§ Sir Peter Mills (Devon, West)
I thank the Chair for allowing a second Adjournment debate. I hope that my thanks will be passed on to Mr. Speaker.
I wish to discuss the future of food production in the United Kingdom and the prosperity of British agriculture. There will not be much food production without a prosperous agriculture. The great debate for the future will be about the best method of obtaining the food necessary for our consumers and about achieving prosperity for agriculture. The debate will be about the best policies to adopt.
I have read with fascination recently some of the documents produced by the other parties. Members of the Labour Party have, of course, left the Chamber because they have gone home. The Labour Party has produced an article entitled "A New Direction for British Agriculture".
If I went to a market in the South-West and asked farmers whether they wished to have a new direction in British agriculture, they would all say no. They would say that they have had three or four reasonably good years and that last year, under this Administration, was one of the best that they have had for a long time.
Despite the world recession and difficulties such as high interest rates, we have had reasonable price reviews, good legislation and good leadership and we know where we are going in agriculture. Agriculture is emerging from the world recession in a better and fitter state than many other industries. Does British agriculture wish to have a new direction? Do we wish to have a new direction in food production? I do not believe so. To relate some of the objectives of the Labour Party contained in "A New Direction for British Agriculture" would make your hair stand on end, Mr. Deputy Speaker.
The Opposition are committed to taking Britain out of Europe. That action would be damaging to British industry, but it would be fatal to British agriculture. British agriculture in the Community has had success, support and the help of a strong lobby. Above all, the consumer has greatly benefited from ample supplies of food at reasonable prices, with no shortages. The future of British food production would not be helped if we were to leave the Community.
The article states that the party would shift the burden of agricutural support from the consumer to the taxpayer. Labour Members need their heads seen to. I have been a farmer for many years and to go back to the old system of deficiency payments and reliance on the Treasury would be enough to make my hair stand on end. We should have the same old battles and the same old enemy that never changes, the Treasury. The Treasury would continue to restrict help to farmers and such action would not help food production. It is wrong that the taxpayer should suffer in that way. People should pay a fair price for food. Since we joined the Community we have moved from the old system of support for British farmers and the change has benefited the taxpayer, the consumer and British agriculture.
I have heard—perhaps the Minister will confirm it—that it would cost the Treasury about £2,000 million to support British agriculture at its present level of support. 482 Such a sum would be very difficult to obtain from the Treasury. The Labour article, which is directed at future food production in the United Kingdom, says that it wantsgood food at reasonable prices.What a nerve the Opposition have. We have never had better food from British agriculture. There is an enormous range of the highest quality. If one goes into supermarkets, stores and retail outlets, let alone small shops, one sees an abundance of good food at reasonable prices.
The article states:People will only be able to eat a proper diet, however, if the prices they must pay for the food they need are reasonable. On leaving the Community we will have the opportunity to take positive steps to bring about reasonable food prices".What a nerve! I wish that a single Opposition Member were present at this Adjournment debate. Food prices rose more than twice as fast under the Socialist Government as they have risen under this Administration. The Labour Party has a nerve to put such rubbish in a document called "A New Direction for British Agriculture".
However, there is much worse to come. The article also mentions the public ownership—the nationalisation—of all land. Does the Labour Party believe that that will help future food production? I do not believe so for one moment and I have never met a farmer who believes it. If farmers believe that their land will be taken away from them and replaced by a Socialist Government bond that will probably become worthless in a short time, it will not inspire them to get on with the task of food production.
There is worse to come. The Labour Party is considering a wealth tax. No one likes to pay taxes, although we must do so, but to have the added burden of a wealth tax with a starting point of perhaps £100,000 would not help our future food production. I hope that farmers will take note of that. I look forward to showing this article, before the next general election, to the farmers and townspeople in my constituency.
The article states that farmers must pay rates for their buildings. That would be fine if food prices could be increased to cover it, but one can be certain that that will not happen.
§ Mr. Colin Shepherd (Hereford)
Does my hon. Friend agree that the track record of the Labour Party while in office gives us no confidence that, despite its assurances that there will be an increase in prices to cover land rating, it will discharge that promise?
§ Sir Peter Mills
My hon. Friend is correct. The article states:We accept that this will add to the costs to be borne by agriculture.That will not help our farmers.
The Labour Party is upset by all rural sports. I am upset by sport in towns and cities. Some of the action that I see on the football field and the exploitation of women in the city are a disgrace. Why should we be denied our rural pleasures that help to keep the countryside what it is? Of course, the Labour Party tries to be clever by saying:Our proposals … will not affect … angling.They do not affect angling because it is the largest sport in Britain and many Labour Party supporters fish at the weekends and enjoy themselves.
This document is a load of—. I must not say what it is here. It is well worth reading and then tearing up.
The SDP's policy—I am sure that you have heard of that party, Mr. Deputy Speaker—on agriculture provided me with the biggest laugh that I have had in years. At an 483 agriculture conference in Taunton this year, the SDP produced some ideas on its agriculture policy at the next election. The first was a reduction in meat, and dairy products. Why should we wish to reduce them? I wish to see British people eating more beef, mutton, Iamb and pork and enjoying butter, cheese and the other items that I mentioned in our previous debate on agriculture. The SDP said:We believe that if people eat less meat there will be less pressure on the environment. Many of the systems used"—It is a waste of time to read this document.
The SDP said, under the heading "Animal Welfare":similar restrictions would discourage the export of live food animals, the close tethering of pigs, 'inhumane' veal production, and the excessive transportation of animals for slaughter.The SDP wants a reduction in the consumption of those products so that those practices can be done away with. The SDP has it the wrong way round. What we need to do is to improve animal welfare standards so that production can continue and people can enjoy eggs, meat, and so on.
The SDP then refers to fishing. It decidedthat fishermen's lead weights"—I should be grateful if the Minister could explain this to me—should be illegal and that fishing line should be made of biodegradable material",whatever that means.
Dog licences are the last thing mentioned, although I do not understand what dog licences have to do with agricultural production. The SDP says:dog licences should go up to at least £10 and the money be used for a dog warden system.In fighting the next election, I shall have great pleasure in dealing with the Social Democrats on such a worthless document.
§ Mr. John Watson (Skipton)
I imagine that my hon. Friend will share the astonishment of a number of hon. Members that what has turned into a major debate on the alternative agricultural policies available to the nation should be attended by a representative number of Conservative hon. Members but not by a single representative of the Labour Party, the SDP, the Liberals or any of the minority parties.
§ Sir Peter Mills
My hon. Friend is correct but, with respect to him, if he had been in the House as long as I have he would know that this is not an uncommon occurrence. They all seem to disappear when we are discussing food or agriculture.
§ Mr. Michael Brown (Brigg and Scunthorpe)
We are seriously considering the great issue of food, and my hon. Friend has drawn attention to the so-called policy documents of the SDP and the Labour Party. The SDP states that it does not want increased meat production but probably, at this very moment, hon. Members of the SDP, hypocrites that they are, are enjoying, at a good dinner, the beef from my hon. Friend's constituency and all the other products that his constituency produces. In secrecy, they are enjoying all the farm products to which he is quite rightly drawing the House's attention.
§ Mr. Deputy Speaker (Mr. Paul Dean)
Order. We are straying a little. The Adjournment debate relates to the future of food production in the United Kingdom.
§ Sir Peter Mills
You are correct, Mr. Deputy Speaker. We were discussing how we were to achieve that food production and the various alternatives available. I take your point, Mr. Deputy Speaker, and I shall come to heel, if I may use that rural term.
§ Sir Peter Mills
Food production and what happens after food production depends very much on the healthy state of our meat plants. It is a fact of life that meat plants are in real difficulty. There is a 50 per cent. over-capacity in the meat plants. Too many buyers are chasing too few cattle. That is one of the major problems that we experience at present. At this point, I must declare an interest in respect of North Devon Meat.
There is a need for rationalisation in these matters. Small plants are important and useful and meet a local need but large plants are in trouble. They are expensive because they are up to export standard, and therefore costly to run. They cost a great deal of money to build and maintain. The danger is that the best plants will go to the wall if market forces continue to operate as they do at present. This would be difficult and sad, particularly with regard to what was said earlier this evening.
Recently some of us had a sobering experience in dealing with North Devon Meat. Matters got out of hand and many mistakes were made. We were chasing too few stock all over the country, paying a great deal of money for them, and not getting very high margins. We had almost a complete failure. Matters are now under control, we are back in profit, and we have learnt some sobering lessons.
It is important to keep the big modern plants going. They are part of the food production chain. If we are to export—I know that is the Minister's wish—we shall need to keep our large abattoirs at a high standard. The industry is in trouble. Any help and encouragement that the Minister can give will be appreciated. Perhaps he will tell us tonight what he thinks can be done. The industry is prepared to help itself, and the Meat and Livestock Commission has suggested a way forward. We shall have to consider its suggestions carefully and see whether something can be done.
I am very much opposed to council abattoirs. I hope that I am not treading on hon. Members' toes in this matter but I feel that it would be much better to leave abattoirs in private hands. I do not see why the ratepayers should have to pay for losses made by abattoirs.
There is genuine concern for the future of meat plants. We need to watch the matter carefully because they are an essential part of the food production chain, which runs from the food producer to the processor, then to the retailer and finally to the producer. Now that, under the Conservative Government, such advances have been made in food production, and now that the retailers have made such great advances in the presentation and sale of food, we do not want one of the chains in the middle to break down. My fear is that that might well happen.
I am very grateful for having been allowed to speak on such an important subject. I am also most grateful that the Minister has taken the trouble to come here to answer my points and those of my hon. Friends. I hope that he feels just as concerned as I do about the meat plant industry.
§ Sir Hector Monro (Dumfries)
I should like to add to a few words to those of my hon. Friend the Member for Devon, West (Sir P. Mills). The farmers of Britain owe a very great deal to my hon. Friend for what he has done over countless years in this House in promoting agriculture throughout the country. He has also been an excellent chairman of the Conservative agriculture committee. All farmers are fortunate to have him as their friend, and it is right that he should have raised such an important topic tonight.
Like my hon. Friend, I am glad that the Minister of State is here to reply to this short debate. As my hon. Friend said, 1982 has been a much better year than last year—and it needed to be. Although we have had some help from a more favourable summer, basically the economic improvement in agriculture has been due to the policies of my right hon. Friend the Minister of Agriculture, Fisheries and Food, whether they have emanated from the Ministry in England or from the Scottish Office. In that regard I pay my tribute also to my right hon. Friend the Secretary of State for Scotland.
I was glad to learn from a written answer today that my right hon. Friend has announced the continuation of the hill compensatory allowances at the same rate as last year. It shows not only that there is a welcome improvement in the hills but, equally important, that the Government feel that we must continue to support the hill farmers in every possible way, because they play an important part in our agricultural production and in the social life of the countryside. Therefore, I am grateful for that good news today. I am sure that the Minister will do his best to see that we are paid our hill compensatory allowances early in the new year.
I was glad, too—this is an important point when considering agricultural production—that my hon. Friend demonstrated what could happen if the Labour Party came to power. Its wish to take this country out of the Community is foolhardy in the extreme. The CAP is not perfect, but we should strive to make it better. To come out of the Community would be the ruination of us all, apart from the other facets of the Labour Party's policy, such as nationalisation and rating of agricultural buildings and land.
When dealing with production, it is important to realise that the statement of the Labour Party this week about the spending of £9 billion to stimulate the economy will inevitably mean that taxation and interest rates will go up dramatically. This year it has been important for agriculture that interest rates should come down. It has been perhaps the greatest advantage to our farmers.
If a Labour Government came to power, interest rates would inevitably go up, which would have as dramatic an effect on the output of agriculture as any other act of any other Government. If interest rates keep coming down, they will add to the efficiency of agriculture because farmers will be able to afford new plant and machinery, the purchase of which is a struggle at the moment.
I am glad, too, that my hon. Friend the Member for Devon, West reminded us of some of the policies of the SDP. We must never let anybody forget that the SDP is nothing but just another Socialist party. Its politicians are failed Socialists from start to finish. The SDP wants us to produce less meat and less milk, which would be the ruination of so much of our livestock farming. We must 486 keep bringing home to the nation the fact that Socialism is one of the most serious attacks on farming that can take place.
My hon. Friend the Member for Devon, West mentioned slaughterhouses and abattoirs, which are important for exports. My constituency also has important exporting slaughterhouses. We sell lamb of the highest quality to the Continent. The problem is not one of supply, thanks to our sheepmeat regime which has been such a success in helping sheep farmers, whether they are fattening sheep on the low grounds or on the hills. The problem, in the view of those who export, is the bureaucracy and red tape involved between the time that the container wagon leaves the abattoir and the time that it reaches the market, whether in the Benelux countries, West Germany or, particularly, Paris.
I have had correspondence with the Department of my right hon. Friend the Minister of State and the Scottish Office pointing out that in trade timing is of the essence for the whole operation. We must have simple, quick administration so that the meat can go as speedily as possible from the abattoir to the markets on the Continent. That is an important part of agricultural output today and an important input to the farmers whom we wish to see make a reasonable and fair profit from their production.
The agriculture industry is grateful for the firm policies that the Government have held to through thick and thin. We have not been pushed aside by Socialist dogma. We have stuck to our guns. We have given the farmers the chance to produce. Most important, we have brought down interest rates. This has probably added a larger sum to farmers' incomes than anything else.
§ Mr. John Farr (Harborough)
I wish to add my congratulations to my hon. Friend the Member for Devon., West (Sir P. Mills) on initiating the debate. My hon. Friend has done the House and the country a useful service in calling attention to the startling programmes of the Labour, Social Democratic and Liberal parties. If the other parties were to enter Government in the foreseeable future, it would be a calamity for British agriculture and even more so for the British housewife. After all, the customer must be more important than the producer. We in this House are concerned to see that the British housewife gets the best deal possible. We believe that she can secure that best deal by buying British wherever possible. It is therefore necessary for British agricultural production to be stimulated by the Government in the years ahead.
There has already been reference to the fact that the House is devoid of hon. Members except Conservative Members. The longest period on record of a sitting of the House with only Conservatives in the Chamber is 45 minutes. It is interesting that that time is about to be exceeded. We shall therefore have established a unique precedent involving the presence of Conservative Members alone during a major debate.
A remarkable and startling trend of increased food exports and diminishing food imports has been achieved. This trend, which the new organisation discussed in a previous debate today has been established to promote, can only continue upon the basis of a prosperous British agriculture. Unknown to most people—this certainly applies to Opposition Members—a revolution is occurring in agriculture. In almost all areas of agricultural production, with one or two notable exceptions, records 487 have been, or are being, broken. It is remarkable that these records have been achieved on a shrinking area of land utilised for food. When one considers that the labour force has also been declining, the achievement amounts to a marvel.
One is struck by the fantastic boost in home-grown cereal production this year. The fact that, for the first time ever, Britain is self-sufficient in cereals warrants a separate debate. We passed that milestone this year. It has useful long-term implications for the farmers who produced the success, and one hopes that the success will be maintained. However, the implication is even greater for the Treasury, the Chancellor of the Exchequer, and all those who seek to balance the Government's books. If we can be self-sufficient in a commodity such as cereals and produce about 23 million tonnes or 24 million tonnes per annum, as we have done this year, and not have to import the three million or four million tonnes per annum, or the five million tonnes when the Labour Government were in office, we could make a massive saving in costly overseas currency.
Let us consider another aspect of agriculture. In dairy output there has been a great improvement, and the capacity of our dairymen to produce our own dairy products has produced a startling change during the past three years. It has changed from a self-sufficiency of about 45 per cent. when the Socialists were last in office to approaching 60 per cent. now. Significantly, the figure is increasing all the time.
I do not have time to go through all the commodities tonight, but I shall mention one about which we are all worried, and that is beef. In agricultural rather than parliamentary terms, we have had a lurch from horn to corn. The reason is that cereal growing in Britain is reasonably profitable if one is well mechanised and knows what one is doing, and the weather is good. Indeed, the weather has been reasonably good during the past three years. On the other hand, the livestock producer is being beaten and the small man is being driven out of business—and, in my area of Leicestershire, the small beef finisher—because livestock has to be fed two or three times a day, attended 24 hours a day, seven days a week, and a man has to be available all the time. That does not apply to corn.
I am glad to see that an agriculture expert, the hon. Member for Barking (Miss Richardson), has appeared on the Benches opposite. It is nice to have someone to talk to for a change, apart from you, Mr. Deputy Speaker. That is always a great pleasure.
With the difficulties of getting labour, and the even greater difficulty of getting skilled labour, there has been a greater tendency for people to get out of stock and into corn. After all, one can sleep at night when one has corn instead of cattle. One is not tied to a place when one has corn instead of sheep or pigs. If one's wife wants to go away for the weekend, one can get away. That is why corn has had such a big boost, while there has been a dramatic reduction in beef coming forward for finishing.
We have heard that we have over-capacity in abattoirs, but that was not so five years ago. Moreover, overcapacity has not come about suddenly. It happened because the numbers of cattle coming to the beef finishers 488 in Leicestershire and other areas where beef finishing traditionally takes place in Britain are not as great as they should be.
Just before the Summer Recess a number of us who are interested in these matters sought to obtain an Adjournment debate on the shortfall in cattle numbers. The shortfall is likely to increase for the next year or two and we cannot reprocess slaughterhouses. I expect there to be a 35 per cent. or 40 per cent. reduction in the number of fat cattle in the next two or three years.
The basic cause of that problem is that the average livestock producer, whether of cattle, sheep or pigs, is under pressure to get out of livestock and into the easier job of growing corn. There are economic and other reasons for that. He cannot pay the massive overtime rates for night and weekend work.
If the Government are as worried as I am that some slaughterhouses in the Midlands have been working at well below half capacity for some time and that many slaughterhouses throughout the country have reported massive deficits in the numbers of home-grown cattle for slaughter, they must restore the balance.
Cereal producers have done well, which is why there has been a swing towards cereals. I do not suggest that the Government should reduce the return to cereal producers, but they must adjust the balance correctly. If the average small farmer finds it financially essential to concentrate on cereals rather than stock, the Government should restore some of the incentives that livestock producers used to enjoy.
§ Sir Peter Mills
Will my hon. Friend bear in mind two other factors—the lack of Irish store cattle coming here to be finished and, more important, the enormous exports of bull calves, which are the raw material of beef production in this country?
§ Mr. Farr
My hon. Friend has great expertise in these matters and he is right, as usual. The number of Irish stores is about half the normal level, which means that there is a great shortage in Warwickshire and Leicestershire where the store markets are traditionally held.
The other point made by my hon. Friend is also valid. There is no incentive for the finisher to buy calves when so many are being exported to the Continent. I know that the Minister of State will consider sympathetically my suggestion that the calf subsidy should be reintroduced for calves that are produced for fattening in Britain, but not paid until the calves are six months old. The calves would have to be retained in Britain, because if they were sent abroad for finishing or slaughter the subsidy would not be paid. The Government must take some steps, however hesitant, and even if they are only a gesture. We must achieve a balance so that all the advantages do not lie with the cereal producer as they do at the moment.
We are seeing a revolution in British agriculture. We must ask ourselves two questions. Will the revolution continue, and how has it been achieved? It has not been achieved by accident or by the Government. The Government cannot take all the credit for the achievements of agriculture. Much has been done in research, plant breeding, genetics and so on. The achievements of our plant breeding stations are seldom mentioned in the House. They do a tremendous job. If we did not have the boffins to supply our farmers with corn which will have 489 a higher yield than five years ago, if all the genetic research were not done, we could not boast of the boost in British agriculture that has taken place.
There has been a tremendous advance in crop protection. Forms of chemical protection are changing every day of the week. Farmers have managed to keep abreast of the times and have changed with them. There have also been fantastic mechanical and technological developments. With our research abilities it is unlikely that such developments will cease. We are on our way now. If we continue the progress of the past three years, we shall become entirely self-sufficient in food in another 10 years. It would be a brave man who said that that forecast was wrong.
Whether such progress continues depends on the Government. The Labour Party's agriculture policies are barren in the extreme. Instead of farming being a career, as it is today, with a good future and a reasonable return for those who are not fools, it would become a hazardous business.
Without the common agricultural policy we would not have the security and prosperity that British agriculture enjoys now, and for which our fathers will show their gratitude by doing their duty by the nation and stimulating production even more.
§ Mr. Colin Shepherd (Hereford)
I am grateful for this opportunity to put my two bits worth into this interesting debate. I congratulate my hon. Friend the Member for Devon, West (Sir P. Mills) on having had the foresight to request such a debate. The industry will also be grateful to him for such prescience and attention to its interests.
I was interested in the remarks of my hon. Friend the Member for Harborough (Mr. Farr). However, I take issue with him on one small point. The difficult balance that must be sustained in the market place between the consumer and the purchaser is not one where the consumer is necessarily king. Man, goats and sheep are the only species on the face of the earth that will eat the seed-corn. Everyone else leaves a little behind. We have to be careful that we protect the seed-corn when our base instincts are to eat all that we can regardless of tomorrow.
I am particularly worried about tomorrow and food production. In an earlier debate we dealt with competition. I said that we had to beat competition not only today, but tomorrow, the day after that, and so on ad infinitum. Competition is never beaten, because it reasserts itself in another form to take account of the adjustments that have taken place in the market. That worries me most.
If we are to achieve continuity of supply—the dimension that my hon. Friend the Member for Harborough omitted from his equation—we must continue to carry out and apply research to all facets of our industry. The fragmented nature of agriculture means that it is alone among the other industries. It is essential that the research should take place on a sponsored and centralised basis.
Our agricultural, climatic, geological, geophysical and geographical conditions are peculiar to this country. Therefore, the research that takes place—for example, into grass husbandry—is not necessarily relevant outside this country, and neither is research outside this country necessarily relevant to circumstances inside it. Therefore, it is essential that we sustain our full programme of research.
490 It perturbs me to get vibrations coming through the ether that the Agricultural Research Council. which I am aware is not the direct responsibility of my right hon. Friend the Minister of State, but is the responsibility of my right hon. Friend the Secretary of State for Education and Science, is seeking to prune essential activities in agriculture research.
I understand that the Ministry of Agriculture, Fisheries and Food is the main sponsoring agency for research undertaken by the Agricultural Research Council. I may be wrong. I have a constituency interest in this matter, but it is second to my main interest. The Hereford herd, which I am proud to have in my constituency, is a major part of the work of the Animal Breeding Research Organisation in Edinburgh. Both ABRO and the Hereford herd have benefited, although I appreciate that the herd is but a vehicle for the genetic research. Also in Herefordshire, but not my constituency, is the Rosemaund experimental farm. It is essential that its confidence is sustained and that the valuable work that it is doing continues.
I could go through various parts of the country, picking out institutes here and institutes there that carry out research on vegetables, grass, seeds and so on. Each of those activities is vital to the continued growth of United Kingdom agriculture production, the reduction of dependency on imports, the maintenance of our competitive position vis-a-vis our overseas competitors who look towards our markets and the financial aspect of substitution of imports and the creation of exports. That is a massive case for sustained activity in research
I hope that my right hon. Friend will make some encouraging noises that will lead me to believe that all is well in this area and that neither I nor the agriculture industry need worry about the future of that essential research activity.
When I opened my remarks I had in mind the words of King Henry VIII to each of his six wives "I cannot keep you long." I apologise for having kept the House for too long, but the importance of this subject is enormous.
§ Mr. Michael Brown (Brigg and Scunthorpe)
I was out of the Chamber when the Adjournment debate started. Suddenly, I saw the name of my hon. Friend the Member for Devon, West (Sir P. Mills) on the monitor screen. That encouraged me to return, because I realised that this would be a debate of great importance, and so it has turned out.
My hon. Friend has stimulated an important discussion on agriculture and food production, and I am grateful for the fact that we have been able to listen to his expertise. I was about to sit down for dinner, but I was prepared to let it go cold. My hon. Friend has drawn the attention of the House to the fact that we must ensure that the farming industry is given a base for the future. If the food and farming industry were to pick up the Labour Party's policy document, it could have no confidence in the future.
Not only was I tempted to break away from other engagements to attend this important debate, but two-thirds of the way through Opposition Members realised how important the debate would be and that they could probably learn something from the expertise of my hon. Friend even though they may have learnt nothing from the Labour Party policy document.
My hon. Friends the Members for Devon, West and for Harborough (Mr. Farr) have drawn attention to the fact that the food and farming industry depends upon its having 491 some hope for the future. Agriculture is based on investment today for generations ahead. My hon. Friend the Member for Harborough said that, whatever the farming industry had achieved so far, it must have confidence in the long-term future. The Government have given dramatic help to the industry during the past three years. I am anxious to ensure that the Government continue to pave the way for the future of the industry.
I should like to bend the ear of my right hon. Friend the Minister about the industry's tax structure, which, especially when there has been a Labour Government, has sometimes threatened the willingness of the industry to invest for the benefit of future generations. The Government have made great progress towards easing the tax burden on the industry. However, I am sure that my right hon. and hon. Friends will agree that the tax regime should be made much easier. Farming requires a massive tie-up of capital. Farm machinery and equipment are sophisticated and involve a heavy capital outlay and require a reading of the future. The industry runs a tremendous risk because—perish the thought—one day the Labour Party may take office.
We should do more to ease the tax burden on the industry, so that it can show enterprise and initiative and have the incentive to invest in the future in spite of the adverse economic climate. If we ease the provisions for writing off debt and replacing farm machinery, we shall assist the farming industry whether a Conservative or Socialist Government are in power. The industry is looking well ahead. I hope that my right hon. Friend will use his best endeavours with the Treasury to ensure that it has an even better tax regime than the Government have created in the past two or three years.
§ The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Alick Buchanan-Smith)
The debate's importance has been highlighted by all those of my hon. Friends—I stress "hon. Friends"—who have spoken in it. Indeed, we attach great importance to this subject and my right hon. Friend the Secretary of State for Employment, who is busy in other spheres, has given up his time to listen to the debate. That shows the importance that Conservative Members, at least, attach to our food industries. The debate follows another vital debate on our food industries, which again stresses its significance.
I join in congratulating my hon. Friend the Member for Devon, West (Sir P. Mills) on initiating the debate and on introducing it in his usual forthright fashion. He has an agricultural background and constituency and it is the least that we would expect of him to be ready to take the opportunity afforded by this debate. He gets up early in the morning although it means working late into the evening and I congratulate him once again on taking this opportunity.
My hon. Friend the Member for Brigg and Scunthorpe (Mr. Brown) has forgone his comfort and dinner to attend and speak in the debate. In recent weeks, my hon. Friend the Member for Dumfries (Sir H. Monro) has had heavy responsibilities overseas, but he has taken the time—I know that he has another important visit to make tomorrow—to attend the Chamber. For the second time today my hon. Friends the Members for Harborough (Mr. Farr) and Hereford (Mr. Shepherd) have contributed to 492 debates on our food industry. My hon. Friend the Member for Harborough said that those Conservative Members present had probably set a record this evening and it will no doubt go down in the annals of history. They have spoken for the longest length of time in this Chamber with no Opposition Members present.
However, it would be unfair not to mention the hon. Member for Barking (Miss Richardson), who is interested in consumer affairs and who represents consumers. I am sure that she has attended the debate because she knows that interest in the food industry goes much wider than those concerned with the production, processing or marketing of food. We welcome her presence and hope that she has benefited from the debate.
We would have been surprised if the hon. Member for Newham, South (Mr. Spearing) had not been in the Chamber. I think that my hon. Friend the Member for Hereford referred to vibrations going through the ether. The moment that the phrase "Common Market" was mentioned, vibrations must have gone through the ether of the Palace of Westminster and stopped the hon. Member for Newham, South in his tracks. Without a thought, he immediately homed in on the Chamber with all the qualities of a homing pigeon, just as we would expect of him. However, we are glad that he has attended the debate and listened to the speeches made.
Several specific points have been raised. I think that it has been acknowledged that some of them are not my Ministry's direct responsibility. My hon. Friend the Member for Hereford raised some questions about research. Some of those responsibilities rest with the Ministry and it is correct that much of the sponsoring of work done by the Agricultural Research Council comes from the Ministry. As he probably knows, we strongly support the council, and I pay tribute to what has been and is achieved in research. However, direct responsibility for the council rests with the Secretary of State for Education and Science and I am sure that he will read with interest what my hon. Friend has said.
My hon. Friend the Member for Brigg and Scunthorpe mentioned taxation. That is a subject that is important not only to farmers and food producers, but to the whole economy. I am sure that my Treasury colleagues will read what he has said with interest.
Prosperous agriculture is important not only for the countryside and the consumer, but also for the other industries connected with agriculture. It is important that farmers have the ability to invest. I am sure that my right hon. Friend the Secretary of State for Employment will bear me out when I say that, among the major problems he must face, it is of some encouragement that investment in the industries that serve agriculture has remained relatively high compared with other sections of the economy. Not least in this regard is the agricultural engineering industry, which is important in many of our rural and industrial areas. The same can be said of other industries, such as agriculture construction. Some of the benefits from agriculture have, quite properly, spread throughout other sectors of the economy.
§ Mr. Colin Shepherd
I am glad that the Secretary of State for Employment is present. In considering their investment plans—I am confident that they will do so as a result of the Government's economic policies—should not British farmers carefully consider the possibility of 493 investing in British-made machinery, given the tremendous dependence of the West Midlands, especially the castings and drop forgings industries, on the health of the British agricultural machinery sector? That is surely one of the best contributions that can be made to overcoming our employment problems.
§ Mr. Buchanan-Smith
I am grateful to my hon. Friend, whose comments carry great weight and importance. His views will have been noted by my right hon. Friend the Secretary of State for Employment, but we must not push our luck too far, or we might encourage my right hon. Friend to leave the debate, and that is the last thing that we want.
As my hon. Friend the Member for Brigg and Scunthorpe said, what happens in the rest of the economy is important to agriculture. The health of our agriculture and food industries is inextricably bound up with the rest of the economy. My hon. Friend the Member for Dumfries touched on that point when he referred to interest rates. There is no doubt that the Chancellor's economic success, particularly the recent reduction in interest rates, has been of immense benefit to agriculture. In recent years, there has been a great increase in indebtedness in agriculture, and in that context the recent reduction in interest rates has been of enormous help.
I also appreciate what my hon. Friend the Member for Dumfries said about hill and livestock compensatory amounts. I am glad that he welcomed the fact that those allowances had been retained at last year's level. There was gossip that those amounts might be reduced, particularly in view of the success of the Community arrangements for lamb, which have greatly benefited the returns for sheep farmers. I am sure that the hon. Member for Newham, South has noted that British agriculture has gained from membership of the Community. I am glad that has happened, because we cannot emphasise too much the importance of the hill areas.
I am delighted to welcome the hon. Member for Renfrewshire, West (Mr. Buchan). The vibrations have obviously gone through the ether even more violently. The hon. Member for Renfrewshire, West must have been going around the Palace of Westminster wondering what the vibrations were. He also has managed to home in on this important debate. In case he has any doubts what the debate is about, we are discussing the future of food production in the United Kingdom and its prospects. He will not have to wait long to realise that.
I know that the hon. Member for Renfrewshire, West is interested in hill and remote areas. I am glad that we have been able to maintain the level of the allowances to them. It makes sense to make the best use of hill and remote land for our livestock industry, especially for the production of store stock for onward fattening on lowland farms.
We often talk of supporting communities in hill areas in social and regional terms. The prime importance of those areas is their economic significance as part of the base of the food and beef production chain. We must maintain the fundamental economic justification for hill farming. It is significant that the Government have increased the hill livestock compensatory amounts to a higher level than ever before. Assistance to hill areas is higher than it has ever been. I am delighted that that is so. It emphasises the importance that the Government place on those areas.
494 My hon. Friends the Members for Devon, West and for Harborough mentioned the problems of the meat industry, especially the slaughtering industry. I touched on that matter earlier today. The industry is suffering from over-capacity. The lack of throughput has been a major aggravation. Nevertheless, we must recognise that with the tremendous modernisation that has taken place recently, even if throughput was dramatically increased, we should still be left with over-capacity.
I pay tribute to my hon. Friend the Member for Devon, West and others who are associated with North Devon Meat for overcoming those difficulties. It just goes to show that enterprise can turn a company's fortunes round even in difficult circumstances. It is a pioneering company that has managed to become profitable. I am sure that everyone will welcome that. It sets an example to others in the trade.
The Government have injected money into the slaughtering industry through the red meat scheme. Modernisations and improvements have been made. My hon. Friend the Member for Harborough said that the industry had faced additional costs and difficulties with meeting export standards. We should not apologise for that. It is good that many of our slaughterhouses now meet export standards. We are now exporters of beef and other meat products on a considerable scale. I understand that there were also problems with meat inspection.
§ Mr. Nigel Spearing (Newham, South)
Neither I nor my hon. Friend the Member for Renfrewshire, West (Mr. Buchan) has heard all the speeches in full. If we had we might have contributed to the debate at greater length.
I assume that the hon. Member for Devon, West (Sir P. Mills) was referring to North Devon Meat and the imbalance, to which the hon. Member for Harborough (Mr. Farr) referred, between stock and cereals. We export about 3 million tonnes of surplus cereals a year. Does the Minister agree that he and the British Government can do nothing about the serious imbalance in British agriculture. with its many repercussions, since there is no British agricultural policy? Prices are fixed in Brussels and that is that.
§ Mr. Buchanan-Smith
Our vibrations must be working well because the hon. Member for Newham, South has anticipated my next topic. I am delighted that he is taking part in the debate, but I am sorry that he missed the earlier speeches, because they were good. He would have improved his knowledge if he had heard them. I am sure that he will read them tomorrow.
I was talking about slaughterhouses. We have been examining the problems closely. The Meat and Livestock Commission has produced an interesting study on the abattoir section of the industry. I pay tribute to all those who put so much work into that report. I hope that it will be debated widely. We have already had discussions with the chairman and other senior members of the Meat and Livestock Commission and we intend to take the matter further.
The commission has produced further proposals. It thinks that the slaughtering industry could be rationalised using self-help. I am glad to see the proposals. We shall welcome further discussions. It is premature to comment on the details now, but I am delighted that the industry is prepared to suggest ideas for rationalisation. We shall do our best to assist. I emphasise that self-help will be involved. I welcome the spirit behind the ideas. 495 The arable and cereals sector was blessed with a good harvest north of the border last year and south of the border this year. The cereals sector has done well. As my hon. Friend the Member for Harborough and the hon. Member for Newham, South said, there is an imbalance between the arable sector and the livestock sector. I have made no secret of that. I have said that in the House and elsewhere a number of times.
It is impossible to define the exact balance, but in the last few years the balance has been wrong. Although returns for cereal producers have been good, they represent the basic on-costs for livestock producers. We should pay more attention to balance. The hon. Member for Newham, South will be disappointed to learn that the United Kingdom has taken an active part in reshaping Community policies. That is the difference between this Government and the Government that left office in 1979. I believe in changing the general direction of the common agricultural policy and I share some of the anxieties of the hon. Member for Newham, South (Mr. Spearing) about some aspects of the CAP. There is scope for improvement in several directions but the present Government have achieved several changes.
Sugar is another commodity that is in surplus and for the first time we now have schemes similar to those that operate in other areas of the world whereby the surpluses of one year are carried over to the next. Part of the costs of the surpluses is borne by the producers. Under the quota and levy systems, when production exceeds a certain level, levies are increased. A financial disincentive falls on the producer who may be adding to the surplus.
§ Mr. Farr
Does the Minister foresee that the European Community will soon sign the international sugar agreement? As the Minister knows, under the Lomé agreement, we have a commitment to many Commonwealth sugar producers. The world sugar price has never been lower. Would the Minister comment on the possibility of the whole Community signing the Lomé agreement?
§ Mr. Buchanan-Smith
We have encouraged the European Community to join the international sugar agreement. Since the Government came to office, discussions have opened between the Community and the ISA countries. I am glad that those discussions have started. A major problem that has faced the Community was that until now it was not prepared to consider such matters as carry-over surpluses and co-operation in more orderly marketing on a world scale. The fact that the Community has now adopted some of the ISA countries' policies improves the prospects for our joining the Lomé agreement. We shall continue to urge the Community to sign the agreement.
At the previous prices-fixing meeting we supported a threshold for cereals. The threshold imposes a discipline on production beyond a certain level in one year in relation to prices the following year. We have moved only into the first stage of the threshold on cereals and many people would like to see even stronger disciplines. None the less, the present agreement on thresholds for cereals is a very important first step towards greater discipline on surpluses.
Up until now when prices have been increased they have been broadly in line with one another. The most 496 important change is about to take place. Almost exactly a year ago, the Commission produced a long-term policy document. Very much at the United Kingdom's urging, the Commission put forward the view that in future price-fixing of commodities such as cereals, where there is an imbalance of supply and demand, we must gradually move to a Community support price that is much closer to world prices. That was stated as an objective in the document and it is a good and correct objective. If that policy is to mean anything, action must be taken along the lines of the Commission's document. Although the change is not dramatic and nothing like the change that the United Kingdom would like, it is none the less significant that institutional prices for cereals at the last price fixing were two percentage points lower than the general level that prevailed for other commodities. That was a small—not enough but a token—first step in the right direction. The answer to the problem is to obtain a more realistic price for cereals. In preliminary and informal discussions with our colleagues in the Community on cereal substitutes, we have found a greater realisation that the policy must be sustained. The Government will continue to do all that they can to help.
My hon. Friend the Member for Devon, West at the beginning of his excellent speech mentioned the policies of other parties—the non-policies of one. I shall not tell hon. Members who arrived in the Chamber late what he said, but it was apposite. His remarks will be read widely by those in the food industry and by consumers.
My hon. Friend asked me about the cost of returning to a deficiency payments system. If we maintained the income of food producers, that could cost about £2 billion a year. Now that the hon. Member for Renfrewshire, West is here, I would say that I hope that we shall not have a doctrinaire or dogmatic argument about the virtues of intervention as against deficiency payments. Neither system is necessarily right for agricultural support. Perhaps a mixed system, such as we have in the Community, would be better.
The intervention system has much to recommend it for easily storable commodities such as cereals, but perhaps the deficiency payments system would be better for perishable goods. The beef premium scheme and the sheepmeat regime are deficiency payments systems. A review of the premium systems is being conducted by the Community and the Government will argue their merits. I say to the hon. Member for Newham, South that the difference between this and the previous Government is that the systems are talked about more widely and are more accepted in principle than they were several years ago. They are not seen as freaks within the common agricultural policy, which is a tremendous step forward.
The intervention system can lead to surpluses. The early 1960s were one of the most anxious periods in farming since the Second World War. As a result of pressure from the Treasury because of the cost to the taxpayer of supporting a strong food industry we went through a period of standard quantities which led to much trouble and anxiety. The answer is not to go one way or necessarily to go the other way. I am sure, knowing the intellectual integrity of the hon. Member for Renfrewshire, West, that he will never try to get into that type of argument but will debate the issues on their merits as I know my hon. Friend the Member for Devon, West wanted to do. 497 This has been an extremely interesting debate. The one thing that the Common Market has given us—I ask the Opposition to reflect and to lay aside some of their broader prejudices against the Common Market—is a much more stable framework within which policies can be worked out than at any time since the war, except perhaps for that short number of years immediately after the war when agriculture was being built up through periods of food shortages to the end of food rationing. That was a totally different era for food production than that of today. The two eras are not exactly comparable.
During my time as a politician dealing with the agricultural and food industries, I have heard the constant cry for continuity, for a stable framework within which to work and for assurances, with regard to investment, of what the future holds. I am not blind to the faults of the Community, as even the hon. Member for Newham, South would admit. I have demonstrated the ways in which it can be improved and I shall continue to try to see that those improvements are carried out. What cannot be denied is that the common agricultural policy in recent years has given greater stability and continuity for the farmer and for the food industry generally and, perhaps most important of all, the security and stability which the consumer in Britain deserves so much as well.
§ Mr. Norman Buchan (Renfrewshire, West)
I do not know how strong the vibrations are in the House, but it might have been useful if, during the middle of my diligent work at my desk upstairs, someone had drawn my attention to the television annunciator. I can only comment on a few of the points that have been made, but clearly reference has been made to policies of the type that I have been advocating over the past year or two. As the Minister of State is my pairing partner, he might have mentioned me during his remarks. It certainly sounded like that when I heard the familiar reference to £2 billion in deficiency payments.
I am always pleased to hear enthusiastic Conservative Members trying to defend the indefensible with regard to the Common Market, particularly the common agricultural policy. By any moral, intellectual or economic standards, it is a bad policy. We joined the Community not for its agricultural benefits but for its industrial benefits. That was the argument with which Conservative Members took us into the Common Market. They said, "Yes, the common agricultural policy is a terrible thing. It destroys food and it is expensive to the consumer, but it is a cost that we have to bear because of the immense industrial advantages that will be gained by joining the Common Market."
Recent figures have put a spike into that argument. The so-called industrial advantages now turn out to be a £5 billion deficit in the balance of manufactured goods. It is incredible that Britain, for the first time, has ceased to be a plus exporter of manufactured goods and is in deficit. We were told that the common agricultural policy was a bad thing that had to be accepted because of the advantages on the industrial side.
I should like to draw the attention of Conservative Members to a document issued by the Foreign Secretary to convince his European partners of our need to get a major rebate on our contributions. It is a most extraordinary document. It is such an indictment of the 498 Common Market that even that well-known anti-Marketeer, the European Member of Parliament for Glasgow, sent a telegram of congratulations to the Prime Minister on the ground that it made a better case for withdrawal than even she had been able to make over the years in Brussels. Among other things, it said that the trouble with the Common Market was that it involved us in high costs because of the basic high level of agricultural support, with no industrial benefits accruing from it.
§ It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Archie Hamilton.]
§ Mr. Buchan
Therefore, we can dismiss the rather plaintive argument that the common agricultural policy is somehow a good thing. It was seen from the beginning as a bad thing and as a cost that we had to bear in order to get industrial advantages. We have had no industrial advantages, so we must now look at the common agricultural policy on its own merits.
At the end of his speech the Minister said that it could not be disputed that the common agricultural policy had given us a more stable framework. He said that it had given us more stability and continuity, but he spent most of his speech describing the changes for which the Government were arguing in the Common Market.
§ Mr. Buchan
We have seen very little of that achievement. The Minister referred to all the changes that were being made, and at the same time claimed that there was stability and continuity. The Minister cannot claim credit for achieving continual change and at the same time claim that it is a stable framework, with continuity. The truth is that it is not stable. On the contrary, the CAP is beginning to create an economic crisis within Europe because of the cost of support, and the changes have not taken place.
In June 1980 there was the mandate which sought to bring about the major changes and shift for which the Minister was arguing, especially in the cost of cereals, but it has not happened. Conservative Members will remember the mandate on which they fought the last election in relation to the common agricultural policy. They said that they would bring about a price freeze on commodities that were in surplus. The prices of commodities in surplus have been rocketing ever since, so they have not achieved the changes that they claimed they would. If they had achieved them, it would make nonsense of the argument about a stable framework. They cannot have it both ways.
The hon. Member for Banff (Mr. Myles) also heard the vibrations, but they must have been less strong than in my case, because he disappeared after hearing some of the arguments from his own Benches. Earlier in the evening he declared that the progress made in British agriculture had nothing to do with the common agricultural policy. He said that it would have occurred in any case because of the amount of research, the improved technology, the new seeds and breeds, and the developments in livestock. So there is no case left for the common agricultural policy.
The truth is that the end price incentives provided by the CAP harm the consumer because we are paying an unnecessarily high price for most of our commodities. In August of this year the world price of wheat was almost 499 half the cost of wheat within the European Community. One of our basic items of diet is bread, and we had to pay double the cost for the raw material. That makes no sense for the consumer.
Hon. Members have spoken about sugar. We should talk to some of the countries which rely on sugar production for their very existence. They tell us that the surplus production of sugar brought about by the high price of sugar paid by our consumers is harming their very existence because of the dumping on the world market. The dumping takes place because each year, on only one kind of treadmill of change, prices continually escalate. Farmers respond by increasing production. The prices are paid at the expense of the consumer and the taxpayer. We are in the extraordinary position of paying high taxes for the pleasure of paying high prices. What we lose on the swings we also lose on the roundabouts. It is a nonsensical policy.
The Common Market pays high prices for the sugar that it consumes. We then have to pay for the export of sugar at subsidised prices, sometimes to the tune of £200 a tonne, to be dumped on the world markets. This has the double effect of charging us as taxpayers for the cost of dumping and of smashing the market for which countries in the Caribbean, the Pacific and Africa depend for their well-being.
§ Mr. Colin Shepherd
To judge from what the hon. Gentleman is saying, it seems that the consumer is paying an enormous price. Is it not the case that the food price index has risen by only two thirds of the level of the retail price index since the Government took office? Is it not the case also that the food price index rose more rapidly than the retail price index during the period of the Labour Government in which the hon. Gentleman served?
§ Mr. Buchan
That is so, because, starting from 1973, we saw an escalation of prices after we joined the Common Market. The hon. Gentleman is right. There was a major and sharp increase in prices throughout the 1970s, including during the period of the Labour Government. That was brought about by the double engine of our transitional period of catching up in prices, followed by an increase in our prices over those of the Common Market.
§ Mr. Buchanan-Smith
Will the hon. Gentleman acknowledge the significance of a parliamentary question answered by his then hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan), who had responsibility for consumer affairs, which showed that the influence of common agricultural prices was minimal compared with the general increase in prices over the period of his Government?
§ Mr. Buchan
The hon. Member for Caithness and Sutherland (Mr. Maclennan) would have said that, would he not? There were other reasons as well.
The hon. Member for Hereford (Mr. Shepherd) said that since then prices in the food index had risen by only two thirds of the general price index. However, food prices bear infinitely more heavily on the poorer people than on the better off because they spend a much higher percentage of their income on food, and therefore it is a higher cost for them. The poor pay a higher proportion of their income in farm support than the rich.
500 The corollary that because the increase in food prices is lower than the increase in the RPI the inflation rate is held down does not follow. On the contrary, any increase in food prices is part of the engine of inflation, and an unnecessary one. The crime is not that food prices are rising more slowly—that is beginning to change—but that this is an unnecessary addition to the general inflation. It is wasteful to spend money on food when it is in surplus so that it can be destroyed or dumped on world markets.
The European Commissioner made a speech in Oxford on 6 January and a similar one in Scotland to the Scottish Farmers Union. The points that he made have been picked up and thrown at me by every Government speaker since. He referred to the system that I have been advocating of a deficiency payments system which gives support to agriculture and ensures an infinitely fairer balance between the consumer and the taxpayer. I make no bones about my desire to shift the cost of agricultural support away from the consumer to the taxpayer. When the consumer bears the cost, the poor pay more. When it is taxation, the rich get a fairer share.
I hope that hon. Members will seek an early opportunity to read a book on agriculture by the hon. Member for Holland with Boston (Mr. Body) who points out that the £2 billion, claimed to be the cost of the deficiency payment, becomes a total of £3,500 billion when all taxation elements in relation to the common agricultural policy are included. I do not believe that Mr. Tugendhat's accusation that my system costs £2 billion a year means other than that the present common agricultural policy costs £2 billion.
If hon. Members want further proof, I recommend that they read the report of the Select Committee in 1980. In his evidence, Sir Brian Hayes, permanent secretary to the Ministry of Agriculture, Fisheries and Food, said that the additional food cost to the British consumer as a result of the common agricultural policy was over £2 billion. That amount could go towards meeting the cost of any deficiency payment that I might seek to operate.
§ Mr. Spearing
I congratulate my hon. Friend on an excellent extempore speech. Does he agree that one of the advantages of the system that he advocates is its flexibility in meeting the needs of British agriculture? Conservative Members were worried about the future for farmers. Is not the CAP preventing small farmers obtaining an income and driving them out of business? Is it not creating difficulties for people who wish to enter agriculture? Does he agree that a deficiency payment system could be geared to the needs of British agriculture, especially farmers in hill areas, small farmers and those wishing to enter the industry?
§ Mr. Buchan
My hon. Friend is right. Once we have the freedom to plan and develop a proper support system in accordance with our needs, several things will happen.
Complaints have been made about the imbalance between livestock and grain. That is right. The cereal price means a loss to the livestock producer. We used to say that the pig is a walking cereal, because 70 per cent. of pig production goes in feed costs.
A great imbalance has occurred. It has begun to distort husbandry. There is pressure to produce a particular commodity not according to the soil and climate of the area but for reasons based on cold economic calculations. 501 Even though a particular crop should not be grown, there is the thought that more money can be made at the end of the day by growing it.
The case is not proved. It has never really existed. The claim for entry into the Common Market was that it would bring industrial benefit. It has not worked out that way. We need a policy that ensures that the cost of support is borne by those who can afford it. The nature of the support should mean that good husbandry is encouraged. It should not only produce a healthy agricultural sector, but help towards producing a healthy rural community.
In the seven years before Britain entered the Common Market, there was a 7.5 or 7.6 per cent. increase in productivity despite a loss of 60,000 jobs of farm workers. In the seven years after entry—I am talking about 1980—there has been a smaller increase in productivity and a loss of 65,000 jobs of farm workers. Over 15 years, 120,000 farm workers have lost their jobs. A major contributor to those losses was the form of support that was employed. [HON. MEMBERS: "Nonsense".] I do not believe that we can have a healthy rural community when we replace workers on the land solely by commuters. I do not believe that an agricultural policy geared only to an end price is good for the community or the country or the farmers.
I leave the Minister with this final thought—
§ Mr. Buchanan-Smith
Will the hon. Gentleman explain the relevance of the policies of rating agricultural land that have been put forward and the benefit that that will bring to rural depopulation?
§ Mr. Buchan
I shall answer that point. Our argument on the rating of agricultural land is simple. It does not arise primarily from an agricultural policy; it arises from a 502 social need. Local authorities in rural areas have to bear big costs, because of distance, for water, sewerage, roads, schools, and so on. Nevertheless, the major element in that local authority is not rated to provide a proper cash basis. That cannot continue. If the country believes that rating relief should be given for farming, it should be borne not by that rural community but by the whole community. Therefore, in introducing rating to assist the local authority, the cost of rating to the farmer will be part of the reckoning in examining farm incomes centrally I wish that Conservative Members, instead of picking up points, would read the policy that I have written. It is all in the Labour Party programme. I think that it costs £2. No doubt it would do them a lot of good if they read it.
Ultimately, the common agricultural policy has not benefited even the farmers. It has benefited some farmers. The farmers who are rich and big have been made richer and bigger. If that were not so, the Minister should explain why, if the common agricultural policy is so efficient, farm incomes dropped by half in the four years leading up to 1981. In other words, some farmers are doing extremely well, but smaller farmers, particularly livestock farmers, have a declining income—and sometimes increasing costs because of the profits being made by others in cereals—and an increasing indebtedness. Farming income as a whole dropped by half in those four years, and indebtedness to the banks trebled. What an indictment—to have a policy which is suitable neither for the consumer nor for the taxpayer, and which at the end of the day is not suitable for the farmer.
§ Question put and agreed to.
§ Adjourned accordingly at seventeen minutes past Ten o' clock.