HC Deb 16 July 1982 vol 27 cc1340-8

4 pm

The Minister of State, Northern Ireland Office (Mr. Adam Butler)

I beg to move, That the draft Agricultural Marketing (Northern Ireland) Order 1982, which was laid before this House on 17th June, be approved. It appears to be a somewhat lengthy order, but it is comparatively straightforward. It seeks to repeal the Agricultural Marketing Act (Northern Ireland) 1964 and to provide in its place a revised statutory basis for agricultural marketing boards in Northern Ireland.

The order is necessary to bring the Pigs Marketing Board into a form which is acceptable under European Community law and to put the Milk Marketing Board on a similar basis to that of other milk marketing boards in the United Kingdom. It is also necessary to make provision for the disposal of any surplus assets of the Seed Potato Marketing Board, which has announced its intention to wind up its operations.

The Pigs, Milk and Seed Potato Marketing Boards were set up under the Agricultural Marketing Act (Northern Ireland) 1933 and continued under the Agricultural Marketing Act (Northern Ireland) 1964, which superseded the earlier legislation. Over the years those boards have achieved their aim of providing orderly marketing of their respective regulated products.

In Great Britain the equivalent legislation is the Agricultural Marketing Act 1958, under which the various milk marketing boards and the Potato Marketing Board are constituted. The Act also provides for the British Wool Marketing Board, which operates throughout the whole of the United Kingdom.

Since the United Kingdom joined the European Community in 1973, we have been aware that questions could be raised about certain aspects of statutory marketing board operations. That presented problems for the three Northern Ireland marketing boards.

The United Kingdom was able to establish that the United Kingdom milk market had certain characteristics which distinguished it fundamentally from other member States. Therefore, it was possible to obtain an amendment to the Communities milk regime permitting, with a few minor exceptions, the continued operation of the milk marketing boards along traditional lines which provided boards with monopoly purchasing powers for milk.

Compared to the 1958 Act applying in Great Britain, the Northern Ireland Act of 1964 provided for greater Government involvement in the establishment and control of marketing boards. Accordingly, in the order provision is made for the Northern Ireland Milk Marketing Board to be reconstituted on a basis more akin to the 1958 Act. Part II of the order closely follows the provisions and procedures of the 1958 Act.

With those changes to bring the Northern Ireland Milk Marketing Board into line with the other four United Kingdom boards, the Department of Agriculture's responsibilities will be reduced in such areas as the approval of staffing levels and staff and members' remunerations, while producer involvement with, and control over, their board will be increased. That alignment should further protect the Northern Ireland Milk Marketing Board against possible future European Commission criticism.

As hon. Members may know, the Northern Ireland Pigs Marketing Board became the subject of an action in the European Court, which ruled that it was not permissible for a member State to retain legislation compelling producers to sell their produce through a marketing board. Following that ruling, discussions with the European Commission indicated that the Pigs Marketing Board could continue in operation only if it gave up its compulsory powers of purchase. Accordingly, under part III, provision is made for the Pigs Marketing Board to be reconstituted without compulsory powers of purchase. In future, producers will be free to enter into contracts to sell to the board only if they wish to do so. This part also makes the Pigs Marketing Board accountable to those producers who on a regular basis sell pigs to the board under such contracts.

I shall deal now with the provisions in the draft order relating to the Seed Potato Marketing Board, which was set up in 1961. The board, from the outset, experienced difficulty in enforcing its monopoly purchasing position. The main reason was that it did not have the power to control producers who exported potatoes on their own account. Even before the end of the United Kingdom transitional period of entry to the European Community, exports accounted for a sizeable proportion of the annual crop. The proportion of the total crop which the board attracted continued to fall, until in 1981 its share represented only 13 per cent. At this level of producer support the board's continued existence under the agricultural legislation was difficult to sustain.

The board therefore decided to wind up as soon as it fulfilled its commitments to producers for the 1981 crop. Legal opinion suggests that in the execution of the winding up procedure under the provisions of the 1964 Act which assume an asset deficit the liquidator would have difficulty in disposing of any surplus assets which might arise. There is, it seems, a possibility that the potato board could have surplus assets after it has met all its liabilities and the cost of winding up.

Article 43 and schedule 7 therefore make amendments to the Agricultural Marketing Act (Northern Ireland) 1964 in relation to the winding up of the Seed Potato Marketing Board to provide for the disposal of surplus assets. These amendments will enable any surplus assets of the board to be transferred to the Department of Agriculture for distribution for the general benefit of the seed potato industry. Among the potential claimants for any such assets as may remain would be any general promotional and development body serving the industry or a widely based producer co-operative marketing seed potatoes on behalf of its members.

I have outlined the main reasons for this order and the overall objective of the major parts II and III. Rather than go through the order article by article, I should like to draw attention to a number of significant points.

First, while part II has been drafted primarily to secure the continuation of the Milk Marketing Board on classical marketing board lines, it will, at the same time, facilitate the establishment of new marketing boards should this become necessary in the future. However, because of the application of European Community law, the opportunities for this will be extremely limited and none is envisaged at present. The retention of this possibility, however, keeps the Northern Ireland legislation on a similar basis to that applying in Great Britain.

Secondly, unlike the Agricultural Marketing Act 1958, on which part II of the order is based, part II makes no provisions for the formation and role of a consumer committee to report on the effects of any scheme on consumer interests. It is intended that this role will be undertaken by an amalgamated consumer protection body looking after a wide range of consumer interests in Northern Ireland. This will avoid unnecessary proliferation of such bodies without diminishing consumer protection in any way. Legislation to provide for this is presently in the course of preparation by the Department of Commerce.

While part III has been drafted primarily to accommodate the Pigs Marketing Board to operate on a voluntary basis, the order has been worded to enable the Milk Marketing Board or any other boards constituted under part II to be reconstituted under part III should this become necessary or desirable. However, the order does not provide for the establishment of marketing boards de novo under part III. If producers wish to set up other voluntary marketing organisations, sufficient opportunities already exist under both companies and industrial and provident societies legislation.

I should like to refer to schedule 3, which applies to all boards constituted under the provisions of parts II and III. This requires a board to show an annual statement as to the emoluments of members and employees of the board following the principle enshrined in companies legislation in Great Britain. The purpose of this statement is to give producers insight into costs of staff and members which are significant factors in the overall costs of a board's administration. This is in keeping with the objective of making agricultural marketing boards more accountable to producers. Lastly, unlike the Agricultural Marketing Act 1958, schedule 2(7) and schedule 6(6) to the order make provisions for boards, whether constituted under part II or part III, to consult producers with a view to winding up and the transfer or distribution of assets. Such transfer could, among other possibilities, include a transfer to some other producer organisation such as an agricultural co-operative.

These specific points will, I hope, illustrate the flexibility which the order justifiably provides to enable agricultural marketing boards in Northern Ireland to adapt to meet the changed circumstance of farming in the 1980s. I am confident that the order will provide a sound legal framework for the future operation of marketing boards in the Province. There has been full consultation with interested bodies. I understand that the three boards affected and the Ulster Farmers Union have welcomed the proposals. I have no hesitation in commending the order to the House.

4.10 pm
Mr. Clive Soley (Hammersmith, North)

I shall not delay the House for more than a few minutes. I want only to say that the Opposition realise that this is largely a tidying-up operation recognising the force of EEC regulations. However, we are far from happy about assuming automatically that we must accept EEC regulations on such matters as the Pigs Marketing Board, given that 13 per cent. of jobs in Northern Ireland are provided by agriculture. Our main priority must be to give positive help to agriculture. It is clear that the draft order does nothing to inhibit that, and I recognise the force of the Minister's argument.

I also noted from the speech of the Under-Secretary of State the hon. Member for Basingstoke (Mr. Mitchell) a moment ago that the less-favoured areas issue will be looked at in the near future. I welcome that, because again a great deal of Northern Ireland's agricultural areas could benefit from being so defined. If we are to have EEC regulations affecting us, let us have the benefits as well as the disadvantages.

That is the main point that the Opposition wish to make. Many small farmers in Northern Ireland depend upon pigs and poultry, and I note with some concern that the pig breeding herd has dropped from 112,000 in 1973 to 65,000 in 1981. That is a drop of about 40 per cent., and that must be a cause for serious concern. Presumably it is linked to the EEC policy on feedstuffs and their prices. If we are to take EEC regulations more or less automatically, we should press hard to make sure that we get the less-favoured area treatment benefits for Northern Ireland as well as just taking orders of this type.

4.12 pm
Rev. Ian Paisley (Antrim, North)

I want to back up what the hon. Member for Hammersmith, North (Mr. Soley) has just said. I am happy to say that we have had the first assurance from the Government about less-favoured areas treatment and that we are now to see an application made to that effect. I hope that it will be made as quickly as possible.

This draft legislation shows the long arm of Europe streching into the House and directing our proceedings. I am utterly opposed to that. I do not believe that the House should make its regulations for Northern Ireland agriculture because of some regulations made by a bureaucratic Commission in Brussels. That has to be opposed. I have opposed it in the European Assembly, and I shall continue to oppose it here and elsewhere.

An attempt was made by Europe to destroy the milk marketing boards of the United Kingdom. It was because of the effective stand by, and, even more, the referendum among, the farming community that we were able to override the directive that came from outside this jurisdiction and impinged on the sovereignty of the House.

Now we can see the long arm of Europe dictating what should happen in Northern Ireland. However, I do not think that many tears will be shed in Northern Ireland about the disappearance of the Seed Potato Marketing Board. The board did not have overall control, its powers were limited, and there was always opposition to the way in which it proceeded. However, we in the United Kingdom should retain the right to set up such boards if they are seen to be for the benefit of agriculture.

Agriculture in Northern Ireland is the biggest employer. It is our basic industry. It is vital to the community. It will be a tragedy if some outside body can say "You will not do this", even though the people in the area, and even Ministers, feel that it is the proper course to adopt. I trust that the Minister will resist any pressures that may be put upon him not to take into account the feelings of the people of Northern Ireland and the interests of the agriculture community.

With those few remarks, I draw my comments to a conclusion. I hope that the Minister will take that matter on board and realise that there is strong condemnation of the idea that the long arm of Europe should dictate how agricultural products are marketed in Northern Ireland.

4.15 pm
Mr. Peter Hardy (Rother Valley)

I hope that the hon. Member for Antrim, North (Rev. Ian Paisley), in his attempt to be in several places at the same time, has managed to make those points in the European parliamentary Assembly. They may be relevant, but I do not propose to follow them at length.

I contribute to the debate for two reasons. It reminds me that a few years ago the hon. Member for Londonderry (Mr. Ross) raised in Question Time the problem of smuggling. He was extremely worried about what he imagined was a relatively new phenomenon. I followed him to say that smuggling of livestock in Northern Ireland might be following well-trodden paths. I am not sure in which direction those paths lead at present. Will the Minister comment on that and, the effect of smuggling on the marketing boards? I raise the matter because a few weeks ago, as a member of the Council of Europe agricultural committee, I discussed the present plight of agriculture in Southern Ireland. It is so serious that the Council of Europe is embarking upon a study, because of the important implications it has if there is to be social and economic justice in Europe.

The majority of the holdings in Southern Ireland are less than 100 acres, and statistically it seems that no one can operate an average quality holding of less than 100 acres and make a livelihood, such is the difference that has developed instead of the buoyancy and prosperity that were purported to have followed entry to the Community. Such is the plight of the majority of farmers in Southern Ireland that it seems to me that they will look intently to see whether there is a better prospect of reward in the North. If that position continues the marketing boards, which will continue to exist, could face difficulties.

The vast majority of holdings in Southern Ireland appear to be less than 100 acres, and of those one-third are less than 50 acres. Many of them are not holdings on the good quality land that would make 50 acres a profitable proposition. The position may be somewhat different in the North where some of the more aggressive planters in the seventeenth and eighteenth centuries may have been able to carve out larger shares of land than those in the South. If there is any similarity in farm structure in the North to the major problems of the South, whether the European Community likes it or not, the Government may have to do far more than dismantle the seed potato marketing arrangements. They will have to promote more positively and generously a sensible agricultural structure, even at the cost of the high public expenditure that they deplore. To return to my first point, if they do they might find that smuggling becomes even more attractive than it was before.

4.19 pm
Mr. William Ross (Londonderry)

I am delighted to follow the hon. Member for Rother Valley (Mr. Hardy), because it gives me the opportunity to tell him that the range of farm sizes in Northern Ireland must be similar to that in the other part of the island. They all spring from the same roots. The farms in Northern Ireland are accumulations of smaller units created under the old landlord system.

As the hon. Member for Hammersmith, North (Mr. Soley) said, the order is a sweeping-up exercise to get rid of the debris created by our entry to the EEC. It makes various changes to bring the Northern Ireland marketing boards in line with EEC rules on competition and trade.

Part II replaces the Agricultural Marketing Act (Northern Ireland) 1964. I was curious because it seemed that the order and the 1958 Act to which the Minister referred were much the same, but the Minister cleared up that matter when he said that there was greater control in Northern Ireland under the 1964 Act than there was in Britain under the 1958 Act. Perhaps he will explain to me, when he replies to the debate or in writing, the differences between the Acts.

As long as the producers support the milk marketing board the proposed changes will not alter the system of milk marketing in Northern Ireland, any more than they will in Britain. Article 25 of the order empowers the board to negotiate with other persons, but is that all that it does? Does it not also allow milk roundsmen to sell goods other than milk and milk products? I have been informed that it does give them that power and I should be glad if the Minister would confirm that that is so.

The new boards outlined in part II are the sort of co-operative ventures that are so common on the Continent and result from the changes that have been made to the pigs marketing board following the Redmond case. In that case, the individual concerned was caught by the police while transporting his pigs across the border. He was told that that was illegal and was taken to court. He contended that under EEC rules his action was not illegal and eventually the EEC was triumphant and the powers of the marketing board were quietly chopped.

It has taken since 1978 for the case to work through into legislation. Another case in England resulted in changes having to be made to the hops marketing board to bring it into line with EEC rules. Apparently, competition has greatly increased, to the detriment of English hop growers. We are further from the Continent, but I wonder whether similar problems will follow this legislation.

All those changes spring from our entry into the EEC. They are all a direct result of the changes in the marketing structure of our agricultural produce that the EEC has demanded. It is the end of a system which, in some commodities, served the farmers quite well—not as well as members of the boards would have us believe, but not as ill as the enemies of the boards would have us believe either, because they succeeded in their objectives to some extent. Milk and pigs are the two outstanding boards in the United Kingdom and there is the hops board in Kent, but others have been set up. The Grass Seeds Marketing Board did not last long.

I was interested in what the Minister said about assets when the Seed Potato Marketing Board ceases operation. That money should go to the Seed Potato producers who sold their crops through the board. I am aware of the severe difficulties that surrounded that board. I was a grass seed grower and I supported the relevant board for that commodity. I am sorry now to see the seed potato board vanish. Given the restrictions under which it had to operate, its demise could have been foreseen a long time ago, not only because of the legal framework in which it operated, but because of the sheer impossibility of forecasting what the potato crop would be at any time.

It is noteworthy that the boards that have succeeded, such as the Milk Marketing Board and the Pigs Marketing Board, covered products that could be used in a variety of ways and could be stored and sold as and when the market was prepared to bear extra production or input. However, that cannot be done with potatoes. People eat only so many potatoes. They cannot be stored well. We cannot make them all into crisps. An increase in yield of 1 tonne or 2 tonnes per acre can make an enormous difference to the success of one's marketing arrangements. The same is true of grass seeds and their availability on the world market.

Regardless of how we try to smooth out the price cycle in agricultural produce and regardless of how we try to control the price and production, which we are still trying to do, we will never wholly succeed. That has been the basic problem of agricultural production down the years. One cannot be certain how much food one will have when the harvest is over. In a country such as this where we must import that food, we have always aimed at the maximum that can be produced economically. We have tried to deal with that through boards.

We inhibited the play of market forces to some extent, but not completely. It was the inter-play of market forces that destroyed the boards that failed. The success of those that succeeded depended on certain characteristics in the product rather than on the board that handled the product.

From now on co-operatives will be the name of the game. I hope that they will be successful. I hope that they can change the attitude of the average British farmer to co-ops and that they can make the British farmer more community-minded in the sense that he is lookng after the farming community. But I doubt it. I believe that farmers will still try to get the maximum each year, whatever their product may be, to the long-term disadvantage of the industry. No one regrets that more than me. I can see the advantages of a co-operative system supported by the fanning community, which works to the general good in many areas. I hope that anything that can be done in that area will be done. I believe that the Minister will do it, but I fear that the future will be more uncertain. Farming income will be more uncertain than before we entered the EEC.

It was popular to criticise Government control but at least at the beginning of the year we had some idea of what we would have. Now we are out in the cold, hard world again. The farmers in Northern Ireland and throughout the United Kingdom have found it a chastening experience.

4.29 pm
Mr. Adam Butler

I welcome the hon. Member for Rother Valley (Mr. Hardy) to our debate and apologise to him for the fact that I shall not remain to hear his Adjournment debate. I shall not follow the tortuous path down which he led us to explore the relationship between agriculture in the Republic of Ireland and that in Northern Ireland. However, I confirm that the size of agricultural holdings in Northern Ireland is about the same as that in the Republic—21.5 hectares in the North and 22.5 in the South. I have not seen any farms in the South. There are some real differences because more corn is grown there. I was impressed by the intensity of agriculture in Northern Ireland and the good use that is made of limited acreage by supplementing the land available with modern farm buildings and farming techniques. I also acknowledge, as I have frequently, the benefits that would accrue to Northern Ireland agriculture if there was an extension of the less-favoured areas and if the same subsidies and grants were to apply to the extended areas.

The hon. Member for Antrim, North (Rev. Ian Paisley) greets my hon. Friend's statement about the less-favoured areas as something new, but he cannot have heard me say the same thing or have read written answers on the subject. The Government intend to apply to Brussels for an extension of less-favoured areas, but we must co-ordinate the regions of the United Kingdom in so doing. But equally there is no commitment to extra cash. The extension alone, although it will give hope, is not sufficient for Northern Ireland.

The hon. Member for Londonderry (Mr. Ross) asked about the differences in the 1958 Act. He asked me to write to him. If he reads my speech he will find that I dealt with three out of the four principal differences. If there are others, I shall write to him. The fourth difference is the one that he pinpointed, and I did not refer to it because of the shortage of time. The Act allows the Milk Marketing Board to sell other products or, as the order describes it, products that may conveniently be so sold. That is current practice in many dairies. It helps to reduce costs and to maintain the viability of doorstep deliveries which, all other matters being equal, we wish to continue. We believe that the order should be used to put the board on an equal footing with other independent undertakings. I am sure that the hon. Gentleman will agree that that is the right thing to do.

Some hon. Members expressed agony about the requirements of the European Commission and the interference with our traditional marketing boards and the benefit that they have given to consumers. The only requirement that arises out of Community legislation is the removal of compulsion. The test should be the voluntary support of producers, which should depend upon the service provided to those producers. That principle is not bad and is enshrined in the special arrangements made for the Milk Marketing Board and for producer polls. In the first poll in 1978, 99.1 per cent. of milk producers voted in favour of the continuance of the board. That is identical to an expression of voluntary support and meets the criteria that both I and the Community wish to have.

About 90 per cent. of producers are making use of the Pigs Marketing Board's services. If it continues to render a good service to them—it will be more accountable to them in the future—there is no reason why the board should not continue to provide the excellent service that it has offered in the past.

In contrast, the Seed Potato Marketing Board has lost producers' support, which has fallen to as low as 13 per cent. That seems to be a good reason why it should not continue in its present form. However, it can continue as explained in the order. Under a slightly exceptional arrangement it may, if it wishes, join the other co-operatives. As the hon. Member for Londonderry said, co-operatives should be the name of the game. Co-operatives are developing throughout the United Kingdom. A new seed potato marketing co-operative is developing and we wish it well. Any organisation so formed will have a greater chance of success if it originates from the wishes of the producers rather than by Government compulsion.

The hon. Member for Londonderry mentioned a surplus which might arise from the winding-up of the Seed Potato Marketing Board. He thought that any moneys available should be distributed to producers. There is a difficulty because the number of producers in recent times has been limited whereas there were many more in the past. It is suggested that the moneys should be used for the general benefit of the industry. This might be done, for example, through supporting co-operative marketing arrangements.

Mr. William Ross

Does the Minister know how much money will be involved?

Mr. Butler

I cannot give the hon. Gentleman a precise figure. I shall be happy to try to give him an indication in writing. I may have to say, however, that it is impossible to do so at this stage. It is thought that there will be a surplus rather than a deficit. Legislative provision has to be made for that because such provision was apparently previously lacking.

I am glad that we have had this short debate. Agricultural marketing is an important activity. Those who have contributed to the debate have shown their personal interest. I hope that for that reason they will give the draft order a fair wind.

Question put and agreed to.

Resolved, That the draft Agricultural Marketing (Northern Ireland) Order 1982, which was laid before this House on 17th June, be approved.