§ The Minister for Overseas Development (Mr. Chris Patten)
I beg to move,
That this House takes note of European Community Document No. 8705/86 on food aid policy and food aid management and the supplementary Explanatory Memorandum from the Overseas Development Administration of November 1986; endorses the view that reform of the European Community's food aid programme is necessary; and welcomes the United Kingdom's endeavours to ensure that food aid is better integrated with other forms of development assistance and is provided in ways that are primarily intended to meet the needs of recipient countries.I begin by welcoming the Scrutiny Committee's recommendation that the House should discuss these documents. The debate is extremely timely. Experience during the past four years since the existing framework regulation for Community food aid was introduced clearly shows the need for a further thorough review of its policy and management. Since the Commission submitted its formal proposal for a new framework regulation in July this year it has been possible, under the United Kingdom presidency, to make rapid and substantial progress towards the adoption of a text which, although not perfect, will I am confident, provide the basis for a great improvement in the future.
There are two documents for debate tonight; the original Commission proposal, and, attached to a supplementary explanatory memorandum dated November 1986, a revised text agreed at the Council of Development Ministers on 11 November. Before I deal with these, however, it may be helpful to the House if I briefly sketch in the background.
The Community food aid programme began in a small way in the mid-1960s, very much as an adjunct to the management of the common agricultural policy. It has grown steadily until, in 1985, its cost to the aid chapter of the European Community budget was some £333 million. The United Kingdom share, which is attributed to the British aid programme, was £77 million. Additional costs in the form of export restitution payments are met from the European agricultural guidance and guarantee fund. It is second only to the food aid programme of the United States in size and represents about one third of the Community's total expenditure on overseas aid. But it has not been easy to shed the influence of its origins. A high proportion of the programme has always been in the form of food for resale by the Governments of recipient countries, where it is especially difficult to protect the interests of local producers. Procurement procedures, tied to the operations of the common agricultural policy, have been slow and cumbersome.
At the time of its adoption in 1982 it was hoped that the previous regulation would go a long way towards meeting these criticisms, but that did not happen. Nor did a resolution passed by the Development Council in 1983, much of which was incorporated in the third Lomé convention signed the following year, have much effect. The European Court of Auditors produced a series of harshly critical reports focusing on slow deliveries and poor quality control. The famine in Africa in 1984–85 showed up the deficiencies of the present system, especially on the procurement side. The Community institutions 280 found it very difficult to react with the speed and flexibility then required. This was recognised by the Select Committee on Foreign Affairs in its report "Famine in Africa", which also supported the Government's broad approach on food aid policy. So it is clear that reform has been needed urgently.
I turn now to the documents before the House. The Commission's proposals are set out in document 8705/86. This was submitted to the Council and to the European Parliament in July this year. The stated aims of the Commission were, first, to link food aid more closely to other forms of European Community development aid; secondly, to deal with certain institutional problems concerning the 1982 regulation which have never been resolved with the European Parliament; thirdly, to base food aid on the part of the treaty of Rome concerned with the external relations of the Community, deleting the present reference to article 43, which governs the common agricultural policy; and fourthly, to strengthen the Commission's powers of implementation.
In practical terms, the main changes proposed by the Commission were to allow more triangular transactions, or the purchase of food in developing countries with surpluses rather than in the Community; to introduce a new procurement and transport procedure for food aid under the direct responsibility of the Commission; to change the form of the Food Aid Committee which considers individual allocations of food aid; and to remove from the Council the power to fix annual quantities.
The Government carefully considered those proposals, which were the outcome of a major effort of review and discussion within the Commission. As explained in our initial explanatory memorandum, we fully supported the objectives set by the Commission for the new regulation. However, we felt that the detailed proposals did not go far enough towards improving the developmental effectiveness of food aid, and the solutions put forward by the Commission to the institutional problems gave rise to some concern.
For those reasons, when detailed discussion of the text began in Brussels in September, the United Kingdom introduced a series of amendments aimed at broadly maintaining the status quo on institutional questions; at laying down clear operational guidelines on the developmental significance of food aid; at giving clear priority to emergency operations; at emphasising the financial implications for donors and recipients of food aid; and at liberalising further the possibility of purchase from outside the Community where this is cost effective.
Discussion on those amendments and on the amendments proposed by other member states continued during October and the early part of November. At the same time, the European Parliament played its part by producing its opinion on the Commission's draft with commendable rapidity and thoroughness, proposing 14 amendments. Almost all of them, except on the institutional issues to which I will refer later, have been accepted in part or entirely by the Council. The outcome of the deliberations is reflected in the text which is attached to the supplementary explanatory memorandum. This text was approved as a common position at the Development Council which I chaired on 11 November following several discussions with other EC Development Ministers. On two issues, the setting of annual quantities and the form of the Food Aid Committee, the Council's view differs from that 281 of the European Parliament which has, therefore, invoked the conciliation procedure, about which I will have more to say later.
First, I wish to explain briefly the main differences between the text on which the Council reached agreement and the original Commission proposal. These are set out in more detail in paragraph 2 of the supplementary explanatory memorandum but can be summarised as follows: the references to the need to ensure that food aid is better integrated with development policy have been strengthened throughout the text; the proposed limit on the overall level of triangular transactions has been dropped; major improvements have been made in article 6 dealing with emergencies; regular evaluation of significant food aid operations is provided for; it is proposed that the Council should continue to set annual quantities, although there was general agreement that these should be in conformity with budget appropriations, and that the present form of the Food Aid Committee should be maintained.
§ Mr. Stuart Holland (Vauxhall)
The Minister refers to the Council of Ministers. Does he mean Development Ministers? Is there not a meeting on Monday concerning this document and, therefore, is not its status only provisional? Will he clarify the matter for the House?
§ Mr. Patten
I shall come to next Monday and Tuesday's meeting of the Foreign Affairs Council. I am referring to a meeting of Development Ministers of the EC, at which I am pleased to say that we reached a common position on the text of the regulation. But, as the hon. Gentleman suggests, there is still a hurdle to clear next Monday and Tuesday.
The new text goes a long way towards meeting United Kingdom concerns. Of course it is not perfect. Other member states have different attitudes and different priorities. For example, we would have liked a cleaner break between food aid procurement and the common agricultural policy and even more clear-cut arrangements for purchase in developing countries. But we have made more progress than we expected in the relatively short time since the issue of the original Commission proposal—more progress than anyone seemed to think was possible a few months ago. I might add that it took nearly three and a half years rather than three and a half months to reach the corresponding position during the preparation of the 1982 regulation, which most hon. Members would regard as less than wholly satisfactory or adequate. It is important now that the momentum is maintained so that the new regulation can be adopted in time for the new policies and procedures to apply to the 1987 programme.
It is our intention—I come to the point made by the hon. Member for Vauxhall (Mr. Holland)—that conciliation with the Parliament on the two outstanding institutional issues should take place at the Foreign Affairs Council on 15 and 16 December, and I hope that the new regulation will be formally approved either at that meeting or as soon as possible afterwards. To do this would, of course, require good will and understanding from the European Parliament, from other member states and from the Commission. However, I am encouraged by the positive attitude and sense of urgency which has been shown so far by all parties, without which it would not have been possible to move so far so quickly.
The outstanding issues are of course important and complex. The main United Kingdom aim is to obtain early 282 agreement so that the new rules can come into force. The existing arrangements for aid committees, including the Food Aid Committee, are spelt out in more detail in a memorandum on European Community aid published by the Select Committee on Foreign Affairs earlier this year. We believe that, while it is important that the Commission should be given the necessary authority to manage the food aid programme effectively, it is equally important that member states should continue to be able to influence policy in an effective manner.
I conclude by repeating a point I made at the beginning of this speech. Everyone agrees that a new framework regulation for food aid is needed. The text before the House is not in every detail the text I would have drafted myself, but it is, I believe, a very considerable improvement on the 1982 regulation which it will replace. I am also sure that it can provide the basis for a better targeted, more relevant, more effective Community food aid programme in the future. The successful passage of this new regulation will be good news for the European Community but, above all, good news for the developing countries. It is a positive response to public pressures and concerns within Europe and to the anxieties expressed by some of the recipients. The progress that we have made can, without hyperbole, be properly regarded as one of the principal successes of our presidency of the Community.
§ Mr. Stuart Holland (Vauxhall)
The Minister was right to draw attention to the fact that these are potentially major reforms. However, they are still not firmly in place. As he has made plain, the EEC Council of Ministers has yet to approve the measures.
The Minister did not underline the extent to which the Council and the European Assembly disagree on two main points—which institution should have the power to set the actual quantities of food aid to be allocated, and the role of the Food Aid Committee of member states' representatives that examines individual food aid proposals from the EEC development directorate. Although these two issues are important in principle, we do not believe that they should be allowed to delay the adoption of the new food aid bill. However, they are important issues and the House will want to watch them carefully.
The European Assembly wants the Food Aid Committee to be an advisory committee. The Council wanted to have a veto on the lines of the procedures set out in article 8. That means that if any member state should challenge the proposal on the Council it could mean a delay of up to two months unless the aid was designated as emergency food aid. That very much qualifies the otherwise forward-looking provision that a 48-hour consultation procedure by telex should take place between Governments under the emergency food aid provision. Although under the measure food aid policy should be dissociated from the common agricultural policy and given more of a development emphasis, it by no means resolves all the fundamental problems in relation to food aid policy or food aid distribution. Several of these problems are unlikely to be solved by the new provision, even if it is adopted on Monday. Inasmuch as they cut the formal policy links with the CAP and increase the scope for purchases of food aid in the developing world, the changes are to be welcomed. The provision also emphasises the need to use food aid to promote food 283 production in the developing world rather than as a substitute for local production. But in practice, the issues are difficult.
Food aid should be used to help the hungry who cannot afford food, and for disaster relief. At present, only 10 per cent. of EEC aid is reserved for use in emergencies. The remaining 90 per cent. is divided into programme food aid that is often used by developing Governments to generate income by sales on the internal market through counterpart funds. It is also used in project food aid such as food-for-work schemes and nutritional feeding.
Much food aid therefore finds its way into sale on international markets. It clearly does not reach the destitute who need it, and it depresses food prices and therefore discourages local food production. Food aid is often inappropriate. Dairy products are the best example of that. Hon. Members do not need to be told about the hazards of milk powder, but a clean water supply is needed for the reconstitution of butter oil and milk powder, and that is rarely available in the developing world.
Food aid in such circumstances can be dangerous, especially to children. In spite of that, however, the EEC is committed to spending £163 million this year on dairy food aid. That is one third of the food aid budget. I stand to be corrected, but, as far as we can see, dairy food aid is not covered by the measure. I am sure that the House agrees that milk powder sales to the Third world should be stopped.
Food aid is almost always less effective than other forms of development aid. There is a strong case for saying that non-emergency food aid should be phased down rather than out, to be replaced by an equivalent amount of development aid to smallholder food production, which is the bread basket of much of the developing world.
The Minister spoke of seeking the support of the Select Committee on Foreign Affairs. In its report on famine in Africa, it stressed smallholder production. It is not clear that the EEC is proposing to phase out dairy or non-emergency food aid. Perhaps the Minister will say that he will fight that case. If so, we welcome that. Article 2(2) states that the Community's food aid shall be integrated as thoroughly as possible into the development policies and food strategies of the countries concerned. The EEC is laying great emphasis on the food strategy approach which as the Minister said, has been incorporated in the third Lomé convention under the heading of food security. Yet how food aid has inhibited development strategy is illustrated by the case of Mali, which has had a food aid agreement with the EEC since 1982. Food aid in Mali has been sold to generate counterpart funds, which have been used to increase cereals prices to local producers. The EEC appears to consider this an ideal example of the developmental use of food aid, but the food aid was supposed to be used only for a transitional period. In reality, Mali is the largest recipient of food aid in the Sahel, the increase having come only since the cereals policy was started in 1982. Food aid has risen from some 26,000 tonnes in 1981–82 to 90,000 tonnes in 1984–85.
I am not sure whether the Minister has had the opportunity to visit Mali, and I am sure that he would like to make that one of his first priorities. I had the opportunity to visit Mali. It is one of the poorest economies and societies in the world. It is situated on the edge of the Sahara and literally on the margins of survival.
284 I am sure that he would not wish to interpret my remarks as suggesting that we are claiming that, pending the development of greater economic viability in Malian agriculture, food aid should be stopped. But there is a grave dilemma, and the reality is that Mali also suffers from the cash crop syndrome. Food which has been produced for local consumption by smallholders has been diverted. The World Bank counts it as a success that Mali should be a food exporter. The reality is that Mali has debts like those of Chad, Niger or Burkina Faso, and that is the real problem. That debt could be written off from an accounting error of the World Bank and if that were pursued Mali would be in a much stronger position to pursue an effective food policy.
We are not saying that food aid should be removed in any circumstances, nor that food aid policy necessarily harms food production. Inversely, however, the planned withdrawal of food aid does not necessarily harm a food development programme.
In the mid 1960s the United States cut off cereal aid to India, but since then India has greatly increased cereal production so that imports are now unnecessary.
§ Mr. Holland
It is interesting that the Minister should take that up. It is not market prices which have had this effect. In India there is a minimal price support scheme which guarantees income for farmers. I am glad that the Minister made that point, because it is something to which I wish to address further remarks.
If one simply uses the market mechanism in rural development, one cannot guarantee a minimum income to farmers who are on the margins of existence. If one applies to farmers the principles of income support of the type that we have had in Britain, directly under the deficiency payment scheme and now indirectly, through the CAP, self-sufficiency in food production in many developing countries could be achieved.
I have cited two countries that are entirely different in scale, size, and organisational abilities—one of the most powerful countries in the developing world, India, and one of the weakest. But the principles are relevant to both. If there is to be a policy of increasing local sufficiency, one needs a policy of income support for farmers.
We display double standards when we say that there should be market forces at work in areas like sub-Saharan Africa, yet we do not expose our farmers to the rigours of market forces. A minimum price level should be supported in some of these developing countries. But they are not strong enough to do that. Therefore, either price support policies or income support for specified categories of farmers especially in the marginal dry areas, is the strategy which the EEC, with its considerable collective resources, should be adopting in its policies towards developing countries.
That would make much more sense of the regulations before the House. It would give a context and strategy for a transition to a different policy and make it feasible to consider phasing out non-emergency food aid over the longer term.
In balance of payment terms, non-emergency food aid is open to use or abuse as a political instrument, going far beyond conditionality or conditionality with a human face—to use the felicitous terms used earlier today. There are countries—it is not necessary to name them or to go 285 through the pack drill—where that has been the case. It is doubly damaging because it undermines the feasibility of sustained indigenous agriculture—including some medium-sized states in the Third world, not simply Mali and the sub-Sahara—and because it does nothing to remedy the underlying problems which are both agricultural production and debt.
The World Bank figures for debt in sub-Saharan Africa are about $85 billion, and others estimate that the real figure is about $120 billion to $130 billion. That needs tackling. It should not simply be a matter of development Ministers being responsible for development food aid policy or of food aid in relation to development. Finance Ministers should consider issues of the global debt crisis not only in terms of the costs and risks to British, United States or other banks in relation to developing countries, but also the terms of development.
The Minister has done well with the measure. He has been active, gone abroad and campaigned on it. We welcome that and congratulate him on it. But if he wants a real fight, he should carry the issues of debt and underdevelopment onto the agends of his colleagues in government and ensure that in foreign policy terms we can see a long-term relation between restructuring debt and enabling many of these countries to restructure their agriculture, rather than to continue with a food aid policy which is a back-door form of balance of payments support.
Certainly the above cases illustrate some problems that are likely to continue despite the new regulations. The real answer is, not only a long-term phasing out of non-emergency food aid, but new dimensions to development policy. If one pursues a rural development policy in, for example, sub-Saharan Africa, one is also pursuing a regional development policy. If one wants to ensure that out-reach agriculture and support systems reach those who otherwise come off the land into the capital cities, one needs a policy which encourages Governments willing to do it to ensure that skilled personnel are prepared to live in the out-reach centres and towns. That implies an education policy for those who are qualified to work there, support policies, and a development package in which agricultural development relates to regional development. Those are the types of policy that those countries need.
I am tempted to refer to the Foreign Secretary's speech in May in New York in which he referred to fitter and leaner administration and the cutting of public expenditure. I am happy to have fitter administrations and, certainly, if necessary, leaner administrations, but none of those countries in desperate food crisis in sub-Saharan Africa can pursue wide rural development policies by cutting public expenditure.
In that respect food aid policy should certainly be part of and not a substitute for development policy, and I am sure that this is something with which both sides of the House will concur.
§ Sir Philip Goodhart (Beckenham)
The distribution of food aid should be one of the EC's strongest points. In fact, it is an issue on which the Community in recent years has too often seemed to be mean and inept. Over the years, there have too often been physical and administrative delays in getting food to famine areas and in the end it always seems to be the Russian consumer who gets the biggest help from our food mountains.
286 I suspect that one reason for that paradox is that much greater attention is paid to the problem of how to try to stop our agricultural surpluses from accumulating in Europe than to thinking of sensible ways of distributing those surpluses.
Will the new proposals help to inject more vigour and imagination into our food aid programme? I share my hon. Friend the Minister's hope that that will be so and I congratulate him on bringing the policy forward.
One area in which the Community's food aid endeavours should be expanded is the provision of food aid to refugees. The Community should underwrite most of the food requirements of the United Nations High Commissioner for Refugees. So far this year, I am told, the Community has given £20 million in food aid to the High Commissioner, of which about £17 million has been allocated to help Afghan refugees.
That sounds like quite a lot of money, but it is not when one considers that there are 3 million Afghan refugees, so our food aid works out at just £5 per year per head, and that the £l7 million pays for only about one week of storing our residual food mountains. That £17 million is also very much less than the food subsidy that we give the Russians who are bombing the Afghans.
Article 6 of the document, which deals with emergencies, refers to food aid for refugees and our scope for giving food aid to the refugees seems to be hedged around with qualifications. Will the new Food Aid Committee even have the power to recommend that the Community programme of food aid for refugees should be much increased?
Will the new Food Aid Committee have the power to look at schemes for food aid for our people? Once upon a time the Community operated schemes which subsidised the sale of butter out of intervention stocks to some European consumers at Christmas. There was also a beef token scheme some years ago. But all those schemes were held to he uneconomic. Perhaps they were, but I note in passing that in 1987 the United States will spend some $17 billion on its food aid programme, through food stamps, for its own population. The new European Food Aid Committee will primarily be a management committee, but will it be empowered to try to work out a scheme for cut-price food for our own hospitals, nursing homes and pensioners at Christmas?
§ Mr. Andrew Rowe (Mid-Kent)
My hon. Friend is pursuing an interesting line of thought. One of the questions which he prompts in me is whether, as in America, he foresees a switch, as happens in some states, from direct cash benefit to people receiving benefits to a proportion spent on providing in kind, or is that too dangerous a path to tread?
§ Sir P. Goodhart
Not only is it a dangerous path but I should be out of order in treading it in this debate. Suffice it to say that I see it only as a bonus at Christmas and that we should work out longer-term programmes for assisting our hospitals and nursing homes.
Meanwhile, I continue to resent the absurd fact that the inhabitants of Moscow get more direct benefit from these food mountains than do my constituents. I only wish I was more confident that this instrument would help to put things right.
§ Mr. A. J. Beith (Berwick-upon-Tweed)
We broadly welcome the instrument and particularly the Government's efforts to improve it. It is much better than it was, and the Government deserve credit for knocking it into a shape which more reflects views held in all parts of the House about the food aid programme.
There are great dangers in the assumption, which is widespread—particularly among those who are not aware of some of the difficulties involved—that dumping large quantities of EC surplus food in very poor countries will save a situation when in reality it can make it much worse.
When I refer to the instrument having been improved, one must realise, to get that sense of improvement, what it was like before. It still contains, for example, references to "triangular operations," in which food is bought in a poor country to supply to another poor country, rather than supplying direct from the Community's food surplus.
An essential condition for making use of this opportunity of triangular operations is that it should be kept within limits which do not jeopardise the basic principle of mobilising on the Community market the products to be used for food aid. In other words, we must still make sure that they eat our surplus and not anything that they buy from, or which is produced in, another poor country. Having seen the earlier document, one appreciates that this provision is a piece of elegant backpedalling in an attempt to save face on the broad principle. However, the document has made an important concession, which we welcome.
The problem that underlies our debate is the fact that food aid frequently represents the supply of food—designed mainly to ease our surplus problems—into areas which would be helped more if they were encouraged to produce food and given a reasonable price at which to sell it.
In many cases, the value of the food being provided to a poor country would be better spent on improving facilities in that country. It must be galling for people in some countries to realise that the value of what is being given to them, if given in cash, could be spent more effectively on internal transportation and food production which would overcome their food problems for a much longer period.
Sometimes the food provided is inappropriate to local diet and need, especially when dealing with undernourished children, or it creates future diet expectations which the local economy cannot, and should not be attempting to, satisfy. It can also produce a dependence on food imports which is inimical to the development of the local agricultural economy. The views which I have expressed so far are firmly held within the ODA, which has expressed them on many occasions.
Food aid has a valuable part to play in emergencies, disasters and crises where a short-term benefit is sought. But such emergency aid must be provided efficiently, and several hon. Members have pointed out that the record on that is not all that good either. Food has not got to where it has been needed quickly and efficiently enough.
The hon. Member for Beckenham (Sir P. Goodhart) referred to Afghan refugees. Whereas in that and similar situations it is legitimate to use our food surplus to good 288 effect, we must not allow our aid policy to be distorted as the by-product of an agricultural policy which is going deeper into chaos.
The root of the problem is that we have a common agricultural policy that is producing large surpluses. It is no part of our development aid policy merely to devise a means of getting rid of the embarrassment that the surpluses are causing. We must not let an important aspect of development policy simply become a means of concealing that embarrassment; that is what this is really all about. Unless 12 nations and different political parties within those nations face up to that problem and deal with it, there is no way in which development needs can overcome their difficulties for them or provide them with a way out of these difficulties.
There is a legitimate case for having some surplus food within the European community in order to deal with possible disasters or harvest failures. There is no argument against having limited food surpluses and there are uses to which such surpluses can be put in emergencies or disasters. However, the generation of surpluses is so large that we look round in desperation to see what to do with them. That cannot be morally justified. It leads us to the absurdity of selling surpluses off cheaply to the Soviet Union or allowing the food to be stored and to rot and degrade while in store. That is clearly what has happened to intervention beef. That cannot be justified.
§ Mr. Beith
I am glad that my hon. Friend the Member for Brecon and Radnor (Mr. Livsey), who speaks for the alliance on agriculture, is here, sharing our concern.
Clearly, when we are looking at what to do with the surpluses, we must look at some of the means available to use them within our own economy, not as an act of selfishness against people in under-developed countries, but because there are some circumstances in which we can usefully make butter available to pensioners, hospitals and schools in our country. There are limits to that, especially at a time when most health authorities are trying to encourage patients to eat less fat and to wean them off the eating of large quantities of butter. We are now dealing with surpluses for which there is no appropriate use in our economy or anybody elses.
At the same time the CAP, which is giving us the surpluses we are trying to get rid of, is directly affecting the economies of the countries to which the food aid is directed. It is affecting the prices they can obtain for their own foodstuffs—the market price of the basic commodities they produce and their ability to sell in our markets, which is traditionally how they earn their living. The classic example of that is sugar; we all know the history of what happened to the main sugar producers.
The root of the problem, as I have said, is the common agricultural policy. We would not be discussing the food aid programme tonight if it had not been devised as a means of getting rid of the surplus by-products of the CAP. We would no doubt be engaged in other debates such as looking at whether Europe could meet certain disaster needs. We would not be looking for ways of offloading in various parts of the world surpluses which have been created by a process which is, in part, harmful to economies of the Third world. That problem must be tackled by any and all of the Governments of Europe. The food aid activities in which Europe engages must be 289 assessed for their value as a development aid and must never become subordinate to the despair which is indicated throughout Europe by the present state of the CAP.
§ Sir John Osborn (Sheffield, Hallam)
I was a member of the European Parliament's Committee on Development and Co-operation some 10 years ago. I operated Lomé 1 and was involved in renegotiating Lomé 2. I have perused the working documents, especially A2-201/85 published on 14 January, and the work of the Committee. I have noted the names of the people who supported it. I have also perused the document before us. Article 2 is very strong. It states that the objective shall beto raise the standard of nutrition of the recipient population, to help in emergencies".Paragraph 4 states:The grant of food aid shall, if necessary, be conditional on the implementation of annual or multiannual development projects".I have heard my hon. Friend the Minister make speeches on this subject. I have no hesitation in supporting the motion. I should like to know how it will strengthen his hand.
I welcome the decision on 11 November by the European Community's Development Ministers to change the way in which Common Market development aid is administered. I, too, welcome the leading role played by my hon. Friend the Minister. I shall watch with interest what happens at the Foreign Minister's meeting next week. That food aid should be given in a controlled way, together with other development aid, to enable the Third world countries to use their resources in the best possible way to develop their agricultural economies is a great advance. As has been said, it should not be used as a means of disposing of food surpluses as a result of the common agricultural policy.
This spring, Sir Henry Plumb took part in a Council of Europe seminar in Switzerland on the subject "Agriculture 2000". I have looked at the report of the summit meeting of the Organisation of African Unity which took place in July. Bodies such as the OAU, the Economic Commission for Africa and the African Development Bank have acknowledged that many of the problems encountered by African Governments have been of their own making. They admit to extensive corruption, inefficiently run state enterprises, depressed performance in agriculture and the lack of incentives to the private sector. The summit meeting expressd a determination for self-sufficiency—a point that was touched on when my right hon. and learned Friend the Foreign Secretary was in New York. These are all issues in which the Community is providing a part of the necessary help.
I am chairman of the sub-committee of the Council of Europe's Economic Affairs and Development Committee which has been working on these matters and called "North and South Europe's Role". It has been responsible for setting up a public awareness campaign which will run in 1988. The campaign's themes are, broadly, interdependence and solidarity and will apply between all developed and developing countries, but especially Europe and Africa. The European Parliament's Committee on Development and Co-operation is assisting in the campaign.
The motion refers to this country'sendeavours to ensure that food aid is better integrated in other forms of development assistance".290 One such form of assistance could be the fostering of the private sector in Third world countries so that they can better help themselves. My hon. Friend the Minister for Overseas Development, the hon. Member for Vauxhall (Mr. Holland) and I attended a few weeks ago in London a meeting of the Committee on Development and Co-operation of the European Parliament. Sir Henry Plumb had expressed his views on our aims. We are all striving for the same object. We realise that Europe working together can achieve more than it will if there is disorientation. One suggestion—to direct some of the funds that are spend on aid programmes not into indebtedness but into investment—has been put forward by the World Bank, and I welcome the fact that encouraging investment featured in the Queen's Speech. I hope that we shall move forward.
I could say much more, but this is a short debate. The motion is positive. I hope that the outcome will be a positive European contribution in an area that must be the responsibility of all developing Countries. The work of the Council of Europe leads me to look to the World Bank, the DAC and the Organisation for Economic Co-operation and development. I hope that my hon. Friend the Minister will feel that his hand has been strengthened by the resolution of the House.
§ 11.4 pm
§ Mr. Stephen Dorrell (Loughborough)
I join the chorus of approbation of my hon. Friend the Minister for Overseas Development. He is to be congratulated for having cajoled or charmed his colleagues in the European Community's Council of Ministers into agreeing this draft regulation much more quickly than any of his predecessors were able to do. The intention that emerged from a meeting of the European Community's Development Ministers reflects major improvements in the Community's food aid programme. They include the divorce of food aid from its link with the common agricultural policy, the commitment to integrate food aid more clearly with the development programmes of the recipient countries, the commitment to better administration, the freeing of triangular deals and the commitment to make the system more flexible and more closely attuned to the development requirements of the recipient countries. Those improvements are long overdue and very welcome.
My purpose in rising to speak is to ask my hon. Friend to suggest that his colleagues in the Council of Ministers should take the initiative, or he should take the initiative himself and follow through the logic of all that. It is not enough to say that food aid should not be regarded simply as the disposal of CAP surpluses. We should ask ourselves what developmental purpose can properly be served by food aid. The Community has not yet addressed the answer to that question with sufficient honesty.
All of us agree that food aid has an important part to play in disaster relief. However, as the hon. Member for Vauxhall (Mr. Holland) pointed out, food aid constitutes only 10 per cent. of the Community's food aid programme—roughly £35 million. The Community is still spending £300 million on food aid that has nothing whatever to do with disasters or refugees. It is surely legitimate to ask what that money is being spent on, or what is the guiding principle that we are trying to establish by spending that money.
291 Anybody who looks, even in the most cursory way, at food aid must conclude that it is a very dangerous commodity. It is rather like a drug. It is too easily seen in Europe as a quick fix to sort out some of the CAP's problems. Much more seriously, it induces in developing countries a dependency upon imports either from rich countries or from other poor countries that are financed by rich countries, a dependency that developing countries cannot, by any stretch of the imagination, afford. If that is the danger of food aid, and if we are conscious of the fact that that is the danger, however well intentioned, it has potentially very dangerous consequences for the economic and social structure of the recipient countries.
The Community owes it both to the electorate who are paying for this £300 million programme, divorced from disaster relief, and to the recipient country to make clear what integrating food aid into a clear development plan means. Anybody who examines development must accept that any sound development programme has to concentrate, among other things, on the promotion of local production of agricultural products and on the promotion of an agriculturally based development programme. That must mean, within the relatively short term, phasing down the food aid programme and using the money for more specific developmental functions within the recipient countries.
The hon. Member for Vauxhall addressed this issue but was anxious to stress that he did not think that food aid should be removed overnight. If food aid is potentially dangerous and induces a state of dependency, we have to recognise that the discipline of withdrawing food aid in certain cases, although it may not be an easy or a particularly attractive option, may have a role to play.
§ Mr. Stuart Holland
I said twice that I thought food aid ought to be phased down in relation to development policies for agriculture, especially in marginal areas. I said that quite clearly and I would not wish to be misunderstood. I said that I did not recommend that it should be phased out, because if one takes somebody off drugs overnight the result may be disastrous.
§ Mr. Dorrell
I am grateful to the hon. Gentleman for clarifying what he said, but that still does not invalidate the gloss that I sought to put on what he said, that we must recognise that the commitment to phase out food aid may well be a discipline to be imposed on the recipient country within a time scale in which it is entirely reasonable to expect that country to increase its own domestic production.
One of the great fallacies that many of our electorates believe is that recipient countries of food aid, developing countries, are in some sense unable to feed themselves. With proper development programmes they would be well able to feed themselves and some of the countries that run the biggest deficits are well endowed by nature and well able to to provide for their own food needs in the forseeable future.
Perhaps my hon. Friend will address his mind to the role that food aid plays in his development policy. I should like to draw his attention to an article that he wrote in The Sunday Times on 9 November, in which he said:We also believe that food aid proposals, outside famine emergencies, should be thoroughly examined so that they make financial and developmental sense.292 That is absolutely right. He went on to say:They should help, not hinder, local producers.How does he see food imports—because that is what we are talking about—helping rather than hindering local producers of food? That is the guts of my question.
Like the hon. Member for Vauxhall I do not argue for the immediate withdrawal of food aid, but we need to see a structured programme for its reduction. Still less do I argue for a reduction of European Community development assistance in total. I am arguing that we spend £300 million on this programme and in general it is not well spent. We need to think about how it could be better spent.
§ Mr. Chris Patten
I have had the pleasure today of listening twice to the hon. Member for Vauxhall (Mr. Holland). I hope that it will not worry him too much if I say that once again I found myself in agreement with a great deal of what he said.
§ Mr. Patten
I hope that reselection is out of the way.
Perhaps I should clarify the position in which we now find ourselves. The Community has settled its food aid policy. However, there are two institutional questions that remain to be resolved. I do not underestimate the difficulty of trying to resolve them, but I hope that it proves possible to reach a satisfactory conclusion next week and to engage in a process of conciliation with the European Parliament that will produce the results to which we all hope conciliation will lead.
The hon. Member for Vauxhall gave an admirable criticism of the way in which food aid is sometimes operated, and his speech contained much with which I am in agreement. I have said much the same things myself from time to time in a number of widely unreported speeches. I have no doubt that the result of the regulation on which the Council arrived at a common position last month will lead to greater integration of food aid development policy.
The hon. Gentleman asked about two specific issues. He inquired whether dairy food was covered. I assure him that it is, and that under the regulation the same criteria will have to apply to dairy food aid as applies to other products. The hon. Gentleman eloquently posed the Mali dilemma. I am glad to say that in 1986 the European Community decided, with our strong support, to provide cash from its food aid budget to stimulate local food production rather than flood developing countries with European surplus products.
My hon. Friend the Member for Beckenham (Sir P. Goodhart) made an interesting contribution to the debate. I should point out that the regulation is about the contribution to developing countries. Thanks to the economic policies pursued by the Government over the past seven years, we have not continued our descent to developing country status. My hon. Friend asked whether the new proposals would inject new vigour into the emergency distribution of food aid. I can assure him that they will. He asked also about food aid for refugees. The European Community annually provides substantial quantities of food to the United Nations High 293 Commissioner for Refugees as well as cash from a European Community budget line specifically for aid to refugees.
I also recently approved an allocation of nearly £3 million in British food aid to help the UNHCR's programme in the Sudan. We have chosen to help Afghan refugees largely with cash. So far, we have contributed about £40 million to Afghan refugees. When I was in Peshawar two weeks ago, I announced the contribution of a further £3.5 million to the UNHCR. I commend everything that my hon. Friend said about Afghan refugees. I hope that in the next months and years we shall be able to demonstrate that we are alive to our international obligations towards the 3 million refugees who have been driven from their country by Soviet weapons. In addition to cash aid to Afghan refugees, we also provide substantial quantities of food aid through the UNHCR.
The hon. Member for Berwick-upon-Tweed (Mr. Beith), like the hon. Member for Vauxhall, set out a number of criticisms of existing food aid policies. I am in substantial agreement. Of course I accept—I have said as much—that we should not allow food aid to provide a spurious moral justification for the creation of surpluses in the United States or in Europe. I have made that point again and again, not only in this country, but in meetings with my colleagues, the Development Ministers from other countries, but the problem of surpluses and the adequate use of food aid are different matters. They require different solutions. To some extent, the fact that they have been linked so often in discussions has prevented the clarity of view that is necessary to solve the problem of surpluses.
§ Mr. Stuart Holland
I am sure that the House will welcome a counter-soporific intervention at this stage of the debate. How does the Minister argue that point? Surely it is clear that when there are surpluses on so sizeable a scale there is pressure for their disposal rather than destruction? It serves the farm lobby in Europe well for there to be this PR exercise, in that there is food aid to developing countries rather than butter being sold at 3p a pound to the Soviet Union, or food being destroyed. If the Minister cannot grant that fact now, will he go deeper into the undergrowth of the farm lobby? It is a widely held view. I am sorry to find that he does not share it.
§ Mr. Patten
I was not aware that I made that point. I assure that hon. Gentleman that, on this issue, I speak with all the courage of an hon. Member who has two farms in his constituency. I thought I had just said that we should not allow food aid policy to provide a spurious, specious moral justification for running up surpluses. Food aid policy has to some extent disguised what we need to do to reduce those surpluses. I find wholly convincing the arguments which the World Bank advanced about the cost to developed and developing countries of illiberal agricultural trading policies and substantial state aids, which all too often disfigure our policies in Europe and North America. I am extremely pleased that on that issue this Government and this country have been so substantially on the side of the angels.
§ Mr. Beith
Speaking as one who has many farmers in his constituency, I hope the Minister will accept that 294 farmers are well aware of the dangers posed by the policy. It is certainly not any part of the lobbying done by farmers in this country to argue that it is a good thing to maintain food surpluses because one could always give them away to the Third world. On the contrary, farmers in this country and their representative body, the National Farmers Union, are actively looking for ways of ending the production of surpluses.
§ Mr. Patten
I said that I was pleased that this Government and this country are, on the whole, on the side of the angels. I am delighted to have confirmation from the hon. Gentleman that the farmers are positively angelic as well.
My hon. Friend the Member for Sheffield, Hallam (Sir J. Osborn) said several kind things, for which I am extremely grateful. I know that his knowledge of these matters begins more or less where mine ends, and that he has laboured in this vineyard for several years. I shall be as interested as he said he would be in what happens at the Foreign Affairs Council next Monday and Tuesday. I also agree with what he said about the importance of encouraging the private sector. I hope that shortly we shall be able to announce ways in which we can do that in Nigeria, for the agriculture industry there. I trust that in future we shall be able to do it in other countries, where we have bilateral programmes.
My hon. Friend the Member for Loughborough (Mr. Dorrell), in the final speech of this short but interesting debate, said a few kind things about me as well. He and I ran some joint charm campaigns in the past, in which, alas, we were not as successful as both of us might have liked. Nevertheless, we both survived, in a manner of speaking. I hope that, having survived, I shall be able to respond to my hon. Friend's challenge and articulate more explicitly the developmental objectives of food aid.
I endorse the point made by my hon. Friend, that food aid can be a dangerous drug on which both donors and recipients get hooked. I remind him that the European Community agreed about two years ago, following persuasion by my distinguished predecessor, a regulation allowing substitution actions, that is, providing cash from the food aid budget instead of food at the request of the recipient country. If one looks at our bilateral food aid programme, one sees several examples of food aid being used in a sensible developmental way. That is happening with the export of 7,000 tonnes of Kenyan maize to Ethiopia, and with the 7,000 tonnes of Zimbabwean maize that is at present going to Mozambique.
With the approbation of the House ringing in our ears, for a change, we shall set off with due humility to Brussels next week, and to the next round of this important battle.
§ Question put and agreed to.
That this House takes note of European Community Document No. 8705/86 on food aid policy and food aid management and the supplementary Explanatory Memorandum from the Overseas Development Administration of November 1986; endorses the view that reform of the European Community's food aid programme is necessary; and welcomes the United Kingdom's endeavours to ensure that food aid is better integrated with other forms of development assistance and is provided in ways that are primarily intended to meet the needs of recipient countries.