HC Deb 19 February 1998 vol 306 cc1172-4
10. Mr. Webb

What assessment he has made of trends in farming incomes over the next three years. [28754]

Mr. Morley

It is difficult to predict the trend in farm incomes because of the many factors involved. I am kept informed by my officials on how specific market developments could impact on farm incomes.

Mr. Webb

Does the Minister accept that independent forecasts, such as those by Barclays bank, suggest a further significant fall in farming incomes next year? Farmers in my constituency have overdrafts that would make my eyes water. Does he accept that they cannot wait two years for an upturn, and does he agree that the crisis in farming incomes needs to be tackled urgently?

Mr. Morley

There is no doubt that this is a difficult year for farming incomes, although the hon. Gentleman may have misinterpreted the report slightly: Barclays suggests a downturn in 1998 and an upturn in 1999.

Mr. Pike

Does my hon. Friend accept that many hill farmers, particularly in the Pennines and similar areas, already farm on a non-viable basis and that, if something does not happen to give them a better return and standard of living, they will get out of farming?

Mr. Morley

Yes, I accept that. It is one reason why we are discussing the idea of early retirement with farmers' representatives and considering schemes such as hill livestock compensatory allowance. Hill farmers have always been in the lowest quartile of income. Perhaps the time has come to look at the support mechanisms as part of the restructuring of the CAP and the year 2000 proposals.

Mr. Curry

How much has been taken out of farm incomes by the rise in interest rates since last May, and how much more would be taken out by a further rise, as canvassed by the Governor of the Bank of England?

Mr. Morley

A rise in interest rates would affect farmers in the same way as any other business.

Mr. Flynn

The Government are to be congratulated on their courage in dealing with the extremely difficult and painful, albeit inevitable, changes that have taken place in the farming industry. Could farmers hope for a more secure future in the long term if they were to change farming practices and carry out more organic farming, or move into areas for which there will be a secure market in the future, such as the cultivation of flax?

Mr. Morley

Farmers are certainly going through a period of change, not least because of the pressures on the CAP. There are tremendous premiums for organic products, but nearly 70 per cent. of the organic market is taken by imports. We are doing our best to encourage farmers to convert to organic methods and take the opportunity of that market. We shall announce further proposals in the very near future.

Mr. Beggs

Does the Minister agree that, as soon as the ban on the export of beef from the United Kingdom comes about, farming incomes will start to increase again? May I take this opportunity to thank the Minister of State for attending the animal health computer presentation by the Northern Ireland Department of Agriculture today, and urge other hon. Members to attend the presentation at 4 pm in Room 21 so that their regions can benefit from the facilities that we have in Northern Ireland?

Mr. Morley

The computerised scheme in Northern Ireland is excellent and has helped in terms of the Commission's recommendation that the ban should be lifted in Northern Ireland. We are extending such a scheme, through the cattle passport scheme, throughout the country. It is a great shame that the previous Government did not implement that scheme in 1989 when they were pressed to do so by those on the Labour Front Bench.

Mr. Jack

The Minister will understand that the agrimonetary regime has a profound effect on farmers' incomes. A document produced by Mr. Lebrecht, a senior official in MAFF, has come into my possession. It waxes lyrical about the stability of the current arrangements and the contribution to farm incomes, and talks about the generous compensation schemes available to farmers in the context of post-euro agrimonetary arrangements.

If the Minister's officials feel so enthusiastic about the arrangements to help farmers, why does he not feel the same?

Mr. Morley

It is a shame that the shadow Minister did not see a document that I have seen, which points out that in 1995 the then Conservative Government voted against the agrimonetary scheme—the very scheme that the Conservatives are now pressing us to implement.