§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Goodlad.]
1.37 am§ Sir Geoffrey Johnson Smith (East Grinstead)I am glad to have the opportunity to raise this debate, and I am grateful for the warm support which I gather comes from both sides of the House in these small hours of the morning. It shows the popularity of the subject that I propose to discuss. I thank those who are staying behind to listen to the debate. It shows a measure of solidarity.
The Minister knows that I support British membership of the EEC, and I understand the reasons why it was thought necessary to include Spain and Portugal in the Community. I do not oppose their entry.
To those who suggest that I take a protectionist line, I can only say that I am not a protectionist. I welcome freer trade in manufactures, commercial products and agriculture produce. Higher tariff walls and artificial restrictions on trade and the free movement of goods and services are inimical to the greater prosperity of nations, stultify initiative, raise prices and lead to loss of competitiveness, but there is bound to be a limit to what any country can and should tolerate.
Agriculture is one of our basic industries, and it is highly competitive. We live in a country which is a net importer of food. Our agriculture industry has learnt to live with high imports, and no one is asking for a ban on them. However, we must be concerned with the level at which imports begin to weaken and ultimately destroy large sectors of our agriculture industry, which, for a mixture of economic and social reasons, is essential and therefore must be maintained.
As it now stands, the strain of the CAP has created bad blood in the Community and has already led Britain into a crisis in its relationship with fellow Members. The enlargement of the EEC brings nations whose climatic conditions alone will make it even more difficult for northern nations of the Community to adjust.
It is one thing to create a Common Market in industrial products and commercial services among nations in similar stages of development. Lord knows, that is proving difficult enough in all conscience. It is quite another thing to try to create a Common Market in agricultural products among nations which range from Cape Wrath to the Straits of Gibraltar. It would be more dramatic if one took it in lines of latitude. That could well bring into the Community a rock of a different kind, against which the Community could dash itself to pieces.
One would be complacent to disregard the warnings contained in facts for all to see. Agriculture accounts for over 30 per cent. of total employment in Portugal and about 20 per cent. in Spain, compared with about 8 per cent. in the existing Community. It contributes about 13 per cent. and 8 per cent. respectively to the GDP, in contrast to 4.2 per cent. attributed to agriculture in the EEC.
Portugal is likely to export poultrymeat by the mid-1980s. It is already self-sufficient in egg production and it is forecast that it will become a sheepmeat exporting country.
Portugal's entry has serious implications for Britain's fruit growers. As a big producer of non-temperate climate 408 fruits, it must inevitably cut into the demand for homegrown fruit. Citrus production is increasing. The acreage of apples and pears doubled between 1970 and 1977.
Spain poses an even greater threat to farmers and growers than Portugal. When it joins the Community, it will increase EEC early potato production by 39 per cent., barley production by 20 per cent., and tomato production by 45 per cent. Spain is destined, so I am told, to be a potential barley producer as acreage and yields increase.
A myth has developed that Spain is desperately short of livestock. In fact, it is 90 per cent. self-sufficient in beef and is the second largest EEC sheep producing nation. There is a large pig population and it is likely to be a pigmeat exporter. Spanish poultry production is similar in size to that of the United Kingdom. More generally, Spain acts as an exporter in this sector.
Hon. Members will not wish me to underline the situation with regard to Spanish fruit. It is really that set out in relation to Portugal. There have been enormous increases in the production of apples and pears.
It may be said that the average farm in Portugal and Spain is small, that it is all rather peasant-like, that the holdings are fragmented and that the level of mechanisation in fertiliser usage is limited. That is all true, but of course entry into the EEC will bring access to Community funds.
Even in the existing Community, agreement on resource transfers proves difficult to achieve. At a time when the Community is reaching its budget ceiling, a commitment to transfer resources to the new member States would require either the Community's own resources to be increased or a substantial cut to be made in expenditure on existing Community policies. That option would have serious repercussions for British agriculture, horticulture, and, indeed, other parts of the economy.
There is a considerable potential for expansion in Spain, where yields, as we know, of many products are relatively low, but where irrigation and structural measures, perhaps aided by FEOGA funds, could dramatically raise output.
It is put about by the Ministry that rain does not fall so much on the plains of Spain. However, there is far more to irrigation than that. The use of water has greater potential. Therefore, it is thought that the 3 million hectares presently irrigated could be increased by a further million by the year 2,000. That is a substantial increase. In recent years the area protected by glass and plastic has expanded rapidly.
It is said by those who think that we should be more relaxed about the matter that Spain's lower production costs would be offset by higher transportation costs. I wonder if that is so. I doubt whether the transportation costs are sufficient to offset Spain's other cost advantages. Therefore, Spain must constitute a serious threat to United Kingdom growers.
There are many other problems, but other hon. Members wish to speak and I shall not detain the House. I know that olive oil poses serious problems not only for us but for the Community. It is feared that the benefits that will accrue to both countries through the EEC farm modernisation directives coupled with their climatic advantages, could convert the existing threat into something far more serious. I refer to the eventual destruction of some sectors of British fanning and horticulture.
409 The Minister may say that my fears are exaggerated. Let us have proof of that. What detailed analysis has the Ministry made of the long-term impact of the entry of Spain and Portugal into the Community? Will the Minister undertake to publish such an analysis in the forseeable future? If one does not exist in the Ministry, is he prepared to finance, jointly with the National Farmers Union, an independent research programme? A study might be prepared by the Centre for European Studies at Wye college. I do not want the Minister to draw my attention to some Select Committee document or to some document published by the other place. That will not deal with the issue.
In my part of the world, members of the NFU are rightly suspicious that Foreign Office pressure will lead Ministers to ignore the dangers that enlargement must pose. We understand the Foreign Office's fascination with Spain's inclusion. We understand how Foreign Office judgment has led us to make serious mistakes in many other areas. The industry needs to be reassured that my right hon. Friend the Minister will press for adequate safeguards before those two countries join the Community. For example, seasonal quotas might be discussed. Therefore, I expect my right hon. Friend the Minister of State to give us that assurance in principle this morning.
§ Mr. John Wells (Maidstone)I congratulate my hon. Friend the Member for East Grinstead (Sir G. Johnson Smith) on his perspicacity in raising this important subject and on his luck in the ballot.
Many of us—not only in Kent but in other horticulture areas—are concerned about this issue. Horticultural products represent about one-third by value and volume of all the food that we eat, to say nothing of the buttonholes that we wear and the flowers in our homes. The entire spectrum of those valuable and important products will be put at risk because of the knock-on effect. My hon. Friend dealt with apples and some general agricultural produce, but the entire spectrum of horticultural produce will be at risk. As the horticulturists of southern France find themselves in competition with Spain and Portugal, they will go into new crops. The horticulturists of northern France will also change crops. There will be more production of crops that we now consider to be exclusively produced in the United Kingdom or in northern Europe.
I have had letters from people in the nursery trade. I declare an interest because I am in the nursery trade and know that sector's practical difficulties. I join my hon, Friend in seeking assurances, but I also wish to reassure the Minister that the horticulture industry is not so foolish or naive as to think that its small voice will prevent Spain and Portugal from joining the Community. We are not children. We live in the real world. We hope that the Minister and the Foreign Office also live in that world and will give us some comfort.
The glasshouse industry has had an appalling winter with high fuel prices and assurances that the Dutch would be brought under control, but that does not seem to have happened. It is another sector of horticulture which is suffering. We want some assurances for the future.
My hon. Friend, in passing, dealt with transport. I understand that many heavy lorries which bring in 410 horticultural produce are in breach of our road traffic regulations. That is not the Minister's responsibility, but I hope that he will urge police at Channel and other ports to cast a vigilant eye on incoming lorries to ensure that they are not in breach of our laws or the laws of other EEC countries.
§ Mr. Michael Marshall (Arundel)I add my voice to discussions on competition within the Community as it relates to horticultural products, particularly tomatoes, the principal glasshouse product in my constituency.
Two aspects are relevant in the light of what my hon. Friend the Member for East Grinstead (Sir G. Johnson Smith) said. The first is that, according to the West Sussex growers, the March and April figures for tomato imports from the Canary Islands depressed the price of tomatoes to the 1980 level—a disastrous level. The Canary Islands presence in the market is a factor which must be borne in mind when considering future relationships with Spain.
On the wider aspects of competition, I hope that the Minister will say that he sees in the accession of Spain and Portugal an opportunity to examine the market structure and the way in which the market will work on a broad basis. In time horticulture might be in a similar position to the European Coal and Steel Community. Market distortion has brought Governments together to discuss problems on a wide basis.
The Dutch energy subsidy is not to be phased out until next spring. That represents even greater competition than that from Spain and Portugal. Our energy costs are likely to rise again, and the industry is facing difficulties on many fronts. I hope that the Minister will examine the problems and use the opportunity of the accession of Spain and Portugal for further and deep studies.
§ The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Alick Buchanan-Smith)I am grateful to my hon. Friend the Member for East Grinstead (Sir G. Johnson Smith) and others of my hon. Friends for raising this subject. I congratulate my hon. Friend on being successful in the ballot and on his choice of subject. The matter is serious. There is no question of the Government disregarding, or being careless about the implications of Spanish and Portuguese entry into the Community.
We are aware of the potential threats and the problems for which we must prepare. I should be disappointed if it were thought that we were not treating the matter seriously or showing proper foresight and preparation for what might happen in a few years. We treat the matter seriously and will continue to do so. I give my hon. Friends that absolute assurance.
My hon. Friend the Member for East Grinstead rightly said that we should be worried about the implications and problems, but I must make it clear that the Government are firmly committed to Spanish and Portuguese entry to the Community. In the interests of democracy in Western Europe, those countries should join and thereby strengthen our political unity. However, we must also be aware of the advantages for British exporters from their accession. The Government are firmly committed to the enlargement of the Community, but that does not mean that we shall overlook the problems.
My hon. Friend the Member for Maidstone (Mr. Wells) spoke of the problems facing our horticulturists because of 411 the additional benefits enjoyed by the Dutch glasshouse industry. My hon. Friend is right, but I hope that he will acknowledge that my right hon. Friend has consistently been in the forefront when seeking fair play for our industry. By applying pressure on the Commission to take appropriate action and by co-ordinating with other European Ministers, whose industries face similar problems because of Dutch action, we have continually taken the initiative in trying to deal with the threat of the Dutch growers, who have the advantage of subsidised fuel prices. We must also give credit to my right hon. Friend for negotiating additional help for our industry. I know that the industry would have wished more help, given the severe competition that it faced. However, the financial help that we have given with adaptation aids and the lead that we have taken in Europe cannot show any lack of concern on our part.
The Dutch growers must adapt by the spring of 1983, and it is possible that our adaptation aids will be continued during next winter. None of that shows a lack of concern. What my right hon. Friend has done about the marketing of apples shows that we have taken a firm and positive lead and done all that we can to assist this important section of agriculture and horticulture. I say that to show that we do not lack anxiety or preparation for future problems.
I understand the sensitivities of those in agriculture and horticulture who are worried about Portuguese and Spanish accession to the Community. They point out the benefits of climate and the problems that higher prices for some commodities may bring in terms of increased production. We are aware of those matters. In the recent price-fixing round, I took the lead for the United Kingdom when we discussed Mediterranean produce, especially olive oil.
We are always ready to remind our European colleagues of the immediate effects of some of the price increases of Mediterranean products and the implications that certain pricing decisions will have following enlargement. There have been occasions when the Commission and the Community have not shown the foresight that we wished. They are introducing policies and principles that may be appropriate for the Community at its present size, but we must look ahead to see what effect they will have when they are applied to an enlarged Community. I have reminded my Community colleagues of some of the immediate as well as long-term effects of Community policies.
We must be concerned about the accession of Portugal and Spain because of the climate and geographical conditions that they enjoy, but we must not lose perspective. I have been urged not to shrug off Portuguese agriculture because it is backward and on a comparatively small scale. I do not shrug it off on those grounds and I hope that others will not. I accept that we shall have to face and be realistic about competition. In many respects, Portugal's agriculture is far behind ours. There may be scope for Portugal to increase its production, but the necessary changes in structure and organisation would have to be dramatic before it reached the standards of our industry and of the industry of other parts of the Community.
We know from events in Europe before we joined the Community that the opportunities for change in the short 412 term are not especially great, but I am concerned about the competition that we shall face. Portugal is importing about 50 per cent. of her supplies of food and feeding stuffs. I am sure that my hon. Friends will have read the short article that appeared in yesterday's edition of the Financial Times about these matters. That article underlined the tremendous obstacles that our competitors will have to overcome before they reach our standards of efficiency.
Competition in the egg and poultrymeat markets must be watched, but it must be put into perspective. In Portugal, we are talking about poultrymeat production of about 3 per cent. of the total production within the enlarged Community. It is a small percentage, but I accept that it is significant. It should also be remembered that total production of sheepmeat is about 18,000 tonnes. That must be set against total production within the United Kingdom of about 275,000 tonnes. Sheepmeat prices are not all that dissimilar from prices in the Community. We must not exaggerate the threat, but we must watch it and be ready for it.
I acknowledge that Spain is a larger and more developed country with a high standard of efficiency in agriculture. However, Spain remains a considerable net importer of northern European products, such as cereals. As I said, the prices of many commodities in the countries that we are discussing are not so very different from Community prices. That is different from when Britain and Ireland joined the Community, with no transitional period. There were enormous boosts for production. The current price levels of some of the commodities in Spain are not very different from the European levels, but if there is a big difference, as we saw in Ireland, there can be a dramatic effect in a short time on production increases.
It is true that Spain has irrigation problems, so there is a physical limitation on increases in production, but they can be overcome if it is physically possible to find the water. It is not always physically possible to find the water, and even if one does, as in this country, with our better rainfall, irrigation is not a cheap project in which to indulge. It requires heavy investment. I know from my contacts with my Spanish opposite numbers that there are certain physical and cost limitations on expansion.
I agree that the real worry about Spain will be on the horticultural side, especially vegetables. Already we compete with Spain. Apples and pears have also been mentioned. We are alive to that worry and shall watch developments closely.
My hon. Friend asked specifically whether we would carry out more research. I shall consider what my hon. Friend has said. However, an enormous amount of information is already available to us. It is not just from our own sources. My hon. Friend is right. We have shown what is available to us. I am not talking of what the House of Lords Committee published, but the evidence that we gave to that Committee demonstrates the information that we have, and we shall continue to update it.
A considerable amount of work has also been done by other independent bodies. For example, information has been collected by the European Commission. Work has been done by the Meat and Livestock Commission, the result of which is available, and by bodies such as Agra Europe, the quality of work of which is normally high. We shall take into account all that work, from whatever 413 source. Much academic work has also been done. I shall make sure that the information that we have is updated. If more is needed I shall consider that carefully.
I shall make two points about the negotiations.
§ The Question having been proposed after Ten o'clock on Wednesday evening, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.