§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Garel-Jones.]
10.55 pm§ Mrs. Marion Roe (Broxbourne)I am most grateful for the opportunity in this Adjournment debate to discuss the state of British horticulture and, in pa:ticular, the part played by the glasshouse industry within it.
It is no exaggeration to say that horticulture is one of Britain's greatest unsung success stories. In 1987, the latest year for which figures are available, horticulture output rose by 5 per cent. to a value of almost £1.3 billion. To put that in perspective, that is equivalent to more than two-thirds of Rolls-Royce's turnover, or to about £25 for every man, woman and child in the United Kingdom.
We produce more fruit and vegetables than ever. Remarkably, Britain is more self-sufficient in crops that can be produced in the United Kingdom than at any time in our history. Overall, exports of foodstuffs have more than doubled since 1979. In contrast to the 19th century and to much of this century, Britain no longer has to trade goods and services in international markets to pay for massive imports of foodstuffs.
In the Lea valley in my own constituency, the strength of the glasshouse industry is indicative of that success. Over the past couple of years, a massive rebuilding programme has been under way, resulting in the construction of about 125 acres of modern, efficient aluminium glasshouses—replacing hopelessly ancient and obsolete timber-framed glasshouses. At the same time, growers have been switching to the latest hydroponic methods of growing, using sophisticated computerised controls and plant feeding systems.
Some indication of the strength of confidence about the future being shown by growers in the Lea valley is that they have invested about £15 million over the last year or so. There are probably three main reasons for that investment boom and for the industry's general optimism in my constituency. First, as with all industries, the fortunes of the glasshouse business are in part a function of the strength and vitality of the whole economy. With the economy in better shape than at any time since the war, with unemployment falling fast, and living standards up to record levels, the environment in which the industry operates is better than it has been for years. Coupled with the growth in real incomes, a more discerning, health-conscious consumer is emerging—able and willing to pay for fresh produce.
Secondly, the fall in the cost of fuel—especially oil—over the last two or three years has given an immense fillip to an industry whose profitability and viability depend to a substantial extent on fuel prices. Thirdly, the Government deserve great credit for the introduction of the enhanced rate of grant aid for replacement heated greenhouses. Until November last year, growers were able to claim grant aid of 50 per cent. of the cost of replacement heated glass up to an expenditure limit of £136,000, placing a maximum of £68,000 at the disposal of the investment-minded grower. For glasshouse heating systems, the level of grant was 20 per cent. up to the £136,000 limit. The implemention of that special scheme has proved enormously beneficial to British glasshouse 130 growers as they prepare for the 1990s, the completion of the single European market, and the full accession of Spain and Portugal to the Community.
The new scheme for glasshouse growers provides for grant at a slightly lower level, with an investment ceiling of £74,000. Although that may seem a dramatic cut, it is important to bear in mind that the new arrangements give the highest level of grant and ceilings now permitted by EC rules, and compare very favourably with those in other sectors. Moreover, the old scheme was never intended to be anything but temporary. Its aim of giving a substantial boost to investment in the glasshouse sector now having been achieved, it is only right that the grant should revert to lower, although by no means ungenerous, levels.
Most growers were delighted that the Government kept the scheme alive, a recognition of both the importance of the sector and the need for the industry to continue raising levels of investment. When we consider that very few manufacturing companies are able to obtain comparable levels of grant for their capital investment, it is apparent that the glasshouse sector received a fair hearing from the Government. It would, however, be wrong to portray the industry as one entirely without problems, and perhaps the most sobering long-term threat comes from the full integration of Spain and Portugal in the European Community.
So far the industry has proved itself more than capable of meeting the challenge of foreign competition. That success is all the more remarkable when we consider that British growers are increasingly competing against overseas producers who have the advantage of lower labour costs and a more favourable climate. Moreover, the telescoping of distances by air travel and the reduction in the real cost of that travel have brought produce from the most distant corners of the earth into the average supermarket, and has strengthened the competition that British producers have to face.
Against that background, our growers have made increasing use of new and existing technology and research to lift output and to boost productivity. As the removal of the final barriers to trade within the Community in four years' time approaches, it becomes all the more crucial that British growers are at the very forefront of the development and exploitation of new production techniques, technology and research. The preparation for the next decade has already begun with the huge increase in investment in the glasshouse sector, thanks in no small part to the old agricultural improvement scheme. But, as manufacturing industry knows only too well, investment on its own is not enough. British producers need speedy access to first-class research and development and advisory services. Without such resources home producers will find it increasingly difficult to compete against the low-cost producers from Spain and Portugal in the 1990s. For, just as industry has found that it can hope to compete successfully only through the application of new processes and techniques, so our growers will come to rely ever more on scientific methods of production.
I believe that it is only right that the industry should make a substantial contribution to the cost of the research and development and advisory services on which its competitiveness so crucially depends. After all, who better to decide on and to fund such services than those who know what they want and how much they are prepared to pay for it?
131 That does not mean, however, that there is no role for Government. Although it is only right that research and development should be industry-led, I do not believe that Government should leave it entirely to growers. At a time when our competitors, notably the Dutch, are able to make use of the substantial resources provided by their Governments, we cannot afford to abandon growers entirely to the market. Without such assistance, I think that the long-term competitiveness of the industry could be threatened.
It is sobering to remember how effectively the Dutch have come to dominate the United Kingdom vegetable and seed industry over the past 20 years, thanks in large part to a substantial commitment of resources to seed research by both private companies and the Dutch Government. Today the cabbages, sprouts, carrots, lettuces and tomatoes in the greengrocers' shops are more likely to be of Dutch origin—possibly grown in the United Kingdom but grown from Dutch seeds developed by Dutch scientists. British glasshouse growers are of course determined to ensure that foreign competition does not have a similar impact on their industry. In doing so, they attach great importance to the roles of Government-supported research and development and the agricultural development advisory service in ensuring the continued success of the industry.
Growers have shown their commitment to the industry by investing in new glasshouses on a massive scale and by supporting important initiatives such as the Horticultural Development Council. However, within the industry there is great concern that the Government may go too far, too fast in trimming Government-sponsored research and development and reducing spending on advisory services at a time when the need for those services has probably never been greater.
The Government are right to expect growers to make a substantial contribution to so-called near-market research, the benefits of which are for the most part immediate and tangible. There are inevitably problems in defining what constitutes near-market research. I know that the industry is concerned that the Ministry of Agriculture, Fisheries and Food's proposals on near-market research will lead to a drastic cut in overall Government support for research and development. If the case for greater spending by the industry on near-market research is strong, the equally important although less commercially attractive—at least in the short term—basic research requires a more substantial financial commitment from the Government.
A current example of where research and development funding needs to be directed is the control and containment of pests and diseases in glasshouse crops. Western flower thrip—WFT—has now become a major worry to glasshouse growers, despite the fact that it has been notified in the United Kingdom for only a couple of years. It has spread to some important crops, both edible and ornamental, and new outbreaks continue to be confirmed. Fortunately, as yet there have been no notified outbreaks of WFT on cucumbers in the Lea valley, although there have been 11 outbreaks in that crop elsewhere in the country.
At present there are no proven biological controls for WFT and chemical controls are incompatible with existing biological control of other pests. Thus, glasshouse growers are faced with the possibility of relying ever more on chemical control methods for WFT despite the fact that it 132 goes against the trend of reducing dependence on chemicals due to concerns about pesticide residues and environmental pollution.
Since chemical controls for WFT negate the impact of existing biological controls used against other pests, the use of chemicals against WFT could result in the waste of considerable amounts of work in recent years on developing the extensive biological controls now used. Fortunately, the Horticultural Development Council has recently made available extra funds to research the use of chemical and integrated controls for WFT. I believe that five chemicals are being tested by ADAS for control on crops at Reading and Wolverhampton. I hope that the Minister can assure growers that research into that pest will proceed rapidly and that, as far as possible, the speed of the development of effective controls for WFT will not be hindered by a lack of resources.
There is also some concern within the industry that MAFF approval of the chemical Dynamec, which is widely used in the United States and on the continent for the control of WFT, is being held up because the committees concerned have not yet been able to consider it. I know that the National Farmers Union has suggested that an extra advisory committee on pesticides should be set up, thereby helping to solve the bottleneck problems. I hope that the Ministry will give that idea close consideration. However, for reasons of cost alone it may prove difficult to implement.
The second major area of worry to growers is the level of funding for advisory services. The Lea valley has experienced the loss of the pathology unit at the ADAS Cheshunt advisory unit and the Lea valley experimental horticulture station is about to close down. The number of full-time senior advisers at the Lea valley local advisory unit is now down to one. Only a year or so ago there was a complement of three. The irony is that, thanks to the buoyancy of the glasshouse sector and the switch to hydroponic growing techniques, the need for professional advice has never been greater. So great has been the demand for advice contracts with the local ADAS that the unit has had to turn away applicants simply because it does not have the manpower necessary to cope with the demand. That is a great pity, especially at a time when growers are more than happy to bear the charges associated with ADAS services.
In contrast to this apparent weakening of ADAS, it is interesting to note that the Department of Trade and Industry is putting an ever greater emphasis on the provision of advice and consultancy services to industrial and commercial companies through its enterprise initiative, which was introduced in January 1988. That is a clear recognition of the importance of professional advice in important areas such as design, marketing and production and such advice is already proving of special value to small and medium-sized firms, especially independent businesses. I hope that the recent decline in the ADAS service in the Lea valley does not represent a break in the policy of the Ministry of Agriculture, Fisheries and Food of aiding the industry through the provision of advice to growers. Relatively low levels of Government assistance can bring substantial benefits to the industry and to the local economy. I hope that my hon. Friend the Minister can reassure the growers that the Government are committed to continuing the fine work of ADAS in advising growers.
133 The glasshouse industry is an increasingly high tech business, which is now in a strong position to meet the challenges of greater competition as we enter the 1990s. The Government have made a major contribution to the revitalisation of the industry through the generous levels of investment grant available to growers over the past five years. At a time when the industry is in such a strong position, I hope that it can look forward to the continuing support of Government, especially in research and development and advisory services. The Government are right to look to the industry to fund an increasing proportion of those services from its own pocket. The glasshouse sector has done that, notably through the Horticultural Development Council. However, it would be a false economy at this stage to reduce support for research and development and ADAS too drastically. To do so could risk the industry's not inconsiderable achievements over recent years.
§ The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Donald Thompson)I am grateful to my hon. Friend the Member for Broxbourne (Mrs. Roe) for bringing this important subject to the attention of the House. I notice that my hon. Friend the Member for Daventry (Mr. Boswell) is listening to the debate. The challenge facing the glasshouse sector of horticulture is important and I congratulate my hon. Friend on the well-informed and interesting way in which she has presented the matter to us. I hope that she will excuse me if my voice does not sound as interested as it should; I am suffering from a touch of flu. I endorse what she has said about the success achieved by our growers and welcome the opportunity to explain the Government's attitude to the range of issues.
I begin by offering my congratulations to the industry which, despite its fair share of problems in recent years, has made determined efforts to organise to meet the demands of today's market. I do not underestimate the problems encountered along the way, from the high fuel prices of the early 1980s—and I was pleased to hear my hon. Friend mention low fuel prices in the late 1980s—to the storm damage in October 1987, which none of us will easily forget. I have nothing but praise for the way in which those growers affected by the storm so quickly got their businesses back in production. Despite this setback, and often in the face of strong competition from overseas, glasshouse growers have adapted their production to become one of the most buoyant sectors of the horticulture industry.
I am particularly impressed by the efforts that so many growers of protected crops have made to improve the quality and presentation of their produce in recent years. They can now meet the multiples' stringent requirements and claim the high rewards that today's consumers are willing to pay for top quality goods. Thanks to the achievements of the British Quality Salad Association and the various crop associations, customers nowadays have a better choice of high quality fresh produce than ever before. Salad crop growers have taken advantage of the FEOGA marketing grants to invest in facilities to 134 maintain produce at maximum freshness and in equipment to transform vegetables into increasingly popular new products, such as prepared salads.
For their part, the Government recognise the valuable contribution to the economy that is being made by the glasshouse sector and the need for it to adapt and modernise in order to maintain and improve its share of the market. My hon. Friend referred to the enhanced rates of grant for replacing heated glass and for heating systems that were introduced in 1983, initially for five years. I believe that it was part of our election manifesto. Following the storm, these favourable grants were extended for yet a further year. Now, under the new capital grants scheme that was announced by my right hon. Friend on 28 November, grant at a preferential rate is being continued until the end of 1993.
I was glad to hear of the extensive rebuilding programme that is being undertaken by growers in the Lea valley. I know that many other growers are anxious to replace and modernise their existing glasshouses, and I hope that they, too, will take full advantage of these generous grants. I am heartened by the increasing optimism among glasshouse growers, but I am also aware that there are a number of issues that are causing concern to the industry. My hon. Friend does well to bring those issues before the House. She referred to the challenge of foreign competition.
I know how concerned the glasshouse industry has been about the effect of Spanish and Portuguese accession to the European Community. It is at the beginning and end of our growers' marketing season for protected crops that problems are most likely, for it is at these times that there is an overlap with production in the Iberian peninsula. However, various measures have been taken to ensure a smooth transition to a Community of Twelve.
The transitional period for fruit and vegetables extends over 10 years, three years longer than for most other sectors. Tariff barriers are phased out over this period, and there is very little other change in the first four years. In the fifth year, some abatement of the reference price system is introduced, but for salad crops it does not fall below 80 per cent. of the minimum prices for third country imports until transition ends.
There is also provision in the treaty to prevent any market disruption from Spanish and Portuguese imports over the transitional period. Obviously, after that Spain and Portugal will be on an equal footing with the Ten and the ordinary provisions for trade between member states will apply. However, I am confident—as, I am sure, is my hon. Friend—that, given the enterprise shown by our leading producers in the areas of production storage and marketing, the challenges of competition from the Iberians will be met.
Growers, like other business men, are now looking ahead to 1992. With the coming challenge of the single European market, it is particularly important for the industry to realise its potential for further development. The object of the 1992 exercise is to weld the markets of the 12 member states into one and to ensure that this large single market is an expanding one. It is for our growers to take advantage of the 350 million customers who will then be available to us.
To compete in this new market will call for imagination and energy, but the opportunity is there for those who wish to seize it. It will be for individual businesses to rise to that challenge. The Government will make every effort 135 to ensure that the new terms of trade are fair and do not discriminate in any way against British growers or British interests. In addition, we shall seek to ensure that British producers have all the information that they need, as changes occur. In fact, the present well-developed Community regime for fruit and vegetables gives considerable advantage to this sector.
For growers, 1992 is, in a sense, already here—at least, within the former Community of Ten. We have free trade and generally accepted quality standards and labelling provisions. That is a positive advantage. However, I must add that any advantage that 1992 brings will apply equally to other Community producers. Thus, the industry must continue with its excellent track record of development and adaptation so that it may not just retain but enhance its future share of the market. To compete successfully in the Community and world markets, our growers recognise that they will have to keep abreast of technological change. The public funding of research and development is, I know, uppermost in growers' minds. The Government have announced progressive reductions in contributions, totalling about £30 million over three years, in research and development for near-market research—that close to commercial application. The readjustment should, however, be seen in perspective. The Government remain firmly committed to supporting work which is of public good and that which involves basic and strategic research.
Current funding of agricultural research by the Agriculture Departments is about £120 million. The Department of Education and Science contributes £40 million for more basic research, and a further £40 million is spent on food and fisheries research. That makes a total of more than £200 million, which puts the £30 million into perspective.
This support of the science base provides a platform for future exploitation by industry—and it is best exploited by industry. Like my hon. Friend, I believe that industry is the best judge of what, and how much, work should be done on near-market projects. It knows where the gaps are, and it can see what really needs to be done to meet the needs of the future. It will therefore see the need to invest more in near-market research and development for its own benefit.
My noble Friend the Parliamentary Secretary is holding consultations with every sector of the industry, including horticulture. Further meetings at official level and bilateral discussions are taking place between research establishments and industry representatives to consider what research industry would be willing and able to fund. I can 136 assure the House that no final decisions on the future level of Government funding will be made until those discussions are complete.
The lead given by horticulture, and especially the support of the glasshouse sector, in voting for the establishment of a Horticultural Development Council was very encouraging. The HDC is to be congratulated on the progress that it has made in commissioning research and development work to benefit the horticulture industry, including work for the glasshouse sector.
My hon. Friend mentioned Western flower thrip, which is a serious pest that has been present in the United Kingdom since 1987. WFT is now widespread on a range of commercial flower and vegetable crops grown under glass. Nevertheless, I assure my hon. Friend that the Ministry's interest remains. We will find effective chemical and biological means of control of this pest. I know that the industry would like the pesticide product Dynamec to be more widely available for use on WFT, but it has approval under the control of pesticides regulations at only an experimental level. It cannot therefore be given off-label approval, allowing far wider use, now. Such approvals have already been given to a range of other products to control WFT.
We have grave doubts about using our limited manpower resources at the plant health and seeds inspectorate in continuing to try to hold the line against a pest which is now so widespread. We have therefore made it clear that the statutory campaign should continue for only a few months more. That will not affect the Ministry's interest in, or research devoted to, finding effective chemical or biological means of controlling the pest.
My hon. Friend expressed concern about the availability of ADAS advice in the Lea valley area. I understand the value that growers place on this advice, particularly in the light of the closure of Lea valley EHS, which they have proved by their readiness to take up ADAS contracts. We fully appreciate the need for a full-time experienced glasshouse adviser at the advisory unit and have every intention of filling the post. In the meantime, the regional protected crops adviser has taken on this role personally, which I think shows our recognition of the need for technical support for Lea valley growers.
§ The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
§ Adjourned at twenty-five minutes past Eleven o'clock.