Lord Stoddart of Swindon – 2014 Parliamentary Question to the Department for Environment, Food and Rural Affairs

The below Parliamentary question was asked by Lord Stoddart of Swindon on 2014-04-01.

To ask Her Majesty’s Government what is their assessment of the financial impact, in terms of percentage of United Kingdom food prices, of the United Kingdom’s participation in the European Union’s Common Agricultural Policy; and what is their assessment of the overall effect on the United Kingdom economy if the Common Agricultural Policy were abandoned.

Lord De Mauley

The Organisation for Economic Cooperation and Development estimates that the Common Agricultural Policy (CAP) cost EU consumers approximately €16 billion in 2012 as a result of higher food prices. This equates to 4% of consumption expenditure on agricultural commodities (at farm gate prices).

The Government does not have estimates of the effect of abandoning the current CAP programme. However studies are available from 2009 which estimated the impact of removing aspects of the CAP policies and budgets that were in place at the time:

1) Modelling commissioned by Defra estimated the impact of phasing out direct payments in CAP and liberalising agricultural trade. The results vary by sector, ranging from a negligible impact expected on UK cereal production and prices to around a 25% reduction in beef prices and production.

2) A European Commission study estimates the impact of eliminating direct payments and liberalising trade. The results showed a 6% reduction in land use and a 30% reduction in land prices across Europe. However the impact on agro-food production was modest and food price changes ranged from a 33% fall in beef, to just a 1% fall for milk and eggs.