APPLE INDUSTRY (Hansard, 24 January 1980)

§ Mr. John Wells (Maidstone)

Hon. Members may have noticed that in the Tea Room this afternoon there was a large notice propped up against a vase of flowers announcing that some dentures had been found. I can only imagine that the Tea Room has fallen into bad habits again and has been selling French Golden Delicious at exorbitant prices. Those of us who eat English apples have our own teeth in our own mouths.

The fundamental problem today is the over-supply of apples. Continental Europeans, particularly the French, have had a massive programme of replanting fruit trees in recent years. It is well known to growers and members of the horticultural fraternity that young fruit trees produce large fruit and housewives' choice today is for large and possibly polished fruit. The Continental climate is kinder than ours to growers and this enables them to produce large, regular, unblemished fruit. Naturally they have some lower-grade apples, but these are taken off the market by EEC intervention. This happens particularly in the Netherlands.

Imports of French apples have shown a dramatic increase in the last three years. They have risen from 38,000 tonnes in the period from August to mid-October 1977 to 57,888 tonnes in the same period last year. This is not dumping; this is quality fruit fetching quality prices.

However, the French industry is backed by advertising supported by the French Government. The only advertising support that our growers receive comes from the Apple and Pear Development Council. The French Government also support their growers in schemes for experimental packaging. One wonders for how many years this packaging can be regarded as being experimental.

The Apple and Pear Development Council is funded by cash found by the growers themselves. No Government or taxpayers' money is involved. The council has recently been re-voted into 786 existence, but it has been through a fairly rough period in the past few years. It went somewhat off the rails. The House expects an early statement from the Minister about the state of the Apple and Pear Development Council. It would be marvellous if we could have that statement tonight, but if that is not possible I hope that we shall hear something from my right hon. Friend in the foreseeable future. The APDC has done splendid work in the past, but we need it to further the interests of the British industry.

I return to the fundamental question of over-supply. Will the Minister consider grants for restructuring the industry? These were called for as long ago as last March in the policy statement of the National Farmers Union. That was long before the financially disastrous heavy crop of 1979. I wish to look briefly at the figures for Cox's apples only. I do not want to consider any other apples in these figures.

In recent years, growers' margins have been shrinking disastrously. In the season 1974–75 they had a margin per acre of £297. The next year it was £393 and in 1976–77 their margin was £212 per acre. However, in 1977–78 it fell to a minus figure of £123. In 1978–79 the minus figure was £316. The Lord alone knows what the growers' minus figure was in the disastrous year through which we have just passed. The great British apple-growing industry cannot face losing money in three consecutive years on its—theoretically—most profitable crop.

The price of the smaller apple has fallen dramatically expressed as a percentage of the value of the larger fruit—from 65 per cent. of that value six years ago to 42 per cent. last year. The message is clear. First-quality fruit must be produced and it must be marketed at a high and consistent level. The fruit must be large, and that can come only from young trees. Only the varieties most desired by the market should be grown and put on the market.

Farm workers have recently had a well-deserved 20 per cent. wage increase. However, growers cannot meet this increase in the face of the sort of prices and the negative margins that I have mentioned. The inevitable result will be the laying off of workers whose unique skills will be lost for ever to the industry.

787 It is sometimes said that packaging and marketing by British growers is poor. While some do not do as well as they might, there are many growers who send a superbly presented sample to market and get a fair return. Just before Christmas I saw boxes of Cox's sent to Covent Garden market, at Nine Elms, marked "Grade I". Some of those boxes contained far too high a percentage of green and blemished fruit. On the same stand in the market were boxes of perfect fruit making four to six times more money than the faulty fruit. The remedy for that lies in the hands of the growers.

However, the grower needs Government help in disposing of his less attractive fruit. If he were to receive a grant for grubbing up and replanting young trees, there would be a lower percentage of poor fruit. Poor fruit can be taken into intervention, but only by co-operatives.

I have no desire to knock co-operatives. I believe that they do a splendid job, and I must declare an interest because I am a member of a purchasing co-operative. I support the co-operatives whole-heartedly, but not every British grower wishes to fit into such organisations.

There are many individual growers in my constituency whose enterprises are infinitely bigger than co-operative enterprises on the Continent. Cannot the Government press the EEC to agree to fruit being taken into intervention from private traders as well as from co-operatives? Intervention withdrawals in the past season in the United Kingdom, up to 31 October, were 2,310 tonnes. Only 16 tonnes were used for animal feed and 1,165 tonnes were destroyed. That is lamentable.

By contrast, in France only 165 tonnes were withdrawn. In Belgium 680 tonnes were withdrawn and in the Netherlands the large figure of 12,350 tonnes were withdrawn. Will the Government consider using these intervention moneys, or persuade the Commission to use those moneys, to foster a viable British juice industry?

Long Ashton research station, at the university of Bristol, has done magnificent work in this context. More and more people are drinking apple juice. Why cannot it be British apple juice? Far too many of our well-known supermarkets 788 are buying imported apple juice, repacking it and selling it. Why cannot that juice be British?

I am aware that the juice industry is frightened that the growers will fail to produce in years of short crop. That can be countered by a better use of concentrates. All the figures show that the years of short supply are becoming more and more rare. In the past they tended to be alternate years. The small grower on 60 acres or less is in great difficulty if he seeks to restructure his holding without Government assistance. Such a farm is too small to turn to other crops. To grub up and replant would leave the farmer without an income for several years. Consequently, he does nothing.

The same small grower is also caught up in another problem. He is caught by the bankruptcies that occur with increasing regularity in the wholesale markets. The National Farmers Union and the National Federation of Fruit and Potato Trades discussed the idea of establishing a scheme similar to a solicitor's clients' money account. Such a scheme was found to be too difficult to operate. I understand that fresh schemes are afoot. I hope that the Government will support them. I am not seeking cash or legislation. I seek a fair wind and help from the Government for the industry.

If there is a declining apple industry which is not supported loyally by the Government, there will be decline in many other directions. The apple industry is highly technical. It depends on the chemical industry. In my constituency and the constituencies of my hon. Friends who represent neighbouring areas—who, I am pleased to see, are supporting me tonight—are many chemical factories that do a good job for the apple industry. If that industry declines, the chemical industry will also decline.

If there is no demand for narrow tractors in British orchards because those orchards have declined, there will be no narrow tractor industry. We are talking not about the British apple industry alone but about the support industries. I hope that the Minister will give us some words of comfort and consolation. I am particularly glad that I am speaking to him on the eve of St. Paul's day, because St. Paul is the patron saint of the fruit industry.

§ The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Alick Buchanan-Smith)

I thank my hon. Friend the Member for Maidstone (Mr. Wells) for raising the important issue of the apple industry. In the Tea Room this evening I also saw the notice to which he referred. It was carefully placed, as though someone who had lost his dentures required something more to eat before he noticed that he did not have them. That person might have had problems in eating certain types of apples.

My hon. Friend is knowledgeable about the subject and I bow to his knowledge. I have been sitting here for the last l5 minutes learning as much as I can as fast as I can. The House knows that my hon. Friend takes every opportunity to ensure a proper deal for this important industry. I also note that many of my hon. Friends—I think it is only hon. Friends—are attending this debate. This demonstrates. from the Conservative Benches at least, the real interest that exists in this important industry.

We in the Ministry of Agriculture have been very conscious of the difficult period through which the apple industry has gone this autumn. Numerous representations have been made to us. My right hon. Friend has discussed the matter with representatives of the industry and he visited Covent Garden himself in the autumn to see at first hand some of the evidence to which my hon. Friend referred. Having looked at the figures and studied the situation in the apple market, I understand and sympathise with the genuine concern that growers have felt. But, as my hon. Friend, I believe, recognises, we have not been able to find any evidence that the French have acted other than commercially in their export of apples to this country.

Last October, when apple prices were at their lowest, French domestic market prices were varying between 3½p and 8½p a pound. At the same time, French Golden Delicious were selling in the United Kingdom at between 8p and 9p a pound. We reckon that French production costs would be about 3½p a pound and that the freight-handling and commission charges would amount to about 3p a pound. More recently, French Golden Delicious have been selling on 790 the French market at between 4p and 12p a pound and in the United Kingdom at about 12p a pound.

We have looked carefully into the technical area of what may or may not be dumping. Others have done the same. There are no indications of the French marketing in this country below the cost of production.

This begs the question, as I know from my dealings with those engaged in other agricultural and food commodities, whether assistance is available to growers in France that may put our industry and growers at a disadvantage. It is true that individual member States have different tax and credit arrangements and national aids for producers, such as our capital grant schemes. It is difficult to distinguish whether there may be an element of unfairness. Every country has its own system of aids. Those systems are not necessarily the same. They do not necessarily have the same effect.

Where there is no specific Community harmonisation, it is for each country to do what it thinks best suited to its own situation, subject to general compliance with Community rules of competition. We have looked at this issue in relation to the French apple industry. We have been unable to distinguish whether there are any French aids that are other than acceptable under the rules that I have described. None the less, I am the first to admit that, although we have gone into the matter thoroughly, there is such a wide range of different schemes that it is often difficult to reach a conclusion on what is a fair balance.

My hon. Friend referred to grading and marketing standards. My right hon. Friend and I attach enormous importance to improved grading and better marketing of horticultural produce generally. I have been encouraged by my hon. Friend's remarks. The more support that is given by hon. Members and others who have influence, the better will be the longer-term future for our growers and producers.

There is no doubt that grading is an essential part of marketing. If properly carried out, there is no doubt that it can result in improved returns for growers. The French achieve an almost 100 per cent. standard of grading. The produce appears at Covent Garden and the retailers buy Golden Delicious apples. 791 They know that by doing so they will obtain a product that is standard and correct. They know that if they buy another type of apple they will not get that quality. In those circumstances, it is inevitable that one type of apple will be given preference. Grading is vital if we are to improve our marketing.

If we are to resist the competition that we face from abroad—as my hon. Friend has said, the French have carried out a well-prepared and well-sustained marketing operation—we must be under no illusions about the skill, energy and vigour of, for example, the French operations. We must meet them with equal skill, vigour and determination if we are to win back the British consumer to the British product. No one would like to see that happen more than myself.

There is no doubt that the best of our growers already achieve extremely high standards. If there is to be continuity and if general standards are to meet those of the best, we must hope that those who are not reaching high standards will endeavour to do so. Enforcement of quality standards for fresh fruit and vegetables is the responsibility of the Ministry's horticulture marketing inspectorate. It has a vital role to play. We intend that the inspectorate shall apply the grading rules as vigorously as possible. That is something that the industry should not resent but should welcome if we are to meet the competition.

Sir Derek Rayner has been asked to consider ways of carrying out the inspectorate's work with greater efficiency. I am glad that Sir Derek has agreed to do so. We shall do our best to follow through any suggestions or recommendations that he makes.

My right hon. Friend has demonstrated his wish to improve standards generally in agriculture and horticulture. In the summer of 1979 he appointed five marketing advisers to consider the different sectors of agriculture and horticulture and try to find new ways of improving marketing techniques. I am glad to confirm that apples are one of the commodities to be studied and considered by the advisers.

As a result of the advisers' recommendations, my right hon. Friend has already asked the Central Council for 792 Agricultural and Horticultural Co-operation to include top fruit among its priority areas in the formulation of long-term strategy. That indicates the importance that we attach to proper standards and proper marketing of top fruit.

By encouragement, advice and generally trying to point the way, the Government can achieve a considerable amount. However, I am sure that it will be acknowledged that it is up to the growers to accept the advice that is offered and to try to follow it. I assure them that we shall do all that we can to try to meet foreign competition.

My hon. Friend mentioned restructuring. Some of the considerations that I have mentioned about the part that the industry has to play apply to restructuring. Grants have been available for many years towards the cost of grubbing up orchards, and I hope that growers will continue to make use of them. I understand that a number of forward-looking growers have already decided on orchard renewal. The decision whether they do so is up to their commercial judgments.

I understand that the Top Fruit Working Group, set up by the industry under the able chairmanship of Lord Selborne, is looking at the whole problem of market requirements and will doubtless give the industry guidance. I hope that that will contribute to the general debate on the restructuring that the industry seeks. Debate is no substitute for action, and I hope that action follows from the wider debate taking place.

On the production of apple juice, I agree with my hon. Friend that there are clear advantages to be gained if it can be shown to be a commercial proposition to set up juicing plants to take surplus and lower-standard apples off the market. There are difficulties—and my hon. Friend mentioned some of them—including continuity of supply, especially when the crop is short. We would look to the Community for help in that direction. However, it may not be a profitable area in which to look as some European Community States, especially Germany, have developed a juice industry. Although there are prospects in the juice area there are undoubted difficulties, the greatest one being that of continuity of supply.

We have already given some assistance in that direction. Last year one of our ADAS specialists discussed apple juice 793 production with growers, processors and growers' organisations. He made a tour of the apple juicing areas of Switzerland and West Germany. He has discussed the results of his visit with Lord Selborne's group. I hope that some value and benefit will come of that. In addition, financial help is available through the Central Council for Agricultural and Horticultural Co-operation towards the cost of a feasibility study on juice production. Progress in that area would be more likely to be successful if it were based on the sort of study suggested.

My hon. Friend raised the question of the Apple and Pear Development Council. As he knows, a poll of growers came out in favour of the council's continuing. My right hon. Friend is currently considering the future operations of the council and we hope to be in a position shortly to say rather more on the subject.

My hon. Friend's question on the consequences for growers of bankruptcies of wholesalers raises a wider issue, which goes beyond the apple industry. Any arrangement of the sort that he suggested 794 would be advantageous, but it cannot he an area in which the Government could directly intervene. I hope that he is successful in his efforts to get growers and wholesalers to work together.

There has been, regrettably, a tendency to talk down the apple industry in recent months because of the competition from French Golden Delicious. Let us remind the consumers in Britain that in Cox's Orange Pippins and Bramley Seedlings the industry has varieties of unsurpassed excellence. The flavour of the Cox sets the standard against which other apples are judged.

I acknowledge the problems of the apple industry and the difficult period through which it has to go in order to succeed. I believe that there is a future for the industry. I hope that there will be full co-operation from the industry. If that happens, I shall not be pessimistic about its future.