HC Deb 14 July 1986 vol 101 cc694-733

4.5 pm

Mr. Andy Stewart (Sherwood)

I beg to move, That this House notes the uncertainty felt by agricultural and related industries due to the need to reduce the production of commodities in surplus, and the problems that reduction in agricultural activity and employment can cause to the rural economy and rural infrastructure generally; and urges the Government to set out its policy towards agriculture and the rural economy in a White Paper or similar document. Last week, my hon. Friend the Member for Lincoln (Mr. Carlisle) remarked that if an hon. Member was lucky enough to win a ballot allowing him to introduce a motion, he would become a statistic. Having won a similar ballot 18 months ago, I suppose that I am a statistic twice over. Some would say that I am lucky. Indeed, Mr. Speaker, I must be extremely lucky winning two ballots and representing England's most famous constituency, with its renowned coalfield, agriculture and heritage.

Today's debate on agriculture and the rural economy is timely because Britain and our European partners, along with the other major food-producing nations, face a surplus of unwanted food. The production record of British farmers during the past 45 years is unrivalled by any other industry in this country. Can any hon. Member honestly say that 10 years ago he would have predicted this crisis of over-production? Today our vital agriculture industry is marking time at the crossroads, waiting patiently for a directive from the Minister, on which road to follow.

Looking beyond today, what will we see? Will there be production quotas for farm products in surplus or will we see land set aside, or alternative uses? Perhaps a lower input system of farming will be considered alongside the demand for organically produced food. My hon. Friend the Parliamentary Secretary need only remember one thing in making a decision and that is to sustain farmers' incomes at a viable level.

Last year's 43 per cent. fall in net farm income brought 20 per cent. of British farmers to near bankruptcy. That must not be repeated unless we wish to see the complete destruction of the rural economy and ancillary industries. Many of those industries, especially the machinery manufacturers, are already suffering through lack of orders. This, plus agriculture's uncertain future, could threaten the jobs of the 800,000 people employed in the supply and processing industries, which are largely dependent on agriculture for their inputs or outputs.

The traumatically imposed milk quotas in 1984 clearly showed the dangers to our ancillary industries by the closures of creameries in the traditional dairying parts of Britain with the resulting loss of jobs. The dairy industry — the farmers and manufacturers — is dreading the consequences of a further 3 per cent. cut in milk production. The European Community buying-in programme at 18p a litre will meet a lack of response. Why sell one's right to a steady income when the alternatives are in surplus? I hope that my hon. Friend the Minister recognises that and ups the figure to at least 27p per litre. That will have the required effect and give the Minister an additional quota to redistribute among the small and medium-sized dairy farmers hardest hit by the imposition of dairy quotas in 1984.

For grassland farmers, the alternatives will possibly be beef or sheep production, but with the review of the variable premium scheme — which is under discussion and on which the outcome is uncertain—this is not the time for such farmers to make a fundamental change in farming practice. During the past three years' Community price-fixing negotiations, our variable scheme has been protected by the Minister, but at what cost to the other commodity sectors?

In the subsequent trade-off, the imposition and acceptance of milk quotas by some member countries was achieved only after accepting some of our production quota in return for Britain's retention of the variable premium scheme. Does my right hon. Friend intend the results of the beef and sheepmeat review to become a permanent feature of the common agricultural policy instead of accepting the trade-off with our partners, who know only too well of our commitment to this scheme, which gives consumers the advantage of cheaper lamb and beef instead of putting it into further store?

The problems of agriculture are not confined to the livestock sector, but face the arable farmers as well. Cereal over-production is currently being pursued by a lower price mechanism; a 20 per cent. price reduction during the past two years has resulted in increased yields compensating the loss in price. That has exacerbated the problem. In addition, we have the iniquitous 3 per cent. co-responsibility levy, introduced on 1 July. A similar levy on milk production failed miserably, so why compound the failure rate — or is it, as producers suspect, the means of sustaining the gravy train for the fat cats accommodated in Brussels?

I can tell my hon. Friend the Parliamentary Secretary that farmers prefer an honest, straightforward price reduction that can be understood and seen to be fair throughout the Community. The present confusion in the cereals market as to who should be paying the levy is only the beginning of another sorry saga, part of which was revealed last week when the Commission decided that Scottish farmers rolling their own oats for making porridge would be subject to the levy. First it was whisky, now it is porridge, and before December we shall have a levy on catching haggis.

The Minister must surely recognise by now that the only way to contain the cereal mountain is by quota or annual licence. It is madness to spend on storage money intended for producers. Simple common sense tells me that we can pay farmers more for producing less, thus eliminating the storage charges and have millions of pounds left over to pay farmers to go into other types of farming, instead of paying farmers to go out of certain products, which then upsets those traditional producers and markets. The inability of the EEC to manage the common agricultural policy properly and efficiently has brought agriculture into disrepute with British taxpayers, and will eventually see the end of the CAP in its present form.

I now refer to the subject of sugar beet and the important matter of the future of the United Kingdom sugar industry, currently being considered by the Monopolies and Mergers Commission. While I do not wish to comment on the British Sugar ownership issue itself, other than to say that I see an overall benefit in EEC terms in a unified United Kingdom sugar industry, I want to speak on the position of beet growers, whatever the eventual outcome of the present situation. Given any practical solution that I can foresee, our 11,600 beet growers will still be selling their beet to a monopoly processor. They have no other outlet for their beet, which is a vital break crop in the arable rotation, and vital also to the many people associated with its production cycle.

That, of course, has been the situation ever since the Government divested themselves of their shareholding in the original British Sugar Corporation some six years ago. My beet-growing constituents tell me that the generally harmonious relationship that they have subsequently enjoyed with the present owners, S. and W. Beresford, was largely based on a series of undertakings offered by Beresford at the time, to both the Ministry of Agriculture, Fisheries and Food, and to growers through the National Farmers Union.

However, other than an undertaking to operate British Sugar as a separate business within the Beresford group, those undertaking have no legal basis, and as things now stand, any new owner of British Sugar could change those arrangements substantially, with growers powerless to stop them. That possibility could represent an intolerable abuse of a monopoly position, and it can be resolved only by those same undertakings, details of which I understand have already been submitted by the NFU in its evidence to the MMC, being incorporated as legally binding on whomsoever eventually gains control of British Sugar. Only in that way will the legitimate long-term rights and interests of beet growers and those who work in the processing factories be adequately safeguarded and protected.

While growing food will remain the prime job of the farmer, food production is not the only demand that the public have of the countryside. We need to create income and jobs through a network of small businesses in the rural communities. There are opportunities, to be developed by farmers, providing facilities for tourism, recreation, and farm shops based on the existing farm businesses. Farmers represent a large proportion of established rural businesses and as such have a head start in seizing a wide range of new business opportunities in the countryside. Those opportunities will lead to a requirement for more Government support in the form of development and advice. I am sure that we have the right vehicle for that through our Agricultural and Development Advisory Service. The initial message surely must be to diversify and prosper.

Agriculture in England and Wales is faced not only with short-term economic problems but with long-term uncertainty. I accept that the Government cannot make individual decisions on cropping and stocking for 200,000 farmers, but such decisions are heavily influenced by Government policy. I believe that it is reasonable for the Government now to give farmers a clear lead as to the direction in which they will be expected to go in future.

4.17 pm
The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Peggy Fenner)

I congratulate my hon. Friend the Member for Sherwood (Mr. Stewart) on the choice of motion for this afternoon's debate. He has chosen an important issue. I can see that a large number of hon. Members wish to speak on it.

I start by assuring my hon. Friend that the Government fully recognise the pressures that, the farming industry is facing, and the challenge that they present. In the main, as my hon. Friend admitted, those pressures flow from the need to control the production of commodities in surplus within the Community, as the motion recognises. The problem has arisen as a result of the success of agriculture in applying advances in technology and techniques. That has happened not just in Europe, but around the world, so that countries such as India and China, which once appeared to be large export markets, are now self-sufficient or even exporting.

Europe's surpluses are a major burden on the Community budget. The stocks include: almost 18 million tonnes of cereals, 1.2 million tonnes of butter, 800,000 tonnes of skimmed milk powder, and 600,000 tonnes of beef. The Community cannot afford to allow the surpluses to continue. The budgetary cost, the problems of disposal and the adverse effect on our relations with third countries all make it essential that we bring supply into better balance with demand. That is now being widely recognised throughout the Community. At its recent meeting in The Hague, the European Council agreed that the Community must continue to adapt the CAP to the changed circumstances". The Council continued: a better control of total production must be ensured so that it is better adjusted to the market situation with the result that the share of public expenditure claimed by agriculture can be reduced". These views of the European Council will be important in the approach which the Community adopts to the CAP in the coming weeks and months.

The pricefixing this year has sustained the tough measures which started with milk quotas in 1984, followed by restraint on wine in 1985, and now cereals where support for feedwheat has fallen by as much as 7 per cent. and where a co-responsibility levy is being applied. Year by year, support prices in real terms have been cut—on average by more than 3 per cent. a year in the past three years.

Mr. Robert Maclennan (Caithness and Sutherland)

When will the Government bring to the House the order under which we shall have the opportunity to debate in detail the co-responsibility levy on cereals? Why has the matter been put off so long when there is great uncertainty about how it is to be operated?

Mrs. Fenner

When answering questions last week, my right hon. Friend said that it will be brought forward just as soon as possible. The EC directive was ambiguous. Until it is clearer, we cannot bring it to the House.

The price fixing also included tough measures for other commodities with cuts for products such as olive oil, tobacco and fruit, which are a charge on the Community budget ranging up to 7 per cent. Taking all of the changes to support measures into account, expenditure this year was reduced by 320 million ecu or about £200 million, and next year by 457 million ecu, or £286 million.

At the same time, we ensured that United Kingdom producers had the benefit of modest green pound devaluations, and we avoided discriminatory limits on the beef and ewe premiums and discriminatory exemptions on the cereals co-responsibility levy.

We want to ensure that our farmers can continue to prosper from their own efforts and enterprises. Our continuing commitment to agriculture is demonstrated by the positive steps we take, including spending £2.2 billion on agricultural support last year and introducing substantial improvements in the hill livestock compensatory amounts arrangements. We have extended the scheme to pay HLCAs to farmers in the new less-favoured areas for the first time. I know that that has been of considerable help to farmers in the marginal areas. We have also this year increased overall HLCA payments by some 11 per cent. Total Government support in this financial year is expected to be about £110 million throughout the United Kingdom. This is a very significant contribution to ensuring the continuation of livestock farming in the hill and upland areas, thereby helping to sustain the rural economy.

We took special action last year by making available some £16.9 million to assist those livestock farmers who had been most seriously affected by the exceptionally bad summer weather. As a result, suckler cow and sheep producers in many parts of the less favoured areas and dairy farmers in certain more limited areas benefited from a significant injection of cash to help them through the winter. We have also sustained the variable premium scheme for beef.

Mr. Charles Kennedy (Ross, Cromarty and Skye)

The Minister has detailed the Government's spending record, but does she agree that, at the end of this financial year, less will have been put into agriculture than last year? Will she take this opportunity to answer the important point raised by the hon. Member for Sherwood (Mr. Stewart), who said that it is important for the development of agriculture that as much advantage as possible should be taken of research and advisory services? How do the Government hope to sustain agriculture in marginal areas such as mine when they are introducing a charging system for advice for the very marginal farmers who need it most? Surely that flies in the face of what she has just argued.

Mrs. Fenner

Perhaps I might develop my argument in support of the Government's commitment to agriculture and pursue the hon. Gentleman's comments on research and development a little later.

As my hon. Friend the Member for Sherwood said, the measures that I have outlined did not prevent farm income falling by 43 per cent. last year, but that was mainly the result of the bad weather, and it followed an increase of 35 per cent. in 1984 when we had exceptionally good weather. We do not pretend that agriculture is having an easy time, but the need to change has to be faced and we are only part way into the readjustments which are needed.

Farmers everywhere—in Europe, in the USA and in other major producing countries—face the same need for change. Our farmers must play their part, but we will not accept measures which discriminate against us because our industry is efficient. We believe that, with a fair application of restraint measures, our agriculture will respond with vigour and continue to prosper.

We recognise that price policy alone is not enough in securing the necessary adjustments. This is why we want to have the idea of taking cereals land out of production fully examined within the Community. That could help to speed the necessary changes and help the producers worst affected by price restraint.

We already help farming to adapt to new and changing circumstances through the farm capital grant schemes. That support has been continued in substantial form in the present agriculture improvement scheme, which we introduced last autumn and which puts emphasis on helping smaller farmers and farmers in the less-favoured areas.

An important new strand in our policy for securing the future of farming—and one which recognises the strong link between agriculture and the rural economy—is, of course, that of farm diversification. The new agriculture improvement scheme already incorporates a totally new grant for farm tourism and craft investments. This grant covers a wide range of projects from tourism and recreation to crafts and light industry in the less-favoured areas. It is based on the premise that farmers possess the buildings, land and collateral which can be developed to the benefit of the rural community as a whole. This aid is backed by advice from the ADAS socio-economic group.

The recent debates on the Agriculture Bill have also shown that there is very strong support for the idea of aid for an even wider range of ancillary farm-based businesses. The Government have recognised that support, and responded to it positively by introducing their own amendment to the Bill which would permit Agriculture Ministers to make grants towards ancillary businesses defined by order. I very much hope that the availability of such a power will provide a valuable extension of our support for farming and the rural economy.

Sir Paull Hawkins (Norfolk, South-West)

Can my hon. Friend assure me that, even if research is cut in some areas, that into alternative crops will be stepped up? We may find, for example, that converting areas from wheat growing into woodland might produce a saving by the time that storage costs and the cost of maintaining woodlands have been. calculated. We should also consider land for industrial uses. Crops for plastics, for example, might not be wanted at the moment, but will my hon. Friend at least assure me that research into such matters will be stepped up?

Mrs. Fenner

We shall rely on the advice of the priorities board, which is establishing priorities for research. The Centre for Agricultural Strategy recently had an interesting seminar which we supported. The priorities board will take account of alternative uses of land.

We must avoid putting unnecessary impediments in the way of farmers who wish to diversify. I have mentioned our amendment to the Agriculture Bill concerning ancillary services. Indeed, my right hon. Friend the Secretary of State for the Environment has taken very positive steps to encourage local planning authorities to consider sympathetically applications to use redundant farm buildings for minor industrial and craft purposes that are compatible with rural surroundings. This is a further valuable contribution to our overall efforts towards the diversification of farm incomes, and the strengthening of the rural economy generally.

Further opportunities for farm diversification are being explored. My Department is sponsoring considerable research in this area. As I have said, we recently funded a most successful seminar organised by the Centre for Agricultural Strategy, which considered a range of alternatives to existing systems of agricultural production. The results of this seminar are now publicly available.

My hon. Friend referred to forestry and farm woodlands. These are one of the more promising alternatives. For this reason, late last year we issued for consultation a report by officials on the potential for "Woodland as a Farm Crop". Since then the EC Commission has produced its own consultation paper on forestry measures, and the NFU has issued a policy paper under the heading "Farming Trees". This indicates the strong and still growing interest in the possibilities for the expansion of forestry on farms.

The main problem is that the income that trees produce is not likely to be available until perhaps 50 years or more after planting. The difficulty lies in finding some means of bridging this gap. But at the same time, it may be more cost effective to encourage farm woodlands and timber production than to maintain land in agriculture. This is an issue to which we are giving the closest attention, as we fully recognise the economic and — particularly in the case of broadleaves — the environmental benefits that can flow from an increase in farm woodlands.

Agriculture, of course, forms a key part of the rural economy, and its continued strength is therefore of great importance in this respect. But additional support for rural communities generally is provided through the Development Commission, for which my right hon. Friend the Secretary of State for the Environment has responsibility. The work of the Commission has assumed even greater significance at a time of uncertainty for agriculture, when new job opportunities are now needed more than ever.

The Development Commission has a wide range of activities, ranging from small factory and workshop construction to provision of grants for the conversion of redundant buildings. It also offers a range of advice, training and assistance to small firms. This activity is backed up by a range of social policies to promote self-help through community and voluntary work.

Some rural areas have a greater concentration and range of problems than others, and that is why nearly 80 per cent. of the Commission's resources are directed to the rural development areas which were designated in 1984. Over the past year, the Commission has launched a coordinated approach towards the problems in these areas in close consultation with local agencies. In recognition of this valuable work—I hope that my hon. Friend will be reassured of this additional work which makes a contribution to the rural economy—the funds available to the Development Commission have been substantially increased over the past two years from £21 million to £29 million.

Of course, our policy for agriculture and the rural economy generally must take account of the need to conserve the countryside. It is vital to care for the countryside, its landscape and its wildlife, not only for the people who live and work there but for the millions of visitors who enjoy the countryside on a pleasant day out or on holiday.

The countryside is what it is because of the activities of generations of farmers. It is a managed countryside in which agriculture plays the leading role. We are therefore committed to striking the right balance between all the diverse interests in rural areas and to gearing our agricultural policies towards the achievement of wider environmental, social and economic goals.

We have already gone a long way down this road. Many of the activities with which agricultural Departments are involved are not solely, or even mainly, concerned with agricultural efficiency. For example, the MAFF and the Countryside Commission are jointly sponsoring an experimental scheme for protecting the traditional landscape of the Broads, and the response from farmers has been very positive. Recently, the capacity of ADAS officers to offer conservation advice has been greatly expanded and the Ministry has already played a leading role in the development of the highly successful Farming and Wildlife Advisory Group movement.

Mr. Tam Dalyell (Linlithgow)

In relation to the whole saga that surrounded Halvergate, what has the MAFF and the Department of Environment learnt from this episode?

Mrs. Fenner

I am sure that we have learnt the basics for protecting the traditional landscape of the Broads. If Halvergate is among the designated areas, I have no doubt that that will be as successful as the rest of the Broads scheme.

That is our commitment, and the next step is to write it into legislation. As hon. Members know, the Agriculture Bill includes a clause that will require Agriculture Ministers to endeavour to achieve a reasonable balance between the interests of agriculture, the economic and social interests of rural areas, conservation and public enjoyment of the countryside. As a result, not only will this be our policy—which it has been—but it will be our duty. We recognise that this is no easy task, but we have already gone much of the way to achieving it in practice. That clause in the Bill will bring our existing policy into a new and sharper focus.

We are also taking more specific steps to encourage farmers in the achievement of wider environmental goals. Clause 17 of the current Agriculture Bill will empower Agriculture Ministers to designate areas as environmentally sensitive. Within such areas emphasis will be placed on encouraging farmers to maintain and adopt practices that better protect the needs of the environment. We shall do this by asking farmers to enter into agreements whereby they abide by conditions such as restrictions on the use of fertilisers, stocking limits, number and timing of hay cuts, maintenance of hedges and stone walls and so on. Such conditions inevitably have financial implications, and in recognition of this we intend to make payment to farmers who agree to enter our schemes. I know that this new initiative has received a welcome reception among the farming community, and I believe that it represents a most important positive step towards a wider, more integrated approach to support for our valuable rural areas.

Mr. David Harris (St. Ives)

Is my hon. Friend yet able to say when the first batch of these ESAs will be designated? We seem to have been waiting a long time for that announcement.

Mrs. Fenner

I accept my hon. Friend's criticism of the time lag, but this is a first experiment, as it were. We hope to be able to announce very shortly the areas that have been accepted. I cannot define it more closely than that. My hon. Friend will have to be patient for a little while longer.

Mr. John Home Robertson (East Lothian)

Will it be this year?

Mrs. Fenner

I said very shortly.

I have at some length set out our commitment to agriculture and the rural economy. I hope that the House will agree that the record shows that the Government retain a positive commitment to agriculture, the rural economy and the environment. But we cannot be complacent. The agricultural environment will continue to change. Indeed, the pace of change seems likely to accelerate in the years ahead. We cannot predict in precise terms what the changes will be, and we know from experience that we cannot predict in detail what measures will be agreed in the European Community as a whole to tackle the continuing problem of agricultural surpluses. The detail is often an important part of that.

It is against that background that we must look at the idea of a White Paper or a similar document. I respect what my hon. Friend the Member for Sherwood said about the uncertainty felt in agriculture, but it would help no one if we tried to produce a plan for agriculture that was in danger of being out of date.

I have noted what my hon. Friend said, and I shall also listen to what other hon. Members say during the debate. I know that my right hon. Friend the Minister—who regrets that he is unable to be present today because of his duties as President of the EC Council of Agriculture Ministers—will be paying similar particular attention to them. I can assure the House that we shall continue to bear this issue very much in mind as the situation develops.

4.40 pm
Mr. Geraint Howells (Ceredigion and Pembroke, North)

I thank you for calling me so early in this debate, Mr. Deputy Speaker. I should also like to thank the hon. Member for Sherwood (Mr. Stewart) for giving us all the opportunity both to discuss this important subject and to bring to the Government's attention the great anxiety felt by all hon. Members who represent rural constituencies. I know that the hon. Gentleman and other Conservative Members are worried about what the future holds for them, because the Government's agricultural policy has had a disastrous effect on every Conservative candidate in by-elections during the past three years, when the results are declared.

A long time ago, or so it seems, the Conservative party liked to portray itself as the champion of rural Britain and claim that it alone understood and was able to interpret the voice of the countryside. Today, as the Conservative Government preside over a declining rural economy and the dismantling of the many services and facilities previously enjoyed, that claim sounds extremely hollow.

Mr. Paul Marland (Gloucestershire, West)

Before the hon. Gentleman starts on the apparent benefits of his policy, may I ask whether he is aware that the alliance party on the Gloucestershire county council has just voted in favour of rating agricultural land? Will he temper his remarks bearing that in mind, and will he let us know whether that is now alliance policy?

Mr. Howells

With respect, I shall come to the rating of agricultural land later in my speech and I shall address myself to the specific point raised by the hon. Gentleman.

Agriculture is going through another period of crisis, and more and more farmers are finding it difficult to make a decent living. Opportunities for new entrants into the industry are becoming fewer. With the decline in farming there follows the disintegration of the supporting industries and the structure that upholds and assists the community. They are gradually whittled away until the community disappears. Some of the blame may well be laid at the door of the common agricultural policy, which has encouraged lakes and mountains of produce that cannot be sold. I have always believed that the Government's insensitive handling of agriculture and unwise panic measures have exacerbated the position unnecessarily and caused an unprecedented loss of morale throughout the industry.

The difficulty started in 1984, when the Government introduced milk quotas in a panic. It is a great pity that farmers and agriculture have never got over that sudden shock.

Mr. Harris

Perhaps the hon. Gentleman could throw some light on alliance policy on milk quotas and say whether the hon. Member for Brecon and Radnor (Mr. Livsey) is no longer the Liberal spokesman on agriculture. Can the hon. Gentleman say whether the Liberal party still has no policy on milk quotas, as that hon. Gentleman said?

Mr. Howells

I am surprised that in 1986 Conservative Members are so keen to know what alliance policies are, but of course are doing well at every by-election and they are getting worried, week in, week out. My hon. Friend the Member for Brecon and Radnor (Mr. Livsey) has apologised for the fact that he is unable to be present today, and I am deputising for him. Milk quotas were introduced in 1984, and the hon. Gentleman will agree that the Government rushed them through in a panic. If my colleagues and I had been in office at that time, we would not have introduced them as the Government did.

Agriculture, which was encouraged to become efficient and produce more food, should now be given much more backing to help it through this difficult period in 1986–87. What alarms me and many of my colleagues is that the Government seem intent on doing exactly the opposite. The industry needs help to diversify, and every farmer needs advice relevant to his or her position, but what are the Government doing? They are cutting the advisory services, undermining the work of the Agricultural Development and Advisory Service, reducing its effectiveness, cutting staff and then charging for advice. That is not good policy for agriculture. At this time there should be an entirely different approach and a much more supportive attitude from the Government in the form of more advice and assistance, given free. Agriculture needs a 10-year policy so that farmers know exactly where they are going.

I am also alarmed at the way in which the Government are cutting research related to agriculture. In my constituency the Welsh plant breeding station at Gogerddan near Aberystwyth, which is renowned throughout the world for its work and for the way in which it has promoted and developed crop production, recently received news about its recurrent expenditure for 1987–88. It is estimated that there will be a deficit of about £260,000, which is equivalent to 9 per cent. of the budget. Not only will that mean that several posts will be lost in addition to those already lost in the past year or two, but it will lead to a severe loss of morale and a greatly reduced capacity to carry out what has proved to be vital work for the farming community.

Those involved in agriculture in Wales and elsewhere are horrified at this attack on a greatly respected institution and see the same gradual erosion extending throughout all agricultural research and development organisations in Wales and Britain as a whole. We need a radical change of approach to agriculture to match the changed circumstances. There must be more support for the rural economy, and measures should be introduced to support the family farm, to encourage young farmers, and to provide credit facilities and favourable interest rates through an agricultural or land bank. We should give increased support for development and advisory services and for improved marketing schemes, and, generally, provide a suitable environment for diversification.

That cannot be done overnight, but we need to start now to plan for the next 10 years. Do not let us carry on, as we have been doing, going from one crisis to another, with the Government inventing policies as they go. Farmers are tired of uncertainty and changes of direction. Give them more stability and purpose and, by doing so, save the rural economy from decline.

Mr. Robert Key (Salisbury)

Sceptical as I am of some of the things that the hon. Gentleman is saying, I believe that both he and I have the interests of the rural economy at heart. Will he develop his theme of a land bank for young farmers to promote the family farm? One of the main problems in the crisis that our farming community has faced in the past few years, particularly since the milk quotas, has been that banks have let young farmers get into tremendous debt, and they have suffered most. The hon. Gentleman seems to be suggesting that we have an institutionalised form of debt creation for the very people whom we are trying to help.

Mr. Howells

Let us put the record right once and for all. It has always been the policy of the Liberal party that we should have a land bank. That is also the policy of the alliance. The bank is not for young people to buy land, but to give them the opportunity to start. The Labour and Conservative parties are now in favour of a land bank, on similar terms to that which we envisaged in the first place.

Over the years, I have said that we are fortunate that we have a capital grants scheme, which has operated well for years. However, our counterparts in Europe also have a cheap credit facility. We do not have that choice. Our friends in Europe are willing for us to pursue a policy if it is the wish of the Government that we should have a capital grant scheme or cheap credit facilities. The door is open for us to accept such a policy, and I am sure the hon. Gentleman will agree that that is the way to help young farmers.

The hon. Gentleman should divert his mind to another policy. Many smallholdings are owned by county councils. It is a pity that, because of the shortage of cash, many county councils are having to sell these farms. It is the duty of the Government of the day to give extra financial aid to those county councils to make sure that such smallholdings remain.

I feel strongly on this issue. This Government are the worst since the war for ignoring the urgent needs of agriculture. It needs help, and many farmers need to be saved from financial difficulties and ruin. The most effective industry in Britain has been brought to its knees by unwanted Government policies during the past three years. Many farmers have asked me and others how long Ministers will ignore them. It all started in 1984 with the milk quotas. If the Parliamentary Secretary is to wind up the debate, will she answer this question? Do the Government intend to introduce quota systems for any other commodities during the next few years? I can give the answer. As an election is pending, the Government will not do so.

It has been said that the Government have helped farmers for a long time, but farmers are aware that the grants are slipping away quietly and that instead of having 50 or 60 per cent. they are getting 20 or 30 per cent. That is a great shame. If the Government want to help hill farmers and marginal farmers, they can give extra funding under EEC rules, but the grants have never been paid in full, as they should be. No one in Europe is opposed to such grants. It is only the Government who have kept down grants and the hill compensatory allowances.

I am sure that hon. Members on both sides of the House will agree that many sheep producers have applied for the ewe premium under the sheep regime, but many have been refused. Many have been refused the ewe premium because they have not applied in time. Many farmers in England, Scotland and Wales have been denied the premium because their application was 24 or 48 hours late. Nobody disputes that they are honest people, and for the sake of a few hours they should not be deprived of the money that is theirs by right.

The Minister did not tell us what we should do about marketing surpluses to the Third world and other parts of the world. The Government should have a plan for marketing. They should be able to persuade our counterparts in Europe what should be done with the surpluses. We do not need to penalise successful British agriculture. How many times have the Secretaries of State for Wales or for Scotland, who have full responsibility for agriculture in those countries, been in Brussels in the past three years? They have admitted on the Floor of the House that they have not been there to protect our rights during negotiations. It is time that they went there. They have the full responsibility for looking after their people and are duty bound to go.

Many of us on both sides of the House believe that we are Christians. We are all aware that we, together with the rest of the world, spend $17.5 billion a fortnight on arms. If that $17.5 billion were spent to help those in the Third world, every person would be fed, educated and housed. The Government and hon. Members on both sides of the House should give more thought to those people in other parts of the world who are less fortunate than we are.

The hon. Member for Gloucestershire, West (Mr. Marland) asked me about land rating. I do not know why so many Conservative Members want to find out whether the alliance is in favour of the rating of agricultural land. The hon. Member for Southend, East (Mr. Taylor) last year introduced a Bill to rate agricultural land. He was supported by other Conservative and Labour Members. It was I and one of my colleagues who spoke against the hon. Gentleman. With the support of many Conservative Members we destroyed the Bill. It has been our policy that we have no intention to rate agricultural land.

I had thought that the Minister would say something about the radioactive fallout in Wales, north England and parts of Scotland. Many people have asked whether there was any need for such lamb restrictions. Perhaps the Minister will tell us later. I know that the National Farmers Union of England and Scotland, and the Farmers Union of Wales have been in touch with her. What is the hon. Lady's latest information on the radioactive fallout and on the compensation to sheep producers?

My hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan) asked about cereal farmers. Two years ago, the dairy farmers went through agony, but now the cereal farmers are in dire trouble, and they are getting worried. They are more worried than the dairy producers, and I hope that the Minister will announce when a statement will be made on the Floor of the House of Commons to ensure that the morale of the cereal growers will not be dented, as was that of the dairy producers. I hope that a prepared statement will be made soon.

The hon. Member for Sherwood (Mr. Stewart) said that it is now reasonable for Governments to give farmers a clearer lead on the direction in which they will be expected to go in future. If the Government will not do it, the alliance will.

5 pm

Sir Peter Mills (Torridge and Devon, West)

I welcome this debate and congratulate my hon. Friend the Member for Sherwood (Mr. Stewart) upon his choice. He is a true friend of British agriculture and the rural scene. Unlike others, he speaks from experience, and that is important.

1 was amazed by the phrase that was used by the hon. Member for Ceredigion and Pembroke, North (Mr. Howells). He said that this Government were inventing policies as they went along. That is an extraordinary statement to make when one considers all the debates that take place in Brussels and the policies that are formulated there as well as by the Ministry of Agriculture, Fisheries and Food. The Government do not invent policies as they go along. It is the Liberal candidates who are inventing policies at they go along, and they vary from constituency to constituency. The hon. Gentleman must check up on what is being said by Liberal candidates. I assure him that they believe in agricultural rating.

Mr. Geraint Howells

Is the hon. Gentleman aware that the Secretary of State for Wales apologised on the Floor of the House—as did the Minister of Agriculture—for misusing words and for saying to the public that we are in favour of agricultural rating? That is wrong, and the hon. Gentleman knows that it is wrong.

Sir Peter Mills

That is not so. The hon. Gentleman ought to go to the constituencies and listen to what the candidates are saying.

Farmers are very concerned about the future. All of them understand the problems involved in dealing with the surpluses, as well as the tremendous cost and the reluctance of taxpayers to pay for the storage of surpluses. The hon. Member for Ceredigion and Pembroke, North kept on about agricultural aid and said that far more should be given than is already being given by his Government, but he said nothing about the cost to the taxpayer and about taxpayers' reluctance to pay for it. However, the Government ought to provide guidance and help to agriculture. The industry does not want to be provided with firm guidelines, but it wants to know what will be required in the future. I hope that my hon. Friend the Parliamentary Secretary will take that on board.

Swine fever is causing a great deal of concern in the south-west of England. It poses a very serious threat. I ask Ministers to redouble their efforts to ensure that only non-infected meat is allowed into this country. It is absurd that our pig farmers should be put at risk.

Will my hon Friend also note that there is a staffing problem at Weybridge? Of the 220 samples that were sent to Weybridge by veterinary officers, only 70 had been dealt with after 10 days. Testing must be speeded up so that we can get on top of this problem. The results of tests must be made available quickly. The National Farmers Union is pressing for a ban upon all imports of pigmeat. It says that the Government have the power to impose a ban, but legal proceedings could be taken against this country if a ban were to he imposed upon imports of pigmeat. The NFU has prepared a good brief which I shall send to my hon. Friend. I ask the Government to check up on the legal points. If we were to impose a ban on pigmeat imports, it would be ridiculous if then we had to pay a very heavy fine and compensation. But if such a ban could be imposed, I believe that it should be imposed.

As for the future of a great British agricultural institution, the Milk Marketing Board, for many years the board has provided stability and confidence for milk producers. Consumers have also benefited from the board's activities. They have been assured of constant supplies of milk that is pure and of good quality. We must ensure that the board continues to function. Some would disband it. Europe is not too happy about the Milk Marketing Board, and I must confess that some Conservative Members wish the MMB to be disbanded, but that would be a tragedy for all concerned. The Touche Ross report must be implemented and the Dairy Crest problems must be solved. The MMB has provided a great service to both the consumer and the farmer.

We cannot just say that more and more aid must be given to solve the problem of surpluses. That would produce even more surpluses. Alternative crops are essential. A desperate search must be made for alternative miracle crops. The combination of small changes and new enterprises adds up and must be used. I trust that the Government will provide every encouragement to the various agricultural colleges and research establishments to continue the search for alternative crops.

Mr. Maclennan

The hon. Gentleman asks the Government to continue to provide help for the agricultural colleges. Is he not aware that the Government are slashing the assistance that they give the agricultural colleges and that in Scotland the assistance they provide has been reduced by more than 50 per cent., just at the time when help is most needed for those purposes?

Sir Peter Mills

It is not true to say that the Government have slashed assistance. The Government want value for the money that they give to the agricultural colleges, and that is absolutely right. Instead of research covering a very wide area, the colleges should concentrate upon the kind of research that is needed. The need at the moment is for research into alternative crops.

It is important to warn British agriculture of some of the serious problems that it may face in the future. Agriculture has to deal with many problems caused by nature but there are also political problems. I wonder whether the Opposition's proposal to introduce yet further taxation and a wealth tax and to withdraw from Europe is the way to give confidence and help to British agriculture. I doubt it. It is no use the hon. Member for East Lothian (Mr. Home Robertson) shaking his head. The Opposition's policy is that this country should withdraw from Europe and renegotiate. If the hon. Gentleman wants this country to become the dumping ground for European food surpluses, it will do untold harm to British agriculture and, more than anything else, it will sap its confidence.

I do not intend to say any more about agricultural rating. I do not believe that the alliance will ever get the chance to put its policies into operation. However, we have to take seriously what is being said by the Socialists about these matters. I hope that no more nonsense will be talked about our withdrawal from Europe. Membership of the Community has been of great benefit to British agriculture.

As I read the press and survey the rural scene, I come to the conclusion that there has been far too much gloom and doom in some magazines and newspapers. Of course it is true that profits are down, except in the dairy industry. Again, the hon. Member for Ceredigion and Pembroke, North, who spoke for the alliance, does not know his facts. The costings of the Milk Marketing Board and of the British Oil and Cake Manufacturers show that, under quotas, the margin over costs per cow is the highest that it has ever been. It is more than £700 a cow. It is absolutely ludicrous to talk as the hon. Gentleman has done. It is true that profits are down in agriculture generally, and that borrowing is rising, but there are pluses too. Costs are down, farm inputs are down, productivity measures are increasing and many farmers have learnt how to manage in areas where they never thought of doing so before. Interest rates are down and every 1 per cent. reduction in interest rates means £50 million off the burden on agriculture. Long may they continue to fall.

Prices have been good. I do not know what is happening in the constituency of the hon. Member for Ceredigion and Pembroke, North but calf prices and store cattle prices have never been higher, and early lambs are fetching the highest prices ever. Some lambs have been fetching £60 each. It is nonsense to talk about the entire industry being on its knees. The prospects for 1986 seem much better. Agriculture should be praised for the way it is adjusting to the difficult circumstances of tremendous surpluses. Agriculture needs some guidelines, support and confidence from the House. The Conservative Governments offer that.

5.11 pm
Dr. Roger Thomas (Carmarthen)

Welsh agriculture contributes nearly 4 per cent. to the Principality's gross national product, which is about twice the amount that agriculture contributes to the United Kingdom's GNP. Compared with the United Kingdom, nearly twice the percentage of the working population in Wales is directly dependent upon the industry for employment. The grassland sector, and with it the dairy sector, is the backbone of our rural economy. In a country that is predominantly hilly or even mountainous, that has a well above average rainfall, and where four fifths of the terrain now has, thankfully, less-favoured status, the dairying enterprise is imperative.

Wales has a relatively small arable sector. Income trends in that sector have, overall, been rather more favourable. Even before the badly rehearsed, badly researched quotas were brought into being, restrictive price awards and levies kept incomes to only modest improvements, and that at a time of a general drive for expansion. But it proved to be impossible to throw a dynamic industry into reverse without widespread damage being inflicted. At the time of that expansion drive, there was an exceptionally high financial commitment with record levels of bank borrowing. Welsh farmers realised that allowing production to increase as demand was falling throughout the Community needed positive steps, but penalising a country such as Wales—and Great Britain is more than 10 per cent. short of self-sufficiency in milk and dairy products — would lead to widespread and severe hardship, and there was a rural outcry of unprecedented proportions. That was at the same time as, across the St. George's channel in Eire, the Government there, fully represented at Brussels, could afford and was given extra quota and general preferential treatment.

It is not unnatural, perhaps it is only to be expected, that the wrath extended to the favoured position of New Zealand imports, and to the continued favoured position of New Zealand dairy imports. Even now, dairy producers in Wales and other parts of the United Kingdom—some struggling successfully; alas, many struggling unsuccessfully—must witness the continued importation and the carrying round the world of 80,000 tonnes a year. That appears to Welsh farmers to be shrouded in irrationality.

The farming unions of Wales are now opposed to the continuation of that level of importation from New Zealand. They have recently been joined by the Milk Marketing Board and the Dairy Trade Federation. In 1973 it was agreed that New Zealand would be doing well if in 10 years' time it received just under 25 per cent. of the United Kingdom market. The real figure is now nearer to 40 per cent. The farmers of Wales are very irate that that high level of New Zealand importation should continue.

Our agriculture must contend with a continuing state of affairs whereby measures that appear to favour our national position when imposed by the Community, are inexplicably held back or are only partially enforced by the Government. Yet other countries are prepared to modify, even to reverse, Community measures which, if implemented nationally in that country, would be socially harmful. Not every country in the European Economic Community is fighting by the Queensberry rules.

When some commodities are produced in excess we take a short-sighted and almost miserly attitude towards research and innovation. There is an abject lack of an overall agenda for the future. The Government appear to prefer to leave things to chance.

Of the United Kingdom farmers that employ labour, 23 per cent. account for 80 per cent. of farming output. Since the second world war, the larger farms have ridden the storms better and, in general, have done better and been more prosperous than the smaller farms. Far too few of the grants, the guaranteed prices and the deficiency payments have percolated through to the farm workers. There is annual indignation from farmers who employ labour when the wages board announces modest annual pay increases. Farm wages urgently need to be brought into line with the wages of other industrial manual workers. That is how agriculture can influence and improve our rural economy.

The farming community still has the largest occupational group claiming family income supplement. That should not be allowed to continue. During the past 15 years the number employed in agriculture has continued to fall sharply and, with persistently high rural unemployment, there has been far too great a tendency to call upon casual and part-time labour. With the loss of farming jobs, the whole non-farming rural economy suffers. Village and hamlet life loses essential facilities and unfortunately, in many of the remoter rural areas there is hardly any infrastructure to which small-scale industries can be attached. Job creation is stagnant.

Well before the end of the century, Britain will have a new commodity surplus. There will be a surplus of rural land. An area equivalent to the size of Wales or East Anglia will be surplus to agricultural needs. Years of heavy investment and improving efficiency will have by then taken their toll. Many hon. Members have mentioned the mounting surpluses and they are a continuing embarrassment, with millions of pounds of national taxation being used to pay farmers for crops for which there is either no market or a diminishing market. Those which are not used have to be stored at equally escalating and prohibitive costs. We have had dairy produce surpluses, and now cereals are being vastly over-produced. Farmers who were induced or forced to give up milk production, turned to beef and sheep, and it is likely that within a few years those commodities will be yet further examples of surpluses.

Much innovation and enterprise has been focused upon the alternative use of surplus land. It appears that the land must be used, come what may. The solution may lie in further afforestation, and there would appear to be a social as well as an economic advantage, because timber imports would be reduced and local jobs would be provided, thus countering the depopulation that follows land becoming surplus to conventional usage. We must support areas of localised afforestation. It is hoped that such afforestations may include the lowlands, the broad-leaf woodlands and farm forestry, as opposed to landowner and specialised companies. The needs of the former must be subsidised.

The contribution that forestry can make as a fuel as well as a chemical resource should not be forgotten, and could form part of a sensible non-nuclear strategy. We hope that that is what will finally emerge. The redundancy of agricultural land is not a limited farming interest. Such a situation might be immensely challenging. Both the countryside, and jobs in the countryside, could be protected, as many aspects of rural life could be thrown open to the people as never before.

At a more parochial level, farmers, and particularly hillfarmers, need to be reassured following the ban on sheep, their movement and slaughtering. There must be adequate and honourable compensation. Last summer's poor weather and cash flow problems form the background to the recent disasters afflicting the farmers on the hillsides of Wales. Others, too, must not be forgotten, such as those who work in abattoirs and those who are employed in the haulage industry.

Farmers must ensure that they keep accurate records of costs and losses associated with those restrictions. They must be prepared to present adequate, substantiated proof of their damaging effects. We must not leave our farming community or our hillside farmers high and dry on that issue.

We are passing into an era in which a highly sophisticated food-buying public is developing. There is a general and developing interest in organic farming. The public is becoming aware of the dangers of, for example, the irradiation of food, the contamination of food by agrochemicals, and the indiscriminate use of pesticides, many of which have been banned in other countries and in other EEC countries as well.

We are moving in the right direction. As a result, some sectors of the conventional agricultural community will be adversely affected. Hence the need for a rolling programme, and for a comprehensive forward review of agriculture. The Government are reticent and reluctant to bring that forward, hut, unless they do so, displeasure with them will continue. Indeed, that has already been witnessed in by-elections during the past two summers. Unless the Government do something about agriculture, and particularly grassland agriculture, they will suffer even more electorally.

5.24 pm
Mr. Paul Marland (Gloucestershire, West)

To be on the safe side I should declare an interest in this subject, as I am a working farmer.

In the time scale of farming and food production, the current crisis of surpluses has hit farmers in this country very quickly. Only three and a half years ago they were being urged to produce more and more food at home. Many geared up to do that, often with borrowed money. In this debate, it is important to recall much of the cause of today's dilemma in the countryside.

Farmers and the ancillary trades face the future with apprehension and uncertainty. They are inevitably looking more and more to the Ministry, not to tell them precisely what to do, but to lay down some rough guidelines for the future. A rigid and unswerving devotion to price cutting will claim many victims in the countryside on the way, and at the end of the day it will solve nothing and will serve only to accelerate the exodus from the land and to destroy rural communities.

Currently, 80 per cent. of the EEC budget is spent on buying, storing and disposing of surpluses. Agricultural support in the United Kingdom now costs the taxpayer twice as much as the total net income of farmers. As prices fall, farmers seek to produce more and more. We are all being urged on by the ancillary industries, which are also feeling the pinch. As a farmer, I have never had so much literature through the post before from various ancillary trades suggesting how I can increase the output of my farm.

The present policy of trying to control over-production can be described only as crisis management. It concentrates minds on only one product at a time. The aim is to smooth out a bulge here, which inevitably produces a bulge there. As has been said, sheep farmers used to ask us to urge the Ministry not to reduce the price of cereals too far, for fear that the prosperous arable farmers of East Anglia would all go into sheep production, leading to a crisis in sheep production. They therefore understandably ask what they can invest in with any certainty.

In fairness, I should perhaps have asked this question six months ago, but I wonder whether there is a forecast or model at the Ministry or anywhere else giving the long-term effects of continuing to cut the price of cereals and of buying in beef. Production restraint through co-responsibility levies—which is what we have—has been tried in the past and has failed. Does any hon. Member imagine that price restraint will encourage farmers to produce less? With a 43 per cent. drop in incomes in the past year, farmers of all sizes are fighting back as best they can by producing more and more. They are all doing it to the very best of their ability. Sadly, some of them will fail. I believe that they will be mainly those on poorer land, and on the western side of the country.

Many hon. Members have probably read about the plight of Mr. Stewart Thomas, which was mentioned on the front page of this week's Farming News, but many others will follow him if we continue with a policy of price restraint. Price restraint will inevitably lead to more intensification in the eastern counties. Conservation will suffer, as farmers struggle to stay in business. The EEC budget will continue to demand more and more finance to purchase, store and dispose of surplus production. At the end of the day, none of us will be better off. It is a pretty depressing picture.

Nevertheless, as has been said, farmers are great entrepreneurs and are looking everywhere for new crops. Many of them are trying new crops on a small scale, but the only real alternatives to cereals, for those who are tooled up to cope with them, are oilseed rape, beans and peas. Other farmers have tried different crops, such as flax, linseed, evening primrose, domestically produced snails for home consumption, and even— as I heard the other day — ducks' feet for export to China, but those can only be described as exotics and at best may make only a modest contribution to farmers' incomes. The hon. Member for East Lothian (Mr. Home Robertson) has tried growing evening primrose and has warned me of it, saying that there is no money in the job.

Forestry has already been talked of as an alternative. It will take root only on the poorer land to the west of the country—for example, in some parts of the Forest of Dean, and in the Cotswolds, where my farm is located. Those areas already have sufficient trees. Farmers in East Anglia, who have highly productive land, should be encouraged to plant more trees, which we need for many purposes, yet they show no interest whatsoever in doing so.

Another suggestion is set-aside. A proposal to leave land barren will not find much sympathy with today's ramblers and the other urban visitors who seek to make the countryside agreeable to themselves. Farmers w ill not favour such a suggestion. I should not like to set my farm aside and see it taken over by thistles and weeds.

Other farmers are trying to cash in on leisure, with holiday cottages, shooting, fishing and caravans. I am trying to grow a crop of caravans, but am severely restricted by the local planning authorities, which have other ideas.

The answer for the farmers, and also for the taxpayer, is to extend the system of quotas to all products currently in surplus. That would be the quickest and the surest method of control. It would allow each farmer to tailor his production to suit his own farming practice, just has been done in the dairy sector.

Quotas will not encourage inefficient production, as is often said, because each farmer will want to maximise his return. As a result of quotas, land will become available for alternative production and more attention will he paid to producing products which are in deficit; for example, flax, evening primrose, and ducks' feet for export to China. More new markets will be explored by farmers, who will operate from a base of strength and confidence, rather than having continually to look over their shoulders and wonder whether the new enterprise in which they have invested will be the next to have the price of its end product cut by EEC Ministers.

Another advantage is that all the land will be cared for and farmed. I genuinely believe that the farmers of this country have been in conservation for a lot longer than have most of the Greens. People will be retained on the land in the smaller family units mentioned by some hon. Members, rather than holdings becoming larger, with management and directors operating at arm's length from the land and sitting in offices many miles away from the farm. We have already seen this starting in the United Kingdom, and I do not want to see it encouraged.

A system of quotas would maintain agricultural incomes, albeit at a lower level and at much less cost to the taxpayer than in previous years. Last year there was a 43 per cent. drop in incomes. As we saw last week, maintaining agricultural incomes is one of the main objects of the common agricultural policy. Quotas will give farmers confidence and provide better opportunities for young people to assess a farm's real worth before tendering a rent or entering any other form of farming enterprise. At the end of the day, quotas will save the EEC budget literally millions of pounds.

Some will say that quotas would be impossible to operate and police. However, can that be true in this age of the computer, satellite photographs and the Land Registry? Others will ask how we can get the French, the Germans and the Italians to co-operate. Why could national quotas for guaranteed Community buying not be set, based on past performance, and each national Government left to sort out their own surpluses, and to do what they will with their own taxpayers?

National quotas should be based on acreage rather than on tonnage produced. Quotas should apply to everybody. It is not true to say that because a farmer feeds home-produced foodstuffs on his farm he is necessarily more sociable or desirable than a cereal farmer, such as myself, who produces only cereals.

A quota approach to surpluses is not a piecemeal approach, such as has caused problems in the past and will cause more problems in the future. The present policy of forcing down cereal prices may appear a boost for livestock feeders in the short term, but in the medium term it will.produce an explosion in intensively produced pigs and poultry. This will further undermine the price of beef and lamb and put more pressure on EEC funds.

West Gloucestershire is a rural constituency. I have experienced at first hand much of the excellent work that is going on there and elsewhere, as the Minister mentioned, to develop rural businesses and to keep rural communities alive. Agriculture is the engine of the rural economy and we must seek to keep it in balance, in the long-term interests not only of the farmers and those who live in the countryside, but of all the taxpayers of this country.

5.35 pm
Mr. Tam Dalyell (Linlithgow)

The hon. Member for Sherwood (Mr. Stewart) will acquit me of discourtesy if I do not congratulate him on winning this ballot. By rights, the motion should have been that standing in the name of my hon. Friend the Member for Middlesbrough (Mr. Bell). It is a matter of supreme irony that, as 1 understand it, the application was put in not by the hon. Member for Sherwood, but by the Minister of State for the Armed Forces, the right hon. Member for Tonbridge and Mailing (Mr. Stanley), who should have been answering the debate on 6 June, the loss of which made it possible to have this extra time for private Members' business.

However, the hon. Member for Sherwood has chosen well because this is an important subject. I am, therefore, in no way curmudgeonly about his choice of subject, and should like to raise specific issues with the Minister.

My first point relates to the ongoing saga of the destruction, for that is the right word, of the Macaulay research institute at Aberdeen, which I visited with some of my hon. Friends. I would pray in aid, not any Opposition Members, but the former Minister of State, Ministry of Agriculture, Fisheries and Food, who is now the Minister of State, Department of Energy, who has close links with the Macaulay institute, and who is continuing the fight inside the Government.

Hon. Members who have visited the institute are absolutely appalled at what is happening to the concentration of agricultural research in the Aberdeen area. I can say this the more strongly because, although I am a Scottish Member, I have no constituents nearby. However, the Macaulay and the Rowett combine to make a major European centre for agricultural research, and that is being destroyed. I ask the Government what they intend to do about it, not least because of the representations which I understand have been made by the Minister of State, Department of Energy, who is a local Member of Parliament. I am dismayed at the cuts that have taken place at Rothamsted relating to soil research. I do not know how the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food could comment on the health of agricultural research in the United Kingdom at present. Her remarks do not correspond with the facts.

Secondly, the Parliamentary Secretary referred to grants to ancillary industries. How much money was she talking about? It may be justified, but I wonder whether grants to ancillary industry are as worth while as the money that is being taken from agricultural research. The Government should at least justify their policy.

My third point is relevant to my constituency, but it is even more important to Clydeside and to other areas of the country. I am not alone in believing that glasshouse owners are no longer crying wolf. Meeting their fuel expenditure is a very real problem. The hon. Member for Dumfries (Sir H. Monro) knows the problems at first hand.

What is being done in all the discussions with the EC about what can properly be described as unfair competition from Holland? The Europeans go on and on subsidising their glasshouse owners, particularly their tomato producers, and ours get very little. Many are being driven out of business. Glasshouse owners tell me that they cannot do the repairs and maintenance that are necessary if they are to continue in business.

My fourth point is a bit different. I interrupted the Minister when she talked about what was being done in particular conservation areas. I shall not go into the details of Halvergate that so exercised the Committee considering the Wildlife and Countryside (Amendment) Bill other than to say that it seems to some of us that marshland is being drained, moorland is being cut back and the surpluses are getting ever bigger. Does that form any kind of a rational approach?

I repeat the question that I put in the intervention. What has been learned since Halvergate? If I am told that the Government will never do any such thing again and that grants are being withdrawn for the drainage of ecologically valuable marshes, so be it, but that is not the information that comes to us.

I remain with the Wildlife and Countryside (Amendment) Bill, on which some of us spent 100 hours in Committee, and return to the old question of the Sandford amendment and the Sandford money. I see the hon. Member for Dumfries smiling. He was the competent Minister who dealt with all this. In Committee some of us said that we wanted to monitor, year by year, how much Ministry of Agriculture, Fisheries and Food money is going into conservation. We have been told hitherto that it is difficult to identify it. Forgive me for being cynical, but I suspect that very little of MAFF funds is going into identifiable conservation causes. If the Government think that we are wrong, let us be told when the Minister replies.

My penultimate question is about marine nature reserves. I understand the difficulties about Lundy. However, other areas were designated. Why are we taking so long? If Ministers accepted the reasons for marine nature reserves five years ago, why are we dealing with the circumlocution office in getting things done— I will not say on the ground, because that would not be an appropriate analogy? Those of us who five years ago argued tle case, and rightly, are greatly disappointed.

I understand that the Salmon Bill will not now be taken in the last week before the recess but in the week that we come back in October. If the Government have plans to do it next week, fair enough. However, those of us who spent a long time discussing it in Committee—I am not just talking about my hon. Friends but about a number of Conservative Members as well, particularly the hon. Members for Crawley (Mr. Soarnes) and for Wealden (Sir G. Johnson-Smith)—put forward strong arguments, the better briefed we became, that something should be done about the drift netting position.

If that Bill is to remain until the hang-over of the Session, I ask the Government, for heaven's sake, to pay some heed to what was said in that Committee and reflect on whether the weight of argument suggests changes in the Bill. No one on that Committee will come and poke a finger and say, "We told you so," or make any political capital. It is not that kind of a Bill. Surely the purpose of House of Commons Committees is that there should be time for reflection. The Government may not have got it right, but that is not entirely the fault of present Ministers. The Bill goes back to the noble Lord Mansfield and the briefing that he received a long time ago. The fact is that basically much of the Bill is flawed and fundamentally wrong. If it is to be taken in the autumn, there is some time to do something about it.

Finally, I had the honour of attending the annual conference of the National Federation of Site Operators this year. It invites politicians of different parties. Have the representations that Mr. Spencer and his colleagues have been making to MAFF on the difficulties of site and location policy and rating been accepted and what does MAFF think should be done to help the site operators who, after all, are an important part of the rural economy and British industry?

5.45 pm
Mr. Jack Aspinwall (Wansdyke)

First, I thank my hon. Friend the Member for Sherwood (Mr. Stewart) for creating this opportunity to outline some of the unease and uncertainty expressed by many farming communities about the future of the rural economy.

Agriculture, as has been illustrated this afternoon, is in a state of flux. The development of technology in areas of specialisation and modernisation, and the requirements of the CAP, all herald change for rural society and industry. The increase in farm costs of some 22 per cent.—more than farmgate prices over the past seven years—is also worrying. It has been estimated that to bring supply in line with demand, 14 per cent. of land now devoted to agriculture will have to be put to some other use, and, in the next decade, 10 per cent. of our agricultural land could be looking for alternative uses.

That readjustment threatens the very existence of the rural community and the village idyll. Agriculture is crucial to the rural economy. For every job in farming, which now employs about 620,000 people directly, four or five jobs exist in industries connected with it. A lack of jobs discourages young people from staying in villages and their places are taken by people retiring to the countryside and by second-homers.

Rural Britain should not be a dormitory area which does not contribute to the well-being of the nation as a whole. Those areas should be full of appropriate vigour and activity, and, in a country which is in reality a crowded island, it is illogical not to use the potential that this valuable asset represents.

Changes are taking place in the way that we view the countryside and the agricultural community is changing too. In this, the Government must play their part in grasping the nettle and giving a clear commitment and guidance for the future of agriculture and the rural economy, assisting the farming community to be successful and moving towards exploiting the enormous potential in growing and providing food of greater variety.

There are three broad areas in which positive measures can be taken. I am heartened to see that certain steps are already afoot. Initially, there is room for development in marketing. The era of guaranteed high prices for unlimited agricultural produce is disappearing, the free market environment is becoming more a fact of life. The British farmer is responding to that demand and in so doing ensures top quality produce for the discerning consumer, properly graded and packaged.

It is on the demand side that action can be taken. Some of us are familiar with the Agricultural Marketing Act 1983 which established Food from Britain, a central coordinating agency to promote and improve the marketing of British agricultural produce. I have been heartened by the fact that the Government saw fit to provide £14 million initial funding during is first five years. I hope that that important organisation will continue to receive Government encouragement. The quality of products has now been given a degree of assurance under the British food quality mark scheme. That is soon to be extended and will, I hope, eventually cover most of the essential British foods to aid the discerning housewife.

Locally grown food must be promoted. There is considerable scope for marketing co-operatives — a recent example being the "Taste of Somerset" group which was set up three years ago, covering South Avon in which my constituency lies. It returned in triumph from the Royal Show this year with valuable orders for the future. With the farming community continuing to take the initiative, supported by the Government, I am sure that marketing will make a fundamental contribution to ensuring that a healthy rural environment is maintained.

Secondly, new ideas for crops should be looked at more positively, not merely shrugged off as irrelevant. Farms can become more varied, interesting and accessible, thereby finding new ways to earn money. Enterprising farmers have found ingenious ways to meet the challenge. In the west country there have been many reports of such entrepreneurial activities. One farmer has recently planted new cider orchards, because of the demand for cider and the huge demand from health food shops for English apple juice. On hearing the news that a great deal of apple juice was imported from France, I wondered why. Another farmer has begun specialising in worm farming. The worms turn muck into high quality compost and are themselves turned into protein feed additives.

There are many markets to be exploited. We spend about £30 million per annum on imported herbs. That must be a market to go for. We can grow all those herbs and there is a need for co-operatives and marketing coordination to take advantage of the opportunity.

There is also a growing demand for fresh, organically grown vegetables and health products. One notable farmer is selling sheep's milk cheese to Harrods and another has just doubled his organic vegetable business because the market is crying out for more produce, particularly mushrooms and other vegetables.

Another entrepreneur has decided to take on the French by going into snail farming, and British and English wines are beginning to take off in the world of the grape. The traditional Somerset crop of teazles is also taking on new life. The dried teazle head brings up the nap on high quality cloth, the demand for which is growing because of the current snooker boom.

Another opportunity exists in farm forestry. Our import bill is over £4 billion per annum and we import more than 80 per cent. of the timber that we use. With land being available, opportunities to develop forestry as a general farm enterprise must be encouraged. Such a long-term activity must receive realistic and continuing income support. There could be many more job opportunities in timber processing, too. The environmental impact on our landscape would be appreciable.

Those are just a handful of ideas. There are many more and a great deal is being done. The signs are that, with proper guidance and encouragement, British agriculture is taking on the future and adapting to a changing scenario, as it has always done.

The third area where positive steps can be taken is the encouragement of alternative strategies in the countryside. I stress that I do not advocate the permanent loss of our countryside to the property developer, but we must not let rural planning policy stand in the way of small-scale housing projects, the development of light cottage industries and the conversion of farm buildings. That point was adequately made by my hon. Friend the Member for Bristol, West (Mr. Waldegrave), the Minister for Environment, Countryside and Local Government, at the 40th Oxford farming conference earlier this year.

As early as 1984 the Development Commission urged the conversion of farm buildings and proclaimed the idea a "splendid success", asserting: conversions fulfil … the aim to make the countryside a place where local people can live and work, bringing back economic vitality to villages and small towns—and thus helping to keep open the local village shop and school. In the west country such conversions have included local craft and furniture workshops and small food processing centres for locally made jams, cider, wines and real dairy ice cream. However, there are still too many local authorities that do not recognise that an unobtrusive rural conversion from a disused farm building to workshops, manufacturing units or recreational facilities will make a contribution to the local economy, providing jobs and enabling other functions to be done better, because more resources are available.

The growth of tourism and leisure activities also must be supported. A number of farmers and land owners have proved themselves to be most enterprising. One farmer who has converted some of his land into a lake lets out rights to trout fishermen, selling the supply to the market and providing a recreational amenity. There have also been conversions to golf courses, ski slopes and many other appropriate uses.

Other suggestions have involved the development of farm holidays and tourism and the opening of farms to the public. All those ideas have one feature in common —the aim of keeping the countryside active and vital. I trust that the Government will continue to give their support and encouragement to that aim.

The farming community has to face many problems. The recent hippy invasion cost farmers in my constituency many thousands of pounds. There have been high legal bills, including costs of £1,544 and £750 in legal charges alone. That is an enormous burden added to the damage costs, which I believe that the Government should cover on behalf of the general community. I shall be pleased to hear the views of my hon. Friend the Parliamentary Secretary when she replies.

Many other frustrations are suffered by enterprising country people, including red tape, especially in planning. I am sure that the saga of the simple bed and breakfast sign, with the frustration of endless paperwork, delays and confusion, is not an unfamiliar experience.

It seems that inflexibility about the prospects for change needs a thorough review. With the farming and rural communities taking the lead, supported by the Government encouraging and supporting marketing initiatives, new ideas for new crops and strategies, and perhaps even a differential rating system for some of the rural facilities and services such as small shops and the important village post offices, I am sure that agriculture and the rural economy can face the future with greater hope.

I received a letter recently from the secretary of the south-west branch of the Women's Farming Union and I think that the House would be interested to hear the heart of the letter. Mrs. Norah Pow wrote: Our brief, in the past few decades, has been to put food in the shops, in plentiful supply, at prices the consumer can afford. By our skill and use of grants from government we have fulfilled that order. By telling us at a stroke to cease production as we have come to understand it, we shall denude the countryside of its traditional inhabitants, and fill it with trendy, commuter-type people, who have no real understanding of the countryside. To keep our nation strong, we must keep a strong presence of food producers in the countryside, give them a sensible price for producing less food, but make sure the people of the nation are warned that we shall keep those people there only if we arc prepared to eat what they produce. Coupled with this, we must tell the people that trendy, imported lentils, muesli etc., is not the answer to good health. Take a look at diet in this country 50 years ago. Both milk and meat formed a good proportion of our daily diet. Above all, let the government get its facts right concerning diet. Milk is an important health food, and contains ONLY 3.8 per cent. fat. If they must attack bad diets, take a look at the fried chip, and sweet biscuit industry, at chocolate and … fizzy drinks, etc. — or are they afraid of the response of those manufacturers and marketers? Farmers have been asked to produce meat with less fat, and have responded admirably to this request. Yet persistently we hear through media and papers that eating meat is had for people. A sensible amount of meat is vital for a balanced diet, and stories to the contrary lead once more to loss of livelihood for livestock producers at the same time robbing third world countries of their own produced food, vital to their own peoples … Turning defunct farm buildings into rural workshops for the production of stained glass, pottery, and furniture will only slightly correct the loss of livelihood in villages. The answer should be to let agriculturalists continue to feed our own people, but let us get into the schools and hospitals, and tell them to feed people on locally produced, fresh, healthy food … Rice may be good for Indians, but jacket potatoes grown locally are the answer to both our rural, health, employment, and balance of payment problems. The farming industry has a history of responsibility and an ability to respond well to change. The signals at the moment point to diversification, the mobilisation of entire farm resources, a more varied use of land and buildings and improvements in marketing. I feel confident that, with the Government's help, the British farmer and the rural community, will take on the challenge and win —preserving the rural environment, improving opportunities for employment, ensuring that the rural economy is sound, producing good British food at reasonable prices and making a vital contribution to the nation's quality of life.

5.58 pm
Sir Paul Hawkins (Norfolk, South-West)

I congratulate my hon. Friend the Member for Sherwood (Mr. Stewart) on his good fortune in the ballot and on the way in which he moved his motion.

Unfortunately, I cannot declare an interest. I should have liked to be a farmer many years ago and would like to be one now, but I was never allowed to be a farmer, because I was told that I did not have enough brains and my father did not have enough money.

I wish to say a few words to some of my hon. Friends who seem always to denigrate East Anglia. I was told by my hon. Friend the Member for Gloucestershire, West (Mr. Marland) — I think that Gloucestershire is the second best county in England—that we in East Anglia had no woodlands, but I think that Thetford forest in my constituency is the largest forest in England.

Many farms in East Anglia could do well with more woodlands. If more of our better lands—not the best—were put to woodland or forestry we would create a variation in the countryside and improve windswept areas with few hedges. Most places did not have hedges for many thousands of years. Part of Norfolk had no hedges because it was a sheep walk. Hedges were introduced in the 17th and 18th centuries. Now, most of the hedges have had to go.

Some people seem to think that too many trees in East Anglia have been cut down and that the area is inhospitable to those who want to walk and ramble in the countryside. East Anglia is an arable county. Apart from the woodlands at Thetford, crops of sugar beet and wheat are produced, and they cannot stand large numbers of people tramping through them.

Town-based organisations are rightly interested in the countryside, but I must impress upon them that unless farming is reasonably prosperous the countryside will suffer. Farmers and farm workers might leave the land, leaving possibly the most scenic areas as deserts, to which no one will want to come from the towns or from other countries.

Town-based organisations often criticise farmers, but if they constantly attack farmers they are unlikely to gain their co-operation. Most farmers who live on their farms and whose families have worked their farms for generations are the best carers of the countryside. Their care has made our countryside what it is today — a wonderful and beautiful part of the world to visit for holidays and recreation.

I spent a week in Turkey. I could not have been received more hospitably. When I came back, even though in one weekend I had to attend five fetes within five miles and it poured with rain, I thought that green England was one of the loveliest countries in the world.

The main problem over the last few years has not been production. The greatest problem for farmers, particularly those who have entered farming during the last 20 years, has been over-borrowing. Each time the price of land goes up farmers tend to borrow against the increased value of the land, but when the land goes down in value farmers experience difficult times. When the value of land decreases and rents come down — as come down they must — younger farmers will have the opportunity to enter the industry once again. The Government must do all that they can to help.

I am glad that my hon. Friend the Member for Sherwood mentioned sugar beet. It is probably Norfolk's most useful crop. It provides employment in the factories, in the haulage industry and, although not as much as in the past, on the farms. Sugar beet puts more money into the rural economy—into the shops and villages—than any other crop. We are all extremely worried about the British sugar beet crop. I urge the Minister to try to speed up the inquiry to clear up the doubt and worry.

I do not care a damn who runs the British sugar industry, although I am in favour of a certain company which has pulled round other industries. I do not care a damn, so long as the sugar beet industry is looked after, and so long as whoever is in charge stands up for it against the machinations in Brussels. I do not want a monopoly in Europe. We must guard against that. British sugar must remain an important industry. I hope that the Minister realises how important it is, not only as a change crop in East Anglia with barley and wheat, but as a crop which creates employment and money for the countryside.

As I tried to say in my intervention, it is essential that research is concentrated on what worries farmers today. What further help can be given? Will research take into account the pros and cons of putting woodland on to farms, the pros and cons of the industrial use of farm crops and the pros and cons of any other farm crops that might be grown in Great Britain?

In the past 20 years the population of Norfolk has grown faster than that even of the south coast. East Anglia produces all forms of food for our own people. We must not dilute the area because it is of great benefit to townspeople who want to visit the countryside and the coast.

Because blight has hit so many of our industrial cities, many people want to return to the countryside. I hope that those cities will be made better so that people are content to retire to them, and to holiday in Norfolk. I do not want every village in Norfolk to become a settlement for retired townspeople. If that happens, an antipathy will grow among those retired people who think that the countryside is heaven but do not realise the realities. Food is just as expensive in the countryside as it is in the towns. There is no doubt about that.

We want Norfolk to remain an area which produces food but to which people will be pleased to come. We want people to visit our seaside, the countryside and the woodlands of Thetford. We want Norfolk to be a holiday place.

Once again I plead with the Minister to give us some ideas about which way we are going. We cannot have detailed plans. We know that most farming plans are made in Brussels, but the Minister must be able to say to British farmers, "This is the way we hope we will go. This is the way in which we will help farmers to go, subject to what happens in Brussels, and we shall try to persuade Brussels that this is the way we want Europe and Great Britain to go in the future."

6.10 pm
Mr. John Corrie (Cunningham, North)

I congratulate my hon. Friend the Member for Sherwood (Mr. Stewart) on securing this debate today. I should declare an interest in that I am a practical farmer. How long that continues depends on how right my hon. Friend the Minister gets the policy over the next few years. There is no doubt that we are discussing this at a dramatic time for rural areas. I do not need to talk about the glut of food or the huge bank indebtedness because the Minister knows that very well. However, there has been a change in the past four or five years. Before that time all sectors could buy themselves out of a problem by simply producing more food on their farms to pay for their extra costs. Now, of course, all sectors where we have quotas, such as the dairy industry, can no longer do that and, as the costs increase, the lid is on the income of the farm and the pressure is on.

I, like my hon. Friend the Member for Gloucestershire, West (Mr. Marland), sincerely hope that the Government are looking at quotas for all products in the future because as the pressure increases for one product with quotas such as milk at the moment, people will simply jump from that to other sectors within the industry, such as beef and lamb. The sooner we bite the bullet the better.

We have to take about 2.5 million hectares out of production in this country. That does not necessarily mean that it goes out of production completely. There are ways of taking it out by going for extensive farming rather than intensive farming. The real answer to our problem is that the common agricultural policy has been too efficient. Many people say that we were wrong to encourage production as we have done. I would not agree with that. I hope that the Minister will agree that if we are to have quotas throughout Europe we have to reach the high figures in all products so that as a nation we start well up the league when that time comes.

I believe that we are going through what we might call the third industrial revolution. In the 1930s and 1940s we saw the move from horses to tractors. In the 1960s, 1970s and 1980s we saw a tremendous move forward in fertilisers, chemical sprays and modernisation of equipment. We have now reached the crunch time, when we have to cut back. I was pleased to hear my hon. Friend the Minister saying that the cutback would have to take place throughout Europe because there is no way in which farmers in this country will have their highly efficient industry cut just to please other nations throughout Europe.

As many people have said during the debate, it is not only the farmer who is affected when agriculture hits bad times. It is the machinery companies, the seed merchants and the fertiliser companies, which are now waiting on their money. The local blacksmith, the local post office, the local school and the local bus service are all parts of a rural economy. Empty farm cottages, which are lived in for only two months of the year because they have become second homes, reduce the rural economy.

It is no use simply looking at the agriculture industry in isolation. It is now a rural problem. Country life needs a viable agricultural industry to sustain its families or they drift to the towns and urban areas and cause problems there. It is no use tinkering with the system any longer. I believe that some drastic changes are needed and I am sure that the Minister is wondering why I do not suggest something.

I suggest that it is no use any longer having production subsidies when we have mountains of food and lakes of wine and milk. Therefore, those production subsidies should be changed in some way. I suggest that we should move from a headage payment to a hectarage payment. If we are to diversify into different sorts of industry within our agricultural industry or if we are to move to forestry on a small or large scale, we shall need some sort of social payment to farmers as the changeover takes place. Getting a hectarage payment would take the pressure off producing too much beef or lamb. In that way we may be able to hold on to the viability of our agricultural industry.

The problem is not the fact that we do not have enough money poured into the industry. Billions of pounds are poured in from Europe each year. The problem is the way in which the money is being spent. In fact, if we got rid of our surpluses now agriculture, would have billions of pounds to spend in a way that would certainly keep it going.

There is a second thing to be done which has already been mentioned. We should move away from grants of any kind and towards an agricultural bank with low interest rates. The Government would have only to pick up the bill between the low interest rate and the standard rate of interest. Of course, the lower the Government could keep the rate of interest, the better it would be. That would mean that we would not have people borrowing money to top up the grants that they get to put up buildings that they do not need, to grow a crop that probably nobody wants anyway. We have to find some way of keeping the industry viable and, at the same time, keeping a rural economy going.

The only answer to over-production is not to produce goods in the first place. The more one produces the more it costs to save the produce. We are simply wasting billions of pounds in storage costs. It would save us that vast amount of money if we dumped the entire lot in the sea. However, that is not morally acceptable. Of course we shall see a move to forestry but I believe that it will not be on a small scale because it will be extremely difficult to integrate that on smaller farms. However, there are vast areas throughout Scotland, England and Wales where woodland could be planted. As timber is one of our biggest imports, that would be no bad idea.

Leisure and recreation will play a much bigger part in the future because we have many people unemployed and, if we face hard facts, that will continue. Properly planned and integrated into the countryside, leisure and recreation can do the rural areas no harm whatsoever. I suggest that we have to look at relaxation of some of our planning laws. I could have 100 new families building houses on one of my islands off the west coast of Scotland which would regenerate that island. However, because of planning restrictions, only four houses are allowed to be built. We want conservation but we want it in a sensible manner, not on a blanket scale which sterilises huge areas of the countryside.

I said at the start that we are facing dramatic changes. We must sort out the future. It is no use just burying our heads in the sand and saying that we have to wait until the EC sorts it out. It is time that we as a Government showed a lead in this matter. We must sit down with the National Farmers Union, landowners, Government bodies and conservationists because it is our rural economy that depends on the outcome. Any delay will only pile up the problems more and more. I hope that the Government have taken on board how difficult the situation is just now and how much more difficult it will become if we delay any longer.

6.18 pm
Mrs. Elizabeth Shields (Ryedale)

This debate is one of considerable interest to my constituents in Ryedale, as about 20 per cent. of the community are involved in farming or in the many allied industries that are the backbone of our small market towns.

More individuals would like to be involved in agriculture. Although the proportion of the rural population working on the land has fallen dramatically since the war through increased use of advanced machinery, there still exists a strong desire among those who have grown up in the country to seek a living from the land. One has perhaps to live in a hamlet or village oneself fully to appreciate the kind of love that people have for the land. Sadly, the kind of small farm or smallholding that would provide an entrance to such a living is difficult to come by in Ryedale, and no doubt that is true elsewhere too.

A few years ago North Yorkshire county council sold off many of its smallholdings, which became part of the larger estates, thus effectively preventing new and young entrants from gaining access to agriculture. In seeking to revitalise the role of the rural economy, we should look for ways to encourage the young to return to the land. Local authorities generally should stop selling off the smallholdings, and perhaps should increase the stock of land that is available for prospective smallholders. Authorities should be discouraged from pursuing an amalgamation policy unless that is essential.

I reiterate the statement of my hon. Friend the Member for Ceredigion and Pembroke, North (Mr. Howells) about the need for an agriculture land bank. Such a bank would provide long-term, low-interest credit to enable small and new entrants to farming to stock and modernise their units. It would not be intended to provide finance for the purchase of land.

Farming cannot be changed overnight, as it needs longterm policies. That is something that the farmers among whom I live have told me repeatedly during the many years that I have lived in Ryedale, and not only recently. If they are to grow and prosper, they do not need policies that are made on one day and changed by a Minister on the following day, such as we had with milk quotas years ago.

Whatever emerges from the debate, I hope that policies will be forward looking and that we shall have a five to 10-year planning policy for agriculture.

6.22 pm
Mr. Michael Lord (Suffolk, Central)

I am delighted to have the opportunity of contributing briefly to the debate on agriculture and the rural economy. A large part of my constituency is agricultural and Ipswich, of which I represent a quarter, is much dependent on successful agriculture. I should like to rephrase the title of the debate, for I believe that agriculture is the rural economy. It is the mainspring that drives everything else along. If it slows, it has an effect on all the ancillary industries in rural towns and villages. That is an effect that can quickly be seen, and it is starting to be seen already.

I wish to raise only three issues. First, I want the House and my hon. Friend the Parliamentary Secretary to reaffirm their faith in farming. I am sure that my hon. Friend will do so. Secondly, I believe that we need an urgent commitment on the part of the Government to help to find ways of maintaining the dynamism of agriculture. Thirdly, I urge my hon. Friend the Minister to do all that she can to ensure that, however complicated the framework may become in which our farmers have to operate, the rules and regulations will be enforced fairly on everyone.

We do an enormous disservice to our farmers if we fail to recognise all that they have done in the past and are doing now to produce our food as efficiently as possible, and in looking after our countryside, for which, sadly, they receive more brickbats than compliments. We owe our farmers a great deal, and we should acknowledge that.

Currently, we have surpluses. That means that we have too much food. I acknowledge the existence of surpluses in some commodities and in some areas, but something inside me tells me that it is a bold nation, or perhaps even a bold world, that says that it has too much food. Setting aside the needs of those parts of the world that are desperately hungry, I have a real fear that if we are not careful the day may come when we do not have too much food. It is one thing to have too much food to feed the nation, and an entirely different thing to have insufficient.

Many years ago, when I studied agriculture, there was a nasty disease about that was called "take all". It meant that if a farmer was not careful he could wake up one morning and find that all his cereal crop had been destroyed. That disease seems to have been conquered by breeding and sprays. However, we are still vulnerable to some extent. In the 1960s, Dutch elm disease first came to our shores in its present form, and I was much involved. Since then that disease has almost completely destroyed our elm population. Perhaps the finest tree that we had in our landscape has almost disappeared for ever. It might still survive in isolated pockets, but, broadly speaking, it has been wiped out, and nowhere more so than in East Anglia. I suspect that in many instances farmers have been blamed for the changing landscape, when they have had no control over the change. I was especially involved with Dutch elm disease because of my then occupation, and 20 years later we do not have the slightest idea how to conquer the disease. I do not want to sound alarmist, but sometimes it is right for us to remember that we are not entirely invulnerable.

I have had the gravest and the most specific forebodings about an industry which has been driving forward so well for so many years being put into neutral or, worse still, into reverse. Two things must be tackled simultaneously. First, we must struggle with our European partners and the common agricultural policy to endeavour sensibly and at a reasonable pace to reduce and balance our food production. Many have suggested how that can be achieved. It is essential if we are to curb over-production and contain expenditure, but we must remember that from agriculture's point of view that is a negative approach. Secondly, it is vital that positive measures are taken to stimulate and encourage diversification in as many areas as possible as a way of maintaining the industry's momentum.

A way must be found of achieving international cooperation, both to help the hungry nations of the world and to avoid an international food price war, which would hurt everyone. If certain land is not to be used to produce current crops, as most seem to agree must happen, a much canvassed alternative is tree planting, in which I confess I have an interest. It seems to be a sensible solution, because it would improve the appearance of our countryside, and the land involved, although not available immediately for food production, could be cleared and used again for that purpose reasonably quickly if that were required, and we never know exactly what the future holds. Our huge import bill for timber is well known, and anything that reduced it would be to the country's advantage. Several of our farming organisations and the Ministry itself have produced publications on forestry and woodland management. If this activity is stimulated, it will do nothing but good for the nation.

Many new crops are being experimented with and several hon. Members have referred to the work that has been undertaken. The experimentation should be encouraged. More important in the long term, both cereals and sugar may be used in a variety of industrial processes in manufacturing various chemicals. These may prove important outlets in future.

My last subject is fairness, which is the issue that leads to constant complaints from farmers and various parts of agriculture in my constituency. Whether we are talking about the effect of CAP measures on Britain as a whole and the way that they are implemented in various member states, or whether we are talking about how CAP measures affect us internally as a nation, such as the problems that the co-responsibility levy is causing among cereal growers, compounders and feeders, it is essential that we do everything in our power to ensure that fairness prevails.

If we are not careful, there is a great danger that we shall talk ourselves into a depression. That is easily done, and we must avoid doing so at all cost. It is essential that we pledge our faith and confidence in our farmers for what they have done for us in the past and for what they will continue to do for us in future. We must do all that we can to keep the industry moving forward to prevent stagnation and decline. Finally, we must ensure that the rules, however complicated, are obeyed by everyone so that our farmers get a fair deal. If we do these things, we shall be doing all that we can to preserve the future of farming, and with it the fabric of our rural communities.

6.29 pm
Sir Hector Monro (Dumfries)

I have agreed with many of the things which have been said in the debate, but I want to touch on a crisis that is affecting my constituency and the constituencies of other hon. Members in the north of England and Scotland. The crisis has arisen since the ban on the sale of lamb because of radioactivity. I accept that Ministers have done their best in the circumstances, and I accept what they have done, but I must press my hon. Friend the Parliamentary Secretary on compensation.

I have received letters from my right hon. and learned Friend the Secretary of State for Scotland and I noted the replies by my right hon. Friend the Minister of Agriculture, Fisheries and Food last Thursday, relating to compensation. The key issue upon which both Ministers are resting their case is compensation for severe loss in particular circumstances to specific farmers. That could mean many things, but the key question which farmers in the North and Scotland want answered is, will compensation be paid? I hope that my hon. Friend the Parliamentary Secretary will respond to that when she replies.

The sale of lambs was banned in certain areas for three weeks from 1 July. Fortunately that ban was eased in some areas of low ground last week. In the areas where the ban has been lifted, some 15 per cent. of Iambs have failed to pass the grade because they are too fat. This position will deteriorate where the ban still exists and where the lambs are growing fatter.

I went to market on Friday to check and I found that lambs which were not graded in the 22 kilo range, were sold for about £26 or £28. They therefore lost the subsidy of about £15 per head. That is a severe loss to the total profit of the farmers and this has occurred, through no fault of the farmer, on account of events in Russia.

I was glad to see that the Meat and Livestock Commission, Ministers and the graders have accepted this point and have ensured that the lambs which have failed the grade because they are too fat, have been marked in the left ear. This leads me to hope that an administrative solution to the problem is being prepared. Once the lambs are marked in the left ear, purchasers will know that there is no conceivable way that the animals can be graded in future. That tends to lower the market price immediately.

Many farmers in my constituency, in the constituency of my hon. Friend the Under-Secretary of State for Employment, and in the constituency of my hon. Friend the Member for Cunninghame, North (Mr. Corrie) and elsewhere in Scotland, now have large numbers of lambs to sell. The farmers, the markets and the hauliers are all losing out.

In the past two weeks the position has been complicated through no fault of the Ministers'. The compulsory dipping regulations came into force on 28 June. While the three-week ban was in place, farmers employing good husbandry dipped their lambs because the weather was appropriate for that. The farmers have therefore been unable to sell the lambs for two weeks as that is normal practice. That means that, although there have been relatively few lambs coming on to the market over the past week or so, there will be a flood of fat lambs next week which will have a severe effect on price. I hope that my hon. Friend the Minister will not delay in giving a firm assurance that compensation will be paid in appropriate cases where lambs have failed to pass the grade on account of being overfat as a result of the recent ban on sales. The sooner that he gives that assurance the better. There is much dissatisfaction among farmers who have been caught out through no fault of their own.

Several hon. Members have claimed that farmers require confidence for the future to invest and prepare long-term plans. I do not wish to overplay the matter but I cannot understate the present difficulties. There are vast overdrafts, falling land values and there has been a big drop in income over the past farming year. I am glad that inflation has fallen to its present low level and that is a great help for farmers. As hon. Members have said, the reduction in interest rates is worth a tremendous amount to farmers.

The debate about the future of the industry has been going on for several years since surpluses became more and more apparent. Although there were tremendous problems about milk quotas and subsequent difficulties facing the milk industry, there is no doubt that the industry can now see a way ahead, and credit is due to the Milk Marketing Boards of the four countries involved. The main grain and livestock sector needs a clear way ahead and a light at the end of the tunnel. Many of the suggestions put forward have been on the fringe, but we must keep our thoughts at the heart of the matter — basic livestock and grain farming at which farmers are expert and have staff of equal efficiency. Craft workshops, tourism and forestry are welcome but represent only fringe elements to the farmers' income, not the part of his farm work which has always provided the main production.

My hon. Friend the Member for Cunninghame, North raised an important point. Positive planning in the countryside is vital. There is no doubt that, without affecting the environment, we can do an immense amount in the countryside to keep people living there, to give them the chance to build houses in the right setting and in the right density and help small developments in very small towns. We must keep a close eye on the rural communities if we wish to maintain the population in the countryside and ensure that facilities are as good in the small towns as they are in larger towns. We must consider the retention of the village hall, the village school and church, its shops and post office which constitute the rural community. We must work towards a rural policy for the future.

The Select Committee on Scottish Affairs investigated the Highlands and Islands Development Board and recommended very strongly that a rural development fund should be set up for the rest of Scotland to perform many of the duties carried out by the Highlands Board in Scotland which are carried out more effectively in England by the Development Commission than the Scottish Development Agency in Scotland. The Select Committee made an all-party recommendation to set up the fund with £25 million and that would do an immense amount of good for the rural economy in Scotland and a similar fund would benefit England and Wales.

We must pay a great tribute to what the Government have done to keep money in the hills and the less-favoured areas through the hill livestock compensatory amounts, the suckler cow subsidy and through the many grants available to farmers. I accept that grants have decreased especially in the case of the farm improvement scheme. I must tell my hon. Friend the Parliamentary Secretary, as I have told my right hon. Friend the Minister on more than one occasion, that when reducing drainage grants we must not muddle the normal replacement of drains in arable fields with those drains which might affect the conservation through draining wetlands. That is an important difference as we want to encourage tile drainage in cultivated land.

As my hon. Friend the Member for Cunninghame, North, said, there is a great future for agriculture. However, we must make firm decisions about the Government's lead and we must bear in mind that mainstream agriculture is important and that the fringe benefits to be gained by the alternatives which have been suggested — including, of course, forestry, which has a low cash flow and low input of employment — are secondary. We must concentrate on the main stream and I hope that the Government will do that in the immediate future.

6.39 pm
Mr. John Home Robertson (East Lothian)

I am glad that the hon. Member for Dumfries (Sir H. Munro) was able to make his speech, particularly in view of the tantalising trailer in today's issue of the Glasgow Herald, which said: Sir Hector Monro, Tory MP for Dumfries, is expected to press another little thorn into the side of the Scottish Office … Sir Hector will be an embarrassment to Mr. Malcolm Rifkind. I am not sure whether the hon. Gentleman lived up to those expectations, but I intend to refer to the point that he raised about the rural development fund for the parts of Scotland that are outside the Highlands and Islands Development Board area. I agree with the points that he made about the need for compensation for sheep farmers who have been affected by the ban that was imposed following the pollution from Chernobyl.

I congratulate the hon. Member for Sherwood (Mr. Stewart) on his double good fortune in securing the debate. He was doubly fortunate because the debate should have gone to my hon. Friend the Member for Linlithgow (Mr. Dalyell) a few weeks ago, but it was talked out by devious tactics by some Conservative Members. Nevertheless, I join my hon. Friend the Member for Linlithgow in congratulating the hon. Member for Sherwood on raising this important subject. We for our part would support the terms of the motion, not least because it highlights the Government's failure to give a proper lead to the agriculture industry at a time of radical changes in the circumstances facing the industry. The motion also recognises the existence of a range of special problems in rural Britain, which have been getting considerably worse throughout the seven years that the Government have been in office.

The hon. Member for Sherwood calls for a White Paper on agriculture. Some of us have been calling for that publicly for some time. The Minister fell a little short of refusing it yet again, but we shall see what comes of that in due course. There is no doubt that the industry needs a positive lead to get it out of the mess that it is now in.

The fact that the hon. Member for Sherwood has consistently supported the Government on these and other issues is something that he will have to explain to his constituents some time next year, according to all the leaks. With the best will in the world, I suggest that he may have more time to consider the problems of agriculture after his constituents have delivered their verdict than he has at present, but we shall see.

The debate has rightly centred on the agricultural industry. It has to be said that the industry has been drifting into chaos, along with the common agricultural policy, which is supposed to be supporting it. Some £15 billion was spent last year on the CAP, and the amount is going up again this year. That was 70 per cent. of the Community's budget. In spite of all the resources that are supposed to be supporting the rural economy and agriculture throughout Europe, we have falling employment in agriculture and rising indebtedness for many farmers in this country, as several hon. Members have said.

The CAP is a fairly ham-fisted instrument. It provides an open-ended artificial market for a range of agricultural commodities. We all know what is happening. It is supposed to be helping small producers, but inevitably it is providing a substantial incentive to larger farmers to fill the Community's intervention stores with vast quantities of junk cereals and other surplus stock. I do not necessarily criticise the farmers who are filling those stores—indeed, it would be the height of hypocrisy for me to do so, because I am one of them. But we all must recognise that the system that provides such incentives for people to do such things must be absurd.

Last year the European Community was the proud possessor of about 16 million tonnes of cereals in store. Here in the United Kingdom we started this year with 85,000 tonnes of beef, 240,000 tonnes of butter and other milk products, and no fewer than 5,700,000 tonnes of cereals in intervention store. Make no mistake, there will be more this year because, in the absence of a positive lead to the industry to get away from that farce, it is inevitable that production will continue to increase.

The Government and the Commission keep putting off the decisions that should be taken to control that situation, but there is a growing awareness that something will have to happen. The trouble is that neither the Government nor the industry has a clear picture of what that something will be. The only thing that we are all absolutely clear about is that the common agricultural policy is not working. The hon. Member for Gloucester, West (Mr. Marland) pointed out the amazing fact that last year we spent £2.2 billion on agricultural support in the United Kingdom, but the net farm income of all farmers in the United Kingdom was only £1.1 billion, so obviously there is something far wrong with the targeting of the resources.

The Minister of Agriculture, Fisheries and Food spent his first year or so in office saying that price cuts were the right way to control the production of surpluses. He is wrong, for the very reasons that the hon. Member for Gloucestershire, West, among others, gave. A marginal cut in prices would be a spur to increased production. It is possible that the proposed co-responsibility levy will add to the spur to increased production whereas the massive cuts in prices that would be required to suppress production would probably bankrupt a large number of smaller producers. I was delighted to hear in the Parliamentary Secretary's speech that the Government, as of this debate, intend to abandon the ludicrous position of using the price-cutting mechanism to deal with the problem.

The other alternatives are much more specific constraints. Quotas are the obvious one. There has been some support for that idea during the debate. We have heard about the imposition of milk quotas. Even the most fervent supporters of the Minister of Agriculture, Fisheries and Food would admit that he was rushed into that decision and did not act cleverly. It was a panic decision in its implementation in Britain. It has given rise to unforeseen problems. The most topical one must be tenants' rights to the value of quota when they give up their tenancy on farms. However, I agree with several hon. Members that the system is working. There may well be a case for quotas in other sectors. However, the Minister and the Parliamentary Secretary have been talking about set-aside. We are longing to find out exactly what that means. If it means some sort of subsidy to encourage farmers to fallow some of their land, there may be a case for it. But if it means a longer-term abandoning of land, which was suggested in the structures proposals from the European Commission which we debated last week, there would be much opposition to that suggestion.

Let us emphasise the fact that the delay and uncertainty surrounding the industry just now are extremely damaging. My hon. Friend the Member for Carmarthen (Dr. Thomas) emphasised that. Against that background, we see the massive cuts in research and advisory services £16.5 million slashed off the budget of the Agricultural and Development Advisory Service, 800 fewer advisers in England and Wales, and a 41 per cent. cut in the funding of the Scottish agricultural colleges. This is no time to be cutting back on the research back-up and advice available to farmers. For the Minister to talk about value for money in such circumstances is absurd.

The Opposition say that there should be three fresh approaches within the CAP. First, we emphasise the need for structural change. That means alternative land uses, alternative crops, alternative stock and in particular the cultivation of trees on agricultural land.

Mr. Mark Hughes (City of Durham)

It is very good to say that we want alternative uses. Given modern technology producing more food, whether from livestock or grain, to pretend that the way out of excess production is by growing trees is to delude ourselves. We have too many people, too much land and too much technology. We cannot pretend that we get out of that by growing trees.

Mr. Home Robertson

We are trying to be constructive. The growing of trees is one of several alternatives. What the industry needs above all is a positive lead, which it is not getting from the Government. The National Farmers Union has admitted that between 100,000 and 150,000 hectares will have to be taken out of production of existing crops. It is time for positive guidance on that. That is one of the things that the Ministry of Agriculture, Fisheries and Food should be doing.

The second area on which we want to concentrate is the need to negotiate a major shift from the intervention system to alternative support mechanisms, which would help the consumer as well as the farmer. The obvious examples of that are the beef variable premium and the sheepmeat regime, or our old deficiency payment system. There are signs that the French and the Germans may be moving in that direction. We should encourage them.

Thirdly, there should be better targeting of support, especially for smaller farms and less-favoured areas. To achieve that, we must repatriate many of the nuts and bolts of the CAP. We must get the local decision-making done in Britain rather than Brussels.

At national level, we must restore ADAS and build up a rather different land bank from that which has been talked about today, to make more land available to let to people who want to come into the industry. My hon. Friend the Member for Pontypridd (Mr. John) has talked of that before. It is a scandal that it is so difficult to start a career in farming.

The Labour party has an excellent record when it comes to our relationship with agriculture. It was a Labour Government who brought in the Agriculture Act 1947, which provided the basis for the industry's recovery after the war. When we were in office until 1979 we tried to guide the industry on the way ahead by publishing White Papers setting out our general objectives. There has been no White Paper on agriculture since 1979.

The industry does not know what it is supposed to be doing. The National Farmers Union of Scotland says in its journal this week: the British Government's attitude — so far as we can discern it—seems less than lukewarm and is uncertain. This is part of the general complaint that the Government has no strategy for the countryside, that there is no sense of purpose for producers in the more peripheral regions, and policy makers have no clear notion of how we shall enter the next century with a countryside as a place in which wealth is created". The industry does not know what direction it is supposed to be going in.

Mr. Lord

Will the hon. Gentleman give way?

Mr. Home Robertson

No. I am sorry, but there is not time and the Minister wants to reply.

There is more to rural Britain than agriculture. There are many long-standing problems in rural Britain which have been aggravated by the Government's economic policies and other aspects of Tory dogma. Rural unemployment is a growing problem in many areas. We have the problems of conservation and the environment, the rural housing crisis and the disruption of already poor transport services by the Transport Act 1985 and perpetually high fuel costs. Government spending cuts and successive rate support grant cuts have had an impact on a range of services and on schools, which are important in rural communities.

It is in response to that challenge that organisations such as Rural Voice, in England and Wales, and the Rural Forum, in Scotland, have been set up to try to fight the corner for rural communities. I have experience of the threat through the proposed closure of my village school, which my children attend. I am acutely conscious of how fundamentally important such services are to rural communities. I am delighted to say that people in my constituency have succeeded in fighting off the efforts of the Liberal chairman of the education committee and the former Conservative administration in Lothian regional council, which wanted to close rural schools. One cannot over-emphasise the importance of schools and housing in rural communities.

It is important to emphasise the serious poverty that is to be found in many rural areas. In its spring edition of "Poverty", the Child Poverty Action Group says: approximately 25 per cent. of households in rural Britain were living in or on the margins of poverty. In such areas, costs, including transport costs, are higher than elsewhere. Much work must be done to sustain services to create jobs and to make life more tolerable in rural areas.

The hon. Member for Dumfries mentioned the need for a rural development fund. We both represent part of the rural south of Scotland which does not have the benefit of a specialist rural development agency. The Select Committee on Scottish Affairs, of which he is a member, and the Confederation of Scottish Local Authorities presented a powerful case, supported by the Rural Forum, for a modest rural development fund to help the Scottish Development Agency and local authorities to promote services and employment in those areas, but they were rejected out of hand by the Government on the most spurious grounds. The hon. Gentleman and I can make common cause on that. There is an urgent need for a development initiative to create jobs and sustain services in rural areas.

There is a serious crisis in rural communities today. It takes an insidious form and we cannot leave it to market forces to find a resolution. It will take a Socialist Government, who are prepared to intervene, to overcome those problems.

6.55 pm
Mrs. Fenner

With leave of the House, I should like to reply to the debate. In view of the shortage of time, hon. Members will have to rely on getting a note from me.

I again congratulate my hon. Friend the Member for Sherwood (Mr. Stewart). I am aware of the anxieties that he expressed, especially in regard to getting some forward plan. As for a White Paper or a similar document, I said earlier that a great deal is going on in Europe at the moment and we would want to set out such a document only if it were not in danger of being changed immediately.

I listened with some interest to the hon. Member for Ceredigion and Pembroke, North (Mr. Howells), who would spend a great deal of money. He mentioned marketing, but obviously failed to take account of the fact that we promoted Food from Britain with £14 million. We are the first Government to have promoted a marketing organisation. We are continuing to put our money where our mouth is by giving £1 for every £2 which comes from the industry.

Several hon. Members were worried about research and development, but £200 million on agricultural research and development and food development is not a measly sum. I understand that a letter from the alliance was sent around, saying that a spending standstill would be imposed on agriculture under alliance policy. The hon. Member for Truro (Mr. Penhaligon) admitted in the House on 6 May during a debate on the Finance Bill to my hon. Friend the Chief Secretary to the Treasury that that letter had been sent out and that there would be a spending standstill. I do not therefore plan to take instruction from the hon. Member for Ceredigion and Pembroke, North about how to support agriculture when he would put a freeze on support for it.

Does the hon. Member for East Lothian (Mr. Home Robertson) believe that the Labour Government's policy of fixing land tenancies for three generations did anything to make rented land available? That is why we introduced the Agricultural Holdings Act 1984

Mr. Home Robertson

It does not work.

Mrs. Fenner

It has not been working long enough for the hon. Gentleman to make such comments.

My hon. Friend the Member for Dumfries (Sir H. Monro) is anxious about the marketing of lamb. My information is that the average market price continues to strengthen—over last week's price, and over that for the same week last year. The general picture is that trade is improving. Rejection rates have been falling. If my hon. Friend has additional information, we must examine it, and I should be obliged if he would supply me with it.

The hon. Member for Linlithgow asked about the comments of the National Federation of Site Operators. I shall ensure that the hon. Gentleman's comments are drawn to the attention of my right hon. and noble Friend the Secretary of State for Employment, who is apparently responsible for these matters. The hon. Gentleman also mentioned horticulture. I assure him that the Dutch have stopped support for their glass horticulture industry—it is not necessary with reduced energy prices. The case is being presented in the European Court. If it succeeds, we shall press for recovery of the money that has been paid. The hon. Gentleman also asked about the Salmon Bill. The business for next week has not yet been announced, so I cannot say when it will return to the House.

My hon. Friend the Member for Torridge and Devon, West (Sir P. Mills) was worried about swine fever. He realises that we have to determine the origin before we can seek any banning operations. He complained about the delay in obtaining samples from Weybridge, and I shall have to look into that specific point.

Many questions and points were posed by two of my colleagues who have apologised because they have had to leave the Chamber, and perhaps I shall have to write to them as well.

This has been a useful debate. Hon. Members have had the opportunity to express the concerns that farmers have clearly expressed to them. I congratulate my hon. Friend the Member for Sherwood on choosing a subject of such interest to so many hon. Members. We have noted his request for a White Paper or a similar document.

It being Seven o'clock, proceedings thereon lapsed, pursuant to Standing Order No. 6 (Arrangement of public business).