§ Motion made, and Question proposed, That this House do now adjourn—[Mr. Kirkhope.]
10.26 pm§ Sir Roger Moate (Faversham)I welcome this chance briefly to raise on the Floor of the House the serious problems facing the English apple industry.
It is now widely understood that the problems facing the industry are indeed serious. The word "crisis" is much over-used in politics, but that is what some growers are facing now and what the whole industry could be facing if, heaven forbid, the 1994–95 season is a repeat of last year's. If some crop forecasts for Europe are correct, this will be the third year in a row in which growers will face serious financial hardship, and many will go out of business altogether. The loss to them, the rural economy, the countryside and the consumer would be great indeed.
I welcome my hon. Friend the Minister of State to the debate. He has, with his personal knowledge of the industry—I say this deliberately—been working phenomenally hard to find answers. I welcome, too, the Opposition spokesman, the hon. Member for Clwyd South-West (Mr. Jones), who, with the Minister's permission, hopes to catch your eye, Mr. Deputy Speaker, and speak for a couple of minutes in the debate; my hon. Friend the Member for Medway (Dame P. Fenner), who is secretary of the newly formed all-party parliamentary British industry fruit group; and many other hon. Friends, who have so strongly supported the apple and fruit industry.
I know that there is tremendous support in both Houses for early action to help the English apple industry to stave off an immediate crisis and to secure long-term viability in a tough free-trade environment. I emphasise that the industry is not looking for subsidy or handouts. It has always had to stand on its own two feet, but it cannot do so in the face of a tidal wave of imports generated by what can reasonably be called, in the broadest terms, unfair competition.
That unfairness results from the distortions of the intervention system of the European Community, from subsidised growing over long periods in the third world and from predatory pricing. In addition, the United Kingdom is the most open market for fruit in the world, and we grow only 30 per cent. of our total apple consumption. Only 30 per cent. does not sound much, but we should remind ourselves that the figure represents employment—full and part time—for nearly 100,000 people in the rural economy. It represents some of the finest—I would say the best—fruit, with the best flavour, in the world.
Our orchards are an essential part of our countryside. Figures for 1992 show that the wholesale value of fruit to, as it were, United Kingdom Ltd. was some £257 million, with a retail value of £736 million, so someone in the middle is making a good margin.
I do not exaggerate when I say that all that is at risk. I think that the Minister and the Ministry could help greatly by publishing authoritative statistics to emphasise the importance of British horticulture in terms of value, employment and the number of people who are dependent on this tremendously important sector. How long can 123 growers survive if prices this season, like those last season and the season before, literally cover only half the cost of production?
Without subsidy, the industry has dramatically improved its marketing, packaging, advertising and grading. It produces the highest quality apples and, given an orderly market and fair competition, can increase its market share in the United Kingdom and move into exports.
Now is not the time to record all the work that the industry can do and is doing for itself, but it is summed up in the words of David Browning, the executive chairman of English Apples and Pears Ltd. In his latest newsletter, he states that:
political support alone will not reverse the fortunes of our industry and we must press on with our measures of self-help.I pay tribute to a number of organisations for the work that they have done—English Apples and Pears Ltd, of course; the National Farmers Union; and the British Independent Fruit Growers Association, all of whom are fighting valiantly for the industry in these challenging times.Before I deal with political support and the steps that need to be taken, I think that it is right to say something about the supermarket buyers who, to a large extent, hold the answer in their hands.
I do not doubt the good intentions of the great supermarket chains. As a rule, their support for the industry is genuine. I do not denigrate them in any way, but, if the industry "delivers the goods"—in terms of quality and price—the retailers that dominate the market can surely give better, longer-term contracts for the quality fruit that the British grower can produce. That applies equally to vegetables. One hopes that, in view of the possible political measures and those which the industry can take itself, supermarket buyers can go further and provide longer-term contracts to suppliers.
What do we want from the Government and the European Economic Community? First, I should like my hon. Friend the Minister to tell us the latest on the grubbing grant proposals which were adopted, I understand, by the Council of Ministers on 23 June, but which have yet to receive final approval. We welcome the scheme. It is a crucial step towards reducing the enormous structural surplus in Europe.
However, I quote verbatim from a note sent out by the National Farmers Union, which has been playing a major role in the fight to protect the industry. A paragraph entitled "Grubbing Up" states:
We would like the UK Government to insist that the proposals adopted at the Council of Ministers meeting on 23 June be resubmitted at the Council meeting on 16 July with the following amendment:the removal of the age limit for eligible orchards; in the current proposals orchards must be less than 20 years. We suggest that if an age limit is imposed, a derogation be allowed for Bramley trees of up to 75 years to address the issue of poor quality fruit associated with old orchardsThe UK Government should treat the matter with the utmost urgency and press for an early implementation of the grubbing up scheme by using the fast track method in invoking the appropriate Statutory Instrument".It seems illogical to exclude older orchards, which can be highly productive, but produce lower-quality fruit.I have a letter from a grower, which makes the point very effectively. It states; 124
Recent financially poor years have caused considerable postponements of our replanting programme and I now find that much of my farm has trees on it that are over twenty years old and will not qualify for grant aid…If the twenty year rule is kept in place it will fail to ensure the reduction of the surplus products the grant was designed to prevent. It will stop those who are willing to get out because they will not be able to afford to.I ask the Minister please to seek a derogation or some flexibility for older dessert orchards—perhaps 25 years or more. We must have flexibility if we are to make the scheme work well.Secondly, I ask my hon. Friend to say something about the intervention system and where we have got to in trying to reform or, preferably, eliminate it. It is clearly unacceptable, some would say obscene, that in France, for example, more than one third of production was grown to be destroyed, partly at the expense of the British taxpayer. In Greece, 76 per cent. of nectarines and 61 per cent. of the peach crop went into intervention. It is a mad system, and I hope that we shall see the end of it fairly soon.
Thirdly, I ask my hon. Friend please to tell us, or to press the European Commission to tell us, the full implications for top fruit of the general agreement on tariffs and trade and of the agreements with Chile, which may set the pattern for other third countries. If the agreements, which I understand go beyond GATT obligations, result in a flood of imports during our principal selling season, without any agreements from the countries concerned about orderly marketing, all our efforts, whether political efforts or the internal efforts of the industry, will have been in vain. We have to be strenuous and robust in dealing with any dumping and any unfair competition—and I mean robust.
Although my hon. Friend has been pretty robust so far, I am not sure whether he completely meets the suggestion from David Browning last year. Mr. Browning says:
We are not asking for something which is illegal. We are merely asking our civil servants to take on their new role in Europe on the same basis as our competitors' Governments, which have been more generous, more ingenious and possibly, in some cases, more devious, in using national aids of various kinds to assist their producers.Fourthly, there has been talk of more specific help in the form of grants for modernising or completely replacing cold store facilities. This is, I understand, permissible within European Community rules and perhaps my hon. Friend could say a word about that.Fifthly, is there any more help that the Government can reasonably give to support new marketing initiatives, such as the encouragement of apple consumption in England? It is odd that we still eat fewer apples than people in most other European countries, although we produce the best. Perhaps the Government could give further help with the encouragement of new varieties. What the English grower can offer, above all, is quality, flavour and greater variety, all of which can help to secure a premium price. Any developments and reasonable help that the Government can give in those aspects of apple development and growing would be very helpful.
I include there a special note for my hon. Friend to help, if he can, the Brogdale horticultural trust, the home of the national fruit collection in my constituency, of which I am proud to be a trustee. That, too, is the ideal location for the development of other varieties, which will be tremendously helpful to the industry.
Time does not permit me tonight to develop other questions relating to other aspects of research and development or, for example, the encouragement of 125 English apple juice, although most of us feel that that is a tremendous untapped resource which could help to sustain the British apple-growing industry. Again, any assistance that we can direct there to encourage an industry that is already important, but which could be of even greater importance will be helpful, and I believe that it is the right area for the Government to help.
I stress that the apple industry, so much of which is in Kent, but which is truly a great British industry, is ready to meet the challenge of tough world competition. However, we need the robust political help which, I strongly believe, the Minister is able and willing to give, to ensure that the competition both in Europe and around the world is absolutely fair. That has not been the case so far, but all the efforts that are being made by everyone now can make that come right. I hope that tonight's debate will help in one small respect in that way.
§ Mr. Martyn Jones (Clwyd, South-West)I congratulate the hon. Member for Faversham (Sir R. Moate) on obtaining the debate, and I am grateful to him for allowing me a few minutes to support his case.
He has highlighted the crisis in the apple industry. The Opposition believes that it is not just a blip in the normal agricultural cycle of production but that there is a structural problem. The apple regime has failed and the Government must ensure that Britain has a level orchard, so to speak. One gets fed up with hearing about level playing fields, and orchards are perhaps more appropriate.
United Kingdom apple growers receive 2 per cent. of intervention payments, but the United Kingdom pays 12 per cent. of all the costs of intervention. Therefore, by pure mathematics, UK apple growers miss out by 85 per cent. on the funds. The industry has had a good record of standing on its own two feet, as the hon. Member for Faversham said, but it is essential that the Government should now step in.
I hope that the Minister will tell us that he can give some real assistance to the industry, which employs 100,000 people throughout the United Kingdom, but particularly in Kent, as the hon. Gentleman said. The hon. Member for Faversham also made some real suggestions about how that can be done, and I hope that the Minister will take them on board.
§ The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Michael Jack)I add my congratulations to my hon. Friend the Member for Faversham (Sir R. Moate) on gaining this particular debate. It is an important subject and one on which I certainly share his passion, having, as he kindly mentioned, made my living in the horticulture industry and been closely involved in buying apples and building up a packing business that goes with it.
I am delighted that in the Chamber this evening we have my hon. Friends the Members for Medway (Dame P. Fenner), for. Suffolk, Central (Mr. Lord), for Cambridgeshire, South-East (Mr. Paice), for Hastings and Rye (Mrs. Lait), for Torridge and Devon, West (Miss Nicholson) and for Canterbury (Mr. Brazier) and the hon. Member for Clwyd, South-West (Mr. Jones). Their presence for an Adjournment debate in which normally 126 there is only one hon. Member and the Minister present, shows the importance which is attached to this crucial subject.
As my hon. Friend the Member for Faversham said, the subject is crucial to the rural economy of this country. We often forget that, in addition to the growing of apples, there is the industry of packing, storage, distribution and machinery. All that goes with it and is very important.
My hon. Friend the Member for Faversham opened the debate by rightly reflecting on some of the problems of last year's season. He mentioned the excellent work done by English Apples and Pears Ltd. I take my hat off to David Browning and others in the industry, because, in a season of great difficulty, they managed to raise about £1.5 million as a fund to promote English apples and to make certain that in spite of problems they did not take the difficulties lying down. In the same newsletter from which my hon. Friend read, he will see that David Browning highlights one area in which the industry intends to help itself.
I am glad that my hon. Friend took that theme as underlying much of what he said. The industry intends to improve its crop forecasting. If anything went wrong last year, it was that the industry did not properly anticipate the additional stock of apples. Therefore, proper and orderly marketing could not be arranged. The industry has learnt from that. I do not think that the same problem will occur this year.
My hon. Friend posed several questions, and I shall do my best in the time available to respond to them. He rightly drew the attention of the House to the subject of imports. If the industry has set one positive image, it is that it is not per se against imports. It recognises that southern hemisphere fruit has an important part to play in ensuring that there is a good demand of apples 52 weeks of the year, but it is right to emphasise that difficulties arise when there is unplanned marketing of fruit.
For example, large quantities may come from South America and Chile in particular. Where the marketing of that fruit is not properly planned, it coincides with the end point of our season and causes difficulty for growers who have incurred cost in long-term storage of some of their very best fruit. That is a matter which requires almost a world solution.
My hon. Friend asked me to comment on our general agreement on tariffs and trade obligations and the effect that that would have on our prospects for fruit. In coming to an agreement on a more manageable system for controlling southern hemisphere fruit coming into this country at very low prices, the negotiation on the Chilean challenge to the European Union made it possible for Commissioner Brittan to propose a positive date by which he wanted to see the grubbing scheme come before the Council of Agriculture Ministers. That accelerated the whole process of reform of the fruit and vegetable regime, in particular focusing on the subject of grubbing. I shall say a few words about that in a moment.
The way in which the arrangements work with Chile, through GATT, to control third-country imports will be to the advantage of our industry because the scheme will be more transparent, and it has occasioned the arrival of the grubbing situation. It still means that there is a problem, which we will have to continue to discuss with some senders of fruit from the southern hemisphere.
My hon. Friend mentioned authoritative statistics and on that subject I am at one with him. I can assure him from this Dispatch Box that, in the work that I am undertaking 127 to study the horticultural industry, I have laid special emphasis on trying to ensure that we first deal with some of the problems of the apple industry. Good statistics—produced using our position as a Ministry of overview—are vital so that people can take informed decisions. I will certainly do my best to find out what we can do to respond positively to the point that my hon. Friend made.
My hon. Friend also mentioned price versus yield. That is crucial for the Cox. One of the results of one thing that the Department has been doing to help the industry—running a seminar for everyone from the inspired individual or independent, who was there at the beginning of the English apple industry, to those representing some of the major co-operative ventures in the industry—was an insight into the way in which new varieties that are being developed may well, under the right circumstances, have yields that will put them on a par with their continental competition. That is a very exciting development.
In concluding, my hon. Friend mentioned the importance of new varieties, and I side with him about that. In addition to the yield and economics of new varieties, there is a growing recognition that the taste of apples is changing. We rightly place much emphasis on the Cox, which lies at the heart of the English apple industry. It is the very tradition—the essence—of what we call English apples. The industry rightly recognises that there is more work to be done in research and development to ensure that the flavour that is the Cox apple is sustained and maintained.
In the long term, we have to look to new varieties. Representatives of one of the supermarkets, who saw me during my studies, said that they had recognised a trend towards some of the newer varieties, such as Braeburn and Gala to name but two, especially among younger fruit eaters. The industry is also looking at Fiesta. That development is encouraging, because it seems to be in tune with the way in which the consumer is going. We spend about £2 million a year on research and development, and it will assist the industry in that work.
My hon. Friend is also a trustee of the Brogdale horticultural trust and I congratulate him on what he does for Brogdale and for the enthusiasm that it shows on the question. The trust made an interesting point. While the search for new varieties continues, it has about 2,300 varieties of apple at Brogdale, which represent an almost untapped potential for looking forward in the industry.
While the Ministry of Agriculture, Fisheries and Food gives about £200,000 per year to help Brogdale to move forward, I hope that my hon. Friend will not lose sight of the marketing development scheme, which provides grants of up to £150,000 for innovative projects to improve the marketing and operation of large parts of the horticultural industry. I quietly suggest to my hon. Friend a little innovative thought—Brogdale might find the marketing development scheme helpful to it in its wish to exploit its knowledge and resource. I put that on record to show that positive action is available.
While we are talking of additional resources, I suggest that my hon. Friend reminds members of the industry, who may not have seen the press release that we released a week go, that bids are open for the new scheme of processing and marketing grants—the so-called FEOGA scheme. The 128 Commission has not yet come up with the final details of the exact nature of projects that will be supported, but we have a fairly good idea of what they will be.
Some people have already said that they want to make an advanced start on works. Innovative projects in the processing and marketing field in top fruit could well find that those FEOGA grants, which are serious money—£100 million during the next six years—are an area worth exploiting, to assist the industry positively through some of its difficulties.
On positive help, my hon. Friend mentioned cold storage. He may be interested to know that in the submission on the reform of the fruit and vegetable regime to the Commission, the United Kingdom has said that it could accept grant aid for improvements of storage facilities, particularly in the apple sector. We have tried to get that debate going, because I recognise from my discussions with industry representatives that cold storage facilities are a source of concern.
In highlighting research and development, the group marketing scheme, the FEOGA grants and some of the contributions that we have already made to the debate about reforming the fruit and vegetable regime, I hope that my hon. Friend will appreciate that we have taken matters further by trying to provide ways of giving concrete help to the English industry.
At the heart of the current debate is an issue on which my hon. Friend rightly concentrated many of his remarks—the grubbing up scheme. It is a sadness to me that I cannot confirm tonight the precise details of that scheme. It was my earnest hope that the matter would have been agreed at the recent meeting of the Agriculture Council. As my hon. Friend will know that, sadly, no final agreement was made on that occasion. I believe, however, that the issue will be discussed at the next meeting of the Agriculture Council, which will be held this month. I firmly hope that it will come to an agreement.
It is important to put that scheme into context. It is effectively a temporary one, in recognition of Commissioner Brittan's intervention and the needs of the industry. It does not, however, address some of the wider issues of the reform of the fruit and vegetable regime throughout Europe. My hon. Friend was right when he counselled us not to forget the inequities of the intervention scheme. That scheme, which operates throughout Europe, effectively rewards production for no particular end purpose. My hon. Friend was right to say that we gained little advantage from it and that it fuelled the production of apples that are not required.
To that extent, we have advocated a reform of the fruit and vegetable regime, a removal of intervention, coupled with grubbing, because we believe that the two go together. The interim scheme will enable matters to move forward and I know that that will benefit the industry.
My hon. Friend asked whether it was possible to address the question of orchards in which the trees are more than 20 years old. I must tell him that it will be extremely difficult to do that. As matters move forward, however, I will undertake to see whether there is anything that can be done. I must emphasise that that may be a long shot and I should not like to say any more at this stage. I will investigate and evaluate that proposal, because I understand its importance to the industry.
My hon. Friend was right to refer to the consumption of apples. The level of fruit consumption is this country is low. My hon. Friend has highlighted, however, a real 129 opportunity for our industry. A real gain can be made in the marketplace by English apples, not only the traditional Cox but new varieties, and by English pears. If we consider such consumption in the wider context of the work undertaken as a result of "The Health of the Nation", we can see that the work of the nutrition task force, as well all the other efforts to encourage a healthier style of eating, in which fruit plays a vital part, our apple industry can play its part. The debate comes almost full circle, because the very fact that the industry was able to raise £1.5 million to assist the promotion of its own fruit shows that it, too, is taking that issue extremely seriously.
My hon. Friend mentioned English apple juice, which I enjoy drinking. I refer him back to the subject of FEOGA, because it may offer opportunities. It is interesting to consider whether there can be more integration and co-operation within the industry, in which juicing may play a part. I know that the industry is debating that question.
130 I hope that my hon. Friend will see that much positive work is being done within that package of measures. He made a salient point about supermarkets' positive support of the industry and the fact that they must take seriously the quality, excellence and safety of English fruit. I guarantee that I will take up that challenge. I intend to invite senior buyers from supermarkets and to underscore that point to them. Although they support the industry, in my humble view they must, on this occasion, put their money where their mouths are and understand that, if they want supplies of the best fruit in Europe, they must continue to give the industry the support that it deserves and recognise the qualities that mean good sales on their shelves and good sales for our apple growers.
§ Question put and agreed to.
§ Adjourned accordingly at five minutes to Eleven o'clock.