are actually part of the mandate of negotiations for your member state. So, first of all, I have to influence your own mandate in relation to this matter. As a former minister of the environment in Ireland, I had regular discussions with your people here in the UK, particularly Mr Davies, who had quite a lot of ambition in relation to climate change measures, maybe more so than some of the people in the UK. His views and mine were fairly close, but we have to be also mindful of the fact that behavioural change doesn't happen easily or overnight, and when you're giving some financial support, it's the best time to concentrate the mines. It's amazing the number of farmers that actually can change their pattern of behaviour on the environment when there's a few pieces of sterling involved, and the checkers in the post always helps, and that's the time to grab the attention. You know that for Motton as well. And whether it is coupled support or whether direct payments are 30% of our CAP now for environmental reasons, there's good reasons for that, because people do actually take note of these, and there will be a lot of gnashing of teeth in relation to the obligations required, but again, people will fill their form if there's money in it, and if it happens to achieve an environmental objective, that's great in my view. But mandatory reporting on farm, I'd have to be very careful about that one, because it does constitute an additional burden on people at a time when I'm trying to simplify the policy. But there is no ways in which you can calculate your carbon intensity on farms in a voluntary way, and I think more and more farmers are actually getting used to the notion through application, app technology, and all of these new technologies that they're able to form technologies, that they know it's a competitive advantage for them now in order to sell their product if they have all this information, where they're able to show the consumer that they've complied with good environmental standards, and that they have able to give the figures themselves in relation to it. So I think that's a selling point, and if you're getting more of a premium price for your product arising from this information, that will be enough to do the behavioural change. So it comes down to the financial outcome arising from decisions that are made on farm, and if it's positive, I can assure you that you'll see a major move towards behavioural change. Thank you. Mike Russell and then 3MD. Can I move on just a little to the question of dairy farming? As you know, there are very substantial problems in the Scottish dairy sector, and this is intensified particularly in the rural parts, the really rural parts of the Scottish dairy sector, the areas of contire on the island of Bute, which I represent are perhaps the worst effect. Indeed, the island of Bute is the worst effected with the lowest price that's being paid by a single provider, which is single processor, which is first milk. Those farmers want to know very clearly how close we are to any intervention in terms of the price of milk, because on the price of production at approximately 24 or 25 pence a litre, the payment that they're receiving is probably something around 16 pence a litre at the present time, and that's obviously unsustainable. I was fascinated by your phrase what I think could be called unsustainable intensification of the dairy sector over a long period of time, but some comes from world forces, which are clearly strong, closure of the Russian market, for example, and matters like that. First of all, in the short term, where are we in dairy, what hope is there for assistance for the dairy sector, and secondly, what is your own view of where dairy prices will go over the medium term? First of all, I do acknowledge just a serious problem in the UK in relation to dairy, and part of it is down to your structures. I think that there could be a significant look at the structures in terms of co-operatives and private companies and how they behave in the marketplace. We have insufficient structures in my view in terms of bringing farmers together in a co-operative basis to do things in a way that I would be used to perhaps in another jurisdiction, and I suppose that's a medium and long-term strategy that doesn't satisfy the farmer today or tomorrow. In the medium term, I see that there's going to be continuous volatility, it's not because of the abolition of milk quotas, it's because of the global market trends in recent times, particularly in the Far East and Russia, that have contributed to these problems, but also I think that there's issues to be looked at in the food chain, and I welcome very much the UK groceries adjudicator being part of your legislative process, and we're watching this very closely in the European Commission to see what we can learn from it, and if we need EU common rules and a framework that we can lay down for other member states. The UK and Spain are the leaders in trying to do something about ensuring that producers are not squeezed between retailers and processors, so that needs a bit more time probably to work as well, true. I am optimistic in relation to the latter part of this year and going forward on prices of milk, because they do see the Far Eastern market opening up to more opportunities when you consider 150 million people are going to be in the middle class income brackets each year for the next 30 years. The growing possibilities that that gives to Western-type products is actually enormous, provided we can get it at the course of the right price, but I think we can. We are completing a lot better now with New Zealand in this part of the world, and they've had a drought as well, and California is in the drought, so all of that feeds into giving European Union farmers a little bit of an advantage later on, and I suspect that Chinese will open up their powder markets in the near future again. Their stocks are now going low, and therefore they're in a position to start buying again, but the worrying trend is definitely that you've articulated for the last six months on the global market options are something I'd prefer not to see, because I have tools that I can use, intervention, export refunds, AIDS to private storage, and we did open AIDS to private storage for cheese last September, which didn't work out great, because a lot of the people that weren't directly affected by the European market jumped in and gobbled up an awful lot of the money that was available for that particular scheme, but we learned from that, and we go a more targeted approach now and future if we have to do so. So the Baltic states in the UK seem to be suffering the most at mill prices, but I'm not going to give any commitment here that I'm able to intervene immediately. I'm just waiting to see can we get washed through this volatility that's there at the moment, and hopefully farmers can hang on a little longer for it to see arising from the 7th of August next, when the Russians have to decide what they're going to do about extending the ban or adding to it, or hopefully subtracting from it, that would give us an opportunity to review the supports. There are some labelling issues in this, which the commission should at least be aware of. The labelling is a difficult issue in this Parliament in terms of the powers of this Parliament, but for example a cheese and yoghurt sold as particularly cheese sold as Scottish cheese produced in parts of Scotland can be made imported from Northern Ireland. The Scottish agricultural industry so far has been unable to change that process. There is a launch of a new Scottish daily products brand at the Highland show today, I think, today or tomorrow, but it would be important that the commission is aware that this fluidity of presentation can be quite damaging and there needs to be a stronger Scottish presence in people's minds in terms of the dairy sector. Robert Graham, who runs one of the most successful Scottish dairy companies, has sat in that very seat and said to the committee some time ago during our dairy inquiry that it was perfectly possible in Scotland to buy a range of products, English butter, Irish butter of course, French butter, but it was very difficult in England to buy Scottish butter. We need to make sure that there is a much stronger Scottish brand. Any help that Europe can give us, the commission can give us for that, I think would be very welcome. We are not quite a bit too helpful to you on that. Sorry to give you bad news on this. We did two reports recently, Commissioner Andrew Keiser's and I, which come down totally against the country of origin labelling because of the administrative costs, the additional costs on business and against the principle of subsidiarity. If we are trying to reduce the burden as member states and producers it goes completely against that. I know Minister Eustace was taking the matter on behalf of the UK and I had to remind him of this as somebody that may be not enthusiastic about Europe that we are trying to save them for himself in this one. Though I am enthusiastic about Europe. I know that, I know that, but I can't do everything. But I want to be honest with you that this would have a serious chance of not being successful in the context of the European Union discussion on this matter because of the reasons that I have said and backed up now by various reports that we have done recently to test the country of origin system, but voluntary labelling I suppose is the best way we can go at the moment and that's a matter for the member state. Okay, that's interesting. Angus MacDonald has a supplementary on this. Yeah, on the milk intervention price, sorry to go back to milk, but you did say that you were unable to give a commitment to intervene on the milk price, which is understandable, however. I'm curious to hear your views on whether or not there's any scope to increase the intervention level when there are a serious crisis like we're in just now or when the price volatility is at a serious level. Surely it is an option that could be considered, perhaps? Yes, it is an option. It can be considered. We can also consider the crisis reserve, which is £433 million of farmers' money in order to support product prices as well, which was an option that I was looked at in the context of the Russian ban, which I got changed in the first two weeks of my office. I think the foreign policy and security decision should not be paid for by farmers because they're the ones that are directly affected. It should be paid for by the general European taxpayer, and that's what I succeeded in doing. So we haven't resorted the crisis reserve, but when I asked an interesting discussion in the European Council of Agriculture Ministers some time ago when I asked them to define crisis, none of them were able to do it, keeping their options open on the definition of crisis. So this doesn't help, but I suppose it's understandable politically that you do want to say something more about a crisis in the future, but we have tools available. We continue to keep it on the review, but the next chance I will get to look at it intensively is in the context of the review of the Russian ban on 7 August. Graham Day, I thank you, convener. Good morning, commissioner. The EU consultation on endocrine disruptors is causing quite considerable concern within the Scottish soft fruit sector. I don't think anybody in this room would question the need to limit usage, but responsible soft fruit growers in my constituency already only use endocrine disruptors as a last resort, and they contain that usage to within polytunnels. The Agriculture and Horticulture Development Board's modelling in the UK forecast that, depending on whichever of the suggested scenarios was implemented, crop yield could fall by between 40 and 89 per cent. I'm wondering where we are on endocrine disruptors and whether a count of this sort of impact on soft fruit production will be considered. On a related matter, could you advise us on the latest position with neonicotinoids? Again, it's not my direct responsibility, but I'm glad to give you whatever information I have on it. This is the subject of an FSA review at the moment, a science review. When will it be finished, Eddie? In relation to neonicotines, the process started probably in September of next year, commissioner. So, you're talking about a year's work to be done in terms of coming to conclusions and this, but it does come up regularly in discussions with Commissioner Andrew Cytus again and EG Sente, and we will get the latest data play. We will send it to you directly. It's probably the best. I don't want to be giving you information that may be different to what the latest data play is, but in the context of the FSA review and the timelines, we'll send you directly a note on it. Is it covering the endocrine disruptors as well? It will send you everything. From your portfolio's perspective, you are aware of the potential damage that the outcome of this could have on crop production. I'm aware of a lot of potential problems that can be the responsibility of others. We are fully across supporting the commissioner and trying to come to early decisions and quick decisions, but the trouble is, as you know, impact assessments, evaluation, all these take time, and they're in that process at the moment, but we'll give you a full, more detailed note that maybe would give plant health and animal health is not, even though I have a direct involvement in the export of these matters, I don't, in the context of growing them and the conditions of which they're growing is a matter for somebody else. We have been not being on two or three separate occasions and we're engaging with Sente in relation to it, and we've seen the NFU report. We know the importance of the toolbox, the availability of those products, but the issue around Neonix is as much about the bee population as anything else, and given security around that, and at the moment the jury's out on that, and that's why the FSA review is going to take place. I can just always state why I've raised this. If you take the soft fruit sector, the impact of Neonicotinoids on the bee population, as an example for one company in my constituency, has led to the moment to spend £100,000 creating artificial bee environments around their polytunnels, so they've had a hit from that. Now they could be faced with an issue from endocrine disruptors affecting their crop yield, that's where I'm going with this. And part of the impact assessment will be to look at what the alternatives are, so that the toolbox won't be left bare, so that'll be part of the process as well. Yeah, because a lot of the soft fruit growers are actually working themselves to develop alternatives quite successfully, but they do say to you— Biological control is a key. Yeah, but they do say they need that as a fallback position, some access to that. Have the gut presumed they have made a submission to the European consultation process as well? Thank you. I'd like to, perhaps as a final question just now, because we are short of time, is to address an issue that perhaps affects people across Europe, but affects us here. It relates particularly to the rocketing of land prices in farming, and I assume that that's related partly to the certainty of subsidies in the period up to 2020. Now we see a vast increase in prices far beyond the economic worth of the land concern, and I'm sure in Ireland that it's actually worse than it is in Scotland, but I'm wondering whether, in fact, there could be a significant difference in the kind of levels of support after 2020 that might actually interfere with this spiral of land prices far beyond the economic value of the land that's actually being worked. That's the huge issue for young farmers in particular in terms of getting access to land, and there's a mixture of policies at national level, regional level or European level that must be taken into account. First of all, at national level you have tax incentives that you can for long term leasing or partnership agreements which would get some young people into the world of agriculture. Second of all, access to finance or credit is a huge problem for people that are starting out, and we're doing something with the European Investment Bank at the moment in order to give priority to a new fund for the first time the EIB are going to have a new fund for agriculture where they're going to target financial support through your high street banquet that will be designated by the EIB to give a new source of finance to young farmers who have to implement some investment on their farms and they're starting up our to get access to money to be able to get access to land. So we are very conscious of that in terms of generational renewal as well. So as a series, there's a suite of policies there that are required in a shared way between the European Union and the Member States which we're willing to explore and anxious to explore to meet the challenges that you've mentioned in relation to this. Now I don't want the situation to arise where you get access to finance and credit and it drives land prices even more in the wrong direction. So we have to be conscious of that as well in terms of how we tailored the product. But I think in the short term in order to get access to land for young people we have to do something in terms of long term leasing, partnerships, early retirement. You won't get a young person access to land unless the older generation are actually secure. That's where it'll be triggered from. Be triggered from the older people, the younger people, not the other way around. And we had good schemes in the past that ran their course in terms of the early farm retirement scheme. Todd was an excellent scheme in Ireland anyway in terms of mobilising a lot of activity in a partnership way where before you got the state pension at least you were able to get another farm of security with the help of the European Union. So we're looking at in the context of structural reform and generational renewal. Some options here in the next year that will hopefully meet some of the requirements that you alluded to. Thank you very much. I think that's taken us around quite a lot of the houses just now. It's been very helpful for us to get the flavour of what you're doing. In Scotland here we have very great pride in the achievements of agriculture and the food industry as such and we hope that we can get your support recognising that sometimes there may be differences with the member state in London from our particular priorities but that indeed we are community here in Scotland and that we want to make sure that we've got the opportunities for our farmers going forward. So when we hear the story that you relate just now, some of it gives us hope and some of it gives us reassurance that you're thinking these things through for our benefit. So thank you very much Phil for coming to see us. I want to thank you chairman and members of your committee for being so diligent on the day of a Royal Highland show to be here to meet me and we appreciate the interaction with everybody. I try my best to go to parliament in every place I visit to hear the views of the public representatives. As one for 32 years I value very much the experience you have and the interaction you have with your constituents who not just in the pub but on the farm where you hear all of the information that's very valuable for policy discourse and implementation measures in particular on the CIP. And I look forward very much to visiting your show today to see the showcase of what is best of Scottish farming. Thank you very much for that. Thank you and to your support staff as well. We have a future meeting next week before the recess at the next meeting of the committee on 24 June and our last before the recess. We will be considering four pieces of subordinate legislation, PE 01490 on the control of wild geese numbers and our work programme to finish up. So I close the meeting at this stage. Thank you.