§ [Relevant documents: European Community Documents Nos. SEC (89) 2097 on the agricultural situation in the Community in 1989, 8076/89 on set-aside, 10912/89 on definition of lambs fattened as heavy carcases, 7548/89 on monitoring of export refunds, 7549/89 and 10850/89 on scrutiny of European Agricultural Guidance and Guarantee Fund (Guarantee Section) expenditure, 7566/89 on physical inventory checks for intervention stocks, and the unnumbered Explanatory Memorandum submitted by the Ministry of Agriculture, Fisheries and Food on 22nd September 1989 on the sheepmeat regime; Minutes of Evidence taken before the Select Committee on European Legislation on Thursday 1st February 1990 (HC 188—i.]
§ Mr. Deputy Speaker (Sir Paul Dean)I should announce to the House that Mr. Speaker has selected the amendment in the name of the hon. Member for Thanet, South (Mr. Aitken). In view of the large number of hon. Members who wish to take part in the debate, Mr. Speaker intends to impose a 10-minute limit on speeches from 7 o'clock.
§ The Minister of Agriculture, Fisheries and Food (Mr.John Gummer)I beg to move,
That this House takes note of European Community Documents Nos. COM. (89) 660 relating to prices for agricultural products and related measures for 1990–91, 7010/89 relating to adjustment of agricultural structures, 8309/89 and 8877/89 relating to the quota system in a milk sector, the Court of Auditors' Special Report No. 1/89 on the agrimonetary system, the proposals described in the unnumbered Explanatory Memorandum submitted by the Ministry of Agriculture, Fisheries and Food relating to 16th January on use of agricultural commodities in the non-food sector and of the Government's intention to negotiate an outcome on the price proposals which takes account of the interests of United Kingdom producers and consumers and of the need to maintain the progress made in reforming the European Community's Common Agricultural Policy.This is a good time for us to be discussing these matters, not least because we are now beginning the price-fixing negotiations in the European Community. I am most interested to hear hon. Members' views and, as I suspect that many hon. Members will support the Government's policy, I hope to be able to use their comments in our debates in the European Council. This is also a most convenient date for the debate, because we published today the 1989 edition of "Agriculture in the United Kingdom", which is an improved version, copies of which are available—[HON. MEMBERS: "Where are they, then?"] Copies are available; if there are none in the Vote Office I apologise.
§ Dr. David Clark (South Shields)On a point of order, Mr. Deputy Speaker. The Minister has said that the document is available, but it is not. It is not available in the Vote Office, and we have been informed that we cannot get it unless we submit a green form and wait for it to be sent by post. In view of that fact, I suggest that we should not debate the document today.
§ Mr. GummerI should be quite happy not to debate the ask, and I would have put matters right. I will supply him with a copy—[HON. MEMBERS: "What about us?"] And any other hon. Member who needs the document. I note 783 that we are having a ritual beginning to this debate, because there is not much that divides us in the issues themselves.
§ Mr. Frank Haynes (Ashfield)On a point of order, Mr. Deputy Speaker. The Minister is admitting contempt of the House. That is what he is doing, and I want you to rule on this. More often than not, when we are told that reports are in the Vote Office, we can go and get them, albeit late, but in this case, the Minister stood there at the Dispatch Box and said that copies were available when they were not available. I think that my hon. Friend the Member for Newham, South (Mr. Spearing) has one, but I do not know where he got it.
§ Mr. HaynesThe Minister has not sent Opposition Members a copy of the report. He wants to come off it; he is a fly-by-night.
§ Mr. Deputy SpeakerI hope that this matter has now been dealt with, and that we can get on with the debate.
§ Mr. GummerThe document is not a command document: it is available in the way in which it has always been available. Opposition Members are merely trying to score points. Previous editions have always been available in this form and the Opposition have never complained before. If hon. Gentlemen wish to make a complaint, I am quite happy to answer it, and to ensure that they have what they need.
§ Ms. Marjorie Mowlam (Redcar)What about hon. Ladies?
§ Mr. GummerYes, and hon. Ladies. I would not dream of excluding the hon. Lady.
There is no problem between the two sides of the House. I am quite happy to consider whether the system that we have always operated for the circulation of such documents should be revised, but I do not see how I could possibly be accused of contempt of the House.
§ Mr. Elliot Morley (Glanford and Scunthorpe)The Minister usually is.
§ Mr. GummerIf the hon. Member wishes to continue making sedentary remarks, I have no doubt that we shall all listen with our usual interest.
In 1989, there was an increase in farm incomes of about £200 million, or 16 per cent., on the low figure for 1988, but I would not put too much emphasis on that. [HON. MEMBERS: "Why?"] For a reason that hon. Members know is perfectly right: farming is not one business but a whole range of businesses. Although that aggregate figure may show an increase it does not help the farmer who has had a poor year to be told that other farmers in other parts of the business have had a rather better year.
The figure that I have cited is useful only in making a comparison with previous years and it is fair to say that, in general, this year has been better than the previous year. I lay no more emphasis on it than that. The figure is largely based on improvements in the intensive livestock, potato and dairy sectors and in my other sectors, such as the arable sector, things have been more difficult.
§ Dame Elaine Kellett-Bowman (Lancaster)My right hon. Friend has referred to the dairying sector. Farmers 784 are fair-minded people and they cannot see anything fair about receiving 19.5 per cent. less than other people because of the green pound rate. I know that my right hon. Friend is fighting hard, but will he tell the Community that the farmers of this country will simply not tolerate a mere one-third devaluation? They want the whole thing—not in 1992 but now.
§ Mr. GummerI am pleased that my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) has raised that matter, as I was about to move on to what seems to be the most important point in the negotiations that we are having at the moment—the green pound. I know that my hon. Friend will accept the point that I have to make to her.
The concept of dealing with farmers at a time of surplus is itself a difficult one. When supply exceeds demand, farmers lack confidence in the future because they do not have the security of market that they do when there is a shortage. Moreover, they are concerned that competition should be fair competition. There is no doubt that times of surplus are difficult times, and the one thing that makes a difficult time impossible to bear is the fact that someone else is not bearing the same burden. That is why the devaluation of the green pound is essential, and why it ought to be a substantial devaluation.
My hon. Friend asked me for a specific commitment. I remind her that I am engaged in negotiations in which the United Kingdom is on one side and all the other member states are on the other, because no other country has an interest in the change in the green pound. I hope that my hon. Friend will agree that while those negotiations are in progress, which are bound to go on at least until the end of March and at perhaps even into the first fortnight of April, it would be better if I was not too forthcoming about my negotiating tactics. It is nevertheless important to try to achieve an end, and I shall try to describe what I believe that end should be.
§ Mr. Edward Leigh (Gainsborough and Horncastle)Will my right hon. Friend give way?
§ Mr. Christopher Gill (Ludlow)Will my right hon. Friend give way?
§ Mr. GummerI shall give way to my hon. Friend.
§ Mr. GillMy right hon. Friend pointed out that we are one against 11. Does he agree that the other 11 countries have a big vested interest in maintaining the status quo, which is to their great advantage and to our great disadvantage?
§ Mr. GummerMy hon. Friend has put his finger on it. Anyone who thinks that the negotiations will be easy or that the Commission's proposals will be automatically accepted by the Council does not understand the negotiating process.
§ Dr. Norman A. Godman (Greenock and Port Glasgow)Will the right hon. Gentleman give way?
§ Mr. GummerI shall give way to my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh), when I have finished this point.
§ Mr. GummerI thought that, when I gave way last time, I was giving way to my hon. Friend the Member for Gainsborough and Horncastle, but my hon. Friend the Member for Ludlow (Mr. Gill) thought that I was giving way to him. It is perhaps only fair to give way first to my hon. Friend the Member for Gainsborough and Horncastle; then I shall give way to the hon. Member for Greenock and Port Glasgow (Dr. Godman).
The House should recognise that, in itself, a change in the green pound will not increase the incomes of farmers: it will merely remove the decrease in the incomes of farmers that would otherwise be there. [HON. MEMBERS: "What?"] I shall explain, although if hon. Members do not understand, they cannot have been listening to the farming lobby. The farmers understand what the green pound means, which is that British farmers get less for their products than farmers in other parts of the Community.
By putting that right, one would only be putting the returns of British farmers on a level with those of other farmers; one would not be giving British farmers a price increase or an advantage. The trouble with the negotiations is that our colleagues in the European Community tend to suggest that, somehow, a change in the level of the green pound is a gift to the British farmer. I want to make it clear that that is not how the Government see the situation. The Government see this quite clearly as removing a disadvantage rather than as giving the British farmer an advantage.
I have agreed to give way to hon. Members in order, and I now give way to my hon. Friend the Member for Gainsborough and Horncastle, after which I shall give way to the hon. Member for Greenock and Port Glasgow.
§ Mr. LeighMy right hon. Friend has outlined the problem very well. Does he agree that, as the president of the Country Landowners Association said to him in a recent letter, the association accepts that market forces will have to play a larger part in farming in the future? My right hon. Friend ought to accept that. Will he please make it absolutely clear that he is talking about giving our farmers—as a Member for a Lincolnshire constituency I represent some of the most efficient farmers in the world—a fair competitive position, a level playing field? Our farmers simply want a chance to compete. Can my right hon. Friend assure the House that he will fight his corner? That is what our farmers want to know.
§ Mr. GummerThat is precisely why I have been trying to say that we must get out of the habit of suggesting that, somehow or other, this is a gift to farmers—something to advance them—rather than the righting of a wrong. That is the distinction that many of our friends in the European Community find it difficult to follow. They—very often pushed by their own farming organisations—feel that farmers in Britain are being given an advantage, rather than having a disadvantage removed.
§ Mr. GummerI promised the hon. Member for Greenock and Port Glasgow that I would give way to him next, and it would be unfair of me not to do so.
§ Dr. GodmanClearly the Minister must press for fair treatment for farmers in the United Kingdom. Surely, however, he must acknowledge that in these negotiations he has responsibilities that extend beyond the shores of the United Kingdom. Among the people concerned are the 786 cane sugar producers in the African, Caribbean and Pacific countries. No doubt they would welcome an assurance concerning their interests. My constituents working in one of the refineries here would welcome an assurance that the interests of the cane sugar producers of the African, Caribbean and Pacific countries too will be looked after.
§ Mr. GummerI would have come to a specific reference to that matter, as I did in my evidence to the Select Committee on European Legislation.
§ Mr. Quentin Davies (Stamford and Spalding)I hope that my hon. Friend will not mind taking a little longer on the central point of the green pound. His efforts in Brussels on behalf of the entire farming industry of this country are greatly appreciated. Will he, however, say loudly and clearly, in this House today and in the Agriculture Council in Brussels, that there is no possible reason—in economics, in equity, or in logic—for farmers being unable to sell their products within the Community at prices expressed in terms of real currencies rather than in terms of the artificially administered currency of the green pound? Every other business deals in real currency.
§ Mr. GummerI have said again and again that I do not believe that a system that results in the farmers of one country getting an inferior price merely because of the arrangements between currencies is acceptable. I am absolutely committed to the total dismantling of such a system. I am appalled that there are in the Community some people who do no accept the statements of the Court of Auditors that it would be impossible to have such a system after 1992.
I am committed to ensuring that we get a proper deal for the British farmer. However, I adopt that attitude in a situation in which we have a large number of friends but few immediate allies. I hope, therefore, that my hon. Friend will allow me to leave the terms of negotiations to one side. It must be a matter of getting the best that I can in the context of those negotiations, which will go on for some time.
§ Mr. GummerI really must move on. I will give my hon. Friend a chance later.
§ Mr. GummerVery well: I give way to my hon. Friend.
§ Mr. LordI am grateful to my right hon. Friend.
I make no apology for speaking about the same point, because it is the most important one that we have to consider. There has been talk about the incomes of farmers generally. My right hon. Friend must be well aware of the position of cereal farmers, whose profitability is now in real danger. There is great concern about this matter. Even if the people in Europe with whom we negotiate are not as concerned about our farmers as we are, surely they must be concerned about our opinion of their fairness. It is absolutely crucial, as hon. Members on this side of the House have said, that my right hon. Friend go to Europe with the firmest possible resolve to get the fairest possible deal for our farmers, so that they may see that Europe is fair.
§ Mr. GummerI say again that I am totally committed to the concept that the European common agricultural policy cannot be run on the basis of a principle that results 787 in some farmers getting a substantially lower price than others do because of the way that the agrimonetary system works. However strongly one is opposed to the CAP system, that cannot be right.
§ Mr. Alexander Eadie (Midlothian)rose—
§ Mr. GummerI really am going to get on now. I hope that the hon. Member for Midlothian (Mr. Eadie) will be interested in what I am about to say. He may wish later to interrupt on this point.
§ Mr. EadieOn a point of order, Mr. Deputy Speaker. I realise that the Minister is doing his best to explain, and that he is giving way. However. he must realise that he is responsible to the whole House. It is his right to decide whether to give way, and it is our privilege when he does, but he must give way to Members on both sides. Otherwise he will leave himself open to being known as the most unfair Minister of Agriculture we have ever had.
§ Mr. Deputy SpeakerThe whole House knows that it is a matter for the Minister whether or not to give way. In fairness, I should point out that he has given way already to hon. Members on both sides.
§ Mr. GummerI have tried to give way to hon. Members interested in a very wide range of different problems. I hope that the hon. Gentleman will accept that.
§ Mr. GummerI hope that the hon. Gentleman will contain himself for a moment.
In particular areas of agriculture, there are very special problems that are even more sharp this year than they were last year. I mentioned the overall figure—and increase in farming incomes—and I hope that hon. Members will feel that, in not laying too much emphasis on that, I was being fair. In one area in particular there was a decrease in farming incomes. In that regard, I was particularly concerned, even outwith our negotiations on the green pound, to give some special help. That is why, last week, I announced an increase in the hill livestock compensatory allowances for the ewes of hardy breeds. That represents £5.2 million extra money going into that very difficult area of agriculture.
Perhaps the House will agree that when, in our discussions in the European Community, we come to the question of the best way of helping our farmers to look after the land and to produce the food that we need, we must first of all ensure that there is fairness as between farmers. Secondly, we must look in particular at those areas where farming is very difficult and where farming practices are of particular importance in the context of the environment. The fact is that, in our highlands, the kind of countryside that we have grown to expect and accept can survive only if it is properly farmed. Therefore, the retention of sheep on those hills is a crucial part of any sensible environmental policy.
However, I still believe that we have not quite got the balance entirely right. That is why we were willing to press the Commission to allow us to introduce into the HLCA concept a rather greater element of conservation. We shall be looking, over the coming months, at the best way of doing that. Hon. Members on both sides of the House will probably agree that it is right that we should do so.
§ Mr. SalmondI thank the Minister for giving way eventually; in the absence of a Scottish Office Minister, it is important that he gives way to Scottish Members.
On marginal farming, does not the Minister accept the cumulative disadvantage because of the green pound differential? Will he remind the House what the cumulative disadvantage has been over the last 10 years? As the Government came to power, if I remember correctly, on a pledge to eliminate the green pound differential, is there not a strong case for proceeding faster on eliminating the green pound differential than either the Commission or the Government propose?
§ Mr GummerIt is difficult to accept that it could be faster than the Government propose. The Government propose that I should use my best endeavours in the negotiations to get the best deal. I find it an odd concept that the hon. Gentleman assumes that I should propose something when I have said specifically that we will negotiate. If we are negotiating, we have to negotiate, we should not start by saying to the people with whom we are negotiating, "That is the bottom line," or we would not get the best answer. I do not know how much negotiating the hon. Gentleman has done but I am sure, whatever he has done, that he will agree that that is a reasonable basis.
As for the hon. Gentleman's other comments, we are committed to the eradication of the green pound and its replacement by a system which does not disadvantage farmers as they have been disadvantaged in the past. I remind him that there have been periods in which farmers have had advantage from the green pound, but that does not help much when they are at a disadvantage.
If the hon. Gentleman wants to consider the period in which farmers were hardest hit by the green pound, he should take the period when John Silkin was Minister of Agriculture. At that time, the Labour party insisted upon the green pound gap getting bigger and bigger, so that it might have a counter-inflationary effect. The incoming Conservative Government stripped that away, having given an election pledge which was opposed by the Labour party. When my hon. Friends hear, as no doubt they will, pressure from the Labour party to reduce or eradicate the green pound gap, I hope they will remember what happened when Labour was in power. The Labour Government steadfastly refused to eradicate the difference between Britain and other countries, and steadfastly insisted that farmers bore the burden of their anti-inflationary policy.
On prices, we ought to support strongly the Commission's proposal for a price freeze. Although the stabiliser regime has had significant advantages, it has been operating at the same time as harvest conditions have helped to reduce the mountains and dry up the lakes. I believe that over-production in British and European farming does considerable harm not only to the taxpayer's pocket but also to the reputation of the farmer. It is not helpful to the farmer to be thought of as the producer of food that nobody wants to eat.
Therefore, the stabiliser regime is of great importance if the farmer is to regain the reputation in society which he deserves and which he lost to some extent during the early period of surpluses. So I support the price freeze, and I strongly support the maintenance of stabilisers; and I oppose those in the Community who have sought to weaken stabilisers.
789 About a fortnight ago, I had the pleasure of addressing an audience of farmers and Ministers of Agriculture in Berlin. I had to listen to a speech on behalf of German farmers, given by the leader of the German farming unions. He sought the abolition of stabilisers and the removal of all those things that put into the common agricultual policy a sensible measure of restraint, in order, he thought, to advance the farmer's cause. I believe that that would disadvantage the farmer. It would do grave damage to the farmer if we changed the hard-fought system which we have got. That means that we ought to go further.
It is outrageous that we should subsidise the increased growth of tobacco in the Community when most member states are seeking to reduce the consumption of tobacco. So that the House may understand how serious it is, may I point out that the marginal cost to FEOGA of supporting the growth of wheat, a crop which produces the staff of life, is £400 per hectare in rough translation. The marginal cost of supporting the growth of tobacco, much of which is not a health risk only because it is unsmokable, is £3,000 per hectare. That is unacceptable, particularly as it has resulted in an increase in growth of the very kinds of tobacco which appear to be most damaging and dangerous, and which should not be put increasingly into intervention because they cannot be used.
§ Mr. GummerI must get on, because there is a 10-minute limit on speeches later.
I suggest that the same is true of the production of rice. Rice is about eight times as damaging to global warming as any similar product. Therefore, there is a particular reason for us to say that we do not wish to produce rice of a kind that we are unlikely to use. The japonica rice which we grow in the European Community has a limited market. Indica rice is more widely used.
The hon. Member for Greenock and Port Glasgow asked earlier about cane sugar producers. It is a curious view of developing countries which suggests that the European Community should increase, through subsidised competition, production of products which they can grow—perhaps their only product. So I shall seek a similar stabiliser regime for rice, and also for cotton, another product whose subsidised production within the Community does countries with much poorer populations out of markets.
I agree with the hon. Member for Greenock and Port Glasgow that we must continue to help cane sugar producers. I think it is reasonable, as we have cut the sums being offered to beet sugar producers within the Community, that we should offer them a similar deal. The arrangement is that we offer them the same price for the amounts which they are allowed to export into the Community as we offer Community farmers. It is not unreasonable that we should keep to that. They have benefited from increases even though they may not have had increases in their own production costs. It is reasonable to keep to that when we are making a cut.
I welcome the Commission's approach on prices, and on Mediterranean regimes. There is great pressure to 790 increase the amount of money for regimes on Mediterranean products. I shall resist the weakening of those packages.
I am worried about the Community's proposals on the rural world, because the modulation, as it is called, in favour of small farms is for very uneconomic small farms, with very few of them being in the United Kingdom and very few offering full-time support to a family in the countries in which they are located. It does farming no good to increase the support for such farms when it is wholly contrary to any sensible economic regime.
We ought to examine much more carefully those regimes in which we have a co-responsibility levy. I do not think it right for us to continue a system whereby we tax a farmer and reduce his price without reducing the price to the purchaser in the market. If we reduced the price to the purchaser, there would be a chance of increasing demand. We must move from co-responsibility levies to action on prices. It is much better for the farmer, must better for the market and must more likely to increase demand.
I believe that we have to look very carefully at the intervention prices with regard to milk. There is no doubt that substantial surpluses persist and are bound to increase, because the Community, contrary to the United Kingdom's wishes, has increased the quota by 1 per cent. It would be quite wrong of me not to allow our farmers to have that 1 per cent. if the farmers in every other country have it, but it would also be quite wrong of me to say that I consider it a sensible policy, in view of the increased amount of milk producton which is bound to ensue. I hope very much that I shall be able to announce the suggested revision of 1 per cent. very soon, but, of course, it is something that has to be agreed with the Commission under the regulation as passed.
With regard to beef, there needs to be a much greater cut in the guide price, particularly given our responsibilities in the general agreement on tariffs and trade round. Some of the suggestions for the use of the European Community carcass classification grid are an unnecessary burden on the industry. If it is necessary to improve the terms of trade and if it does not bring unnecessary burdens, that is one thing; but if it is merely a matter of harmonisation and neatness, I believe the United Kingdom should oppose it. So we are looking very carefully at the detailed proposals in that connection.
It now seems to be generally accepted that the sheep regime, which is a general one covering the whole of Europe, is good news for us, because it means that we have got rid of the differences which have been the cause of so much difficulty in our export markets. The basic price freeze is sensible, and there has been a notable improvement in the maximum guaranteed quantity arrangements.
Turning to the structures problems, I have no doubt that it was quite wrong of the Community not to accept the United Kingdom's case for no headage limits on the reimbursement for the compensatory amounts. There is no sense in suggesting that because it has been necessary for economic reasons to have a large flock in Scotland, for example, for some reason to do with the mathematical minds of those from other countries, there should be a headage limit—not because the farmer is rich but because he happens to live in a particularly poor area where a large number of sheep are needed to make any kind of sense and any kind of living.
791 We fought that battle very hard, and we got a response and a change which most people in this country said was much better than they had expected. Indeed, it was much better than the House had thought it would be from our discussions beforehand. But it was not as good as I wanted, because I did not and do not believe that this kind of headage limit is a proper way of dealing with these problems. It is discriminatory, albeit accidentally so, against the United Kingdom.
I have been able to announce that, when we come to review the figures next time, we shall not automatically carry through the HLCA levels fixed by the FEOGA proposals. We shall do as we have done in the past and look at the state of the industry and decide the levels of HLCAs on that basis, not on the basis of the artificial proposals which have now been agreed in the Council.
With regard to milk quotas, I have said that I hope that it will soon be possible to announce the allocation. That will depend upon how quickly the Commission is prepared to discuss the proposals which we have put to it, which are complex and seek to meet a wide range of problems that we feel can now be met.
With regard to the non-food use of agricultural products, I am always concerned when it is suggested that there is an automatic and easy answer to the problems of over-production. There are those on both sides of the House who have their own magic answer to the problem of surplus agricultural products. I look with a fairly leary eye on those who suggest that, if only we grew this or that for one or other purpose, we would meet the real problems.
We have to look very carefully at these propositions. I am keen on some of the proposals for the use of straw, for willow cultivation, and the like, but these have to be seen as marginal and must stand up. We cannot accept the proposition that has been put to us that, if we subsidise them totally and give them to industry free, they ought then to be turned into a competitive fuel. That does not seem to be sensible, and I do not think that any hon. Member would want it. I am therefore very careful about some of the proposals for non-food use of agricultural products, and we shall be looking with great care at the Commission's report and proposal, which will be linked to set-aside. The principle of new uses is acceptable, but I have doubts about it being tied to set-aside.
The discussions in the House are the prelude to some very tough bargaining. I am wholly committed to the principle of ensuring that British farmers shall compete with other farmers in the Community on a fair basis. I also believe that we have taken very large strides indeed in improving the common agricultural policy through the stabiliser regimes and the policies of Her Majesty's Government.
I know that some of my hon. Friends want us to go further, and have some very tough words to say about some of the things that still happen or are still budgeted for in the Community. I agree with much of what they say. I want to go much further down the road of ensuring that food is not destroyed; although that is a minor part of the budget, it is still too great. I want to go much further down the road of making sure that we do not grow food for which there is no market, and of dealing with some of the Mediterranean products, in particular where there is an indefensible amount of wastage.
To that can be added the question of fraud, which is widespread. That is why we have taken the toughest 792 measures in support of the Commission and have refused to support the watering-down proposals that have been presented by other people. I believe that fraud must be prosecuted wherever it occurs, whether abroad or at home. I shall be as tough on the fraud that takes place in this country—we have reported some items of that—as on the fraud that takes place elsewhere. I am suspicious that Greece has announced that there is no fraud in that country at all.
I believe that we can at least claim that the Government have presided over the largest reform there has been in the common agricultural policy, and very much greater reform than anybody thought was possible. There is no doubt that most other countries in the Community have now come to accept what was a United Kingdom initiative—that is, a common agricultural policy increasingly designed to meet supply with demand rather than supply with surplus. We must keep on with this. We are pleased that the Commission is proposing measures which in large part support those changes.
I ask my hon. Friends, and indeed many hon. Members in all parts of the House, to give me the opportunity of saying that we have complete support in the battle to make sure that our farmers have a fair deal.
§ Dr. David Clark (South Shields)I found the Minister's speech disappointing. I suspect that hon. Members, when they go back to their constituencies, will find that their constituents found it somewhat disappointing.
Today, we are debating agriculture in Europe against a rapidly changing political background. The Communist parties of eastern Europe are calling for multi-party states. Apartheid is perhaps beginning to crumble in South Africa. The Minister has just come back from Berlin and I am sure that he viewed with great pleasure the crumbling of the Berlin wall. I am sure that many hon. Members share my view that, against all these momentous changes, the iniquitous structure of the common agricultural policy probably remains the last great untouched folly in the world. It is certainly of that seriousness.
Before we discuss the various aspects of agriculture, I shall briefly remind the House, yet again—it is important to do so—of the effect of the CAP on the British people. In spite of the progress that I concede has been made, the CAP is a costly folly. I checked the figures for the end of the year. The price of butter in the EC is almost double the world price. We pay 50 per cent. more than we should for beef and sugar, and 40 per cent. more for skimmed milk—at a time when even the most widely respected opinions believe that world prices will fall again and, therefore, the differential will increase.
In 1988, the Treasury estimated that the average household of four in the United Kingdom spent over £10.50 a week more than they should have done on purchasing food. The semi-official National Consumer Council estimated that the figure had gone up to £,13.50 and the most recent survey by the Organisation for Economic Co-operation and Development that I have seen puts the subsidy that the British consumer has to pay for food at no less than £.17.50 a week. That is far too much. Therefore, we go along with the Minister and support him in his endeavours to ensure that the Commission's proposals for price freezing are upheld.
793 That is absolutely vital. Equally, the maintenance of stabilisers is essential. On those issues the Minister has our support.
The key factor in the common agricultural policy and the reason why I describe it as crazy is that it is not only the consumer who loses but the farmer. For every £1 that goes to the farmer, about £2 goes for intervention and dumping on the world market. How can that possibly be justified? Export refunds have reached astronomical levels. In spite of the efforts of the Commission, export refunds for dairy products alone last year were only marginally below the figure for 1988, the worst year ever.
§ Mr. Andy Stewart (Sherwood)The hon. Gentleman talks about his concern for farmers and he knows of my close association with the land. Will he say what his party intends to do if it ever comes to power? Will it nationalise land? How will it pay for it? Will it pay for it through junk bonds or when resources allow?
§ Dr. ClarkAs a farmer, the hon. Gentleman knows that he has thrown out a canard. The Labour party has no intention of nationalising farmland and that has not been in a Labour party manifesto since the war. I wish that the hon. Gentleman would stop trying to spread that rumour and cause alarm. We know why he does it: we have noted the dramatic fall in support for the Conservative party among the farming industry and the growth in its support for the Labour party.
§ Mr. Peter Hardy (Wentworth)It is appropriate to make the point that a few days ago the hon. Member for Sherwood (Mr. Stewart) seemed to be queueing up to have his land taken over for opencast mining. My hon. Friend talks about the cost of intervention and the fact that much of the vast sum spent does not go to the farmer. My hon. Friend will be aware that throughout Europe there has been grave anxiety about the amount of fraud and corruption in the intervention processes, and that anxiety is relevant to the United Kingdom. As the Minister knows, in Britain fraud and criminal action have been the subject of confession on television and no one has been prosecuted in such cases.
§ Dr. ClarkMy hon. Friend raises the point I was coming to later. It is a serious one, and I shall certainly press the Minister on it, but I shall come to that in my own time.
I note in the documents that we are discussing—there is a huge pile—little about specific action to reduce export refunds. In the Treasury's public expenditure paper last week, there was provision for a 40 per cent. increase in intervention buying in the United Kingdom, from £1,102 million in 1988–89 to £1,540 million in 1992–93. That is a staggering figure. Will the Minister explain why he is planning for such a vast increase in intervention buying which will be paid for by the British consumer and taxpayer?
We have a right to know why that increase is being budgeted for when we are told that the surpluses are going. The surpluses may well be going, but they are going to other countries—often wrecking Third-world markets—with huge subsidies paid for by the British and European taxpayers. Is that why the budget has been increased?
§ Mr. Teddy TaylorDoes not the hon. Gentleman accept that the main reason for these increases is simply that we have transferred spending from the Common Market to national Governments such as Britain's as a means of cutting Common Market spending?
§ Dr. ClarkAs I am sure the hon. Gentleman would agree, this is wasteful expenditure which does not help anyone, and the sooner we can eradicate it, the better. We seem to have a consensus on that.
§ Mr. GummerSurely, one advantage of transferring a wasteful expenditure such as this to national Governments is that some national Governments, who do not contribute to the European Community common agricultural fund because they are net gainers from it, will begin to be more aware of exactly what the hon. Gentleman says, with which I agree. Therefore, it is not a disadvantage but an advantage, because we are aware of the expenditure, as we contribute significantly to the funds. I hope that the hon. Gentleman will agree that that is part of our battle against what we both agree is an unacceptable fact.
§ Dr. ClarkI accept the right hon. Gentleman's valid point. I am sure that he agrees that we must tackle the problem. I am disappointed that we are expecting a 40 per cent. increase in expenditure in this country when we were already spending quite a lot on intervention buying.
Apart from the general CAP, this country's farmers suffer enormously from the Government's economic policies. We have heard from hon. Members on both sides of the House the overriding public concern of farmers; getting the devaluation of the green pound. However, that is only part of the problem; the other part involves inflation and high interest rates which are affecting our economy. The farming industry, often at the exhortations of Conservative farming Ministers, invested heavily in the early years of the last decade. They are now having to bear the price of that policy and the Government's one-club approach to the economy: high interest rates.
Last year, British agriculture had to pay about £1,000 million in debt repayments alone—an increase of almost one third over the previous year. I stress that the high interest economy which the Government pursue is shoving farming up to its neck in debts. The sooner we get away from such an approach, the better.
§ Mr. Paul Marland (Gloucestershire, West)While the hon. Gentleman expresses concern for the increase in farmers' costs—I accept the answer that he gave to my hon. friend the Member for Sherwood (Mr. Stewart)—will he reflect a little on the extra costs that some Socialist-controlled local authorities are considering: rating agricultural land? Is that to be part of a future Labour Government's policy? Would a future Labour Government rate agricultural land and add further to the costs borne by farmers?
§ Dr. ClarkI appreciate the hon. Gentleman's intervention. I thought that the Government's policy was to abolish the rating system and go over to the poll tax. We conducted a little exercise and found out that the poll tax will be particularly hard on farming. We checked a farm in Copeland where rates are currently about £200 a year. As the hon. Gentleman knows, farmers pay rates on their domestic houses. Under the new situation, instead of paying £200, the three adults living on that farm, judging 795 by the probable level of poll tax, will pay £1,000 a year. That is my riposte to the hon. Gentleman. The poll tax will not help farmers.
§ Mr. GummerMy hon. Friend the Member for Gloucestershire, West (Mr. Marland) asked a direct question. Does the hon. Gentleman now publicly state that the Labour party, if ever returned to office, would not rate agricultural land?
§ Dr. ClarkLet us be blunt—I can say categorically to the Minister that that was not in the Labour party's manifesto at the last election, and will not be in the Labour party manifesto at the next election. Let us get that quite clear. I do not think that I have fudged that issue.
It is interesting that many farmers share the views of Mr. Bill Chrystal, the chairman of the Durham and North Yorkshire branch of the National Farmers Union, who wrote an open letter to the Minister of Agriculture, Fisheries and Food to complain about the continuing failure of the Government to tackle the problems of British agriculture, their failure to devalue the green pound and about high interest rates. In that open letter, he went on to say that the Government
contributes to the ruin of many farmers … if British farmers were able to enjoy French interest ratesthe situation would be greatly improved.Unfortunately for Mr. Chrystal and for British farmers we do not have the benefit of a Socialist Government, as the French have, but I say, "Take heart, Mr. Chrystal—it won't he long before we have a Labour Government"—and then British farmers will have a fair deal, as they have always had from a Labour Government.
When we press the Minister on all the points and difficulties with Europe, he always says that he cannot get agreement with the Council of Agriculture Ministers. Of course we understand that, but does not the Minister appreciate that this repeated failure to protect the interests of consumers and farmers in negotiations does not help anyone?
The Minister's offensive attitude towards food from other countries causes a great deal of difficulty with his overseas counterparts. British food is of a high quality, but so is that of our competitors. I usually choose British food, but there are occasions when I do not. For example, if I am faced with a choice in a shop of a British apple, or a New Zealand apple, I normally choose the New Zealand apple, for the simple reason that I know that the latter will not have been treated with alar—the carcinogenic pesticide. Other countries often produce food of the same standard that we produce.
§ Mr. GummerI hope that the hon. Gentleman will accept that I shall spend a great deal of time pointing out to British farmers that he has now made a statement contrary to scientific advice. He has undermined the position of farmers in this country and shown that farmers would get from a Labour Government a Minister who would bash Britain to push the views of food faddists, on no scientific grounds at all. That would lead to a disruption of British industry and the British industrial base—farming in this country—and the hon. Gentleman must understand that he has now said that he would back the food faddists against the British farmer.
§ Dr. ClarkI thought that the Minister might respond in his usual hysterical fashion. I chose my words very carefully, and Hansard will record what 1 have actually 796 said, and not what the Minister said that I said. I can assure British consumers that from the Labour party and a Labour Government they will get alar-free apples.
Does not the Minister understand that when he makes his histrionic and jingoistic speeches at formal functions, denigrating the quality of food from our European neighbours, he causes great offence? The House might not understand what I mean by that. I remind hon. Members that the Minister has a habit of going to functions, and berating his hosts in his after-dinner, or after-lunch comments, for daring to provide, for example. New Zealand butter with the soup rolls. Then he reaches down and produces a white polythene bag. Out of the bag he produces European food products, bought at a nearby supermarket by his hapless political assistant. I point out that the Minister cannot buy them, because he is attending the synod.
There is a moral in this. As each item of foreign food is drawn out of the bag, it is accompanied by extravagant and unusually derogatory comments by the Minister, with the unending message that the food is inferior to that produced in Britain. Of course, that is the Minister's opinion, and he has every right to say that, but does he not understand that those gratuitous insults cause offence and are heard by foreign agricultural attachés, who speedily relay the Minister's attitude back to their governments?
In all seriousness, I sincerely counsel the Minister that that is not the most effective way to make friends and influence people, and that is important for the interests of British consumers and farmers when he goes to negotiations. I hope that he will bear that in mind.
§ Mr. GummerI hope that the hon. Gentleman will accept that it is better to have a Minister who stands up for British products and who says that he does not believe in buying British unless it is best, but when it is best we must stand up for it and fight for it.
One of our problems is that too many people think that something that comes from abroad is better than goods we produce at home. Britain produces the best apples. They are entirely safe, and the fact that the hon. Gentleman will not eat them shows that he does not have any taste, and that he would not make a Minister of Agriculture.
§ Mr. GillBefore the hon. Gentleman throws any more gratuitous insults at the Minister, would he care to consider the damage that he has already done in this debate to the British apple industry? Does he imagine that he will have any friends left in that industry?
§ Dr. ClarkI humbly suggest to the hon. Gentleman that it is the Minister who has done the damage, by not banning alar.
Perhaps we can now move on to another aspect of the subject, and develop the reasons why the Minister has failed yet again. In the past two weeks we have seen other instances when the Minister failed to carry his ministerial colleagues in Europe with him—the banning of the imports of British cattle for six months, due to bovine spongiform encephalopathy, and the Minister's failure to persuade the West German Government to lift the ban on imported beef. Those are two recent examples of the Minister's failure.
797 The impact of the EC ban on imports is important, because once we have lost the business it will be virtually impossible to regain it. We believe that more action is likely to follow, as the Danes will want to ban all cattle imports, and Spain is reported to be considering banning all imports of British beef. The problem is going to get worse.
That brings me to the Government's handling of BSE—mad cow disease. If the green pound is the spoken agenda of British farmers, I think that if hon. Members on both sides of the House were honest, they would admit that when one talks to farmers, the matter that concerns them more than anything else—the hidden agenda of farming today—is BSE.
I fully realise the implications of what might be said in the Chamber, and I thought deep and hard before deciding to raise the matter. It seems to me to be important that the problem of BSE, which I believe is potentially the greatest single threat to British agriculture since the war, is debated in the House, and that hon. Members on both sides of the House impress on the Minister our desire for further action.
Let me remind the House of the crucial fact that the disease is unique to Britain: it exists nowhere else, except in a few cases in which cows have been exported from this country. Naturally, other countries do not want to take any risks, for—understandably—they do not want their herds to be infected.
In view of all the facts, it is not surprising that BSE has occurred in the United Kingdom. I charge the Government with direct responsibility, and I shall try to support that charge. The most probable cause of the disease in cattle is the scrapie-contaminated sheepmeat with which they are fed. As the practice is almost universal, why has BSE arisen only in the United Kingdom? The key must lie in the only element of difference—the rendering industries that process the cattle feed.
In its final years, 1978 and 1979, the last Labour Government realised that the rendering industry needed tightening up, and presented detailed proposals for consideration and comment. It is strange to think of a political philosophy relating to such a mundane process as the rendering of animal waste, but there is a relationship. One school of thought, favoured by Opposition Members and by most EC Governments, supports the production of detailed regulations on such matters as temperature control and the length of the rendering process. The approach favoured by the Conservative Government, however, has been to ensure that the final product is fit for its required purpose.
Small wonder that the rendering industry was not happy with the proposals of the Labour Government. The chairman of the United Kingdom renderers said:
The original proposals were very expensive, but there was a distinct change of heart when the Conservatives came into office. They were happy to drop the idea of a code and settle for random testing.The weakened regulations were accompanied, in the early 1980s, by a technological change from wet to dry steaming. Mr. Field, of the United Kingdom Renderers Association, has said:
This was partly as a result of changes in animal feed techniques but the basic motive was profit.798 Luckily for the European Community, the changes in British practice were not adopted so widely by renderers in other EC countries.In my view, the Government's obsession with what might be called, in White Paper terms, "lifting the burdens" on industry has led to impure cattle feed emerging from the renderers. That is why Britain is the only country where BSE exists, and the Government have a direct responsibility. I believe that they knew that they had a responsibility, and that when the problem first appeared they did what they could to hide it.
In 1985—we have this on tape—a vet reported a scrapie-like illness in cattle; the following year Francis Anthony, the eminent chairman of the farm animals committee of the British Veterinary Association, submitted a scientific paper on the matter, and the Ministry of Agriculture sought to suppress the information.
All along, the Government have been less than frank—or, to use the words of one of their senior officials, "economical with the truth"—and that obsession with secrecy continues to this day. They have consistently done too little, too late, It took them 18 months to make BSE a notifiable disease, 20 months to introduce compulsory slaughter and two and half years to announce a ban on cattle offal; having announced the ban, they took five months to bring it into effect.
§ Mr. LordThe hon. Gentleman clearly appreciates that this is a serious matter. If his thesis is to be proved, however, he must show that rendering in countries without BSE is carried out more carefully and hygienically than it is here; otherwise the whole idea will fall flat. Is that the case, and can the hon. Gentleman prove it?
§ Dr. ClarkI take the hon. Gentleman's point: the sombre mood in which the House has heard what I have to say reflects the worry that we all feel. Work is in progress along the lines that he has suggested.
§ Dr. ClarkMay I develop the point?
In tentative studies—at this stage we can only study this country—we have found that when renderers have used the traditional wet-steaming technique there has been less incidence of BSE than when they have used dry-steaming. The researchers have managed roughly to marry the techniques and the incidence of the disease.
§ Mr. GummerI agree that we are dealing with a serious matter. I feel that the hon. Gentleman may be barking up the wrong tree—although, as he will appreciate, I am looking at all the possibilities.
The rules applied to rendering, requiring the end product to be fit for use, obtain in most European countries; the other system, which he recommended, is rarely employed. Socialist France is one of the countries that takes our view, so I do not think that the hon. Gentleman can take a party-political line.
Has it occurred to the hon. Gentleman that it must be true that most other European countries have a much lower proportion of sheep offal than we do, simply because of the nature and number of the sheep involved? The work that we are doing in that direction may be more likely to find the answer that the hon. Gentleman seeks.
§ Dr. ClarkI know that the Minister takes the point seriously, because I know that his officials are examining the thesis that I have advocated. I made that point to the hon. Member for Suffolk, Central (Mr. Lord).
As the Minister and others will know, the Germans, for example, have now adopted specific conditions to apply to any material exported from this country.
§ Mr. Ron Davies (Caerphilly)The French and the Israelis have done that.
§ Dr. ClarkI thank my hon. Friend. The conditions relate to temperatures, and to the length for which they are maintained.
May I be more positive, and make some suggestions to the Minister that I think will be supported by Conservative Members? Will he concede a point, and pay 100 per cent. compensation to farmers with suspect cows? I know that that would be making an exception, but I think that such an approach would meet with a consensus on both sides of the House. Given the current doubt, some farmers may well send cattle that they are not sure about into the auction or the slaughterhouse, and I should like the Minister to deal with that possible loophole. According to an NFU official,
It is common knowledge in the industry that infected animals have gone into the food chain.
§ Mr. SpearingMy hon. Friend has revealed a sequence of events that may not have been so public before. As many of us are relatively ignorant about the subject, can he tell us whether the compensation paid for BSE-infected cows differs from that paid for foot-and-mouth infection? Would not everyone now support the payment of 100 per cent. compensation, and agree that logically it should have been paid from the beginning? Without it, there is a financial incentive to circumvent the regulations, leading to the spread of this and other diseases.
§ Dr. ClarkMy hon. Friend makes a valid point. I understand that 100 per cent. compensation is paid for foot-and-mouth infection, and I cannot see why the same does not apply to BSE, which is a terrifying disease.
The Minister knows that animals are slipping through the net. Some are being caught at the slaughterhouses and livestock markets, but, with the best will in the world, trading standards officers, environmental health officers and vets see only a minority, and many animals with BSE enter the food chain. So can we have some action?
As there is a possibility that BSE can be transmitted from mother to calf, will the Minister not order the culling of all calves of BSE-infected cattle? Let us give the consumer the benefit of the doubt. In the name of completeness, when the Minister bans the sale of designated cattle offal, will he include cattle under six months old? I know that the disease is not apparent at that age, but there are people who think otherwise. The eminent neuropathologist, Helen Grant, questions that point, so just for once why do not the Government take a cautionary approach and put a potential public health risk before money?
§ Mr. GummerOne of the problems that arise on this issue is that we have taken a cautionary approach. We have gone further than the scientists have suggested. The difficulty is that we can become increasingly cautionary and do more than the scientists tell us is necessary. I wonder where the hon. Gentleman would suggest we 800 should stop? If I can say absolutely surely that there is no danger to public health, we have taken the most cautionary approach possible.
§ Dr. ClarkAdvisers advise, but Ministers take decisions. It is not purely a scientific decision; it involves political and social judgments. The Minister and I know how much is at stake. There is a potential risk to our herds and there is a remote possibility of transmission to humans. It is so serious that we should be ultra-cautious.
The Minister rightly said that various bonemeal arid meatmeal from offal cannot be fed to ruminants in Britain, but the export of those products is permitted. Therefore, we are exporting material that we consider dangerous to feed to our own cattle.
Yesterday, in answer to my hon. Friend the Member for Caerphilly (Mr. Davies), it was announced that, according to the latest figures available, we exported just over 13,000 tonnes in 1988. In a number of countries to which we export, such as France, Belgium and Germany, there are restrictions and conditions attached to those exports. I find it strange that when we export to Liberia, Nigeria, Kenya, Lebanon, Saudi Arabia, or other non-European countries, no conditions are attached.
I suggest to the Minister that we should ban the export of those materials or at least warn the receiving countries through a prior informed consent scheme that those products carry a potential risk, no matter how small. That suggestion would certainly receive support from all Opposition Members, and probably from many Conservative Members.
Why do not the Government seek to reassure public opinion and give us more information? Why do they not seek to gauge the extent of that terrible disease in our national herd by following the advice of the Tyrrell committee and introducing random sampling at slaughterhouses? Why does the Minister not have a certain percentage of cattle herds at slaughterhouses examined at random so that we can gain a clearer idea of the extent of the disease in our national herds?
§ Dr. ClarkI have given way a great deal, and I wish to conclude as quickly as I can. I have given way to the hon. Gentleman once and I feel that I cannot do so again.
Before I leave the subject of public health, may I raise a further failure by the Ministry in the European context?
§ Dr. ClarkI prefer not to. I have given way once to the hon. Gentleman. I have given way very generously and I am not prepared to do so again.
The Minister has taken steps against salmonella in British poultry flocks, yet he allows eggs from Holland, for example, some of which are contaminated with salmonella, to enter the country. The Ministry tests those imported eggs at ports and finds evidence of salmonella enteritidis and typhimurium. Yet by the time the tests of those eggs are available four days later, the remainder of the eggs have been released and are on sale to the British consumer.
That is bad enough, but last week a survey by the Dutch national health inspectorate showed that 90 per cent. of Dutch poultry farms had salmonella and thus pose a potential threat to British public health. Therefore, the 801 Minister is allowing one rule for the British egg producer and much more lax regulations for foreign producers. That cannot be right.
§ Dr. ClarkNo.
The Minister says that he cannot do anything about that. Of course he can. Why does he refuse to invoke article 36 of the EC treaty which allows him in the name of public health to stop contaminated foodstuff entering the country? Why does not he invoke that and hold up the eggs until they are found to be clean? In doing that, he would have the support of the British people.
My final point was raised by my hon. Friend the Member for Wentworth (Mr. Hardy) and the Minister also touched on it. In the corresponding debate last year, I raised the issue of fraud which exists in the CAP at an alarming level. Estimates vary between 10 and 20 per cent. of the total EC budget being lost through fraud. I remind the House that the EC budget is roughly £20 billion. We are talking about a great deal of money.
In particular, I raised the statement by the head of the British Serious Fraud Office, who asserted that major fraud was being investigated in the United Kingdom, implying that prosecutions were imminent. After the debate, the then Parliamentary Secretary wrote to me informing me that I was correct and that action was likely to be taken soon. Can the Minister inform the House whether any action has been taken on the two serious cases that were raised in last year's debate? They are not just run-of-the-mill fraud. As the Minister knows, they involve large amounts of money.
I understand that the latest figures of fraud by member states reported to the EC had increased to 352 cases in the first nine months of 1989. How many of those cases were British? I noticed the glee of some Conservative Members when the Minister referred to the Greek situation. Speaking from memory, I think that Britain had the third worst record of EC countries last year.
§ Dame Elaine Kellett-BowmanWe have better records.
§ Dame Elaine Kellett-BowmanWe record these things much more consistently than other countries. The Greeks and the Italians scarcely record them at all.
§ Dr. ClarkThe hon. Lady has a certain amount of perverse logic. She said that we have a better method of recording and reporting fraud. If that is the case, why do two other countries have worse records than we do? The House has a right to know. We often hear the Minister saying that he is campaigning against fraud. We should like to know what results he has obtained and how much fraud there is in the United Kingdom.
We welcome some of the points that the Minister made today. We hope that he will stand firm on the price freeze and we wish him success on the stabilisers. We freely concede that the Minister has difficulties in Europe because the system is not ideally suited to the structure of British agriculture or to the interests of the British consumer. Before the Minister makes jingoistic speeches in this country, he should ponder the fact that it is not wise 802 to insult one's potential allies. By so doing, one loses the battle, which is one explanation why he has been so unsuccessful in Brussels in fighting for the British consumer and farmer.
§ 6.9 pm
§ Mr. Paul Marland (Gloucestershire, West)I appreciate being called early in the debate, because it gives me the opportunity to be the first to congratulate my right hon. Friend the Minister of Agriculture, Fisheries and Food on his excellent speech, in which he gave us a wide-ranging view of the position in Europe. Many Conservative Members agree with him about the appalling subsidies of the European tobacco growers and the tremendous cost of storing surplus wheat.
British farmers recognise that they now work in a changed and changing marketplace. The farmgate mentality has gone, which used to represent the fact that they had to grow produce and get it to the farm gate, after which it was someone else's responsibility. They recognise that they no longer have a divine right to produce food that cannot be eaten at home or sold abroad.
Farmers and their families have been turning their entrepreneurial skills to earning income on or off the farm. Some have gone into deer farming: many have found ways of exporting their produce; and others now offer farm holidays. Most farmers have tried to add value to what they are producing. Those who visited the food and farming exhibition in Hyde park last summer saw fine examples of how farmers are trying to add value to their produce. Many farmers and their wives are beginning to take part-time work away from the farm.
The menu of grants that are now available, and the general discussion with advisers on how to generate extra income on farms has helped farmers to firm up their ideas. That positive lead was given by the Ministry of Agriculture, Fisheries and Food.
Like other hon. Members, I was pleased to welcome the increases in hill livestock compensatory allowances that were announced last week. It is important that we protect our breed stock, from which the commercial flocks are bred. The commercial flocks stand us and our farmers in good stead.
It has always been this Government's policy to seek to help rural communities to earn their living in the countryside. Notwithstanding the current problems, the Government should be congratulated on the way in which they have sought to present the alternatives.
There has been a substantial change of attitude among farmers since 1983. I remember as parliamentary private secretary to my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling), visiting the three counties show in Malvern. As we approached in the car, a light aircraft flew overhead trailing a banner saying
Jopling turns the milk sour.It was alarming to have a police escort—I had always thought that farmers were friendly—but the fact that we had to have one to visit a show was quite a revelation.We then went to Ross-on-Wye, where we were barricaded in the town hall by furious farmers. As if that were not enough, when we visited Dyfed, milk was poured in front of the Minister's car. We got the message—that farmers did not want milk quotas. God help the Minister who tried to remove a milk quota from a farmer today. Some farmers now say that the only profitable activities are those to which quotas apply. Many of them would like 803 quotas to apply to all agricultural produce. We know that that is not possible, and unfortunately Ministers will not agree even to talk about it.
Farmers crave a level playing field and fair competition. The green pound differences are creating gigantic differences in producer returns. For example, the difference on cereals is 18.2 per cent., on sheep 19.4 per cent., on beef 13.6 per cent., on butter 17.3 per cent. and on pigs 10 per cent. Those gaps place United Kingdom farmers at a huge disadvantage and undermine their confidence. As other hon. Members have said, they put them at a competitive disadvantage within the EC.
Farmers must have the confidence to invest in the future if we are to take advantage of the opportunities that will be offered by 1992 for exports to the European Community. How can agriculture in this country compete fairly with one hand tied so securely behind its back, and without being able to invest in the future? All industries want a level playing field, and agriculture is no exception.
We must respond now to the challenges and opportunities of 1992, and a message needs to be sent from this debate that that is precisely what we shall do.
§ Sir Nicholas Fairbairn (Perth and Kinross)Having been present today in Perth at the opening of the most advanced market in Britain, where I spoke to the European Commissioner for Agriculture, and as farm incomes are now about 60 per cent. lower than 10 years ago, would it not be a good idea if the Government proposed that agriculture, if nothing else, should creep towards the European monetary system and that the maximum band of the green pound should be only 6 per cent.?
§ Mr. MarlandMy hon. and learned Friend makes his own point in a very fair way.
Before 1983, British farmers were urged to do what they could to reduce the serious balance of payments deficit left by the last Labour Government by producing more of the food that was consumed in this country.
§ Mr. Robin Maxwell-Hyslop (Tiverton)Food from our own resources.
§ Mr. MarlandExactly. Our farmers responded manfully to that, in a way that would shame most other industries. Today, although the game has changed, the principles remain the same—that imported food costs money and that we must all do what we can to keep it to a minimum.
I accept that last year there was a small increase in agricultural incomes, but overall the trend is downwards. In 1992, the Government will be committed to the complete elimination of the green pound gaps. Today, the Commission proposes a one-third devaluation, but the Government propose a 50 per cent. devaluation. For the reasons that I have set out, I urge my right hon. Friend the Minister to consider without delay a 100 per cent. devaluation, to give us a level playing field and to offer British farmers an equal chance in Europe.
1 accept that this may lead to a fractional increase in the cost of shopping, but British housewives are turning increasingly to British produce because they know what they are getting—
§ Mr. Andy StewartQuality.
§ Mr. MarlandQuality, and a renowned standard. Housewives may accept fractional increases without so much as a murmur.
My right hon. Friend the Minister may be interested to learn that, to substantiate that, some farmers from Gloucestershire and I will, with permission, carry out a little market research of our own. We shall visit the Asda supermarket just outside High Wycombe—which we thought a suitable place, because it is not a rural area and because many of the shoppers come from urban areas and have no connection with farming. We shall ask them whether they think that it is fair to ask them to pay a little more to ensure a continuing and steady supply of British foodstuffs. I shall take great delight in giving my right hon. Friend the Minister the results of our survey.
§ Mr. Teddy TaylorWill my hon. Friend ask those people what they feel about our spending £173 a week per person on dumping and destroying food?
§ Mr. MarlandI am sure that they will not like that any more than my hon. Friend, but it is fair to say that surpluses have been reduced substantially, and my right hon. Friend the Minister deserves much of the credit for that.
As we are discussing EC matters, I want to turn, as the hon. Member for South Shields (Dr. Clark) did, to food safety and bovine spongiform encephalopathy, the scourge of British agriculture. The hon. Member for South Shields was right to mention that matter.
It is important not to overreact. Overreaction is causing a great deal of soul-searching and heartache in agriculture. I am pleased that my right hon. Friend the Minister and the Government—for not only the Ministry of Agriculture, Fisheries and Food was involved—have allocated an extra £12 million to research on BSE to find out its cause. Although the hon. Member for South Shields may believe that he has outlined its cause, nobody knows for sure. However, I join him in saying that we should consider seriously increasing the compensation paid from 50 per cent. to 100 per cent.
The lower rate of compensation puts beef producers and those who own dairy cows in a difficult position. They realise that they could sell a beast in the market for £400, whereas they will receive only £200 in compensation. I know of farmers who, with the very best intentions, have sent cows that look dodgy to the market. When the cows reach the market, the stress is too much for them and they are then discovered to have been infected with BSE.
§ Mr. SpearingI agree that the matter should not be subject to great exaggeration. However, can the hon. Gentleman explain to his satisfaction why, until now the Government did not give 100 per cent. compensation for this virulent and conceivably dangerous disease? Surely all taxpayers, whatever their views on politics or taxation, would have been only too pleased for compensation to be 100 per cent. If the hon. Gentleman does not know the answer, does he agree that the Minister should tell us later?
§ Mr. MarlandThat is precisely why I made that point. I hope that my hon. Friend will reflect on it when winding up the debate. I did not say that I was satisfied with 50 per cent. I was joining the hon. Member for South Shields on your Front Bench in suggesting—
§ Mr. Deputy Speaker (Mr. Harold Walker)Order. It is not my Front Bench.
§ Mr. MarlandI beg your pardon, Mr. Deputy Speaker. I hope that I have made the point.
How many hon. Members realise that BSE affects only old cows, in so far as current research has established? The youngest cow that has ever been diagnosed as infected with BSE was two years and nine months old—I checked that fact this morning. There is also no proven connection between BSE and human beings. The only part of the old cow that is susceptible to BSE is part of the offal, and my right hon. Friend has banned the sale of such offal. I commend him for that. Steaks and beef joints are taken from young cattle which have, so far, never been found to carry BSE.
To add insult to injury, the Germans have now banned all United Kingdom beef exports, which is not very communautaire, especially as those exports are worth £50 million to beef producers in this country. It is sad that we have to take the Germans to court for the matter to be sorted out.
I am sorry to shadow the hon. Member for South Shields to such an extent, but I want to turn to salmonella in eggs. The steps being taken to eradicate salmonella from laying flocks are all very laudable but, as my experience in my own constituency shows, the restrictions seem to be bearing down unfairly heavily on small producers. So far, more than 1 million chickens have been slaughtered. I cannot help but wonder whether the large producers are being quite as rigorous as they should be in the tests, for, despite the measures that are being taken by all egg producers, according to the latest issue of UKEPRA News, which is the journal of the egg producing industry, the number of salmonella-related food poisoning incidents is increasing rapidly. If there is a hint of salmonella in a small man's flock, the flock is wiped out. Are the small producers being made scapegoats?
As the hon. Member for South Sheilds reminded the House, 20 per cent. of eggs consumed in this country are now imported. Many are subsequently repacked and relabelled "packed in England" to try to reassure British housewives. I know that we carry out random tests, but as has already been said, the results take some time to come to fruition and by the time the test has been developed, the eggs have probably been relabelled and repackaged, and have found their way into somebody's refrigerator. We should not hold up imports, but in the name of fairness, we should try to hold up odd loads while the tests come to fruition.
§ Mrs. Ann Winterton (Congleton)Is my hon. Friend aware that the European Community bans the marking of individual eggs, and that only certain containers of eggs can be marked as coming from this country? Does my hon. Friend favour, as I do, the return of the old lion mark on each egg to reassure the British housewife that, if she buys British eggs, she is buying the best product available and one that has been tested?
§ Mr. MarlandI am sure that such markings would reassure British housewives, whether we had the old lion or thought of a new symbol. My hon. Friend makes her point in her own way.
I have tried to make three points in my speech. First, we should have a meaningful devaluation of the green pound to keep British farming solvent and competitive. We should give British farming the fairness of a level playing 806 field. Secondly, we should have 100 per cent. compensation for animals infected with BSE and that should be introduced without delay. Thirdly, we should ensure justice over salmonella. We should ensure that the same rules apply throughout the Community as to our egg producers. Agriculture asks for a level playing field and fair competition. I hope that my hon. Friend will reflect on that in his summing up.
§ Mr. Deputy SpeakerOrder. Mr. Speaker has said that he intends to impose a 10-minute limit on speeches between 7 pm and 9 pm. It is an obligation on hon. Members who are fortunate enough to be called before 7 pm to try to make brief speeches.
§ Mr. Geraint Howells (Ceredigion and Pembroke, North)British agriculture is facing a major financial crisis, which is one of the worst since the war. As a part-time farmer, I am pleased that you have called me so early in this important debate, Mr. Deputy Speaker. The situation is so serious that we have gone beyond attempting to make a political point today; instead, we are trying to persuade the Minister to do his utmost on our behalf. Many of the leaders of our great agricultural sector are keeping a watchful eye on us this afternoon and listening to our contributions. They have come here to urge Members to Parliament to bring pressure to bear on the Minister, so that he in turn can go to his counterparts in Europe and persuade them that they must listen to and heed what our Minister of Agriculture, Fisheries and Food is saying on behalf of British agriculture.
The Minister can be in no doubt today about the message that he must carry to Brussels on behalf of British farmers and of those hon. Members who believe that agriculture should be rescued from its present state of low morale. Real farm incomes have been falling steadily over the past few years. Farmers are suffering badly, as are many other business people, from the Government's policy of maintaining cripplingly high interest rates. It has been calculated that in 1989, the interest bill paid by farmers rose by about £250 million, a staggering rise of 37 per cent. Not surprisingly, investment in farming is falling. Over the five years to 1988, annual investment in fixed capital was down by 40 per cent. which shows clearly that resources are just not available.
I had the privilege this morning of having breakfast with one of Britain's major cereal growers. He said that he had not made a penny profit for the last two years and, worst of all, had not been able to invest in new machinery. He said that, unless something came his way within the next two years, he would have a major problem on his hands in regard to investing in machinery.
I know that the Minister is not in a position to bring down high interest rates at present, but I am sure that, on behalf of everyone in the industry, he will urge the But what makes life even more difficult and heightens the sense of injustice in the industry is the spectre of the green pound that hovers over us, completely distorting the market, making support prices in Britain lower than those of all other member states of the EC apart from Spain and 807 Greece. Can anyone honestly agree that it is fair to maintain a system that taxes our exports and at the same time gives a subsidy, through MCAs, to imports into this country?
A Scottish farmer who is a correspondent of mine writes:
It is absolutely crazy to be subsidising Irish beef into this country and charging the same equivalent on our exports through the MCAs".He points out that, in his area in the north of Scotland, local producers are getting £120 per head on average, less than in November 1989, and he reports that one of the bigger fatteners in that area is looking at a loss of £70,000 on his buying bill since autumn 1989. That will obviously have a knock-on effect on hill-weaned calf sales this autumn.Areas such as Scotland and Wales, where the industry is mainly concentrated on livestock, are particularly at a disadvantage, and it is that sector that the Minister must move to protect. It is essential for the future of our rural areas that a satisfactory level of farm income is maintained.
I have received many letters, like all my colleagues from Scotland, England and Wales, about the plight of the industry at the present time; we can only pass that view on to the Minister in the hope that he will take heed of the requests of all farmers in Britain.
§ Mr. Alex Carlile (Montgomery)Does my hon. Friend agree with me that there must now be grave concern about the future of farming because it is so unattractive and difficult for able young people to enter? With that in mind, does he fear for the future of agriculture unless the Government take dramatic steps to at least provide survival incomes for hill farmers?
§ Mr. HowellsI am grateful to my hon. and learned Friend for raising that important matter. As the Minister is sitting and listening to his comments, I am sure that he will take heed of what my hon. and learned Friend has just said. Something must be done to help young farmers before it is too late.
The point has been made again and again that, while other industries gain export advantages at a time when sterling is low, agriculture suffers as a result of a fixed green rate. Farming at the moment is losing about £600 million in extra costs. If the gap were closed now, it would mean an increase in support payments for sheep of about £2.60 a ewe, in suckler cow premium by about £6.40 and in beef special premium by about £3.82.
The present EC proposal to close the green pound gap by one third is simply not enough at this stage. The industry needs action to close the gap completely and immediately. That is the only way to restore confidence and to ensure that our farmers are allowed to compete on an equal footing with their counterparts in Europe.
I take heed of what Mr. Deputy Speaker said earlier. One could speak on many issues such as the environment and other topics that are relevant to agriculture, but I shall go down the same avenue as some other Members and refer to BSE.
Another cause of great worry to farmers, particularly in view of the uncertain livestock market, is the inadequate compensation for BSE cases. The export ban imposed by West Germany is bad enough, and it is likely to cost the industry at least £10 million. I am pleased that the Minister is dealing with the issue in his usual forthright manner, but 808 there is a strong case for fully compensating the farmer for his losses. Not only will that encourage more vigilance and promote more confidence in the industry, but it would reassure the consumer that no suspect meat is being allowed into the food chain.
The term "mad cows" has been used for a short period in this country, but people who understand cattle and have seen this disease are aware that the cows do not go mad. The disease affects the nervous system and the cow just collapses. It is a great pity that many people, including politicians, are frightening many of our consumers so that they will not eat beef. I admire the Minister's stand. He has to be firm during the crisis. He has expressed the views of the top veterinary officers in this country. There is no more that he can do except stand up for the industry and make sure that this disease will be eradicated.
The hon. Member for South Shields (Dr. Clark) said that BSE has come about during the past five or 10 years, but I have been about for many more years than the hon. Gentleman, and I would say that it has been prevalent in Britain for the past 50 or 60 years, and I have seen plenty of cases in various markets throughout Wales. It is nothing new. The only reason why we have more cows with this disease today is that dairy farmers are feeding more concentrates to the dairy cattle than they did 20 or 30 years ago.
§ Dr. David ClarkI find that quite revealing. Did I understand the hon. Gentleman to say that he was aware of BSE many, many years ago?
§ Mr. HowellsOf course. It is well-known in the agricultural industry that the disease has been in Britain for 40 or 50 years, and the previous Labour Government knew about it, just like the present Government. Anyone who disputes that does not know much about cattle.
It is worth making the point that research into the control and eradication of such diseases should be a top priority and that the Government should reconsider their policy of ruthlessly cutting down research establishments. It would also reassure farmers to know that the Government would consider full compensation for those 1,500 small farmers whose businesses have been practically wiped out by the lead contamination scare and the consequent restrictions.
Finally, there are two important issues if we are to safeguard the structure of British agriculture in the 1990s and into the next century. Many people, some perhaps within the House, and leaders of industry, believe that we should do away with the Milk Marketing Board. But it would be a great mistake to change the statutory powers of the Milk Marketing Board. Producers have been well served by the board over the years. It is unnecessary to change an institution that has been a strong support to the small family farm for more than 50 years and has ensured their survival in difficult and changing times.
The Minister and the Government made a mistake last year when they did away with the financial agreement for the British Wool Marketing Board, of which I had the privilege of being vice-chairman for 11 years. The British Wool Marketing Board is facing a crisis. Everything was going well when the board could sell wool at a high price a year or two ago, but trade has now collapsed. I criticised the Government for doing away with the financial agreement which has been the backbone of the sheep 809 producers over the past 50 years. They decided to do so, but perhaps they will think more seriously before they upset the statutory powers of the Milk Marketing Board.
Let me give politicians in the House one piece of advice, whatever it is worth, about the sheep industry. A quota system operates in the dairy industry. Dairy farmers were not very pleased when it was introduced in 1983, but the majority of those farmers today are probably in favour of a quota system because it is worth more than the farm itself.
Just imagine the effect of the introduction of sheep quotas in the 1990s in the mountainous areas of Scotland, Wales and England. If those quotas were worth the same as the milk quotas, farmers of my age living in the hills and in the less favoured areas could be offered a large sum of money for their quota by farmers from the lowland areas, and then they would sell. There is no alternative to sheep farming on the mountains of Britain, other than to grow trees.
My advice to whoever is in charge of Britain's sheep sector for the next 10 years is to be careful not to introduce quotas, or we shall for the first time see vast depopulation in those areas. We have seen it happen before, and we do not want to see a repeat performance in the late 1990s.
I hope that other hon. Members who take part in the debate will discuss seriously the short-term issues facing the industry at present. There is no point today in debating whether we should be a member of the Community. The important issue is today's survival. I hope that, when the Minister next goes to Brussels, and on each occasion in the next year or two, he will take with him the Secretary of State for Wales, because he has full responsibility for agriculture in Wales. The Secretary of State for Scotland should also go.
§ Mr. John D. Taylor (Strangford)And the Secretary of State for Northern Ireland.
§ Mr. HowellsYes, indeed.
The matter is so serious that all Ministers with responsibility for agriculture should go to Brussels with the Minister of Agriculture, Fisheries and Food. I wish the Minister and his colleagues the best in their deliberations in Brussels to safeguard the interests of agriculture.
§ Mr. Robin Maxwell-Hyslop (Tiverton)The saddest thing to me about the debate is, looking round the House, to realise how few, if any, of our colleagues on either side of the House who do not represent an agriculture constituency apparently realise the importance of a healthy income structure in the agriculture industry to other industries in Britain—the manufacturing industry, the chemical industry and the textile industry. Agriculture does not exist in a vacuum, and when agriculture is depressed the effects are not confined to agriculture; they spread through the country.
There are many examples of that. Look at the decline of the agricultural machinery industry in Britain over the past 10 years and the declining demand for many of the products of the petrochemical industry. If the leaders of those industries are asked whether they care about the income of our agriculture industry, they leave one in no doubt at all about their perception of the interconnection. 810 It is sad to me that those who want to speak in the debate are so clearly almost entirely confined to those who represent agricultural areas.
§ Mr. Eric Martlew (Carlisle)Will the hon. Gentleman give way?
§ Mr. Maxwell-HyslopNo, I will not, because we have been asked to limit our speeches to 10 minutes.
It is right that Ministers going into negotiations on the continent should be encouraged to do everything within their power to get rid of the green pound gap. The Commission reads the official reports of agriculture debates in Britain and in other countries, so it is important that it should know that Ministers are speaking for the House of Commons, not to the House of Commons, and that when they speak abroad they come with the anger as well as the interests of those whom they represent.
For many years now I have been disturbed by how many people in our agriculture industry think that 1992 means 1 January, rather than 31 December. Many people who should have been better informed have said that at least the agony will end on 1 January 1992. It will not. The level playing field, as it is referred to, will come into being on 31 December 1992, if those who oppose it do not find some way of blocking it. Hopeful as I am, my hope is not matched by my confidence because in many other aspects, particularly in the financial services industry which employs more than 3 million people in Britain, it is clear that there will not be equality of trading conditions—to coin a more appropriate phase—even by 31 December 1992.
I support what the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) said about the importance of the Milk Marketing Board to producers. It has been subjected to some unfair criticism in that it has been necessary for it to import milk at times of minimum output in Britain so that it can sustain the regular market for its own manufactured products. We cannot turn off and on established patterns of trade. If we want British butter to be sold in British shops, we cannot leave the retail and wholesale outlets bereft of it at certain times of the year.
In some respects, we have been unenterprising. For example, in many areas people who want unsalted butter must buy foreign because there is no British unsalted butter on the market. The English Milk Marketing Board, unlike its Scottish counterparts, has not given enough attention to seeing that the growing market in unsalted butter—growing because people have anxieties about the interrelationship between salt and heart disease—is met by home production by promoting the sale of unsalted English butter and ensuring that when people visit their supermarkets, they see British unsalted butter at eye level on the shelves.
I support the plea for 100 per cent. restitution in respect of cattle which are, rightly, destroyed when found to be suffering from BSE. There is strong opinion in the veterinary profession—those who read the Veterinary Record know this to be the case—that the present 50 per cent. compensation rate is not adequate to give the necessary degree of confidence.
The claim for 100 per cent. restitution can be even more justified on the ground that the Government consented to lowering the boiling point in the rendering industry. The Treasury should accept some responsibility in the matter 811 and agree to a compensation level of 100 per cent. The public would perceive that as being in their interest as well as in the interest of farmers. I do not know any farmers who would not rather have their cattle and sheep free of disease than have to claim subsidy of that type.
In examining the industry, we need to concentrate not on any one feature. For example, although as the hon. Member for Ceredigion and Pembroke, North said, rightly, high interest rates produce problems for farmers, if the rates were brought down now we would probably increase the green pound gap, because that is related to interest rates. In other words, we should never recommend one course of action which undercuts a different course of action that is also being recommended. In any event, when we get rid of the green pound system completely, the problem will no longer exist.
I am anxious not to overrun the time for speeches that Mr. Speaker has recommended, so I will comment only briefly on the devastating consequences of the gales, and they have been devastating in many ways. For example, consider the plight of farmers who are paying the community charge and who are in some cases paying the charge for their employees, too.
A hideous cost will fall on county councils in repairing damage to buildings caused by the gales. It has been said in relation to the Bellwin formula that the Government will pay 75 per cent. of the cost above a penny rate. That is not the case in respect of damaged buildings, a distinction which the Minister did not make clear.
Some counties pay enormous insurance premiums for the buildings that they own, and that cost must be added to the community charge. Over the years, Devon has found it better to have balances. Some ignorant people—including some ignorant Members—criticise balances but, taken over a period of time, they result in lower costs to the ratepayer, now the community charge payer, than paying insurance premiums. After all, insurance companies are in business to make a profit. Sometimes they get their calculations wrong, but their intention when they set their premiums is to make a profit.
Considering that the Minister speaks not just for his Department but for the Government, I urge him to tell the Secretary of State for the Environment that if the Bellwin formula does not embrace the cost of damage to buildings, an intolerable burden will be placed on those who live in areas of dispersed population, our rural areas, which are also our agricultural areas.
Had time permitted, I would have covered many other points, but I always try to honour the requests made for short speeches.
§ Mr. Ted Garrett (Wallsend)I was interested to hear the hon. Member for Tiverton (Mr. Maxwell-Hyslop) say that there were not many farmers present for tonight's debate. Some older hon. Members will recall that in the past when we debated agriculture, the Conservative Benches were well filled with farmers or landowners.
It is also interesting to reflect, Mr. Deputy Speaker, that you, the hon. Member for Tiverton and I are former engineers. That is not to say that we are ignorant of farming problems. I live in the constituency represented by the hon. Member for Hexham (Mr. Amos), who is in his 812 place and who hopes to take part in the debate. Whatever one's interest, one listens, learns and acquires knowledge of the farming industry.
Hon. Members may also be interested—or perhaps bored—to learn that I was a member of the first Select Committee on Agriculture, and I believe that the hon. Member for Dumfries (Sir H. Monro) was also a member. That Select Committee was abolished by the incoming Labour Government in 1966 because they sought the truth, and the truth about agriculture was not acceptable to the then Leader of the House, Richard Crossman, and we were fired. Those of us who were members of that Select Committee did not take kindly to the decision.
In addition to having been for 12 years a member of the Parliamentary Assembly of the Council of Europe, I am on that body's Agriculture Committee. When the Minister opened this debate, he was urbane and smooth, as always. He was quick to react when provoked, but he had nothing to say about how he sees agriculture in the future.
The Agriculture Committee of the Council of Europe is way ahead in its thinking about the potential for farming in Europe in the years to come. Today, we think of farming in Europe in terms of central, eastern and western Europe. If a fraction of the money that is spent on the CAP was diverted to help the resources of the Council of Europe, it would be money well spent. The hon. Member for Southend, East (Mr. Taylor), who is not in his place, would probably agree with me about that.
We in that committee in the Council of Europe have already arranged for politicians and other speakers from Poland, Hungary and Czechoslovakia to become members of the committee. They already take part in some of our debates, and I assure the House that we debate not merely forestry and fishery problems affecting the whole of Europe, vast though those problems are—I had hoped that those matters would have been raised in this debate—but the whole question of food surpluses. One of the problems in the countries that have been totalitarian is food—not the shortage—
§ Dame Elaine Kellett-BowmanThe distribution.
§ Mr. GarrettYes, the distribution. There has also been a lack of variety of food in countries such as Czechoslovakia. However the basic tenet remains. The land is there and can be cultivated, but those countries must he helped in the marketing and distribution of food when it reaches the huge cities. We are talking also about cleaning the rivers. Rivers do not stop when they reach the boundaries of the 12 European Community countries; they go on. The worst pollutants are in eastern Europe. We have to skirmish on environmental matters and the question of how water can damage agricultural products.
I should like more of the time of the House to be devoted to the various aspects of agriculture. A debate such as today's, of this duration, cannot fulfil that objective. The Agriculture Committee of the Council of Europe should be given more publicity. It has completed reports on the changes in the quantity and quality of agricultural products, as well as the problems of processing, marketing and distribution of food products.
Last Tuesday, there was an animated debate at the Council of Europe on the question of the land set-aside policy. Hon. Members will not be surprised to hear that that idea was ferociously opposed by continental farmers. I took the opportunity to explain Britain's modest 813 proposals for an agricultural set-aside policy, some of the results that have been achieved, and how, in the long term, it would be foolish for the Council of Europe—or the European Economic Community—to throw aside the basic concept of set-aside land.
I know that there is hostility to that proposal in some areas of the farming community, but it is one of the first steps towards overcoming agricultural surpluses. Modest though it is, the Government deserve some credit for taking that initiative. However, I have a word of warning. The policy is established and is starting to work, but we must recognise that there has to be a system of surveillance to ensure that farmers are honouring the agreement.
The farmers receive an annual sum of money for setting aside their land for five years and for honouring the obligation to cultivate the land and to keep it and its surroundings in good condition. At the back of my mind is the fear that not all farmers will live up to the responsibility that has been imposed upon them, and for which they are receiving financial reward. When the Minister replies, he should give that matter serious consideration and, if necessary, produce a report on the success of surveillance.
I am also conscious that we are on a time schedule, so I conclude by saying that I welcome this debate and the wide contributions that have been made to it. I think that the quality of debate in the House on agricultural matters is much better than it was some years ago.
§ Mr. Deputy SpeakerOrder. I remind the House that we are now into the period of rationed time.
§ 7.4 pm
§ Mr. Christopher Gill (Ludlow)Thank you, Mr. Deputy Speaker, for calling me so early in the debate. I am sorry that my right hon. Friend the Minister is not in his place to hear me praise his robust and responsible speech. I am sure that the message that he gave the House this afternoon will be well received by farmers and by those in the countryside generally.
§ Mr. Andy StewartI concur, as did my hon. Friend the Member for Gloucestershire, West, (Mr. Marland), with my hon. Friend in congratulating my right hon. Friend the Minister on his excellent speech. I care about agriculture. Soon the Leader of the Opposition will speak at the National Farmers Union annual dinner, but he has not given a speech on agriculture for 15 years. Who does my hon. Friend think should write his speech?
§ Mr. GillA number of names occur to me but, sadly, they do not include the hon. Member for South Shields (Dr. Clark). He made a poor contribution to this afternoon's debate because he missed no opportunity to undermine the confidence that the British public have in British agricultural products. He took a swipe at British apples, British beef and British eggs. He had a wonderful opportunity to say that, after all the regulations that have been brought in by the Government recently, British eggs are the safest in the world. He missed that opportunity and that is distressing.
§ Dr. David ClarkDid not the hon. Gentleman understand what I was saying? I was making the point that 814 British eggs are tested to a higher quality than Dutch eggs and therefore we should—in words that are much used in the House—ensure that the British poultry producers have a level playing field. I am sorry that that point did not get through.
§ Mr. GillI am sorry, but that point did not get through at all. Many outside the House will be critical of what the hon. Gentleman did say. That is in complete contrast to my right hon. Friend the Minister, whose grasp of the subject and understanding of the problems is complete. He left the House in no doubt that he would tackle the problems.
Today two Ministers have made commitments to eliminate the green currencies. My right hon. Friend the Prime Minister made her declaration on that subject during Prime Minister's questions, and later in the day my right hon. Friend the Minister of Agriculture, Fisheries and Food said that green currencies would be eliminated as soon as practicable. My concern is about what will happen in the meantime.
Farmers' returns are inadequate for the increased costs that they bear. Their products have scarcely risen in value during the past seven or eight years, whereas during the same period a 100-horsepower tractor has increased in cost by about 35 per cent., from £18,500 to £25,000. In addition, farmers have inadequate earnings to service debt. It is interesting to note that this year the interest bill in agriculture has gone up by no less than 38 per cent., to nearly £1 billion. The returns are inadequate for the investment that farmers must make for the future—there has been a 40 per cent. reduction in investment in the five years to 1988. Of course, their inadequate returns have also led to a fall in rural employment—about 23,000 full-time jobs have been lost in agriculture since 1982. That is not to mention the incomes or earnings of the farmers themselves.
I have two concerns—first, for the future of this great industry and, secondly, for the countryside. My concern for the industry is that it is not reinvesting at the level that it should be; it is not reinvesting at the level that it should be; it is not reducing indebtedness—quite the reverse-and it is not generating the cash resources that it will need to tide it over until 1993. It is currently suffering from a crisis of confidence—not in its own ability, but in the sheer impossibility of competing against unfair monetary compensatory amounts.
At this point, I allude to the comments of the hon. Member for Wallsend (Mr. Garrett), who introduced into the debate a note of caution about eastern Europe. There is no doubt that, once eastern European people who work on the land taste the enterprise culture and are given motivation and incentive for increased agricultural production, the competition and scope for agricultural surpluses in Europe will be increased immeasurably. We dare not under-estimate the effects of that. I plead unto the Minister to argue our case, as I know he will, very strongly in Brussels. The total elimination of monetary compensatory amounts would cost about 45 million ecu, or about £35 million, in a full year. The net cost to the United Kingdom would be approximately £120 million, not as a continuing cost but as a one-off cost. The effect on the retail price index would be between 0–25 per cent. and 0.5 per cent.
British agriculture is by anyone's reckoning a major industry and the envy of many of our European partners. They do not want us to get rid of MCAs, because the 815 longer they can keep them the better their competitive advantage and the greater their chance of reducing the United Kingdom's ability to compete in the future. Although agriculture is the second biggest industry in the United Kingdom, second only to oil, it is the biggest industry in rural areas with inputs of about £7 billion a year in capital and other purchases and £2 billion in the annual wage bill, and with the lion's share of all agricultural spending going into the rural economy. That is very important because there is no doubt that, without a thriving, prosperous and vibrant agriculture, the whole rural economy is greatly prejudiced.
Our Minister must break the logjam. We cannot accept that he must wait for three years before we get a complete amelioration of the problems besetting us today. Three years in any industry is a very long time, especially for cash flows to be so seriously undermined. The elimination of MCAs will not release a torrent of cash, a windfall, that will boost farm profits, but it will give agriculture its just deserts. I hope that my right hon. Friend the Secretary of State will be 100 per cent. successful when he goes to Brussels to argue for the complete elimination of MCAs here and now.
§ Mr. John D. Taylor (Strangford)This is a debate on United Kingdom agriculture and the Minister is responsible in Brussels for the whole of the United Kingdom, even though in the Northern Ireland Office we have a Minister and an Under-Secretary responsible for Northern Ireland agriculture. We never have the opportunity of debating Ulster agriculture here, so that Under-Secretary is not answerable either to the people of Northern Ireland or to this Parliament, and I am sorry that once again the Northern Ireland Office is failing to show its interest in agriculture in Northern Ireland and is absent from the debate.
I thank the Secretary of State for the way in which he began his speech, because, although he mentioned the significant increase in farm incomes last year, he went out of his way to say that he was not going to use that to his advantage because it varied depending on which sector one looked at. There are some regions in the United Kingdom, such as Northern Ireland, which are particularly based on one sector—grass: 60 per cent. of Ulster agriculture is in either beef or milk production.
This morning in Northern Ireland it was announced that the price of milk had been reduced yet again by the Northern Ireland Milk Marketing Board, to 17p per litre. It was 20p last October, so in the space of four months we have had a 15 per cent. reduction in the price of milk. In January, we had an intervention system for butter which was operated in different ways in the United Kingdom and the Republic of Ireland. In the Republic, intervention applied below 96 per cent. of the intervention limit, but in the United Kingdom one had to go below 94 per cent. That gave an unfair advantage to milk producers in the Republic.
I ask the Secretary of State always to watch these things when they apply to the Republic of Ireland as well as the United Kingdom, because the United Kingdom has only one foreign country on its borders, the Republic of Ireland, and a disparity like this works to the disadvantage of United Kingdom producers in Northern Ireland.
816 Now that we have managed to reduce the milk surplus in the European Community, the Community should take in hand the complete abolition of the co-responsibility levy in the milk industry.
Mention has been made of the future of the five milk marketing boards in the United Kingdom. With the decline in milk production, rationalisation is now taking place in the milk industry, and that has brought about the combination of various milk operations in Northern Ireland. Several co-operatives have recently decided to become limited companies, and then one has taken over the other. In particular, I refer to the recent takeover bid by Leckpatrick Co-op for Killyman Co-op, both in the county of Tyrone. The Northern Ireland Milk Marketing Board also made a bid for the Killyman Co-op which was higher than that of Leckpatrick, yet Leckpatrick won the takeover battle because the Northern Ireland Milk Marketing Board, which was created by the Ulster Unionist Government at Stormont, has now reached the point when people are uncertain of its survival. So although it was offering more money to the milk producers, the private company won the battle.
I ask the Secretary of State to make a statement about the future of our milk marketing board in Northern Ireland. The producers need to know whether they can place their confidence in the board in the years ahead. it was because of lack of confidence in Northern Ireland in recent weeks that the takeover of Killyman was carried out by a firm offering less than the milk marketing board: people were not sure whether, if they sold to the hoard, it would still be there in a few years.
The Secretary of State and his Department are well aware of beef prices in Northern Ireland which have been influenced by various general factors, such as the new restrictions on intervention and the abolition of the variable premium, and, more recently, by the decline in sterling and the problem created by the green currencies, something mentioned by many speakers in the debate. Here again, the problem is exaggerated by the border; once again we have unfair competition with the Republic. We in Northern Ireland stress the necessity of getting rid of the green currencies as soon as possible. The present proposal is for a reduction of 33.3 per cent. We seek a reduction of 100 per cent.
I want to make special reference to the pigrneat industry, because it is one of the major intensive sectors in Northern Ireland. It is subject to great market fluctuations and always has been—that has always been one of its characteristics. I appeal to the Minister to seek a mechanism for stabilising the pig meat market in the United Kingdom.
The debate has also seen an attack on British apples. I want to defend the British apples grown in Northern Ireland, especially the Bramley, of which we have 10,000 acres. The hon. Member for Skipton and Ripon (Mr. Curry) joined me five years ago in defending the Bramley in Europe to the European Parliament and the Commission. I ask the Department to fight for apples once again and to make sure that there is no reduction in the buying-in price for apples in May this year.
Cereals are a problem for us in Northern Ireland because we are a deficit-producing country. We produce only 18 per cent. of the cereals that we require. We know that cereals have been doing badly elsewhere. I would ask that the co-responsibility level on cereals be removed as 817 soon as possible, because the damage that is being done to the industry in Northern Ireland is dramatic—especially in that small part of our industry which is the specialist part.
I wish to refer to the campaign to introduce a common time zone throughout the European Community. We in the Ulster Unionist party consulted not only agriculture and the fishing industry but the building and construction industry and business and trade generally. I wish to make it clear that the parliamentary Ulster Unionist party will oppose any suggestion that time should be uniform throughout Europe. The one-hour differential must remain.
I join the hon. Member for Wallsend (Mr. Garrett) in asking about the threat from eastern Europe. Of course we want eastern Europe to advance to freedom and a market economy and we want to assist the countries financially, but we do not want them to cease to be self-supporting in agriculture and start exporting cheap agricultural products into the European Community, the further to undermine our farmers' position.
The former Minister of Agriculture, Fisheries and Food, the right hon. Member for Westmorland and Lonsdale (Mr. Jopling), visited Northern Ireland in his capacity as the Minister responsible for agriculture matters for the whole of the United Kingdom. I hope that the present Minister will find an opportunity to come to Northern Ireland as soon as possible to see what the problems are—especially in the beef and milk industries—and take on board the specific problems that arise because of competition from a neighbouring EEC country—the Republic of Ireland. I invite him to come to Northern Ireland at the earliest possible opportunity.
§ Mr. Malcom Moss (Cambridgeshire, North-East)This is one of the most important agriculture debates that we have had for a long time. It comes at a critical time for some—I emphasise "some"—sectors of agriculture. I congratulate my right hon. Friend the Minister of Agriculture, Fisheries and Food on a most positive and helpful speech and voice my disappointment at Opposition Members' contributions—particularly the speech from the Opposition Front Bench by the hon. Member for South Shields (Dr. Clark) which was long on words and short on substance, with veiled promises of more handouts by a future Labour Government. I found the hon. Gentleman's comments on BSE most unhelpful and I know that they will be considered as such by beef producers in east Anglia.
The sector of agriculture that is most under pressure at present is the cereal growing sector, and that is the principal enterprise of the fens in my constituency. Those with root crops—sugar beet and potatoes—are surviving, but morale among pure cereal growers is at rock bottom. I am sure that my right hon. Friend has been apprised of the situation, but I must nevertheless convey to him in the strongest possible terms the feelings of farmers in my constituency.
The reasons for low morale are clear. The farmers are suffering falling incomes and falling profitability, a low price and high interest rate squeeze, pressure from environmentalists and food faddists, some of it quite outrageous in its disinformation, the aftermath of the 818 salmonella and eggs issue and now, of course BSE, and tighter controls and regulations on the use of pesticides and the training that has to go with them.
The final straw is the ban on straw burning. Some farmers on heavy land in my constituency who use only a wheat and oilseed rape rotation cannot see how they can continue to cultivate, given the ban on burning. My right hon. Friend's unequivocal statement on the green pound—that he was "absolutely committed" to its "total dismantling"—will not only reassure my constituents of his complete commitment to the farming cause but will help them to understand that he has their best interests at heart in his negotiations on the pricing mechanism.
Cereal farmers' problems start with interest rates. Nationwide, the industry's bill rose 38 per cent. last year and now stands at a staggering £949 million, compared with £1,400 million of farming incomes. The gearing of borrowings in this industry is larger than farming's gross product, whereas the norm for other industries is about 33 per cent. Bankers are now asking farmers in my constituency whether they think that they really ought to go ahead and drill next year. It has come to that.
The second problem is investment. Nationally, in the five years to 1988, annual investment in fixed capital dropped by 40 per cent. and last year there was a further cut of 7 per cent. At this rate, 1992 may never come for some of my cereal farmers. Even if it does, many of them will not have the necessary new capital investment in machinery to compete on a level playing field with their European counterparts.
The most serious problem is falling incomes. Although statistics show that real farm income is set to rise by 8 per cent. in 1989, after a fall of about 27 per cent. the previous year, they hide regional variations and variations between different farming enterprises in the same region. The cereal farmers had two disastrous years in 1987 and 1988, and 1989 looks as though it will prove to have been equally bad.
The chief culprits are the green pound and the co-responsibility levy. The green pound penalises my fen farmers at a rate of £20 per tonne for their wheat. For a reasonable farmer on a reasonably sized farm, that can total between £20,000 and £30,000 of lost income over the year. As a business man myself, I would not contemplate going into such an unprofitable business. Only recently I was shown two statements from a local grain merchant. In November 1989, a farmer in my constituency obtained £112 a tonne for wheat, less the co-responsibility levy of £3..66 and netted the handsome total of £108.34. The November 1980 statement showed the figure of £107 per tonne for wheat. That means that in real terms income from cereals has decreased to about 15 per cent. of what it was in 1983.
My farmers are also puzzled by the new definition of income from farming that the Ministry has employed. They understand what farm income is, but they are somewhat perplexed to learn that the assessment under the new terms concludes that farmers earn only 60 per cent. of their income from farming. That figure is not accurate when applied to farmers in the fens of Cambridgeshire. The fens are the grain basket of the United Kingdom. All the land in my constituency is grade 1 or grade 2 land; we have no inferior land, and historically we have the highest agricultural land values in the country.
What are the options available to us? First, there is diversification. We have a flat and featureless landscape. 819 With all due respect to my beloved constituency, it is not the kind of landscape that one would want to put on the front of a chocolate box. The opportunities for tourism are obviously limited. It is a sparsely populated area. We have no country houses and estates. No yuppies from the City come up to the fens to buy estates and act as absentee landlords.
The farmers in the fens are worker farmers and they have been since they started to farm the land after drainage. Ours is a unique area. If we did not drain the fens, they would soon disappear under several feet of water. I am quite prepared to lose my constituency at an election; that might be regarded as a misfortune. To lose it under 8 ft of water could look like carelessness. My farmers also have to contribute to the drainage of the land. That is an additional item of expenditure that they have to bear.
Woodland is not an alternative, because one is not allowed to plant woodland in the fens, where all dikes and drainage courses must be free of obstructions so that they can be cleaned out. We cannot change to grasslands because we do not have enough rain, and set-aside rates are just not high enough to make the position viable. I ask my right hon. Friend the Minister why the additional payments for set-aside agreed under FEOGA—the European Agricultural Guidance and Guarantee Fund—and taken up by the French and German Governments were not allowed in this country. That is certainly a question that my farmers have put to me.
Fen farmers now have to worry about rhizomania, of which there have been two outbreaks—one in Suffolk and one in Norfolk. If rhizomania takes a hold, the sugar beet crop in the fens will disappear in consequence. As many hon. Members have said, the root cause of this country's problems in agriculture—cereal growing, in particular—arises from the prices of commodities, and the problems are exacerbated by the green pound and the co-responsibility levy. I welcome my right hon. Friend's commitment to negotiations on the green pound, but the logic is that, if it is to come off in 1992 because it is unfair and unreasonable, it ought to come off this year. Why is that not going to happen? I urge my right hon. Friend to stand firm in his negotiations, and I wish him luck. Certainly he has the support of my constituents.
Much has been said about level playing fields. I remember the days when I played rugby in Redruth in Cornwall, which is famous for a pitch that slopes about 30 ft from one end to the other. I remember that when I was playing at the bottom end the wind was always in my face, and the rain driving horizontally. But, of course, at half time we changed round. The message from my constituents to my right hon. Friend is: "Bring out the oranges; the half-time whistle has just gone."
§ Mr. Martyn Jones (Clwyd, South-West)I have been told by the Minister in the past that the devaluation of the green pound that has already been obtained represents a substantial step towards the elimination of monetary compensatory amounts by 1992. But the farm business survey shows that the underlying economic condition has been declining steadily for all farming sectors, although, in the case of milk, there has only recently been a modest increase. For the last 10 years, the trend has been inexorably downward, while outstanding debt has been 820 going up. It ought to be of concern to the Government that, as other Members have pointed out, investment in United Kingdom agriculture has fallen by 40 per cent. in the last five years. But it does not seem to bother them in the case of other sectors, so I do not suppose that it will bother them in the case of farming.
The number of people in full-time employment has also fallen, with the loss of 60,000 jobs in the same five years. In a constituency such as mine, the great majority of jobs in rural parts are connected, directly or indirectly, with farming. Unless the trend is reversed, the fabric of the countryside will be in real danger. The complete and immediate elimination of the monetary compensatory amounts would be a real help to the farmers who come to my surgeries weekly, many of whom are struggling with all the other ills that, lately, have been inflicted on small businesses as a result of this Government's policies.
High interest rates, VAT on electricity, the poll tax and the uniform business rate, and price increases well above the rate of inflation on a whole string of farming supplies—all these take their toll. Add to these ills the problems of the exporting of beef cattle—or, rather, the ban on the exporting of beef cattle—to western Europe, thanks to BSE and to the unwillingness of the Government to recognise the extent of the problem by paying full-price compensation for infected cattle, and we have a recipe for disaster.
Incidentally, I have great respect for the farming knowledge of the hon. Member for Ceredigion and Pembroke, North (Mr. Howells)—unfortunately, he is not in his place at the moment—but if he knew of the existence of BSE in cattle over 60 years ago, I wish he had told previous Governments. If he had, we might not have the present BSE problems. It is likely that BSE is really caused by the Government's policy of putting profit before safety in the rendering industry. I rather suspect that that is the real reason for the massive increase in BSE.
We in north Wales have further difficulties-this time, imposed directly by the Government. The Minister's right hon. Friend the Secretary of State for Wales is apparently considering closure of at least one veterinary investigation centre—Bryn Adda in Bangor. That would leave north Wales covered—if "covered" is the word—by Aberystwyth, Shrewsbury and Preston. This would be totally impractical for most farmers who have to take their animals to these centres.
Just recently, the Secretary of State announced plans to close the Welsh Office agriculture office in Ruthin—or rather, downgrade the office by reducing the number of staff from 55 to 18. Effectively, that would amount to closure in at least one area of service. I might add that that decision was taken without consultation, and in such haste that staff at the office were asked to decide between moving to Caernarvon and taking a redundancy payment—a payment not yet agreed by the Treasury—within a matter of weeks. At least one 25-year-old was offered early retirement.
Effectively, this change will mean the grants and subsidies on which many of the marginal hill farmers in my constituency depend to eke out a living being dealt with by Caernarvon. The farmers of Clwyd will no longer he able to resolve their problems face to face without a long and expensive journey to Caernarvon or long and expensive phone calls. In short, it may well be the last straw for some farmers who are working long hours for little reward, on very marginal but scenic land. It will certainly be the last 821 straw for the employees of the office, who have provided an excellent service for agriculture in very sub-standard conditions. Will the Minister ask his right hon. Friend to reconsider this closure decision, and will he himself make a commitment to immediate and complete devaluation of the green pound?
§ Sir Hector Monro (Dumfries)I begin by thanking all the Agriculture Ministers in this Government for the exceptional work that they have been doing over the past few years, especially the past 12 months, for the farming industry. Much of the Minister's speech was encouraging, especially what he said about the future and about the strength of the argument that he is going to take to Europe. I hope that no Minister will overreact to the scares that arise almost weekly concerning food. Often, the problems have been resolved without too much difficulty.
I want to say three things with which I think all hon. Members will agree. First, I say, "Well done," to Ian Grant, who, during the last month of his presidency of the Scottish National Farmers Union, made an outstanding contribution to farming. Secondly, like the right hon. Member for Strangford (Mr. Taylor), I believe most strongly that we must not tinker with summertime and go on to continental time. We must make as strongly as possible the case for farming, for which a change would cause enormous damage. Thirdly, I hope that we will do all that we can to retain the marketing boards. The milk marketing boards have done exceptionally good work. I hope that it will be possible to find a little more quota to help the manufacturing industry in the not too distant future. We must give credit also to the Wool Marketing Board and the Potato Marketing Board for all that they have achieved over many years.
I shall refer to two main issues: first, the current economic problems and the loss of confidence in agriculture; secondly, the future and environmentally friendly farming. As the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) said, the value of this debate is to show the Minister what farmers in our constituencies are feeling and enable him to use the evidence in his argument when he goes to Europe.
The economic facts are irrefutable. The industry has suffered a major loss of income over recent years. Let us look at the Scottish figures. If the figure was 100 in 1978, it went down to 59 in 1979 because of bad weather. In 1982, it was 74, in 1984, it was 90—that was a better year—in 1985, it went down to 15 because the weather was dreadful, and in 1988 it was 65. The graph trend is steadily downward, and we must try to change that. Whatever the statistics say, the situation is very serious.
We must highlight how employment in Scotland over the last five years dropped by no less than 23 per cent.—from 19,000 to 14,000. That represents a big loss to rural areas. The resources are no longer available to re-equip with new machinery, to invest in livestock or to think, as many people believe we should, in terms of alternative land use. Almost every alternative land use costs a great deal of capital if it is to be successful. As we all know, the high interest rates that are necessary to contain inflation have a serious impact on farming.
822 The fall in farm incomes makes it much harder for farmers to pay the wages which farm workers undoubtedly deserve. I believe that many farmers pay considerably more than the minimum wage set by the wages board, but it would be easier for them to be generous to the workers if their incomes were higher.
Farmers are entitled to a fair return on their capital in exchange for providing high quality food. At the centre is the common agricultural policy. The price proposals will be before us shortly. I welcome what the Government have done on the hill livestock compensatory allowance. I welcome particularly what my right hon. Friend said today about fighting very hard to retain the HLCA in 1991, I hope at a rate at least as high as this year. If there is any difficulty with Europe, I hope that the Treasury will make up the difference.
The Minister should consider again the headage payment on finished cattle. The premium is payable on 90 cattle. The Minister should consider whether it could be paid on farm to the producer, particularly for calves. There are technical difficulties, but the Minister should make a real effort to overcome the problem.
My right hon. Friend accepted the need to deal with the green pound. I support the 1990 campaign of the National Farmers Union of Scotland to devalue the green pound, certainly well before the end of the three-year period which is to be used as a sliding scale. If it could be devalued this year, it would be of enormous benefit to agriculture. Other hon. Members have given the devaluation percentages—arable at 17 per cent., dairy at 17 per cent., beef at 13 per cent. and so on. There is a big difference. The Minister said that he would do what he could to help. He was backed up this afternoon by my right hon. Friend the Prime Minister, who understands the position on the green pound. I do not think that phasing it out over three years is acceptable.
Much of the common agricultural policy is not sensitive to the environment or to the rural economy. The HLCA, the suckler cow subsidy and the beef premium are important if farming is to be profitable and if people are to remain in the countryside, particularly in hill areas. We must consider how to bring more jobs into the villages and small towns that we all represent. If we do not have people there, everything begins to disintegrate-schools, churches, halls and the community spirit. All in all, keeping up profitability in the less-favoured areas is very important.
As a Government we began, through the Wildlife and Countryside Act 1981, to find ways to help using management agreements. The Government have helped by promoting environmentally sensitive areas. We must keep income in the hills without increasing grazing pressure by adding to the stock of hill cows and sheep.
Set-aside schemes almost invariably cost jobs. If a farmer sets aside part of his farm by letting it lie fallow, or worse, he will shed labour—something that we do not want to see in rural areas.
I have been watching closely what has been happening to woodlands and forestry. We must reconsider the fiscal decisions made two years ago, because maintenance is important in woodlands. If we take away the tax incentive on maintenance that we have had for many years, the forestry ecology will not remain as it is.
On alternative land use, there must be a more realistic approach to planning by local authorities which turn down many good ideas for no good reason. Much more could be said about the environment. I have a vision of a 823 well-farmed countryside, with greater diversity of wildlife and habitat. I believe that many of the Government's policies show clearly that that is the road down which they are going.
§ Mr. Eric Martlew (Carlisle)I was concerned about being attacked by the Minister as a food fascist. I am sorry that he is not in his place; he must have gone off to savage one or two diplomats. Fascism is much more the creed of the Minister than of myself. When he made his famous speech on food fascism, I wonder if he was referring to the hon. Member for Derbyshire, South (Mrs. Currie), who exterminated 10 per cent. of the laying flock and created the largest food scare that we have ever known.
I might well be accused of being a food fascist, because I am concerned about Government policy on the EEC and on food poisoning. Over the last decade, food poisoning cases have increased from 10,000 to 30,000. It seems that 1990 may be a record year for food poisoning. That is the background to my speech.
There is still a problem with eggs and salmonella. There is much confusion in the industry. People do not believe that the slaughter policy is working. I am not convinced that it is working, and I have been a member of the Select Committee. However, the slaughter policy underpins confidence in British eggs. Hon. Members can say that British eggs are better than Dutch eggs: there is no doubt about that. Already, concern has been expressed about the Government's reluctance to ban the importation of eggs from parts of Europe which are contaminated by salmonella. I am thinking especially about the Dutch. There is a belief that the Government would not ban the importation of rats from Holland even if they had bubonic plague, on the grounds that everything that comes from Holland is irradiated anyway.
The German Government do not take the same attitude. The Germans are saying to us, "We understand that we cannot prove that there is a problem with bovine spongiform encephalopathy but we're not having your beef, and that's the end of it." Our Government cannot do anything about it. The Germans are probably right to take that line. They are losing nothing, but they are protecting their population—something that the British Government fail to do time after time.
It is said that BSE originated from feeding cattle with sheep offal which was contaminated with scrapie, yet we appear to be doing nothing about scrapie. That worries me. The argument is that scrapie has been known about for 200 years and that there is no link between scrapie and humans. I do not accept that. I think that some of the cases of Creutzfeld-Jakob disease could have been caused by scrapie. If BSE is transmitted to man, I think that it will only be in small numbers.
It is said that there are only 50 victims a year of the human form of BSE. That is probably an under-estimate. Some cases may not be diagnosed, but I do not think that BSE or scrapie will create a major epidemic. We should not frighten the public, but we should protect them. I asked the Minister if he would stop contaminated sheep going into the food chain. The written reply that I got today was no.
If a sheep came to the slaughterhouse suspected of having scrapie, the animal would be slaughtered and dressed in the usual way, but it would be processed apart 824 from other animals. If inspection of the offal revealed that there was no other sign of the disease, the head would be removed and condemned but the carcase would be passed fit for human consumption. In other words, where a sheep is known to have scrapie, we cut the head off, stain it and throw it into the bin, and send the other part to the butcher.
I asked the Minister today if he would stop that exercise, and the answer was no. I ask him again to come to the Dispatch Box tonight and change his mind, because it is important that we protect our consumers, even if there is only a very slight risk, and I accept that it is only a very sight risk.
On another point—the Minister should listen to this, because his whole political career may depend upon it—if that sheep I was talking about was made into hotpot and was to be served to the Prime Minister, would the Minister allow her to eat it? I know that I would, but I am riot sympathetic to the Prime Minister. I think he had better be careful what he replies.
Coming to BSE, I am glad to see that the hon. Member for Penrith and The Border (Mr. Maclean) is in his place, because at the Dispatch Box recently he told the House that there was no chance of BSE-contaminated beef getting into the food chain. He said that he had belt and braces, but if my investigation of what goes on with his belt and braces is correct, the Minister's trousers will be round his ankles before much longer.
I went to a local auction mart—the Bordway at Carlisle, which is an excellent one and the largest in the country. Inspection there was carried out by the trading standards officer. It was voluntary; there was no legislation that said it had to be carried out. The county council will soon be in great difficulty because of cuts imposed by the Government, and it may not be able to continue to carry out inspection of that sort.
I looked around the largest auction mart in Britain to see if there were any notices from MAFF saying "Beware of BSE" and telling people about the problems and the penalties, because it is illegal knowingly to send BSE-contaminated cattle to market. There was not one notice in that auction mart. The managing director of the mart had rung MAFF and had been told that there were no notices to be put up in the auction mart. I therefore do not believe the Government are doing the job very well. Furthermore, the instructions that have been given to the environmental health inspectors at the abattoir contradict what is laid down by the Government as to how animals of this sort should be treated.
The thing that I find really strange is that all sorts of people say that only 50 per cent. compensation is being paid. That is not strictly true. If a farmer notifies MAFF that the beef on the farm has BSE, he will get 50 per cent.; and if BSE is found at the auction mart, he will get 50 per cent. But if an animal gets right through the system and is killed at the abattoir, 100 per cent. compensation is paid. In most cases, that 100 per cent. compensation does not go to the farmers—we have had many complaints on their behalf today—but goes to the butchers.
From the puzzled look on the Minister's face, I suspect that he is not aware of this, but it is in MAFF instructions. There is no doubt about that.
In order to protect the industry, we should give 100 per cent. compensation to everybody. We should have a policy of trying to eradicate this generation of cattle from our fields as soon as possible. The sooner we can get rid of 825 cattle that have eaten that contaminated feed, the better. I would go so far as to say that we should have a voluntary slaughter policy. Anybody who wants to get rid of beef of that age should be allowed to do so, and should get 100 per cent. compensation. The sooner we are again able to tell Europe that we have the cleanest herd in the world the better.
There is a certain irony in our dealings with the European Community. Is it not sad that we are today debating a situation in which other countries of Europe are refusing to take our cattle, alive or dead, although it appears from EC regulations that we are to start re-exporting live horses to Europe? That is the anomaly of the EC at the present time.
I hope that Ministers will take the warning from the House tonight and get together with those concerned—farmers, MAFF and the veterinarians—and make sure that our flocks, herds, pigs and poultry are pure and clean and ready to put on the table. That is the problem at the moment: people in Europe do not trust the food produced in this country.
§ Mrs. Ann Winterton (Congleton)I am pleased to be able to contribute briefly to this wide-ranging debate as the representative of a rural constituency with a very important milk sector. Naturally, I reflect the fact that that part of the industry, which has now settled down to quotas, is probably more profitable and settled than other parts.
I very much welcome the fact that the Minister may be looking at the prospect of loaning some percentage quota to young entrants to the agricultural industry. The great problem, however, is in defining a new entrant. No farmer or producer in my constituency would want to see an incentive given to some yuppie farmer or somebody who has sold a business and is investing as a new entrant to agriculture.
All hon. Members present who represent rural constituencies will agree with me that the agriculture industry as a whole is the backbone of the rural economy and that farmers are the only true custodians of the countryside—a countryside which is admired, enjoyed and appreciated by vast numbers of British people and tourists and which has virtually been created by the farming community with its good husbandry over the years.
The industry has always responded to incentives provided by central Government and indeed, the EC. In these difficult days, when there is overproduction of food, it will respond with equal vigour to the emerging priority to get supply and demand into better balance and to focus on the marketplace in meeting change and the requirements of the consumer.
It should be said that there is no great divide between the farmer and the consumer. Farmers are consumers and so are their families; they shop in the same supermarkets and corner shops as the rest of us.
There is today an excellent range of home-produced food—helping, incidentally, our balance of payments—at modest prices. Let us not forget that the return to the producer is a small part of the cost in the shops, most of which is made up by processing, packaging and transportation costs. But it is equally true that the industry 826 faces a severe crisis of confidence in its future, with average farming incomes dropping by about 9 per cent. each year, extremely low profitability and, as a result, very low investment. These problems are further exacerbated by the high interest rates which are being used as the sole weapon in the fight against inflation.
The theme that has run through the many and varied contributions to the debate is that the current green pound gap must be eliminated. It is a discriminatory currency mechanism and, in the best interests of Britain and its farming community, must be removed, and as a matter of urgency. Indeed, 1992 is so far ahead that some farming businesses will not last until then, and the Commission proposal of an initial reduction of one third is totally unacceptable. Of course we all realise that the Minister will be batting against 11 European Agriculture Ministers, who have a vested interest in retaining the green pound disadvantage to this country. I hope that the Minister will take away from the debate a message from both sides of the House, distilled into the simple call that this country demands fair play and action now—nothing less than the total removal of the green pound gap will do.
Agriculture needs to be profitable, to reinvest to face the challenges and opportunities of the 1990s and to be competitive. It has never turned its face away from a challenge but it cannot compete with one hand and one leg tied behind its back. The Minister should be in no doubt that the industry's future depends on the forthcoming negotiations; much is at stake and everyone who is involved with or concerned for this country's rural environment will wish him well in those negotiations.
§ 8 pm
§ Mr. Ieuan Wyn Jones (Ynys Môn)During this welcome debate, tremendous concern has been shown about the future of the rural economy, in which agriculture plays such a major part. I welcome many comments from both sides of the House about the importance of maintaining a good base for the economy in rural areas to sustain the rural way of life. The debate has to be seen in that context because in most rural constituencies, agriculture is the most important industry, not only because of the direct employment it creates—selfemployed farmers and those working on farms—but because of the ancillary industries which depend on it. Those who supply the feed to the farmers, distribute milk to our doorsteps, work in food processing plants and supply farmers with feedingstuffs are as dependent as the farmers on the maintenance of a viable agricultural industry.
I want to widen the debate and talk about the link between the economic future of rural areas, and social cohesion. The economy in our rural areas must be maintained and supported if we are to retain the social fabric of our rural districts. Every family that leaves the land leaves the rural community more exposed—as we have already heard—to rural depopulation and destruction. I hope that the Minister will listen to my remarks about this, because he has responsibility not only for the economic future of rural areas, but for their social, cultural and—in Wales—linguistic future.
Ministers have a great responsibility for the future of the Welsh language, because the future of the language in 827 our rural areas depends on a viable agricultural base. Many of our farmers maintain the language through their cultural links.
There is a tremendous lack of confidence in agriculture that manifests itself in a variety of ways. I am sure that all Members, particularly those in rural constituencies with agricultural interests, have been lobbied today by farmers from their constituencies about the problems bedevilling the industry. Is it not right, therefore, that we should place on record their views on issues such as high interest rates so that the Minister can take them to the deliberations with the European Commission? I am told that in the current year farmers will pay £1 billion in interest alone—that is not the total cost of borrowing, but the interest on the loan. Coupled with that is the rate of inflation, now at 7 per cent., and the lack of investment in agriculture, which is a particular problem.
During the past few weeks, I have been invited to visit a number of farms in my constituency. The point put to me time and again was that farmers are failing to invest in the industry's future because they lack confidence in how the Government are handling agriculture on a range of issues. I visited a farm where the farmer has put in the foundations of a new building to house his cattle and sheep, but was not prepared to complete that building because he was not sure that the Government would support agriculture in future. That is a mark of a lack of confidence shown by one farmer that is repeated time and again all over rural Wales and other parts of the United Kingdom.
Investment in the industry has been 40 per cent. lower in the past years. That figure speaks for itself. Recently, I carried out a survey of the number of students now attending agricultural colleges. From a reply to a parliamentary question that I asked some weeks ago, it is clear that there are fewer students attending colleges of agriculture than there were a few years ago. That is because farming is a family concern and farmers are not sending their sons to agriculture colleges. They are advising them not to go into agriculture because they do not see a future in it. The reduction in the number of farming students is a good indicator of the current lack of confidence in the industry. My colleagues in the Scottish National party agree with my sentiments.
Farming is a family business and there are few entrants from outside the industry coming in. Therefore, we should look at the signals coming from the agriculture community. We must ask ourselves why there is such a lack of confidence in the industry. It is due to the underlying, long-term decline in the industry's profitability. Some of the figures were given to me by farmers in my constituency. Many people who have voted for this Government now tell me that they will not support them again if the long-term decline in the profitability of agriculture continues.
It is in this context, and having looked at all the problems, that the industry now demands the complete elimination of the green pound disparity. It was put to me that the elimination of that disparity would not substantially increase farmers' incomes overnight, but would be a benchmark against which to measure the Government's commitment to agriculture. If the Government committed themselves to the complete elimination of that disparity they would send an enormous signal to the industry that they were serious about restoring confidence in it.
828 This debate is about sending signals to the European Commission, to tell our European counterparts that we are serious about ensuring a level playing field for farmers in the counties of Britain. It is also about sending a signal to agriculture at home. It is about the Government ensuring a restoration of the confidence which is sadly lacking to ensure that farmers invest in our future, and the social fabric of our rural communities is maintained.
§ 8.8 pm
§ Mr. Teddy Taylor (Southend, East)I beg to move, at the end of the Question, to add
`but regrets the expenditure in 1990 of £9,000,000,000 on the disposal or destruction of surplus production despite the multitude of costly reform plans in recent years; regrets the massive additional cost to the average household budget of the Common Agricultural policy; regrets the damage to third world economies of the disruption of world food markets caused by European Economic Community food dumping; and regrets in particular, the decision of Her Majesty's Government not to vote against the proposal to disregard for monetary compensatory amount purposes, cereal production above the stabiliser limit, despite previous pledges that the stabiliser mechanism would be automatic and legally binding.'.It is a great pleasure and privilege to move the amendment and, I hope, to persuade the Government to accept these very simple and basic changes.
We have heard a great deal of discussion of a happy nature today. It seems that we have general agreement that the green pound differential should be removed. We have not had much discussion on which way it should move—whether European prices should come down to British ones, or British prices rise to the European level—but it seems to be agreed that we want a substantial increase in British prices, which will of course have a substantial effect on food prices at home.
There has been a demand from the Welsh National party, and from some Conservative Members, for level playing fields. Many other industries in Britain would welcome level playing fields. They ask why agriculture should be the only industry that does not pay rates on buildings, when every other industry in Britain is facing major problems with rating relief. Those other industries might say, "Why can't we have level playing fields?", and they might ask why they cannot have the same protection as agriculture. There are protection levels of 40 per cent.. 50 per cent. and, in one case, 90 per cent. for agricultural products. What other industry in Britain has that?
Very few businesses, even in Wales—if the Welsh nationalists have any consistency—have the right to access to vast sums of money to dump abroad at crazy prices surplus products which simply cannot be disposed of. To have a demand from the agricultural community for level playing fields is a distortion, and a pure hypocrisy, as every single person taking part in the debate must know.
I hope that the Government will accept that the common agricultural policy is a foul protectionist device which is totally opposed to everything that the Conservative party stands for, and totally opposed to all justice and reason, if we have any concern for the world as a whole.
If the Government accepted this amendment, they would at least be accepting that we should stop kidding ourselves with the almost annual hope that things are being resolved, that our problems are being sorted out, and that if we can only keep going on the present course, those problems will somehow fade away.
829 If Ministers had the honesty and integrity to look at things as they are—as I am sure they have—they would see how time and time again in debates on this issue we have been presented with new hope that somehow things are going to change.
I remember that optimism was expressed when the Prime Minister came back to the House saying that we now had budgetary control and that the CAP was under control. We saw for ourselves how that pledge was kept—the Common Market simply had a metric year of 10 months, with 12 months' worth of money coming in, and 10 months' worth going out. That was the success in that year.
Then we had the quota scheme. Everyone said that that was a grand idea which would revolutionise agriculture and bring stability. We know what happened—we paid a vast sum of money to buy out farmers from producing milk, and they simply switched the land to produce other things that were already in chronic surplus. Sadly, despite all the massive pay-outs, we now have a substantial surplus of milk production.
Then there was the set-aside proposal. That seemed to be logical. Instead of paying farmers to produce stuff that we had to pay a fortune to dump, we paid them for basically doing nothing—although the Government have insisted that they are not doing nothing but are putting a green cover on their land. In a very short time, no less than 400,000 hectares of land in Europe were covered by those payments for doing nothing except putting a so-called green cover on the land. That hardly affected surplus production, because usually inadequate land was used for that purpose.
More recently, we had another hopeful sign—the hunt for fraud. It was suggested that fraud was costing too much money, and that sharp people were taking good people's money to waste it on agriculture. I think we all know exactly what has happened—we have set up a department for fraud in the EEC. Everyone must know, if they consider the issue honestly, that it is impossible to avoid fraud in the crazy situation where one pays vast sums of money for dumping food abroad.
Another device to try to reduce the cost of the CAP —and a very effective one—was simply to transfer the spending costs from the EEC to member states. The Minister will be aware, from the previous point that he made, that that was declared unlawful by the Court of Auditors, but it was nevertheless done, and the Court of Auditors' report was never discussed.
Now, on the basis of the Government's motion, we have one of the most hopeful signs that we have had for a long time—the elimination of food mountains. The Government have said today, and on previous occasions, that this was the result of Conservative-initiated reforms. I appeal to the Government to consider what really happened. For example, there was a dramatic reduction in the butter mountain, from 1,007,620 tonnes to only 162,928 tonnes, and that was applauded by all the farming representatives as a triumph. The mountains were fading away, because of the Conservative-initiated reforms. However, we all know what happened, and I wish that people would admit it. We simply had a fire clearance sale, and sold 887,105 tonnes of butter at ludicrous prices—as 830 low as 1.75p per pound. It was simply a device to sell things off, it was not a reform. If we think that it was a reform, we are kidding ourselves.
Now we have the latest proposal—stabilisers. We are told that stabilisers will work unlike all the previous reforms, which did not work. Despite all the horrible people in the Commission, it was automatic and legally binding. In this amendment we have expressed disappointment that when it came to the co-responsibility levy the Common Market decided to ignore the stabiliser level, which was the quite substantial sum of £40 million. That meant £40 million down the drain and the automatic, legally binding stabiliser simply disappeared.
In those circumstances, we would be kidding ourselves if we passed this motion and simply said that more should be done for the agricultural community. The Government must know that previous reforms have not achieved success and that the basic structural problems remain. If anyone doubts that, I ask him to look at the figures which have been published in Hansard recently. Now that the food mountains are almost gone, should we not have very little spending on food dumping and food destruction?
We all know what the figures are. This year, despite the elimination or near-elimination of all the mountains, the Community will spend £9,000 million simply on dumping and destroying food. That is £173 million every week. In 1980, the figure was £89 million a week, in 1985 it was £134 million a week, and now it is £173 million. The Government may try to say that that is an improvement, and it is down on last year. They know exactly why it is down on last year. It is because we had the fire clearance sale to eliminate the mountains.
I am sure that the Welsh Nationalists would like us to spend more money, probably on the Welsh language, using Common Market agricultural subsidies. But £173 million a week could do a lot to help the poor, to help those people who need help, to help people who need more housing, or to help the schools that we are always talking about. That is shameful misuse of money.
What is the impact of those measures on production? We all know that we have now become the highest exporters of sugar in the world—that is unforgiveable. We know that, according to the last fair estimate, the average family in Britain—including poor families—spend £13 a week extra on their food. Should we not give some thought to what we are doing to the world?
§ Madam Deputy Speaker (Miss Betty Boothroyd)Order. The hon. Member will understand that I have to impose the Standing Order.
§ Mr. Harry Barnes (Derbyshire, North-East)Do not worry, Madam Deputy Speaker: what I have in my hands is not the speech that I am about to deliver but the documents with which the debate is expected, technically, to deal. I realise that we are not going to go through them individually, as we are engaged in a discussion of principle rather like a Second Reading debate.
Some 43 documents are involved, many containing multiple items. They deal with issues that we should be scrutinising so that we can advise the Minister before the Council of Ministers makes its decisions. The rather problematical position in which we find ourselves has often been mentioned before.
831 The Minister has not only presented his case in the Chamber today, but has been questioned in the Select Committee on European Legislation. As a member of the Committee, I have had an opportunity to hear his arguments. The hon. Member for Congleton (Mrs. Winterton) talked about fair play, and the Minister has claimed on several occasions that he stands for "fair dos" for Britain and British agriculture. He has often resorted to tautology, especially when discussing the European monetary system; he says that if we join at the right time and in the right conditions everything will be all right, whereas if we join at the wrong time and in the wrong conditions everything will be all wrong. He has also pointed out that he is outnumbered by 11 to one.
That is sometimes rather a luxury in negotiations, as it enables the outnumbered person to be high on principle and extremely low on achievement, and to go down in history as the victim of a revolutionary defeat. On the other hand, the Minister may view himself as a Henry Fonda on jury duty, trying to persuade fellow jury members through both the logic of his case and the art of persuasion. In that case, he should take on board some of what my hon. Friend the Member for South Shields (Dr. Clark) said earlier about the need to avoid alienating one's fellow debaters: the art of persuasion often involves taking account of their problems.
I fear that the Minister will turn out to be neither a defeated man of principle nor a Henry Fonda, pulling such policies as the abolition of the green pound out of the bag through a superior effort of will. He may prove to be more like a demoralised goalkeeper whose team has been trounced 11–1. We do not know yet what the final decision of the Council of Ministers will be, and, despite our expectations, a gradual third-by-third move away from the green pound may not emerge from the negotiations.
The problems that we face have arisen largely as a result of the vast and antisocial nature of the common agricultural policy. Stabilisers and the phasing out of the green pound cannot remove that reality. They can alter and adjust, as transitional payments can alter and adjust the poll tax, but our continuous budgetary problem, like the poll tax, will remain as long as the arrangement itself remains.
The Minister spoke of the problems of over-supply and lack of demand in the European Community, but there are still poorly fed people in the United Kingdom, as well as waves of starvation from other countries—from Ethiopia to Poland—which the agricultural policies under which we operate do little to assist. It is not lack of demand from which the country suffers, but lack of a demand backed by enough cash to enable people to look after themselves. The Government's economic and social policies are on the line this evening.
In tackling the injustices of the CAP, we must consider a number of interests. I do not under-estimate the needs of farmers, but they are not the only people affected by the green pound, the 1990–91 budget and Britain's high interest rates. Other producers are involved, but their interests are fairly well represented. The Dairy Trade Federation, the British Poultry Federation, the Food and Drink Federation, the Association of Meat Producers, the Milk Marketing Board and many others have made representations to the Government.
We must also consider the wider consumer interests. The Minister prides himself on meeting bodies such as the National Consumer Council, which represents their 832 interests, but ultimately they are not well organised. Members of Parliament therefore have a special responsibility to represent them. G. D. H. Cole, in his "guild Socialist" phase, wanted to change the House of Commons into a House of Consumers and the House of Lords into a House of Producers. That might have been quite interesting; certainly the suggestion illustrates the fact that consumer interests were to the fore among our elected representatives.
We were right to consider the problems of BSE and salmonella in eggs, and the general price problems. Price problems involve not only what farmers receive, but what consumers pay. Although farmers are also consumers, not all consumers are farmers; far from it. However, I want to highlight the problems of agricultural labourers, whom the Minister does not consult with any effectiveness. In his evidence to the Select Committee, he said that his personal preference was to try to talk to individual agricultural labourers as he went about the country, rather than consulting their representatives, who were only a small group. No group, however, is as small as the isolated individual who is not organised; at least a number of agricultural labourers have joined forces.
Agricultural labourers face many massive problems. The National Farmers Union has suggested that those living in tied cottages should not receive amounts equivalent to the rates that have been paid in the past, and that individual workers should pick up the poll tax bill. Those workers are not consulted about the budget we are discussing, although there are 37,000 of them in the Transport and General Workers Union agricultural group and 5,000 in other unions such as the General, Municipal, Boilermakers and Allied Trades Union. Some 20 per cent. of agricultural workers are organised, but that is an under-estimate of the number who are represented, because up to 50 per cent. of farms are family holdings in which self-employment and contract work is extensive.
Agricultural workers need the kind of representation and consideration that operates in the National Farmers Union; the Ministry recently regionalised its training boards on the basis of the structure in the NFU. They can, of course, draw on the general prosperity of farming, but a move towards that will, in the short run, involve the abolition of the green pound and the ending of the problem of high interest rates. In the long run, it will require a pan-European movement to democratic Socialism. There is the answer to the CAP question. With a set-up like that, we would no longer operate on the basis of such a stupid policy.
§ Mr. Alan Amos (Hexham)In the limited time available, I shall restrict my remarks to sheep and cattle farmers in the hill and upland areas which form the backbone of the agricultural community in my constituency and, I believe, the British farming community. In so doing, I shall concentrate on the agricultural structures policy. I intend to make three general points: first, the need to extend objective 5b to Northumberland and apply objective 5a more comprehensively; secondly, the need to shift the emphasis of agricultural support away from intervention price support and towards direct payments to farmers on the headage of the animals; and, thirdly, the need to ensure that the United Kingdom receives its fair and proper share of EEC resources and assistance.
833 The section on rural development in the 1989 report states that the
European Community approach to rural development entails adjusting all the existing policies in order to keep abreast of the needs and development priorities of the regions.The FEOGA guidance section on reform focuses EEC action on, first, common horizontal measures—that is objective 5a—applicable throughout the Community designed to speed up the adjustment of agricultural structures within the context of CAP reform and, secondly, two regional objectives which are jointly agreed by the Commission and the national regional and local authorities. Objective 1 refers to promoting the development ands structural adjustment of the regions whose development is lagging behind. More importantly, objective 5b refers topromoting development of rural areas in difficulty with a view to reform CAP.The 1989 report states that the continuing aims of the CAP include a better balance between producers and the markets—that is supply and demand—implementation of the reform of the structural funds and completion of the single agricultural market, but it reaffirms its principal objectives as budgetary discipline to give farmers effective support and, significantly, a greater effort to promote and develop activities in rural areas.
The European Community accepts the need to narrow the gap between the regions of the Community, and it also accepts that agriculture is undergoing fundamental changes. It is therefore incredible that, although structural measures eligible for EEC funding are targeted on agricultural and rural development, Northumberland gets no assistance under objective 5b although parts of western Scotland, Wales, Devon and Cornwall do. Only 2.6 per cent. of the United Kingdom population is covered by objective 5b compared with 7.4 per cent. in Germany and 10 per cent. in France.
The percentage of the United Kingdom population covered by objectives 1 and 5b still amounts to only one fifth of the EEC average. Even under objective 1, in rural regions, European regional development fund and European social fund moneys, plus FEOGA intervention funds, extend to all areas of activity and infrastructure development. Surely a more reasonable application of such criteria would include parts of Northumberland, some remote areas of which do not even have mains electricity.
I firmly believe that Northumberland's right to more targeted assistance under objective 5a deserves new and sympathetic consideration. The United Kingdom has already had an extension in its less-favoured areas so that 53 per cent. of usable agricultural land is now covered. 1 welcome the further application for an extension which was submitted on 21 June last year.
I am not suggesting blanket subsidies but rather the provision of an adequate income to maintain demographic, economic and ecological balance in vast areas of Northumberland. The balanced development and survival of entire communities depend on the viability of hill farmers. Objective 5a must provide for the encouragement of the existing competitive agriculture in the form of British sheep and cattle farmers, assistance for marginal 834 farmers to diversify and the furtherance of nonagricultural factors such as environmental protection and the need to improve the living and working conditions of farmers.
Objective 5a certainly covers aid for young farmers setting up and facilitating the occupational integration of young people. There is increasing concern that young people cannot get jobs in farming, especially in the dairy sector where the milk quota scheme, although popular, lacks flexibility. They then drift to towns and conurbations, leading to the destruction of the social fabric of rural areas. If farmers go, so does rural life. The farming population is aging. It needs more young people who are able and willing to take up the challenges and opportunities of change. There is a need to keep family farms going and to maintain the demographic balance to preserve vibrant communities. Those needs can also be met by another aspect of objective 5a—inducement for early retirement. Again, that will help the demographic balance and bring a dynamic enterprise into the industry.
Objective 5a also includes assistance for diversification—although in some parts of my constituency the situation is so lean that that is not possible—into tourism, crafts, leisure and recreation, the manufacture and sale on the farm of farm produce, and environmental protection and enhancement, for example the maintenance of stone walls. The best stone wall in the world—Hadrian's wall—is in my constituency and farmers have used it to build houses for generations.
The abandonment of farms is very bad for the countryside, but a reasonable system of grants or loans at favourable rates of interest which can be more effective in some areas should discriminate between the less-favoured areas and the non less-favoured areas and between the uplands and the lowlands. Early retirement and help for young farmers to set up are also eligible for support under objective 5b. That reinforces the need for that designation to apply to Northumberland.
The processing and marketing of agricultural products, adding value to farms, also apply under objective 5b and the report acknowledges that they are often an essential prerequisite for economic diversification and the development of rural areas. I accept that there is a cost involved, but it is frankly insignificant. We are talking about the 1990 draft EC budget of £30.7 billion, of which only £1.3 billion goes on the guidance section of FEOGA and only £294 million on structural policies.
We should bring about a shift from intervention price support to direct payments and headage payments. This year, MAFF is expected to have spent about £2 billion, but due to the vagaries of the operation of the CAP, most of my farmers will not receive much, if any, of that. Most of it will go on the cost of storage of surplus products, export subsidies and other costs of disposal. Consumers do not benefit, as they have to pay higher prices than necessary. Farmers do not benefit, because they do not receive much of the money. Therefore, the Government are right to move towards greater reliance on market forces which would benefit consumers by lower prices, reduce the costs of the CAP through reduced export subsidies, for example, and then channel the money directly to the farmers, as income or via headage payments on their stock.
The average net farm income of livestock producers in hill and upland areas is forecast to fall in 1989–90, and a particular worry is the reduction in the incomes of specialist sheep producers in hill areas where the 835 opportunities to diversify are limited. For example, hill livestock compensatory allowances are paid on breeding cattle and sheep in LFAs with the aim of ensuring the continuation of livestock farming in hill and upland areas, thereby helping to maintain a viable rural population and to conserve the countryside.
The recent increase of 75p per hardy breed ewe in the severely disadvantaged areas is warmly welcomed. The extra £5.2 million of HLCA payments goes directly to the farmers. The total amount of HLCAs—about £125 million a year—is direct and effective. For example, the ewe premium goes directly to the farmers, as does the suckler cow premium. I welcome the increase in the Community-funded element of that together with the increase in the amount of national top-up now paid to the EEC maximum, meaning an increase of 42 per cent. Again, £57 million in total goes directly to the producers and is particularly helpful in LFAs where 70 per cent. of specialist beef producers are situated.
In discussions on the reform of the beef regime, we should support the Government's policy of pressing for reduced intervention support and increased direct payments to producers which can be achieved by concentrating more support on the suckler cow.
Finally, we must ensure that the rest of the EEC does not discriminate against the interests of United Kingdom farmers by imposing discriminatory headage limits. We must resist that at all costs.
§ Mr. Terry Davis (Birmingham, Hodge Hill)My hon. Friend the Member for South Shields (Dr. Clark) referred to bovine spongiform encephalopathy as potentially the greatest single threat to British agriculture since the war. I would add that it may also be—I put it no higher than this —a threat to public health.
We do not know whether BSE can be transmitted to people who eat the meat of infected cattle; we do not know whether there is any connection between BSE and Creutzfeld-Jakob disease; we do not know whether the incidence of Creutzfeld-Jakob disease has increased in recent years, although some evidence in the medical press suggests a noticeable increase in it; and, above all, we do not, and cannot, know how many people will develop Creutzfeld-Jakob disease in the future.
We do know that it takes a long time for Creutzfeld-Jakob disease to develop; and we know that there is a great similarity between this disease and BSE in cattle. As the hon. Member for Gloucestershire, West (Mr. Marland) said, it is true that there is no proven connection, which is why the Department of Health is undertaking and sponsoring research into it. We will not know whether there is any connection until that research is completed.
What should be done while we are awaiting results of that research? I find the attitude of the Ministry of Agriculture, Fisheries and Food dangerously complacent—almost as complacent as the attitude of the hon. Member for Ceredigion and Pembroke, North (Mr. Howells), who told us that he had known about the incidence of BSE in cattle in the markets of Ceredigion and Pembroke, North for 50 years. If that is true, we must assume that farmers and vets in his constituency have known about it for 50 years, yet apparently no one has reported it to the Ministry of Agriculture, Fisheries and Food.
§ Mr. Geraint HowellsWith respect, I think that the industry, farmers, vets and the Ministry have known of this disease for the past decade or two.
§ Mr. DavisNow it has become the past decade or two, but earlier the hon. Gentleman said that he had known about it for 50 years, and his remarks will be on the record. However, the past decade or two is different from what we have been told by the Ministry. Only last Friday, it told the hon. Member for Truro (Mr. Taylor) that BSE had been described only in 1988, which is why the Ministry had not been able to take action before. The hon. Member for Ceredigion and Pembroke, North should get together with the hon. Member for Truro, who seems to be taking a closer interest in the problems of the disease.
§ Mr. HowellsTo put the record straight, I did say for the past 50 years, but if the hon. Member for Birmingham, Hodge Hill (Mr. Davis) wants me to go further, I can say for the past 60 years.
§ Mr. DavisThat is contrary to everything that has been said by the Ministry, and I am inclined to believe that it did not know about the disease until 1986. The first case was diagnosed in 1986, which led to the publication of a report in 1988 and subsequent action by the Government.
The Government are also complacent because they did not ban the use of beef brains in meat products until November 1989. Even now, answers given recently by the Parliamentary Secretary show that his constant refrain is:
There is no evidence of a risk to human health."—[Official Report, 31 January 1990; Vol. 166, c. 236.]On the same day, the Department of Health told one of my hon. Friends that it will undertake research to determine whether there is a connection between BSE and Creutzfeld-Jakob disease. The Department would not be undertaking such research unless it were necessary.Against that background, I join my hon. Friend the Member for South Shields in urging the Government to pay 100 per cent. compensation for all cattle that are affected, or thought to be affected, by BSE. I urge them to cull all the calves of cows that have been shown to be infected by this infectious disease. I also add a plea to ban the use of calves' brains in meat products, in addition to banning the use of beef brains.
As I have said, we will not know whether there is any link between BSE and Creutzfeld-Jakob disease until the research is completed, but what should we do while we are waiting for the results of that research? The answer is that the Government should base their food policy on the principle of being better safe than sorry.
§ Mr. William Hague (Richmond, Yorks)I am grateful for the opportunity to take part in the debate. You, Madam Deputy Speaker, will be aware that my constituency is one of the most agricultural in Britain. My constituents are proud of their agricultural heritage and expertise, but the House will not be surprised to hear that they are less sure about the future of the industry than at any time in recent decades and are extremely anxious about their prospects for the next few years.
Ministers are aware of the gravity of the problems faced by those people and show a determined and realistic attitude in trying to tackle them, but I do not believe that the nation has grasped how serious the decline in farm 837 incomes has been in recent years, or how serious are the implications, not only for those who live off the land, but for consumers and the country.
Agriculture is one of our most successful industries. The achievements of British farmers since the war in delivering vast increases in production and productivity at a price that is affordable and of a quality that is sought by the consumer have few equals. It is being only slightly unfair to other industries to say that, if their performance had come close to British agriculture, Britain would be about the richest nation on earth. I only wish that some hon. Members and those sections of the media who are so ready to criticise the farming community would reflect a little more on that.
The success of agriculture in this and other countries has contributed to its current problems. The ability of the developed world to produce more food than it can consume inevitably means that many agricultural sectors face difficult times. I accept that, and I think that my constituents also do so. The farming community accepts that times are hard and that it must do its bit to respond.
The farming community is entitled to expect that the market in which it competes, and in which it needs to compete ever harder, is conducted according to rules that are fair to all. No one can claim that the green currency arrangements of the European Community are fair to all. When a continental farmer can claim £20 more a tonne than a British farmer, no one can claim that it is a fair or free market.
Much effort is being expended by continental politicians to persuade us of the case for closer political and economic integration of the European Community. I hope that they realise that few things do more damage to that aspiration than the utterly inadequate performance of the Community in dealing fairly with the diverse agricultural interests that it contains, despite the best efforts of successive British Ministers. It is sickening to see other members of the Community posing as European idealists but jumping to protect their industries and favour their farmers at the expense of others in the Community.
It is vital for the future of agriculture in this country that we obtain a substantial devaluation of the green pound and ensure that its complete abolition takes place as soon as possible. I hope that Ministers will press the case for simple justice and fairness, which would mean the elimination of the current gap. I appreciate that they would need a Commission proposal and a majority in the Council of Ministers to achieve that, but I hope that the Government are prepared to say that a failure by the Community to rectify the problem will hold up progress in other aspects of the Community's work.
No one should under-estimate the importance of getting a fair deal for our farmers or the number of farm businesses that are in a poor financial condition. It is vital that they be treated fairly and properly by the European Community, and I hope that Ministers will go into the next stage of price fixing and negotiations on the green pound with all guns blazing.
We ask our Community partners to act reasonably and fairly on the green pound, but the same should apply to BSE, which has been the subject of much discussion this evening. British beef is safe, and the opportunistic action of the West German Government in seeking to ban our 838exports is a disgrace. I hope that we shall stand firm in our determination to take the matter to the European Court if the action is not reversed.
I must tell my right hon. Friend the Minister that there is much dissatisfaction about the level of compensation payments for BSE-infected cattle. There is a powerful case for the compensation payable on infected cattle to be increased substantially. The taxpayer may argue that a business man must bear his own risks and that the nation as a whole is not responsible for the disease. However, it is of overriding importance that the disease be identified and dealt with wherever it appears, for the sake of the producer and of the consumer, both of whom are equally innocent in the matter.
I understand the difficulties of the Ministry of Agriculture, Fisheries and Food in increasing compensation to 100 per cent. The Ministry might look silly if farmers turned in their whole herd to claim 100 per cent. compensation, but there is a strong case for a large increase to 90 per cent., if not to 100 per cent. On the green pound and on BSE, the British farmer is simply asking for a fair deal. He is not expecting to be featherbedded against the cold winds of competition, but to be given the same chance as others to compete at all.
There is a further aspect of agricultural activity for which the farmer deserves the special support of the nation, and I was delighted to hear my right hon. Friend the Minister refer to it in his opening speech. I have the privilege of representing much of the area of the Yorkshire dales and my hon. Friend the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food represents most of the remainder. They are the most naturally attractive part of England and are visited by vast numbers of tourists, from home and from abroad.
The reason that the dales look as they do is a result of farming and in the absence of farming, they would look very different. On behalf of my constituents, I urge the rest of the nation—a predominantly urban and suburban nation—to learn to respect and support the farmers who preserve that natural environment. That means not only shutting gates and respecting property when visiting the area—although that in itself might be a considerable advance—but providing financial assistance to livestock farming in such areas, which is barely economic and from which there is little or no possibility of diversification.
In the past year, the combination of interest rates, drought and changes in the sheepmeat regime have reduced the incomes of some of the hill farmers whom I have visited to the lowest for 27 years. That is why I am delighted that the Government were able to announce last week an increase in hill livestock compensatory allowances in the less favoured areas. Equally pleasing was my right hon. Friend's statement that Britain will make its own assessment of the economic position of hill farming in determining HLCA levels in the future.
I also congratulate the Government on the success of the environmentally sensitive areas, which have done much to show how the interests of agriculture and of conservation work naturally together, rather than in opposition to each other. The Government deserve far more credit than they have hitherto received for grasping that. However, I have one complaint. The new farming and conservation grant scheme had the effect of reducing the grant payable for the maintenance of drystone walls in the Yorkshire Dales from 60 per cent. to 50 per cent. The Yorkshire dales national park tried to supplement such 839 grants, and has at least one such scheme for doing so, but its resources are nowhere near adequate to the task. I ask the Ministry of Agriculture, Fisheries and Food or the Department of the Environment to look again at those matters and to monitor carefully the condition of an outstanding and irreplaceable aspect of our national heritage.
Running through all my comments has been a concern for the future of agriculture, for its profitability, for its investment and for its environment. We must recognise that, without the entry of a new generation into agriculture, we shall one day be very short of food.
There is a tremendous amount of agricultural expertise and interest among the young generation. Anyone who doubts that should visit the Bedale agricultural centre in my constituency and meet the young people who take courses there. I hope that we can help those people where we can. In any forthcoming revision of milk quotas, for example, I hope that we shall make some provision for new entrants. Many of those young people will abandon agriculture over the next few years without a chance or a hope unless the House succeeds in winning for them a free and fair market for their products.
§ Mr. Andy Stewart (Sherwood)I begin by reminding my hon. Friend the Member for Southend, East (Mr. Taylor) that the last famous Scottish reformer, George Wishart, was burnt at the stake, so my hon. Friend should be cautious about going out into the countryside this weekend.
The prosperity of British agriculture is dependent on external forces beyond farmers' control. The weather and widely fluctuating interest rates make nonsense of all attempts to work within projected budgets. Those factors are further exacerbated by inflation. If those were all our troubles, there would be room for hope, but we have still to contend with the European Commission and the manipulation of the Common Market rules against the interest of British farmers. In my constituency, farmers face another uncertainty as a result of the proposal to introduce nitrate-sensitive advisory areas, which has blighted farms and made them unsaleable. I hope that there will be an early announcement removing that blight from the area. Before we had—
§ Mr. Teddy TaylorThat is a shocking thing to say.
§ Mr. StewartBefore we had the Green party, we had the green pound. The public could be forgiven for thinking that it was an environmental tax. It is certainly a tax, not to protect the environment, but on Britain's super-efficient farmers and it now amounts to about £650 million. That green tax, or pound, was created to protect farmers in other EC countries from fair competition. British farmers cannot afford to be indifferent to this injustice. There comes a time when we must say that enough is enough, and that time is now.
Why should we have an artificially overvalued rate of exchange? When sterling falls against other European currencies, the green pound gap widens. For other British industries, that fall in value protects their trading position. The price of competing imports rises and British exports become more competitive on foreign markets. Why should those benefits be denied to United Kingdom farmers? To prevent the benefits coming through, the green currency 840 system is underpinned by monetary compensatory amounts. The MCAs tax our exports of agricultural produce and subsidise competing imports. There has been talk today of a level playing field. I should prefer to see the goal posts remaining in one position.
The reality of the green pound gaps for farmers is lower prices. That was reflected in farm incomes in 1988 reaching their lowest point in any post-war period and they have fallen to a point that even a certain lager cannot reach. I accept that supply and demand for agricultural commodities will be guided increasingly by the market, and the European Commission's tight policies on the CAP support prices are consistent with that approach. However, our top priority at this year's price fixing in Brussels must be to secure fair competition in Europe for British farmers. The European Commission proposes a 33 per cent. devaluation of the green pound whereas my right hon. Friend the Minister wants a 50 per cent. cut.
We British farmers not only propose but demand in the name of justice a full devaluation of the green pound. The farming industry cannot wait until 1992 for that distortion of competition to be removed.
§ Mr. Richard Livsey (Brecon and Radnor)Does the hon. Gentleman agree that the green pound is a complex matter? If we were to tell the British public that farmers today are suffering to the extent of 44p per kilogramme on every lamb, £65 on every carcase and £20 on every tonne of cereal, the message would get through and justice would be secured for our farmers.
§ Mr. StewartThe hon. Gentleman is right, but the general public seem to realise that the farming industry is important only when there is a food shortage.
§ Mr. Teddy TaylorWill my hon. Friend give way? Mr. Stewart: My time is running out.
§ Dame Elaine Kellett-BowmanMy hon. Friend the Member for Southend, East (Mr. Taylor) has already spoken and I want a go.
§ Madam Deputy SpeakerOrder. The 10-minute limit on speeches has now been lifted.
§ Mr. StewartI know that, if the decision was the sole responsibility of my right hon. Friend the Minister, action would be taken because he more than anyone else knows that unprofitable farmers are not in the national interests. However, his voice is only one of the 12 who will discuss the price fixing in Brussels next month. Nevertheless we know that our right hon. Friend will go there full of fight and determination, fully supported by the House to accept nothing less than a fair deal for British agriculture.
§ 9 pm
§ Dame Elaine Kellett-Bowman (Lancaster)I have the great good fortune to come from, live in and represent one of the loveliest farming areas in the world. My farmers do not ask for an easy ride; they never have done. What they ask for is a fair deal. They want to be paid as much for what they produce as other European farmers get—not an unreasonable request, one might think. [Interruption.] The hon. Member for South Shields (Dr. Clark) is laughing, but he will soon be laughing on the other side of his face.
I remember the day when, under the late John Silkin—I was at the Berlin agricultural fair with him—British 841 farmers were paid 45 per cent. less for a pint of milk than the German farmers were getting. That was grossly unfair. My farmers said so in no uncertain terms, and I said so, too. Today, my farmers are getting 19.5 per cent. less than the proper price for their milk and 20.8 per cent. less for sheep. That is not fair, either. I was glad to hear the Prime Minister say at Question Time today that she sees that gap as quite unacceptable, and that her Ministers will fight hard to remedy that injustice in Brussels.
I was equally glad to hear my right hon. Friend the Minister tell us that he will fight hard to close the green pound gap, but I do not think that his target is high enough. The Commission's proposal to reduce the gap by one third—will the Minister kindly listen and stop talking to my hon. Friend the Member for Fylde (Mr. Jack)?—is inadequate. That would still leave a gap of 13 per cent. for milk and 13.8 per cent. for sheep. The Minister's target of 50 per cent. is just not enough either. We want to be paid exactly the same as other European farmers. It is sheer nonsense to talk about a common agricultural policy with uncommon prices.
In my part of the world we are prepared to accept the kicks that farming inevitably brings, but we do expect the ha'pence. We expect to get as much for what we produce as our European counterparts get and we look to the Minister to fight our battle for us. I have every confidence that he will do so.
As to fraud, nothing does the European ideal so much damage as the feeling by our fellow citizens that they are being diddled. Fraud destroys people's confidence in Europe. The hon. Member for South Shields—a very civil man, if I may say so—implied that Britain has a bad record for fraud. That is simply not correct. The truth is that we make very strenuous efforts to catch fraudsters and we hand them over to be punished. We do not cover up for them; we hand them over to be dealt with as they should be. Other countries either connive in their action or cover up for them. We shall never conquer fraud until we have impartial inspectors at every level of inspection who will be operating in someone else's country and will have no compunction in reporting the fraud that they find.
I am glad that the Minister, like the Prime Minister, takes fraud seriously, as he made clear in his speech. I know that he will take steps to stamp it out so that all of us, farmers and citizens, will know that we are getting a fair deal. That is all that we ask.
§ 9.4 pm
§ Mr. George Walden (Buckingham)I apologise to the House for not being here earlier. I have a good excuse, which I am sure that the Opposition will appreciate. I was detained by criticising the Government's policies on television. My hon. Friend the Parliamentary Secretary may be less understanding about that.
Therefore, it gives me even greater pleasure to pay tribute to my right hon. Friend the Minister of Agriculture, Fisheries and Food for the good work that he is doing in the face of problems that I need not reiterate. Believe it or not, that is appreciated by farmers. They know perfectly well that the old CAP days are over. None of my farmers tries to argue back over that time.
I want to make a specific point of mentioning the appreciation in retrospect of many of my milk farmers for 842 the work done by a former Minister of Agriculture, Fisheries and Food in introducing milk quotas, for which no one gave him any thanks. I do not remember anyone at the time having a good word to say for him, but where would we have been without those difficult measures? I pay tribute retrospectively to his efforts.
However—this is where we get to the "however" part of the speech—I want to begin by associating myself with the remarks of my hon. Friend the Member for Sherwood (Mr. Stewart) on the green pound. In all honesty, I must recognise that this is a complicated matter, which has repercussions for the retail prices index which there is no point ignoring.
In my constituency, many small-to-medium farmers face a drop in incomes. That is not farmers' flim-flam. It is the reality. I have looked at one or two yearly accounts and in some cases there has been a catastrophic drop, for reasons that I am sure have been mentioned in the debate such as high interest rates and a combination of other circumstances. Against that background, the green pound should be looked at again carefully.
One other point that is very much on the minds of farmers in my constituency is the Government's apparent assumption that it is an easy matter to turn to alternative sources of income. That is an extremely complicated matter. Farmers frequently turn to, or in some cases are driven to seeking, alternative sources of income in ways that risk disrupting the rural environment.
For example, one or two of my farmers have tried to arrange motor cycle scrambling in order, understandably, to boost their incomes. But when my constituents approach me about motor cycle scrambling in the countryside, I find it difficult not to be sympathetic to them. There are other cases, of less environmental irritation, in which for one reason or another, local councils find it difficult to give planning permission.
The point that I am making is that it is not as easy as my right hon. Friend the Minister sometimes gives the impression of believing for farmers to drum up extra income from the diversification of activities or the diverse use of their land or buildings. They quickly run up against planning restrictions—some entirely justified on environmental grounds, some perhaps less so. That is an important point. Flexibility in agriculture is much less than my right hon. Friend sometimes seems to imply.
I stress that my farmers, and I am sure those of other hon. Members, are not such a plaintive lot as they are sometimes depicted. When my farmers grumble, as they occasionally do, there tends to be something behind it, so I tend to listen.
Farmers want the Government to state their vision for farming in the future. Small and medium tenant farmers are particularly anxious to have the answer to that question. They want to know whether the Government see developing in Britain a situation analogous, for example, to that in Germany, where family farms tend to go by the board so that, particularly close to large conubations, one member of the family runs the farm and the rest of the family have jobs in the town. If that is part of the Government's vision for the future, they should say so.
If, on the other hand, the Government believe in the advantages, which seem obvious to me—social as well as economic—resulting from traditional family farms, they should make that clear and do what they can to support such farms. 843 A number of farmers in my constituency have raised with me what they regard as irritating problems caused by the withdrawal or curtailment of the service of the knackerman. I gather from the nods of assent on the Opposition Benches that I have support in raising this remote subject. Because that service has been curtailed, an extra cost is placed on farmers at a time when they can ill afford it.
Farmers are also concerned with the environmental implications because it is important to dispose of dead stock quickly. It is difficult to do that on a small farm, because it is a time-consuming operation and many rules and regulations surround it. What has happened to that service? It was a small but important service to farmers and I hope the Minister will explain why it has been curtailed or withdrawn.
§ Mr. Tim Boswell (Daventry)Like my constituency neighbour, my hon. Friend the Member for Buckingham (Mr. Walden), I apologise to hon. Members for arriving late for the debate. I was detained in a Standing Committee. Not only as a farmer but occasionally as a stockman, I have to use the services of the knackerman. The one I use is in my hon. Friend's constituency, so I endorse what he said on that subject.
We have faced a period of significantly declining farm incomes. As a farmer, I can read that in my trading accounts, and the figures are readily available from the national survey of farm incomes. I have not studied the figures which were published this morning—through what in the old days was the annual review procedure—but I understand that they show a small uplift in farm incomes following a long period of dramatic and inexorable decline.
The figures for farm incomes are low and the Minister must have got the message that, however hard we work at diversification and however many schemes he introduces, they will be of benefit at the margin but cannot by themselves be guaranteed to restore farm incomes. There is no Aladdin's lamp for the environmentally sensitive areas, the HLCAs or whatever. There is no Aladdin's lamp resulting even from the promotion of British food. All such endeavours are important, but will not by themselves solve the farm income problem.
That problem is not confined to Britain. It applies to other parts of the European Community. Indeed, it is worldwide. It is two years since I visited New Zealand, where agricultural subsidies were removed—as the phrase goes—at a stroke. I appreciate that that is not the Minister's intention, and I hope that it will never be the intention of a Conservative Government in this country. After that dramatic, and in my view misguided, decision, many New Zealand farmers, have picked themselves up and reached a measure of survival, not at a high level of income—it has not been an easy or happy process—which proves that it is not always necessary to aim for the highest levels of income.
§ Mr. MartlewCan the hon. Gentleman remember that, when several hon. Members, including myself, went to New Zealand, we visited a dairy farm where the gate had been left open because the farmer had gone to play golf?
§ Mr. BoswellEven the hon. Gentleman must understand that one does not milk dairy cows at every 844 hour of the day and night. They are milked in the morning and the evening and if that farmer had time to play golf in the middle he must have worked hard earlier—so good luck to him.
§ Mr. GummerWill my hon. Friend ensure that the people of New Zealand realise that the Opposition spokesman on agriculture always eats their apples in preference to British apples, in the hope that he might get some votes somewhere?
§ Mr. BoswellI hope that he can get those apples all through the year, but I note the Minister's point.
It is no good bleating about farm incomes, but it is right to record that there has been a problem with them. The main reason for that problem is the existence of agricultural surpluses in Britain, Europe and worldwide. I expect my right hon. Friend the Minister—as do all hon. Members—to continue telling the truth to British and European farmers and to his colleagues in the Council of Ministers, and to remain unremittingly committed to agricultural reform.
I realise that some of my hon. Friends say that we should do more, and they doubt whether anything has been done. I can tell my hon. Friend the Member for Southend, East (Mr. Taylor) that from the viewpoint of farm incomes and cuts in prices, there has been much pain in agriculture, and it is not easy now. The issue is where we go from here.
I do not believe that the British Government's position is credible unless they sustain pressure for agricultural reform in the European Community. Equally, the position is not credible with our own farmers unless the Minister is seen to be anxious to remove discrimination against the British farmer. British farmers, with their skills and resilience, are prepared to take hard knocks and the truth, but they are not prepared to take all the knocks in Europe and to be the only ones respecting the truth in agriculture.
Two built-in tendencies within the European Community need addressing. The first and most obvious, which was mentioned in parts of the debate that I could not attend, is the question of the green currencies. An interesting exercise, which the Minister could construct at his leisure, would be to return to our accession to the Community in 1973 and work out for how many months of that period the pound was at a premium to the green pound and how many months it was at a discount; also how many months during that time the British farmer was receiving over the odds in sterling and how many months he was short-changed against the so-called common price structure. It is clear that there has been if not a universal, a general period of under-recoupment, as there is at the moment. We are aware of the Commission's proposal to cut one third of that difference.
Many British farmers still do not understand the mechanism by which those things operate. Some of them believe that my right hon. Friend the Minister is personally in charge of the green pound and that he has only to rub his Aladdin's lamp and a decision will emerge tomorrow. Perhaps he can disabuse the House of that misconception.
Those farmers who hark back to the good old days of Tom Williams and Jim Turner, 40 years ago, probably believe that the National Farmers Union is personally responsible for the green pound. My experience of the NFU branch meetings is that the leadership gets as much stick as the Minister. Those decisions are taken in Europe 845 and they have to be agreed by our colleagues, but they will not reach an acceptable level unless the Minister and his team go forward and fight for a necessary and appropriate realignment.
The second point, that will be touched on by some colleagues—but of which less is made nationally—is the ever-present danger of differentation or discrimination against the British farmer on the grounds of the size of his or her holding. The average farm in Britain is still four times the size of farms in most of the Community, so it is very easy to produce specious arguments on social grounds for a two-tier price structure or some relief from quota for the smaller farmer or in particular circumstances. They may not be formally presented as anti—British measures, but in almost every case they operate against British interests. I know that my right hon. Friend the Minister is aware of that, but I should like his assurance that he will fight that off as hard as he has in the past, and as hard as he possibly can.
The other area where the British farmer needs support from Ministers is that of food policy. If there was any suggestion from Opposition Members today that there was something wrong with British food, I should like the Minister to come down very hard against it. The measures which he has taken, and for which he has been bitterly attacked, on salmonella and other aspects of food safety, are positive measures, unrivalled anywhere in Europe. He is entitled to some credit for them. To say that British food is in some way unsafe or not of the highest quality is not a reflection on British food or the British farmer but it may well reveal some basic, underlying psychological or personality defect in the person who makes such a statement.
§ Mr. MartlewWill the hon. Member agree that, during the present Government's period of office, the number of food poisoning victims has increased threefold—10,000 when the Government came to power, and 30,000 now? Will he explain that?
§ Mr. BoswellI will explain it on another occasion. I will explain the measures that the Government have taken—
§ Mr. MarlandDoes my hon. Friend agree with me that it has now become easier, thanks to progress in medical science, to identify salmonella, listeria and hysteria, and that this is probably why the finger is being pointed at these various diseases?
§ Mr. BoswellMy hon. Friend puts it better than I could myself.
I have perfect confidence in British food. I have confidence in the Ministers who protect our food. I have grave doubts whether such rigorous regimes apply in certain continental countries. I will say no more, but it needs saying occasionally, because we have allowed ourselves to get into a frame of mind in which we have, as usual, assumed that Britain is worst when it is not and that there is something wrong with us when there is not.
After a period when agriculture has been in difficulty, the time has come for the Minister to stand up and speak for agriculture and to promote its interests. I know of nobody better equipped to do so. I believe that he is committed to reform but also to the protection of British interests. With all the difficulties that we have had, there is 846 still a structure of research and development which lays down the skills for the British farmer to use to enable him to prosper into the 1990s. It has not been easy and it will not be easy for the next few years, but I am quite sure that the Minister is the right man to take these thoughts forward to Brussels in these very difficult negotiations.
§ Mr. John Home Robertson (East Lothian)Until the hon. Member for Daventry (Mr. Boswell) joined us, we were having a fairly lively debate. I am sorry that he wound it down; perhaps we can now wind it up again. Certainly it was a well-informed debate, expressing the concerns of farmers and consumers from every part of the United Kingdom. I say that it was well informed because, as my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) pointed out, the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) was so well informed about bovine spongiform encephalopathy that he knew about it 50 years before it existed. This caused some surprise on both sides of the House. If he knew about it, it would have been helpful if he had told us about it.
§ Mr. Geraint HowellsI stand by what I said. I would never have expected the hon. Gentleman, who is a farmer, to be so dull and ignorant of the facts.
§ Mr. Home RobertsonI shall enjoy re-reading what the hon. Gentleman said, but I suspect that he would be hard put to find anyone, in the veterinary profession or anywhere else, who would seriously suggest that the disease had existed for so long.
The Government have much to answer for after 10 years of the reckless pursuit of free market policies, of cuts in public expenditure and of confused tinkering with the common agricultural policy. Those 10 years of malice and incompetence have taken a heavy toll in the rural and agricultural areas of the United Kingdom, as has been fully confirmed by hon. Members on both sides of the House.
I read the correspondence columns in the farming press from time to time and I know of the increasingly harsh criticism of the Minister of Agriculture, Fisheries and Food, and the Government and all their works, so I am not surprised that a number of Conservative Members have expressed anxiety about the industry. In particular, the hon. Members for Gloucestershire, West (Mr. Marland), for Cambridgeshire, North-East (Mr. Moss), for Buckingham (Mr. Walden) and for Daventry (Mr. Boswell) seemed to urge a little caution on the Minister.
I take this opportunity gently to remind the farming industry—if it needs reminding—that it always does better under Labour Governments. We should welcome some support and participation from those involved in agriculture in our attempts to get rid of a Government who have taken their loyal rural supporters for granted and have ridden roughshod over the interests and aspirations of rural communities throughout the United Kingdom.
I must say that it is difficult to criticise the Government's agricultural policy—[HON. MEMBERS:"Hear, hear."]—because if it exists at all, it is a closely guarded secret, rather like the annual review of agriculture, which the Minister told us in his opening remarks was published today, although unfortunately hon. Members could not get hold of copies of it.
§ Dame Elaine Kellett-BowmanI did.
§ Mr. Home RobertsonI do not know how the hon. Lady got hold of a copy. it was certainly not available in the Vote Office, so I can only assume that she has an inside line to the Ministry.
We have had four Ministers of Agriculture, Fisheries and Food since the Government were elected in 1979, and during that period we have had no White Paper on agriculture and no guidance for the future of the farming industry. The last White Paper on agriculture, entitled "Farming and the Nation", was published by the late John Silkin in 1979 under the Labour Government.
The industry has a fine record of responding to the policies of successive Governments to meet the changing needs and priorities of the nation. But since 1979, agriculture has been left completely adrift—to stagger from crisis to crisis. Today's debate amply confirms the fact that the industry is in crisis. The framework that helped the industry to respond has been weakened and disrupted—I think in particular of the destruction of the research and advisory system that supported the industry so well for many years. Now there is doubt about the future of the Milk Marketing Board, and it would help if the Minister would take the opportunity of this debate to say what the Government proposed to do about that.
Market forces have driven the industry inexorably towards increased dependence on agrochemicals and intensive practices while the common agricultural policy has continued to distort the industry and generate the costly surpluses about which the hon. Member for Southend, East (Mr. Taylor) rightly keeps telling us.
The Government have evidently recognised the need for radical changes in the CAP, but no one is prepared to explain where those changes are leading us. Surely no one regards the notion of set-aside as a satisfactory long-term policy for farming and the countryside. We have heard a lot about level playing fields in the debate, but there is a limit to the number of golf courses that can be built round the country to take up surplus agricultural land.
Perhaps it was the previous Minister of Agriculture, Fisheries and Food, now the Secretary of State for Education and Science, who let the cat out of the bag when he suggested that farmers who were hard up should rely on the social security system. One sad by-product of the Government's neglect of and indecision about the future of British agriculture has been the collapse of public confidence in the industry and its products.
There have been some spectacular cock-ups in recent years-starting with the chaotic response to pollution from Chernobyl. We should remember from time to time that, four years on, 758 farms are still subject to restrictions as a result of that incident. Then there was salmonella in eggs, then nitrate in water, and much more recently we have had the crisis of lead contamination in cattle feed. The Minister will be able to confirm that 1,668 farms are still subject to restrictions because of the Government's failure to protect farmers from that imported junk food. Then, as has been well demonstrated during this debate, there is the question of bovine spongiform encephalopathy—a matter to which I intend to return in a few minutes. Now we have the threat to introduce bovine somatoltropin and irradiation. All this is calculated to undermine the position of our farmers and, for the consumers, their produce
848 There has also been the underlying failure to steer the industry in accordance with the developing needs and aspirations of the British people, both as consumers of food and as people concerned about their countryside. 1 t is in that context that I make my point about the Government's failure to produce a White Paper on farming—a matter that I regard as genuinely important.
§ Mr. SpearingIs my hon. Friend aware that it would be difficult for the Government to produce a White Paper? Is it not a fact that most White Papers are statements of Government intent? Many of us regard it as a misfortune that the United Kingdom cannot have an agricultural policy; there is only the common agriculture policy, which is determined in Brussels. Is that not why there is no—and, alas, can be no—statement of Government policy in a White Paper?
§ Mr. Home RobertsonThat did not prevent Labour Ministers from producing White Papers on agriculture. It is only this lot who have so signally failed to do so. It would be useful if, from time to time, Ministers and their officials were to take the trouble to consult the industry and other interested parties with a view to setting down a reviewed framework of policies and priorities, perhaps every four or five years. If they had done that, perhaps things would have worked out very differently for the industry.
Such consultation and consideration would certainly have pointed towards a slowing down in intensification many years ago and, perhaps, to gradual changes in direction, and would have prevented the panic responses to crises that the industry has been experiencing. Certainly they would have ruled out the prospect of the introduction of irradiation or BST.
§ Mr.Teddy Taylorrose—
§ Mr. Home RobertsonI am sorry that I cannot give way to the hon. Gentleman. His hon. Friends took up more time than they were meant to, and I want to give the Minister a reasonable time to respond to the debate.
As for BSE, it is always easy to be wise after the event, but since it was known from scientific work back in 1980 that scrapie could be transmitted orally to monkeys, surely it was rather reckless to water down the regulations covering the processing of sheep offal in that very year. I am not saying that those regulations would have prevented the disastrous development of BSE in British cattle, but they might have helped. My hon. Friend the Member for South Shields (Dr. Clark) put it to the Minister that those regulations may have been watered down as part of the Government's policy of lifting the burden from industry. Perhaps as a consequence of that decision, the Government have created a far more serious burden. 1 understand that farmers still have no way of establishing whether compound feeds contain animal residues. Understandably, they are interested in that subject now.
My hon. Friend the Member for Carlisle (Mr. Martlew) made an important point. He has received information to the effect that full compensation is payable where BSE cattle are found in slaughterhouses. It would be helpful if the Minister explained how compensation can be available to butchers if not to farmers. The point was well made by my hon. Friend the Member for South Shields—indeed, by hon. Members on both sides of the House—that there is an overwhelming case for the introduction of 100 per cent.
849 compensation and for urgent consideration of a slaughter policy to insure the eradication of this very dangerous disease at the earliest possible date.
Obviously we shall soon have an opportunity to debate the Government's Food Safety Bill. It seems to be a cautious step in the right direction, but I fear that it is too little, too late. For our part, we are determined to establish an independent food standard agency to take a grip on matters in the interests of consumers and producers.
As to the current plight of farming, I wonder how Conservative Members of Parliament dare show their faces in their rural constituencies in view of the Government's record in recent years. There has been bad news at every turn. My hon. Friend the Member for Derbyshire, North-East (Mr. Barnes) referred to the impact of the viciously anti-rural poll tax on farm workers in tied accommodation. There is an immediate rural housing crisis. There is the criminal under-funding of vital services such as transport, education and the Health Service. From one end to the other, as Conservative Members know, rural Britain has taken a hammering.
What about farming? Nye Bevan is supposed to have complained that the regeneration of agriculture by the 1945 Labour Government had only made it possible for farmers to pay their subscriptions to the Tory party. I wonder how many of them are still making that mistake today. I expect that many of them are saying that they cannot afford it. If they contrast the record of the post-war Labour Government on agriculture with that of the present Government, they should break the habit of generations and opt for a safer future with the Labour party.
When I was actively participating in farming back in 1978, I was running a mixed farming enterprise and, in common with other people in the industry, I was investing in improvements. That style of management is not possible today because of vicious interest rates and other aspects of Government policy.
Borrowings by agriculture have trebled from £3.4 billion in 1978, when Labour was in power, to about £10 billion in the current year. Interest payments are up more than five times in the same period, from £184 million to a crippling £948 million. That is a grim burden. It is unlikely to get better so long as the Government pursue their present policies, which have driven farmers' overdraft interest rates up to 18 per cent.
We also have the continuing effects of high inflation on input costs, while output prices are constrained by the 18 per cent. distortion of the green pound, which has been mentioned by hon. Members on all sides, but particularly by my hon. Friend the Member for Clwyd, South-West (Mr. Jones). That must be rectified; I am glad that the Minister acknowledged that point.
The industry is in real trouble. That must spell danger for the rural economy, and particularly for the hills and uplands. The disadvantages far outweigh the long-delayed adjustment in hill livestock compensatory allowances for sheep which the Minister announced last week. He conveniently did not comment on his failure to increase HLCAs for cattle, which is particularly important because the cattle industry is going through a difficult time. We must maintain the diversity of grazing enterprises in the hills and uplands.
850 The consequences of the Government's policy have been grave for the rural economy. The hon. Member for Dumfries (Sir H. Monro) referred to statistics published by the National Farmers Union of Scotland about employees on farms in Scotland. In five years, the total has fallen by 23 per cent., from 19,100 to 14,771. The industry is left with a dwindling and aging work force, and inadequate training and career prospects for young people. There has been a dramatic cut in investment in maintenance, buildings and the replacement of collapsing land drainage systems. All that is hitting rural employment. It also means that agriculture will be ill prepared to compete in Europe after 1992. That distortion of our trading position must be another burden on Britain's disastrous trade balance, as we tax food exports and subsidise food imports.
§ Mr. Home RobertsonNo. I must be fair to the Minister. It is important that he have a proper opportunity to reply to the debate.
We are literally subsidising imports. I understand that Irish beef imports coming into Britain at present get a built-in advantage of £60 a head. That cannot make sense, but that seems to be the general policy of the Government towards our trading partners. They sell and we buy and, to add insult to injury, we have to buy eggs contaminated with salmonella from the Netherlands whether we like it or not. The Minister really should do something about that.
We see no sense in prolonging the green pound discrepancy and we welcome the Minister's assurance that he will do everything possible to eliminate it. The green pound is a mechanism that has outlived any possible usefulness and now is the time for it to go.
For our part, when we come to power in the not so distant future we will introduce economic policies to encourage investment and enterprise, which will be good for farming as well as other industries. We will adopt rural policies to regenerate the rural communities. We will introduce a green premium to encourage extensification on farms and we will establish an independent food standards agency to restore confidence in British food.
Meanwhile, we have to leave the Minister to his own limited devices, which are well illustrated in this week's edition of Farming News. This is what it says about the Minister:
"Nothing to do with me, said junior farm Minister David Curry, as he abdicated any MAFF responsibility for the lack of Government popularity with farmers.
Before beating a speedy retreat from his audience of Essex farmers back to the confines of Westminster, Mr. Curry pleaded for realism in judging the Ministry's efforts on the green £, co-responsibility levies, GATT talks and even strawburning.
'I don't claim that everything is under control,' he said. 'But in those areas for which we do have responsibility we are making as great an effort as we can —
Times are difficult for farmers and I am not here to pretend that that is not the case,' the Minister said."
Well, heaven help the farming industry, because the Minister clearly cannot.
§ The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. David Curry)I imagine that Labour Members must have been most anxious to keep their agricultural policy under wraps pending the epoch-making speech that their leader is to 851 make to the National Farmers Union annual dinner. It will he the first time he has ever addressed himself to agricultural questions and, if what we just heard is a curtain raiser to that, I hope that the NFU invites him to speak before the soup so that he can leave before it is served, because that will be the only thing he has to offer.
In the last 15 seconds of the speech of the hon. Member for East Lothian (Mr. Home Robertson), we heard the Labour party agricultural policy. They are going to do something about the economy and to green things generally. For most of the rest of his speech, the hon. Gentleman was complaining that my right hon. Friend does not spend his time swimming up and down the Bristol channel preventing contaminated feed from Holland arriving in the United Kingdom, and was accusing him of being responsible for the explosion of a Soviet nuclear power station in the Ukraine. My right hon. Friend has many talents and his writ runs a long way, but we regard that as something of a Socialist action and not one for which we claim responsibility.
I should have thought that in all the interventions from the Opposition there might have been a hint—a whisper, just a clue—about what farmers might expect if Labour were returned to power. But all that we were told by the hon. Gentleman was that the time had come to get rid of the green pound. We all know how well qualified he is to press for that and how good that advice is, because when the Labour party was in government and the bottom point of its inflation was almost as low as the peak of ours, it deliberately maintained the biggest green pound gap in the history of the British agricultural industry.
If that is to be the precedent, I do not think that the sort of remarks that the hon. Gentleman has made here will be considered very credible. Farming News, unfortunately, does not always get it right, especially since I ceased to write for it. And, of course. I did not flee to Westminster—I flew to Dengie to look at green crop industry, because we try to keep abreast of innovation. So they got their geography wrong, apart from anything else. However, I will forgive them in return for the past enjoyment of writing for that very singular newspaper.
We look forward to what the Leader of the Opposition has to say about Labour's agricultural policy when he addresses the NFU, and will examine it with the closest attention. I have no doubt that the Opposition agricultural spokesman will wish to examine it as well, because his view must differ substantially from that of his right hon. Friend or it will not make sense.
A series of themes were raised in the debate and I shall address them. No one failed to mention the green pound. The level playing field was mentioned so often that I wondered whether I had been translated to the post with responsibility for sport and recreation.
The position is simple, and my hon. Friend the Member for Daventry (Mr. Boswell) set it out straight. My right hon. Friend the Minister does not just pick up the telephone, ring Ray MacSharry and say,"By the way Commissioner, we would like 15 per cent. or 10 per cent. off the green pound." We cannot take unilateral action on the green pound. It would be utterly futile to demand a White Paper, because agricultural policy is determined in the Community and, increasingly, in the wider international community as the GATT talks indicate.
§ Dr. David ClarkLabour had one in 1979.
§ Mr. CurryNot before we were a member of the European Community. The hon. Member for Newham, South (Mr. Spearing), who follows these constitutional matters with more expertise than the hon. Member for South Shields (Dr. Clark), put him straight on that.
As for the green pound, we have made it clear that we wish to reach the target of zero by 1992 to which the Community is committed. That means that we must take a substantial chunk this time round. We have recognised that the agricultural community believes that this is essential, and we share that view. The Commission has proposed a cut of one third.
No hon. Member should think that it is a doddle to get that third. We have to persuade the other Ministers in the Council of Ministers. As I am sure hon. Members know, there are only two ways in which a Commission proposal can be changed—either a compromise is put forward by the presidency which the Commission accepts as its own, or there is a unanimous vote by the Council members to compel the Commission to change its proposal. That is the constitutional arrangement and we cannot change it. We have to use persuasion and pressure to try to get the best we can out of the negotiations.
I am grateful to my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop), who made an extremely important point. He warned us not to get caught up in contradictory objectives because if interest rates were to come down and, as a consequence, the pound was to decline in the foreign exchanges, the green pound gap would open up again. Therefore, there is some complementarity between our policies, which matters to farmers.
Many Members raised the issue of the co-responsibility levy. We have made it clear from the beginning that we dislike it and we shall do all we can to get rid of it. I would not be honest if I suggested to the House that we shall find that easy. It was encouraging that when we were round the table in Brussels, a number of Ministers said that they wished to see further progress towards the dismantling of the co-responsibility levy system. We subscribe to that because we think it is a pretty silly system, which penalises farmers without benefiting the consumer. We are completely opposed to it, but here again, we are locked into a majority voting system. We shall do whatever we can every time we try to remove what we regard as a silly system.
Many hon. Members raised the subject of BSE and I shall try to deal with the principal points raised. The first concerned rendering. The temperatures needed in rendering depend on the type of machine, the size of the particles and the period in the oven. I have looked at the criteria that most EC countries apply to the process. They apply a range of different criteria, but all have the objective of making the product safe—the same rules as we apply in the United Kingdom.
I have heard hon. Members speak of the need for 100 per cent. compensation for BSE. I have great sympathy with farmers whose herds are afflicted, particularly when they find that there is more than one incident of BSE on their farms. If there is a case for adjusting compensation, it must be based on the grounds of fairness to the agricultural community. I do not accept that there is a case on the grounds of public health. We have taken an ultra-cautious approach and gone way beyond what we were recommended to do. We have had the feed and offal bans. We look at the matters on a virtually daily basis 853 because we have an obligation to do so. We can say that those products are safe for the consumer to eat. Every jot of research we have done shows that, and it has been published. There has been no secret about it.
The hon. Member for South Shields asked about the export of feed products. We have already decided that we must tackle that problem. The chief veterinary officer is writing to his opposite numbers informing them of the bans that are in force in the United Kingdom, so that there can be no suggestion that recipient countries are not aware of any restrictions placed upon the product in the United Kingdom. We are already tackling that problem.
I have checked on what the hon. Member for Carlisle (Mr. Martlew) said, and I am confident that 100 per cent. is paid only when an animal is suspected of having bovine spongiform encephalopathy, but is subsequently found to be clean. We do not have a policy of paying 50 per cent. on animals that are found to be free from the disease.
§ Mr. Ron DaviesNow that the Minister has acknowledged that there is a problem with contaminated feed, can he explain why, since the Government have banned the use of contaminated feed for ruminants, he has continued, knowingly, to export some 12,000 or 13,000 tonnes of feed per year? Can he explain why, as late as yesterday, he acknowledged in a parliamentary answer to me that he has continued to allow the export of contaminated feedstuffs, particularly to the Third world, without any warnings, negotiation or discussion to indicate to those countries the dangers inherent in the products that they are importing?
§ Mr. CurryThe hon. Gentleman must realise that there has been extremely wide publicity for these matters in the United Kingdom, and we have taken steps to inform other countries. It is up to them to decide whether they wish to import the product and whether they judge it to be safe. We have taken all reasonable steps to inform them of the situation in the United Kingdom. I am not prepared to see exports take place on any misrepresented basis, and we have taken steps to ensure that there is no possibility that that can happen.
Several of my hon. Friends mentioned the egg industry and egg imports. It is true that the industry, with the assistance of the Government, has cleaned up its act considerably. We can now say that British eggs are safe and that we have eliminated a great deal of the risk to the consumer. It was not always thus. In the initial stages, the industry was not forthcoming or willing to apply itself and to take fairly radical measures, but we are through that stage now. However, it is still a fragmented industry, and it would help greatly if it could get its act together, and if it could be represented by fewer organisations. Frankly, that would make it an easier partner to deal with.
Many hon. Members have asked why we do not ban imported eggs. Under Community regulations, we do not have the legal power to do that. The risk to health from imported eggs is not sufficient to give us the legal means to ban them. We are not prepared to take actions which we reproach other countries for taking with other products. We regard that as wholly inconsistent and wrong. We must have Europewide regulations, and there is no point pretending that that will happen tomorrow, because we know of the delays, and the time scale of the Community.
854 My right hon. Friend raised that issue at the last Agriculture Council meeting, and the Commissioner said that he would expedite work on the matter and that working groups would get down to business as soon as possible. We hope to have some proposals on the table around the middle of this year.
§ Dr. David ClarkDoes not the Minister appreciate that we have taken action against domestic egg producers because salmonella-contaminated eggs are a public health risk? If that is the case, surely salmonella-contaminated eggs from Holland are an equal public health risk. Therefore, why will the Minister not invoke article 36 of the treaty of Rome, which specifically gives him the power he needs?
§ Mr. CurryThe answer is very simple: our legal advice is that it cannot be used in these circumstances. If it could be used, we would not hesitate to use it. Let me also remind the hon. Gentleman that, at the height of the salmonella crisis, not a single country declined to accept eggs exported from the United Kingdom.
A number of hon. Members, including my hon. Friend the Member for Congleton (Mrs. Winterton), asked why we do not stamp the British lion on our eggs. The industry has informed us that stamping the lion on individual eggs is likely to detract from the image of freshness, so it is not an open-and-shut case—-although there is nothing to prevent us from stamping the packs to indicate United Kingdom origin.
Hon. Members have asked about the future of the Milk Marketing Board, which I agree is an important issue. Let me make it clear that there is no hidden Government agenda. The board has already circulated its producers a number of times on the subject of its future status and the direction of its policies, because it knows that with the advent of the single market and increased competition the present position may not be sustainable. It wishes to derive the maximum benefit from prices for its farmers, and it knows that there have been problems with milk allocation, especially in parts of the manufacturing sector.
The Milk Marketing Board has embarked on an evaluation of its position. It enjoys a statutory monopoly and a special relationship with the Dairy Trade Federation, which receives the particular protection of European legislation. If the goal posts were shifted, there would have to be a general discussion about the relationship between the two sides of the industry and the future of milk marketing in the United Kingdom. We believe that it is up to the board to take the initiative—to come up with its own ideas, and to tell us whether it needs our assistance. We have no prescription for its future direction. We recognise its importance to producers, especially in rural areas: in my constituency, and those of many other hon. Members, they need the security of a market for their products.
The hon. Member for Wallsend (Mr. Garrett) made an interesting speech, in which he broadened the horizon to include the position in eastern Europe. In a domestic context, he mentioned set-aside. Clearly, we cannot change the rules in the middle of the game, but I am reviewing the set-aside programme to see whether it can be made more environmentally effective, and whether any change is needed.
As I have told the House before, if I had absolute truth at my disposal I would have decided to go into the Church 855 rather than the Ministry—if I may put it that way. As things are, I am willing to admit that change and improvement are possible, and I am prepared to embark on the process; I am sure that the House will understand that that process is not always a reflection of governmental processes.
The right hon. Member for Strangford (Mr. Taylor) mentioned pigmeat, and I know that that sector has experienced particular difficulties. We did not accept the Commission's proposals to chop the import levies: the industry had clawed its way back from a difficult position, and we were not prepared to let its feet be kicked from under it. The Commission recently took remedial action to help the industry, and we supported it in that. We advocate a reform of the pigmeat regime based on free-market principles, but I have taken to heart what the right hon. Gentleman said about the need to find stability in a marketplace—although he will no doubt agree that heavy intervention and heavy regimes will not achieve that.
My hon. Friend the Member for Southend, East (Mr. Taylor) had a catalogue of complaints about the effectiveness of CAP measures. We are now engaged in GATT talks, and Ministers know that there is no escape: we are locked into the process. It means what it says—a progressive and substantial reduction in farm support. We cannot tell the industry that the pressure will be off. We cannot say, "Don't worry—we have got through this patch." We all know that the dairy sector still has problems, and that it has not been stabilised effectively, despite the quotas. We know that the cereals sector needs only a decent harvest in all the major producing countries to be landed with a significant surplus problem. The pressure cannot be relaxed, but it is now being exercised through GATT as well as through the EC's own mechanisms.
I realise that my hon. Friend has an honourable record of complaint, but we have progressively taken action. He has only to go into the countryside to find out that it is hurting and it is effective. Of course we will do our best to combat fraud and to save the knackers, because we appreciate their role in rural industry.
Our policy is to defend farming and to support that which gives value for money to the farmer, to the taxpayer and to the consumer. We have to see farming in the wider context of social aspects and of the environment. Farming Must become more market-orientated if it is to deserve the credibility and the justification of that continued support. We intend to defend those interests in Brussels for the Community and for the United Kingdom. We have done it successfully in the past and we intend to continue that success in future.
§ Mr. SpeakerI must now put the Question on the amendment in the name of the hon. Member for Thanet, South (Mr. Aitken) —
§ Mr. Teddy TaylorOn a point of order, Mr. Speaker. I beg to ask to leave to withdraw the amendment.
§ Mr. SpeakerIn that case, I am afraid that I must put the amendment.
§ Question put, That the amendment be made: -
§ The House divided: Ayes 29, Noes 182.
857| Division No. 66] | [10 pm |
| AYES | |
| Barnes, Harry (Derbyshire NE) | Livingstone, Ken |
| Beggs, Roy | McCartney, Ian |
| Benn, Rt Hon Tony | Mahon, Mrs Alice |
| Bennett, A. F. (D'nt'n & R'dish) | Meale, Alan |
| Bradley, Keith | Pike, Peter L. |
| Callaghan, Jim | Redmond, Martin |
| Campbell-Savours, D. N. | Ross, William (Londonderry E) |
| Dalyell, Tam | Rowlands, Ted |
| Dixon, Don | Spearing, Nigel |
| Duffy, A. E. P. | Taylor, Rt Hon J. D. (S'ford) |
| Dunwoody, Hon Mrs Gwyneth | Taylor, Teddy (S'end E) |
| Forsythe, Clifford (Antrim S) | Wardell, Gareth (Gower) |
| Garrett, Ted (Wallsend) | |
| Golding, Mrs Llin | Tellers for the Ayes: |
| Hinchliffe, David | Mr. Dennis Skinner and |
| Leighton, Ron | Mr. Bob Cryer. |
| Lewis, Terry |
| NOES | |
| Alexander, Richard | Hamilton, Hon Archie (Epsom) |
| Allason, Rupert | Hamilton, Neil (Tatton) |
| Alton, David | Hampson, Dr Keith |
| Amery, Rt Hon Julian | Hannam, John |
| Amess, David | Harris, David |
| Arbuthnot, James | Hawkins, Christopher |
| Arnold, Tom (Hazel Grove) | Hayhoe, Rt Hon Sir Barney |
| Baker, Nicholas (Dorset N) | Hayward, Robert |
| Beith, A. J. | Heathcoat-Amory, David |
| Boswell, Tim | Heseltine, Rt Hon Michael |
| Brandon-Bravo, Martin | Hind, Kenneth |
| Brown, Michael (Brigg & Ci't's) | Howe, Rt Hon Sir Geoffrey |
| Buck, Sir Antony | Howells, Geraint |
| Burns, Simon | Hughes, Robert G. (Harrow W) |
| Burt, Alistair | Hunter, Andrew |
| Campbell, Menzies (Fife NE) | Irvine, Michael |
| Carlile, Alex (Mont'g) | Jack, Michael |
| Carlisle, Kenneth (Lincoln) | Jessel, Toby |
| Carrington, Matthew | Jones, Gwilym (Cardiff N) |
| Chapman, Sydney | Jones, leuan (Ynys MOn) |
| Chope, Christopher | Jones, Robert B (Herts W) |
| Clark, Dr Michael (Rochford) | Kellett-Bowman, Dame Elaine |
| Clarke, Rt Hon K. (Rushcliffe) | Kennedy, Charles |
| Colvin, Michael | Key, Robert |
| Coombs, Anthony (Wyre F'rest) | Kilfedder, James |
| Cran, James | King, Rt Hon Tom (Bridgwater) |
| Currie, Mrs Edwina | Kirkwood, Archy |
| Curry, David | Knapman, Roger |
| Davies, Q. (Stamf'd & Spald'g) | Knight, Greg (Derby North) |
| Davis, David (Boothferry) | Knight, Dame Jill (Edgbaston) |
| Devlin, Tim | Knowles, Michael |
| Dorrell, Stephen | Lang, Ian |
| Douglas-Hamilton, Lord James | Latham, Michael |
| Durant, Tony | Lawrence, Ivan |
| Emery, Sir Peter | Lee, John (Pendle) |
| Ewing, Mrs Margaret (Moray) | Leigh, Edward (Gainsbor'gh) |
| Fallon, Michael | Lester, Jim (Broxtowe) |
| Favell, Tony | Lightbown, David |
| Fenner, Dame Peggy | Lilley, Peter |
| Fishburn, John Dudley | Livsey, Richard |
| Fookes, Dame Janet | Lloyd, Peter (Fareham) |
| Forsyth, Michael (Stirling) | Lord, Michael |
| Forth, Eric | Lyell, Rt Hon Sir Nicholas |
| Fowler, Rt Hon Sir Norman | Macfarlane, Sir Neil |
| Franks, Cecil | MacKay, Andrew (E Berkshire) |
| French, Douglas | Maclean, David |
| Fry, Peter | Maclennan, Robert |
| Gale, Roger | McLoughlin, Patrick |
| Garel-Jones, Tristan | Major, Rt Hon John |
| Gill, Christopher | Marland, Paul |
| Glyn, Dr Sir Alan | Marshall, Michael (Arundel) |
| Goodlad, Alastair | Martin, David (Portsmouth S) |
| Gorst, John | Maxwell,Hyslop, Robin |
| Greenway, John (Ryedale) | Mayhew, Rt Hon Sir Patrick |
| Gregory, Conal | Meyer, Sir Anthony |
| Griffiths, Peter (Portsmouth N) | Michie, Mrs Ray (Arg'l & Bute) |
| Grist, Ian | Mills, lain |
| Gummer, Rt Hon John Selwyn | Mitchell, Andrew (Gedling) |
| Hague, William | Monro, Sir Hector |
| Montgomery, Sir Fergus | Steen, Anthony |
| Morris, M (N'hampton S) | Stevens, Lewis |
| Morrison, Sir Charles | Stewart, Andy (Sherwood) |
| Morrison, Rt Hon P (Chester) | Stradling Thomas, Sir John |
| Moss, Malcolm | Summerson, Hugo |
| Neale, Gerrard | Taylor, John M (Solihull) |
| Newton, Rt Hon Tony | Taylor, Matthew (Truro) |
| Nicholls, Patrick | Thomas, Dr Dafydd Elis |
| Nicholson, David (Taunton) | Thompson, D. (Calder Valley) |
| Norris, Steve | Thompson, Patrick (Norwich M) |
| Paice, James | Thurnham, Peter |
| Porter, David (Waveney) | Trotter, Neville |
| Portillo, Michael | Twinn, Dr Ian |
| Raison, Rt Hon Timothy | Walden, George |
| Redwood, John | Wallace, James |
| Renton, Rt Hon Tim | Waller, Gary |
| Rhodes James, Robert | Warren, Kenneth |
| Roe, Mrs Marion | Wells, Bowen |
| Rowe, Andrew | Wheeler, Sir John |
| Ryder, Richard | Widdecombe, Ann |
| Salmond, Alex | Wiggin, Jerry |
| Sayeed, Jonathan | Wigley, Dafydd |
| Shaw, David (Dover) | Wilkinson, John |
| Shaw, Sir Giles (Pudsey) | Wilshire, David |
| Shaw, Sir Michael (Scarb') | Winterton, Mrs Ann |
| Shelton, Sir William | Winterton, Nicholas |
| Shephard, Mrs G. (Norfolk SW) | Wood, Timothy |
| Shepherd, Colin (Hereford) | Woodcock, Dr. Mike |
| Sims, Roger | Yeo, Tim |
| Smith, Sir Dudley (Warwick) | Young, Sir George (Acton) |
| Smith, Tim (Beaconsfield) | |
| Speller, Tony | Tellers for the Noes: |
| Stanbrook, Ivor | Mr. Tom Sackville and |
| Steel, Rt Hon Sir David | Mr. Irvine Patnick. |
§ Question accordingly negatived.
§ Main Question put and agreed to.
§
Resolved,
That this House takes note of European Community Documents Nos. COM. (89) 660 relating to prices for agricultural products and related measures for 1990–91, 7010/89 relating to adjustment of agricultural structures, 8309/89 and 8877/89 relating to the quota system in the milk sector, the Court of Auditors' Special Report No. 1/89 on the agrimonetary system, the proposals described in the unnumbered Explanatory Memorandum submitted by the Ministry of Agriculture, Fisheries and Food relating to 16th January on use of agricultural commodities in the non-food sector and of the Government's intention to negotiate an outcome on the price proposals which takes account of the interests of United Kingdom producers and consumers and of the need to maintain the progress made in reforming the European Community's Common Agricultural Policy.
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c857
- STATUTORY INSTRUMENTS, &c. 18 words c857
- CRIMINAL LAW 44 words cc857-8
- PUBLIC HEALTH 57 words c858
- PUBLIC HEALTH 57 words c858
- TERMS AND CONDITIONS OF EMPLOYMENT 45 words cc858-60
- FEES AND CHARGES 1,118 words, 1 division