§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jamieson.]9.34 am
§ Mr. Dafydd Wigley (Caernarfon)
May I wish you a happy new year, Madam Speaker. This is my first opportunity to do so. I thank you for this opportunity to discuss agriculture in Wales so soon after the Christmas break. It was soon after coming back in the autumn that we felt it necessary to raise the subject in the House, and you were kind enough then to accord a debate to my hon. Friend the Member for Ceredigion (Mr. Dafis). It is a reflection of the continuing crisis in Welsh agriculture that we once again have to return to the subject.
We departed for the Christmas break to the sound of the ministerial statement on Monday 22 December. We return with its echoes still ringing. The concern of farmers in Wales remains equally acute. I represent a largely rural constituency, where the traditional family farm is the backbone not only of the agricultural industry but of rural life in general. The collapse of the family farm would lead to a collapse of the fabric of rural Wales and cause not only economic problems but environmental and social problems.
The industry in my constituency is mainly livestock. Much of it is on hill or marginal land. Much is subsistence farming with relatively low incomes. It has been said that 40 per cent. of eligible families in agriculture receive family credit in my constituency. That is a reflection of the level of income of farmers and their families. I can personally testify that the present crisis is the worst in agriculture in my 24 years in the House. It is the worst in living memory for many people. The figures for 1997 that have been estimated by the National Farmers Union show that there has been a 47 per cent. reduction in farm incomes in 1997 in real terms. That reflects the size of the problem.
The crisis is all the more acute because so many sectors seem to have been hit simultaneously. In previous difficult periods, some farmers were able to move from one sector to another—perhaps dairy to beef, or beef to sheep. Today, there is no scope for such action. All the sectors are in acute depression. To make things even worse, several factors have come into play together, as if conspiring to hit farmers when they are down. They include the direct and knock-on effects of the BSE crisis, the continuing ban on beef exports and the grossly over-valued pound, which brings in cheaper imports, makes it more difficult to export and adversely affects the parity of the pound against the green pound. The price of 264 milk to farmers has fallen by more than 20 per cent. in the past year, and the loss of compensatory and support measures has also hit farmers. There have been increases in several, if not all, input costs, and costs have been imposed by the Government on farmers and continue to escalate. On top of all that, this Christmas, many farmers, especially in my constituency—this is especially true of dairy farmers—have been hit by electricity failures which prevented them from operating milking machines and keeping milk at the required low temperatures. I shall refer to each of those areas of difficulty in turn.
The beef export ban must be lifted. Welsh beef is as safe as any produced anywhere in Europe. It is safer than much that is imported from other countries. Cattle prices in Wales in November 1997 were down 27 per cent. compared to November 1995. I have a graphic example from a farmer in my constituency, Mr. Harri Parry of Glanllynnau, Chwilog near Pwllheli, who came to see me in my surgery last Wednesday. I have his permission to quote his case. He farms 182 acres of lowland just outside Pwllheli and is mainly involved in finishing cattle; he has some sheep as well. He has given me examples of the prices that he has paid and what he has received for his finished product. For example, a steer bought in November 1996 for £245—after the BSE crisis had started—was sold in December 1997 for £304. During that period, Mr. Parry had to meet the cost of feedstuffs at £80, transport costs of £18 and interest on the capital cost of the animal at £25. In other words, if one takes all those costs into account, he made a loss of £64 on that animal. That loss was made even before he had paid anything towards the rent on his farm or towards his labour.
That example is a reflection of the problems that face many farmers. My constituent told me that, two years ago, he just about broke even. Last year, he made a net loss of £15,000, and this year he expects things to be as bad, if not worse. He survives because his wife is a teacher and they take in some visitors during the summer. His case reflects the size of the problem that faces farmers, and quite frankly the Government's package of aid announced in December will not help that farmer by one penny.
The BSE crisis has been a major shadow behind the difficulties encountered by farmers in the past 21 months. I should be grateful if the Minister could tell us about the progress that has been made so far in Brussels, and possibly the progress that may be made today to lift the ban on beef exports from Northern Ireland. I should be grateful to know the possible effects that that may have on progress towards lifting the ban in Wales and elsewhere.
It is also important to consider the impact of beef imports from the European Union. Between January and August 1997, they increased by 63 per cent. compared with the same period in 1996. Resentment is felt in the agricultural fraternity and elsewhere that imports of beef of doubtful quality are coming to this country from other parts of the world. It is also important to consider the policy that is followed by public sector purchasers of meat in Wales, such as schools and hospitals. I urge them to purchase home-produced products rather than imports.
§ Mr. David Hanson (Delyn)
I am sure that the right hon. Gentleman will welcome the news that I have received today that the Glan Clwyd hospital trust, 265 which serves my constituency, has announced that it will buy only British beef this year. It is trying to secure such products in future years.
§ Mr. Wigley
I welcome that statement from the trust. I heard a similar statement from Ysbyty Gwynedd acute hospital trust when I visited it last week. We need to exert pressure on public service purchasers to buy British beef.
It is outrageous that the Ministry of Defence, which plays its war games over the land of the Welsh farmers, should buy its meat from overseas. That matter caused controversy just yesterday, and I know that it has resulted in incidents in the constituency of my hon. Friend the Member for Ceredigion.
There is a strong feeling that the pound is over-valued and that has had a hard-hitting effect on other sectors as well as agriculture. I believe that over-valuation is a direct result of interest rates that are set too high. Again, that hits farmers with capital borrowings. Farmers are suffering in all directions not only because of what they have to pay for their loans to facilitate their work, but because the high value of the pound also hits exports and encourages imports. The Government should change their economic policy to reduce the parity of the pound, which would help the manufacturers of food products to export as well as improve the position of the green pound parity.
In the meantime, we must try to obtain the maximum benefit possible from the compensation available from the European Union. There is a fund of £980 million of aid on offer over a three-year period; half of that money is payable from the EU whether or not the United Kingdom contribution has been paid.
§ Mr. Richard Livsey (Brecon and Radnorshire)
Does the right hon. Gentleman agree that it is also ironic that British taxpayers have paid out for some of that compensation in their contributions to other countries in the EU? Does he agree that meat exports from the EU are having a hard-hitting effect on Welsh farmers because British taxpayers are subsidising European producers to undercut our domestic market?
§ Mr. Wigley
Yes, that is absolutely incredible. All other eligible EU member states have taken advantage of that benefit package, which, as the hon. Gentleman has rightly said, is partly funded by United Kingdom taxpayers. The message from Welsh farmers to the Government about that EU fund is, "Go for it." That possibility should have been stressed far more strongly in the measures announced in the December package.
The dairy sector is also facing a crisis as a result of the reduction of about 5p per litre in the price paid to many dairy farmers compared with the price paid in the best time last year. No other industry could absorb a cut of such magnitude. The price of some animal feed may have dropped by between 1 and 2 per cent., but other component costs such as transport have increased.
Farmers will be driven from milk production unless there is some change in policy. Young people are just not prepared to enter an industry where long hours, sometimes anti-social ones, are required if the rewards are not guaranteed. They would have to be on the farm constantly, day-in, day-out, week-in, week-out because of 266 their obligations towards their dairy herds. They are not willing to enter such an industry when the rewards are so low—they may just break even.
§ Mr. Lembit Öpik (Montgomeryshire)
Does the right hon. Gentleman agree that it is a source of great concern that the dairy industry, which should be the natural point of entry into farming, is now becoming difficult to join? That is putting off potential young farmers who are failing to come into agriculture. That is causing a crisis because of the aging farming population and the lack of entrants to it.
§ Mr. Wigley
Yes. It means a loss of continuity on family farms. The lack of young farmers also poses an implicit threat to manufacturing organisations that depend on the products of our dairy farms. The manufacturer of cheese in my constituency depends on the milk produced by the local dairy sector. If that sector is undermined there will be a knock-on effect on the manufacturing sector.
The benefits provided by the aid schemes designed to help beef farmers have been drastically reduced. That is partly due to the six revaluations of the green pound in the past 18 months. The benefits of the over-30-months scheme have also been severely eroded by the Government's decision to place a 560 kg weight limit for compensation. Those two factors have reduced the compensation available on an average animal of 600 kg from £513 in June 1996 to just £311 in November 1997—a loss of more than £200 per animal. Again, that has hit the farming community hard.
Let us consider the additional burdens that the Government have specifically and deliberately placed on our farmers. The subsidy on rendering will be phased out and will end on 1 February. That will place an additional £47 million cost on cattle farmers and an additional £25 million cost on sheep farmers. The Government are also placing a duty on the farming industry to absorb the costs of the Meat Hygiene Service with regard to specified risk materials. That will be equivalent to an additional cost burden of £16 million on the cattle sector and £24 million on the sheep sector. In addition, the charges incurred under the cattle movement service—the passport scheme—will place an additional £20 million cost on the cattle sector. The double tagging regulations will place a £3 million burden on the cattle sector. Taken together, those costs account for additional annual costs of £86 million on the cattle sector, which is equivalent to £38 per head of cattle, and £50 million on the sheep sector, which is equivalent to £3 per head of sheep.
In other words, the entirety of the £85 million help for farming announced by the Minister of Agriculture, Fisheries and Food on 22 December has been more than recouped by the Government through higher charges. What a vicious, cynical and double-dealing betrayal of the farmers of Wales—the Government are getting back every penny that they said they were giving to help farmers. No wonder our farmers are angry and no wonder we heard last night of demands at Cross Hands for a change in Government policy. Farmers have every right to be angry: they were landed in a predicament by the failures of the previous Government, and they have had their plight first ignored and then appallingly treated by the present Government. Later today, farmers will be watching closely to see who will bear the costs of the new 267 food safety scheme. Certainly, the general costs should be borne by the general taxpayer, instead of additional costs landing on the beleaguered farmers.
The sheep sector has been hit by the high pound. The exporting of lamb has been one of the big success stories of the Welsh economy in recent years, but that is now jeopardised. Any failure of the export markets leads to a flooding of animals on to the home markets, which drives prices down. This month, lambs are selling at 94p per kilogram, compared to 132p per kilogram 12 months ago. Only yesterday, our former colleague in the House, Lord Geraint, who has great personal detailed knowledge of these matters, told me that, very recently, he bought hoggets for £9.14 each—half the price he would have paid 12 months ago. As a man from Ceredigion, no doubt he saw a bargain when one was put before him, but his experience reflects the problems facing those who are selling and the difficulties in the sheep sector. Those issues must be given attention.
In summary, we want to secure the immediate lifting of the beef export ban and we want an end to the weight limits in the over-30-months scheme. We want the Government to absorb the costs of passport charges and of the Meat and Hygiene Service, which is in the interests of both the general public and farmers. We want the Government to give more aid by bidding for the entirety of the £980 million available from Europe to compensate for the green pound. We want more details to be made available about the December package, so that we know exactly how it is to work.
We want lower interest rates, which will bring down the parity of the pound. We want the Government to bear the costs of the traceability scheme in Wales, as they do in Northern Ireland. We want the Government to give adequate funding for an all-Wales agri-environmental scheme and avoid unnecessary bureaucracy in such schemes.
We also want the Welsh Office to speed up payments for which farmers are eligible—there have been quite inexcusable delays in making payments in recent months, which is adding to the cash flow problems facing many farmers. We want the Government to encourage supermarkets to label clearly the countries of origin of the meat products they sell and to support home-grown food. In any reform of the common agricultural policy, we want to ensure that small family farms are safeguarded through having an upper limit on subsidies—in other words, we want modulation policies to be introduced.
The crisis is of direct concern to me, to my colleagues and to my constituents. Had my grandfather, an upland hill farmer in Montgomeryshire, not died when my father was only five years old, I—or a version of me—might well have been one of the beleaguered farmers in Wales today. I know from family, friends and constituents that unless the crisis is sorted out fast, the whole fabric of rural Wales will be destroyed. The clock is ticking and we are at the eleventh hour. The Minister and his colleagues must respond more positively, more generously and more urgently. I hope that today he can give some hopeful news to the farmers of Wales and that the rural parts of Wales will be able to look forward to better prospects than they have faced recently.
§ Mr. Huw Edwards (Monmouth)
I thank you, Madam Speaker, for granting this Adjournment debate. I congratulate the right hon. Member for Caernarfon 268 (Mr. Wigley) on his well-crafted speech. I shall, first, outline the situation in Welsh agriculture as it affects farmers in Monmouthshire; secondly, consider the short-term measures that were recently announced; and, thirdly, examine the need for long-term strategic measures to ensure a more successful future for agriculture in Monmouthshire and the rest of Wales.
In recent weeks, we have seen peaceful demonstrations by farmers in Abergavenny and Monmouth. I support my constituents in undertaking those demonstrations, as I have supported demonstrations by those concerned about the crisis in education, the national health service and the mining community. We also saw a mass lobby of the House by farmers from Wales and I was pleased to be able to share a platform with the right hon. Member for Caernarfon and the hon. Members for Brecon and Radnorshire (Mr. Livsey), for Ynys Mon (Mr. Jones) and for Ribble Valley (Mr. Evans)—
§ Mr. Edwards
and, of course, with the hon. Members for Meirionnydd Nant Conwy (Mr. Llwyd) and for Montgomeryshire (Mr. Öpik) and all other hon. Members who contributed to that event. That shows that, when there is a national crisis, it is important that we do not indulge in futile political point scoring.
I also pay tribute to the representatives of the main farming unions in Wales for the way in which they have briefed Members of Parliament, for their determined campaign on behalf of their members and for the evidence they submitted to the Select Committee on Welsh Affairs, whose brief inquiry into the crisis in Welsh agriculture is still going on. Like other hon. Members here today, I am honoured to be a member of that Select Committee.
The thousands of Welsh farmers who lobbied Parliament demonstrated their concern about the serious crisis in Welsh agriculture, which will have an impact on the Welsh economy in general and in my constituency. More recently, I addressed a mass meeting in Abergavenny of more than 300 farmers, who asked a wide range of questions, which I have sent to my hon. Friend the Minister. They ask whether consideration could be given again to supporting farmers for the end product, although I doubt whether that is likely to happen; and they want further assurances about the labelling of meat.
As the right hon. Member for Caernarfon said, there is considerable concern about payments overdue from September, October and November, and concern that equivalent payments from the Ministry of Agriculture, Fisheries and Food in England have been made, whereas those from the agriculture division of the Welsh Office have not.
§ Mr. Livsey
I addressed a meeting in Brecon of about 350 farmers. We took a poll of the number of people who had not received suckler cow payments and found that 54 farmers at that meeting had not been paid.
§ Mr. Edwards
I am grateful for that comment. I asked that question of the 300 farmers I met, and a high 269 proportion had not received payments due from last September. That is a matter to which my hon. Friend the Minister should give his attention.
It is important to recognise that although the beef sector has been especially hard hit by the crisis, other sectors of agriculture, including the sheep, dairy and arable sectors, are also affected. I have had meetings in my constituency with the National Farmers Union and the Farmers Union of Wales and with large groups of farmers. I have encouraged farmers to write letters and I am grateful for the briefing material I have received. The evidence is clear and has already been outlined by the right hon. Member for Caernarfon: farm incomes have declined by 47 per cent., and the NFU estimates that they are set to fall by a further 45 per cent. this year compared with 1996.
Many farmers have written to me setting out the facts. According to one farmer, cattle that he offered for sale in Monmouth were priced at £350—a deficit of £170 per beast compared to pre-March 1996 prices. Another farmer from Croesyceiliog sums up the situation, saying:This industry is in dire straits. Countless farmers will be bankrupt—the knock on effect to the industry and the rural community is awesome. Please do something before it is too late.It is my duty to convey that message on behalf of my constituents. At the Abergavenny meeting, one farmer comically announced that, paradoxically, his herd would be worth far more if it had BSE than it is currently worth BSE free. That is a perverse situation and we must seriously address those problems.
The key issues involved in the crisis have already been highlighted: the effect of the high pound making beef imported from European Union and non-EU countries cheaper; the substandard quality of some imported beef, especially beef over 30 months and cow beef; and higher standards being employed in Britain than in other countries. It is amazing that, although countries such as Botswana, Mauritius, Namibia, Paraguay, Poland, South Africa, Swaziland, Uruguay and Zimbabwe may operate far less stringent controls, their meat is imported into this country, while beef produced to high standards here cannot be exported.
If British consumers knew that beef over 30 months old was being imported from those countries they would rightly be outraged. Farmers are right to point out that while the highest standards apply in Britain to eliminate BSE, there is no assurance that countries such as Namibia, Swaziland and Botswana are free of BSE. The matter needs urgent consideration.
How can consumers know what they are buying when there is such inadequate labelling? Surely it is time for the country of origin to be advertised so that the consumer can make an informed choice. As I said to my right hon. Friend the Minister of Agriculture, Fisheries and Food recently, if it is possible for the consumer to know the country of origin of every bottle of wine that they buy, why can they not know the country of origin of every joint of meat that they buy?
I should like to highlight a local supermarket in my constituency, Waitrose in Monmouth, which clearly states that all its fresh beef is British. Unfortunately, the same cannot be said about its lamb, which seems to come predominantly from New Zealand. There is concern among farmers in my area that, apparently, lamb over the 270 age of six months is now regarded as mutton, which affects the purchasing policy of supermarkets such as Waitrose. I should like more clarification on the matter and I hope that we shall seek it from the supermarkets.
I commend some of the statements that my right hon. Friend the Minister of Agriculture, Fisheries and Food has made recently. I commend his unilateral decision on certain beef imports that are not up to British standards. I also commend the £12 million package for Welsh farmers which he announced in his statement in December. That was rather more than I had feared it might be, but not as much as I had hoped for. I welcome the support for the suckler cow sector, which will benefit farmers in my constituency. I also welcome the hill livestock compensatory allowance payments, although they will have less effect in my constituency which is largely lowland. To its credit, Monmouthshire county council has announced that only British beef will be used in its schools and other establishments. It has provided a standard which other public bodies should at least follow.
There is a need for both a short-term and a long-term strategy to restore confidence in the beef market. I hope that Ministers will re-examine the further availability of agri-monetary compensation from the EU. Other countries draw on that fund and it will be important that British farmers are also able to claim their entitlement. We have been asked whether Ministers can review the over-30-months scheme and the weight limit which has been imposed. We have also urged Ministers to look seriously at the issue of labelling.
In addition to a short-term strategy, there must be a long-term strategy, which the industry has lacked. The Government are undertaking a strategic defence review; surely it would be possible to have a strategic agricultural review. It is vital that agriculture has a long-term business plan with a clear role for the Government. There must be clear, long-term agricultural objectives for the Government and the Welsh Office. Clearly, the Welsh Assembly will have implications for the future planning of agriculture.
We need clear, reliable data for long-term planning. We need reform of the common agricultural policy so that it distributes resources more equitably and supports the vital environmental role provided by farmers. I commend the agri-environmental scheme that we have in Wales. It will have to be developed further, and I hope that farmers in Monmouthshire will be able to take advantage of it and see that, in future, that is how they will play their vital role in maintaining the outstanding environment in Monmouthshire and Wales.
We need to consider the assessment of the impact of the negotiations on the general agreement on tariffs and trade. There should also be an assessment of EU developments on the single currency and its impact on farming.
I was impressed by a statement from the president of the National Farmers Union, Sir David Naish, which set out long-term objectives for the industry. Those objectives include producing the bulk of Britain's food supplies and creating an internationally competitive industry in Europe and the world that contributes to the maintenance of the countryside and landscape, plays a full part in Britain's rural economy and provides safe food through responsible and sustainable methods. I understand that my right hon. Friend the Minister is making a statement this 271 afternoon announcing the establishment of a Food Standards Agency. The measure is long overdue and I am sure that it will be commended. I look forward to hearing that statement.
Farmers devote a lifetime to producing food for our people. They deserve a secure future, but can have one only if there is a clear, long-term strategy for the industry. I have focused on the crisis facing agriculture in Monmouthshire, but it is a matter of concern, not just to the farmers but to all those involved with the rural economy.
The decline in incomes in farming will have a multiplier effect which will have a serious impact on a wide range of farming-related industries, including feed suppliers, farm machinery suppliers, rural retailers and the banks. I shall be meeting ancillary farm workers on Saturday to discuss the concerns that they have as a result of the crisis.
The loss of those industries and skills would have a catastrophic effect in my constituency and throughout Wales. I urge the Government to respond effectively and immediately to the crisis facing agriculture. If they do not, the impact on agriculture, the rural economy and the environment will be devastating.
§ 10.5 am
§ Mr. Lembit Öpik (Montgomeryshire)
If I were a farmer now, I would be asking, "What have I had done to deserve this?" What crime has agriculture committed that has caused it to be punished so intensely and persistently as to drive individuals out of the business? What other industry would be expected to deal with such deflation in its income at a time when the certainty of its products being sold within the domestic market cannot be assured?
The beef crisis is not of the industry's own making. Government policy led to BSE, yet farmers are increasingly expected to pick up the tab. The export problems are exacerbated by the amazing and depressing fact that while, in the past, sheep prices often compensated for a decline in beef prices, at present, both prices are depressed in an unrealistic and unsustainable way.
We have already heard talk about the overdue payments. It is simply not acceptable at a time when all farmers are expected to bear the burden of the increasing costs to expect them to wait for what meagre subsidy they have been promised. For example, the persistent expectation that meat hygiene costs must be borne by the producers puts an unacceptable burden on producers who have tried hard to protect their industry.
§ Mr. Livsey
Will my hon. Friend also note the impact of charges on butchers who have abattoirs on their premises? There are two in my constituency, Mr. Eddie Thomas and Mr. Brian George, who are being charged £98 per day and £15.74 per hour. They are paying inspectors £200 a day when the farmers themselves are earning only £10,000 a year, if that—owing to the current prices, they are now on much lower incomes. Does my hon. Friend agree that something has to be done or those small butchers will go out of business?
§ Mr. Öpik
My hon. Friend makes a good point and it serves to highlight the fact that we are discussing not 272 simply the depression of incomes but the survival of those small butchers and small abattoirs. Mr. Hamer, an abattoir owner in my constituency, told me:Due to the strength of the pound we cannot export effectively … Therefore the only way this charge … can go is back down the line to the producer. Now given that the producer's returns are so very low, this further £3.50 is going to cause considerable damage to the rural economy and obviously to this industry".With such onslaughts, it is amazing that the rural economies of Britain—in England, Scotland and Wales—can survive.
In addition, there is uncertainty, with no clear guidance as to the extent and nature of the common agricultural policy reforms. Perhaps most depressing, as the right hon. Member for Caernarfon (Mr. Wigley) said, is the amount of foreign imports that are coming into this country and undermining the one market—the domestic market—on which British producers should be able to depend.
Before Christmas, I visited a hospital where the staff were upset by the fact that they were obliged to serve Argentine beef, New Zealand lamb, French chicken and Danish pork to their patients. It is ironic that, although we can now safely claim that British produce is the safest in the world, our hospital patients and the customers of other public outlets are served imports of more dubious quality.
The consequences, in addition to the general decline of UK agriculture, are obvious: the disintegration of the smallholding structure that serves to prop up rural life in mid-Wales as we know it; the stress on family farms; and the fact that many children on family farms are seriously considering leaving the agricultural world altogether to find a safer and more profitable existence in some other walk of life.
The Government may have forgotten that farmers are not simply breadwinners but guardians of the countryside. The countryside that so many city folk love to visit is protected and nurtured by people who are trying hard to make a living in the process of looking after that countryside.
One consequence that has not been mentioned is rural stress. Rural stress and stress-related illness are at record highs in the countryside; suicides among farmers are at an alarming level. Some statistics suggest that farmers are more at risk for suicide than any other professional group in the United Kingdom.
It is fairly obvious what action we must take. First, it would greatly reassure farmers if they received from the Government not just words of sympathy but real financial support. It is merely a tactical excuse to say that BSE has cost too much. The farmers know that it is expensive, but they depend on the Government to provide serious economic support to ensure that we weather this crisis without the wholesale collapse of the networks that provide for rural life in mid-Wales and throughout the UK.
Secondly, as the right hon. Member for Caernarfon said, we need to be told clearly when we may expect a comprehensive lifting of the export ban. I agree that Northern Ireland is in an excellent position to act as a precedent for a phased lifting of the ban. There is no logical reason why Ulster beef should not be allowed into the European market, and there is no logical reason why that lifting should not form part of a phased lifting of the ban throughout the UK.
273 Thirdly, as the hon. Member for Monmouth (Mr. Edwards) lucidly argued, we must end the nonsense of unclear labelling. When a consumer picks up a package of meat, he or she must be able to tell from the label exactly where the beef, lamb or whatever was reared as well as packaged.
Fourthly, we must provide hope to family farms and smallholdings. That requires financial expenditure, but—equally important—it requires a clear strategic statement by the Government so that people on those farms, many of whom are being snowed under by bills that they cannot afford to pay, have some understanding of where the Government intend to lead them.
§ Mr. Hanson
The hon. Gentleman twice mentioned financial support. How much financial support, on both counts, would he provide if he were the Government today?
§ Mr. Öpik
I believe that the points on financial support have been clearly made by the right hon. Member for Caernarfon, but I emphasise that the important point is a strategic commitment to support the countryside. I shall not start throwing statistics around in a cat and mouse game, because I believe—and I hope that the hon. Gentleman will agree—that this issue transcends party politics. We must provide the people of the countryside with the assurance that we really have a Government who want to create one nation of the countryside and the cities, rather than two nations where the interests of the countryside play second fiddle to those of the city.
I make a heartfelt request that the Government really listen to the advice of those who live and work in the countryside when they represent our interests in Europe. In fairness, there is evidence that the Minister of Agriculture, Fisheries and Food is fighting his corner in trying to lift the export ban, but—as many of us have said and will continue to say—money is available that has not been accessed to try to support economically those who have suffered so much as a result of BSE and the strong pound.
The crisis in agriculture is not the farmers' doing. It is a crisis of the countryside, caused simply by the failure of Governments. I do not specifically blame the current Government, but I would point the finger at the previous Government, who failed to act in a way that preserved the economic sustainability of many farms on which we depend for our rural prosperity.
All farmers ask for is a level playing field. All they want is the knowledge that the Government will back them in their efforts to preserve the country life that has been so important for very many generations.
As a final plea, I ask the Minister for reassurance that there is an opportunity for open dialogue between the Farmers Union of Wales, the National Farmers Union in Wales and the Government, and that the Government are willing to listen to creative solutions and creative ideas from those who have made it their life's business to look after the countryside. With such dialogue, there may be a glimmer of hope that we can make genuine progress in a partnership that will secure the interests of those farmers in dire financial crisis in the short term, and the interests of the countryside that we all love in the long term, in Wales and throughout the United Kingdom.
§ Mr. Chris Ruane (Vale of Clwyd)
I congratulate the right hon. Member for Caernarfon (Mr. Wigley) on securing this important debate, on a subject which will affect thousands of people in Wales.
The crisis in Welsh farming has a knock-on effect not only in the farming community but throughout the rural community and in many related industries. Before Christmas, I met a delegation of about eight workers involved in the ancillary industries, such as feedstuffs, farm machinery, ironmongery and fencing, and in the abattoir and processing industries. I saw the desperation in their eyes and heard the desperation in their voices. They are in crisis; they need help. They should get help from all quarters—from the Government, from the supermarkets and from the general public. We each have a role to play.
After the meeting in December, I promised to write to the UnderSecretary of State for Wales, my hon. Friend the Member for Bridgend (Mr. Griffiths), and the Minister of Agriculture, Fisheries and Food, pleading the case for the wider Welsh farming industry. I promised to write to all the national supermarkets in the United Kingdom—seven or eight of them—and I have had some encouraging responses from some, such as Kwik Save and Iceland. Kwik Save and Iceland are both based in Wales; in fact, Iceland was started by Albert Gubay in my home town of Rhyl. Both those supermarket chains have promised to act positively to help the Welsh farming community.
I also received an encouraging response from Tesco, which is aware of the crisis and has said that it will send one of its top executives to north Wales to listen to the problem. I hope that the right hon. Member for Caernarfon will join me on that visit, and perhaps we can get a delegation of Welsh farmers and the Welsh farming community there to plead our case. We should hold up those positive responses from some supermarket chains as an example to the others, and ask them how they intend to act. Most supermarkets wrote back to say that they were aware of the crisis and were doing this or that—but that is not enough: more can be done.
We need also to look at innovative ways of promoting Welsh farm produce. I ask the Minister to consider the American phenomenon known as farmers markets. They started in California because the farming community there was in crisis. The supermarkets were using their strong position to minimise farmers' profits. So the farming unions asked the supermarkets whether, for one or two days a week, they could use their grounds to sell their produce direct to the consumer, thereby cutting out the middle man. It was a great success, and it has since spread across the whole of America. The idea is going from strength to strength, and we could learn from that. I believe that there is only one pilot project of this type in the whole UK, in Bath. I urge the Minister to establish a pilot scheme for farmers markets in Wales.
The Government have thus far played an important role, and I shall continue to pressurise Ministers to plead the case for Welsh farmers. Some county councils are playing their part, but more pressure needs to be brought to bear to ensure that councils and LEAs buy Welsh meat. Some hospitals are playing their part, too. My hon. Friend the Member for Delyn (Mr. Hanson) has recounted how Ysbyty Glan Clwyd in my constituency has ordered the purchasing group for the whole of north Wales to buy Welsh or British meat.
275 Welsh Members of Parliament must continue to bring pressure to bear to ensure that Welsh farmers and the wider farming community survive this crisis. Without that, the farming industry will collapse, and that will bring devastation to rural communities throughout the length and breadth of Wales.
§ Mr. Ieuan Wyn Jones (Ynys Môn)
I am indeed privileged to be called to speak in a debate on agriculture in Wales. I know that the Minister is well experienced in these matters—this will be the third time since the Government came to office that he has responded to agriculture debates initiated by my party. I thank him for the courtesy he showed my colleagues when we visited him before the announcement was made; I thank him for listening to our concerns.
Farmers in my constituency were disappointed with the compensation package, in the sense that it did not compensate specialist beef producers who finish beef—in other words, farmers who bought their store cattle in the spring and summer and finished them in the autumn and winter. They are the ones who bore the brunt of plummeting market prices. They have not received a penny piece from the compensation package. Perhaps the Minister will recognise these fanners' concerns and see what can be done for them.
The Minister is fully aware of the strength of feeling in Wales, so, rather than repeating points that have been made by my hon. Friends on both sides of the House, I should like to make three or four different points today.
First, I want to emphasise the depth of the crisis resulting from plummeting prices. I want to cite figures given me by the Morgan Evans market in Gaerwen. On 28 November last year, the average price for bullocks was 83.3p a kilo, and for heifers, 83.6p. The prices in mid-November 1996 had been 94.3p and 91p respectively; and in November 1995, 114.49p and 107p. That clearly shows, as my right hon. Friend the Member for Caernarfon (Mr. Wigley) said, a reduction of way over 20 per cent. in two years. There has in addition been a large drop in the price of lamb, from 130p to about 90p—a fall of 40p a kilo. It is the twin effect of the price falls in the beef and lamb sectors which has caused this awful crisis.
Wales is primarily a livestock-producing country, so the impact has been severe. The remarks of the Minister of Agriculture, Fisheries and Food at the Oxford conference, therefore, could not have come at a worse time. He said that he wanted support for the industry to decline even further. There are times to say these things, times when these matters need discussing, but raising them when the crisis is at its deepest was probably not particularly sensitive.
The introduction of new regulations on the exporting of sheep carcases on 1 January has caused immense concern to abattoirs and others involved in the export market. The Minister is well aware that when the industry was consulted about how the regulations should be introduced, certain exporters made the point that if the spinal cord had to be removed from the animal before export, that would cause difficulties with the retailers in France, who wanted the whole carcase. I do not see why the spinal cord cannot be removed in the country where the carcase is received. That should not be a problem, because France operates the same regulations.
276 So provided the spinal cord is removed in an EU-licensed abattoir or other approved establishment, I cannot see any difficulty.
One abattoir in my constituency has laid off 25 people simply because the French refused to accept split carcases. Will the Minister look into that? We need only a small change in the regulations to allow EU-approved abattoirs or cutting plants instead of UK-approved ones.
The Government have introduced a voluntary beef-labelling scheme. Farmers are concerned about the way beef is labelled in supermarkets. It is often labelled "United Kingdom packed", whereas in fact the beef has been imported. The EU is to introduce a scheme in 2000, and the Government have decided on a voluntary scheme until then—but that could let many supermarkets and other retailers off the hook. There will be no statutory obligation to inform consumers properly. If there were a statutory obligation to label beef with its country of origin everyone would know where they stood and consumers would be satisfied that they were buying properly labelled meat.
Farmers are also worried that the labelling scheme will apply only to fresh and frozen meat and to minced beef, and not to meat products. As the Minister well knows, the difficulty often arises not with fresh meat but with added value meat products which are now bought in vast quantities by consumers. I should like the beef labelling scheme for the UK to be compulsory, not voluntary.
As for the purchasing policy of public bodies, the Minister will recall that the first debate to which he responded as a Minister was on that very subject. I realise of course that it is not up to individual stations such as RAF Valley; what matters is the central purchasing policy of the Ministry.
If the Government are serious about acknowledging the depth of the crisis in the industry in the UK, they can do something positive about it. They can ask the Ministry of Defence to change its purchasing policy. The MOD buys vast quantities of beef—it is a big contract. The Minister acknowledged the point in the earlier debate and promised to raise it with his colleagues in the MOD. Can he tell us what progress has been made?
The Minister is well aware of the issues. I hope that he will recognise the depth of feeling throughout the House, and I ask the Government to respond appropriately.
§ Mr. Elfyn Llwyd (Meirionnydd Nant Conwy)
I congratulate my right hon. Friend the Member for Caernarfon (Mr. Wigley) on once again securing parliamentary time to discuss this important matter. I shall be brief, as I know that others wish to speak.
It may be obvious, but I shall restate the fact that the agriculture industry is not a marginal industry. Together with the food industry, it represents some 8 per cent. of the United Kingdom's gross domestic product and 8 per cent. of employment. That is a significant contribution.
The announcement on 22 December was a step in the right direction; it would be churlish to say otherwise. However, huge losses have been suffered by the industry and a great deal needs to be done. Hon. Members on both sides of the House have made important contributions today and offered valuable suggestions, to which I hope the Minister will respond in due course.
277 The question of a retirement package for farmers needs to be looked at again. That is a long-term view shared by our party and others, and we should be working on it.
On the immediate question of the agri-monetary compensation to which such eloquent reference was made, it is a fact that sterling has appreciated by 20 per cent. against the ecu and 30 per cent. against the deutschmark. Therefore, the sum that comes to Welsh farmers is far less than it appears. The value of the output in 1997 fell by a substantial amount because of the appreciation in sterling, creating a huge disparity.
As we know, compensation is available from the European Commission. I cannot for the life of me understand why some of the £980 million is not being applied for. It is being provided in all other eligible member states, and I reiterate the call for the matter to be reconsidered.
As a result of the strength of the pound during 1997, the Government have benefited from an underspend in the sheep annual premium scheme of about £190 million, together with an additional saving of £222 million in the over-30-months scheme.
Greater efforts must be made to lift the export ban. I understand that there is to be a statement on that today, and I hope that it will be the first of many such statements.
As my right hon. Friend said, there has been a weight limit in the over-30-months scheme, which has been unfair, and compensation has been capped, to put it mildly. That is unjustified and unwarranted. I urge the Government to review the scheme and the weight limit, and to ensure that proper compensation—for compensation it is—is paid to those who need it.
On imports of beef, a number of factors are coming together to create the very low returns being experienced by beef producers. Clearly, the strength of the pound is one reason, and the effect of price imports is a major contributory factor. As a result, imports of beef into the UK are considerably up on 1996 levels.
My party believes that it is essential for the Government to ensure that all agricultural produce imported into the UK conforms with the strict conditions relating to farm assurance, welfare concerns, traceability and processing safeguards. We have in Wales and throughout the UK an agriculture industry that is second to none. The same standards should be applied to all imported meat.
The hon. Member for Vale of Clwyd (Mr. Ruane) made some telling points about supermarket chains. I agree whole-heartedly with what he said, and I urge the Minister again to reconsider the promotion of Welsh meat. That important avenue should be pursued more energetically as a means of bolstering the internal market. It could be done quickly and effectively if sufficient investment and effort were committed.
I refer to the hon. Gentleman's remarks about the purchasing policy of some local authorities. I am pleased that purchasing groups within local authorities are beginning to recognise that the matter needs to be addressed. I congratulate my own authority, Gwynedd, on having stuck rigidly for some time to a home meat policy. That should be emulated throughout Wales and beyond. It is an important step forward.
278 I share the concern of hon. Members on both sides of the House at the dramatic fall in income of Welsh farmers. I share the concern, which could easily be allayed, at the delays in processing payments by the Welsh Office Agriculture Department. It is unacceptable that farmers in my constituency have been waiting since August for substantial payments. There is no possible excuse. We have had written responses about some computer or other. It is the same computer that works in England and in Scotland. Payments are made there on the due date, but not in Wales.
In fairness to the Minister, when I saw him before Christmas he took the matter up and I know that he will do his best, but he is fighting a system down at the Welsh Office that needs kicking. I hope that he will get the strength in his foot to do so, and I will assist him if necessary. That is not to say that I am a bovver boy, but action is needed.
This has been an important debate, with useful contributions from both sides of the House. We all unite in calling on the Government to address the crisis urgently. We went part of the way before the Christmas break; let us please look again and do what we can to ensure the strength and well-being of an extremely important industry.
The hon. Member for Montgomeryshire (Mr. Öpik) referred to rural stress. I was pleased to deliver a paper on the subject recently at Gregynog in his constituency. The Welsh Office and the Ministry of Agriculture, Fisheries and Food have it within their power to alleviate the great problem of rural stress, at least in part. I urge the Minister, for I know that he is sincere, to redouble his efforts to put matters right.
§ Mr. Cynog Dafis (Ceredigion)
It is important to emphasise that the present crisis in farming is temporary and intense, arising from BSE and the export ban, and the strength of sterling. The Government have shown themselves slow to respond—indeed, in the autumn they intended not to respond at all. Their response now has been inadequate.
The Ministry of Agriculture, Fisheries and Food is on the record as arguing that it would be wrong to maintain people in farming who should not be there. The retirement scheme has been proposed in that context, to take people out of farming and reduce the numbers in farming in Wales. The proposal has been linked with the issue of environmental sustainability, and I have two comments on that.
First, environmental sustainability requires not fewer people in agriculture, but more. Fewer people in agriculture will lead to environmental loss, not environmental gain. People are needed to maintain and restore hedges, to create natural habitats and to maintain biodiversity. Moreover, cattle as well as sheep are needed on the uplands to promote environmental gain. If we lose people from farming in significant numbers, the countryside will fall into neglect and decay, and we will all be impoverished, including town dwellers who want to visit and walk in a living countryside, not in a decaying countryside.
Secondly, if the Minister wants to see an example of unsustainable agriculture, he should look in the direction not of cattle and sheep producers but of the intensive 279 industrialised systems that produce much of the pig and poultry meat that is so popular. Such systems convert grain to meat in conditions that are very dubious in terms both of animal welfare and of environmental impact. It is astonishing that the output of that production is advocated as being representative of healthy eating.
The awful thing about the present situation is that the most sustainable systems with first-rate animal welfare standards that produce meat from grass in mature animals are being undermined. It is high time that consumer choice was informed with an understanding of those issues. We must project those realities in order to encourage the consumption of healthy meat.
We should bear in mind the fact that BSE and the strength of sterling are temporary phenomena. We all agree that the agricultural policy should be reformed fundamentally—and it must go well beyond what is in Agenda 2000—but it would be wrong to pull the plug on farming when the industry is facing its worst crisis in living memory. The extra money that has been provided will do no more than meet the extra costs imposed on farmers.
If the Government intend to introduce the early retirement scheme, I appeal to them to link it with a scheme for new entrants, as occurs in other EU countries. Those two measures must combine to enable us to begin the process of reconstructing rather than reducing the number of people in agriculture.
By and large, the Minister did not make many enlightened comments at the Oxford farming conference. However, I was pleased to see reports of his remarks vis-a-vis CAP reform that he would consider modulation proposals that could be controlled by member states. He seems to have shifted from his previous blanket opposition to that measure. I hope that the Minister is listening to voices other than those of the NFU in England and the Country Landowners Association. He must heed also the voices of the Farmers Union of Wales, the Sustainable Agriculture, Farming and the Environment Alliance, and the Family Farmers Association.
As to modulation, it would be sensible to link agricultural support with labour units. That would assist the family farm and encourage employment. The policy would be in keeping with the fundamental principle of sustainable development: resource productivity is every bit as important as labour productivity. That will be an increasing policy trend generally, and we could start in the area of agriculture in the near future. If the United Kingdom Government were to take the lead in advocating policy change along those lines, it would be welcomed by the public at large and certainly welcomed in Wales where the family farm, which is largely owner occupied, remains the bedrock of our rural communities.
§ Mr. Nigel Evans (Ribble Valley)
I congratulate the right hon. Member for Caernarfon (Mr. Wigley) on gaining this debate. I have tried several times to secure a debate on this issue that examined the whole of the United Kingdom. As the right hon. Gentleman said, this crisis affects all farming and all aspects of farming in the United Kingdom—from dairy and beef farming to arable, poultry and sheep farming. The crisis has spread down a long chain, affecting suppliers to the industry: suppliers of capital goods, including buildings and machinery, and even feed merchants are suffering.
280 Farm incomes have dropped dramatically—some estimates put the fall at more than 50 per cent. The Government's figures are also alarming, and that has an enormous knock-on effect. Farming is in need of life support and the meaningful existence of the rural economy depends on the industry being given the intensive care that it deserves and needs. As farmers have less to spend, incomes in local areas, local shops and other rural businesses that are dependent on farming suffer. Those incomes will drop also. This is an urgent and dire emergency and, by their inaction, the Government are fast becoming an undertaker to an essential industry that does much more than provide food for our nation.
We have seen farmers in Wales and in other parts of the country moved uncharacteristically to demonstrate at ports, outside supermarkets and in fields around the United Kingdom where our armed forces usually conduct manoeuvres. Farmers want to know whether the Government understand the industry. A farmer in the Ribble Valley wrote recently to a Welsh Labour Member of Parliament about hunting, and received a reply that was more than she had bargained for. I shall not mention the name of the Member of Parliament concerned as I have not written to him, but I hope that the letter is a one-off. It begins:I have many farms in my constituency and I am familiar with the problems and advantages that farmers have. Your address sounds as though a large amount of public money is spent providing roads and other facilities to you.The hon. Member then goes on to address the hunting issue. What an arrogant and totally unnecessary introduction to a letter that displays abundant uncaring prejudice. The letter concludes:Time makes it impossible for me to take up your kind invitation to visit your farm. But I will spend a day at the Welsh Agricultural show next week where I expect to meet many farmers.My constituent should consider herself lucky with that response. Farmers who live in the constituencies of Labour Members should be aware that, if they want sympathy from their Members of Parliament, they had better ensure that their addresses ooze poverty.
The reality for many farmers is that, despite the level of wealth or prosperity their farm addresses may suggest, the evidence will show an industry facing bankruptcy. Some farmers are in daily contact with their banks. That has led the National Farmers Union to initiate an unprecedented campaign. These are unprecedented times, and a petition will be presented shortly to the Prime Minister at 10 Downing street on behalf of the NFU.
The BSE crisis was an appalling body blow to farming initially, and the previous Government responded with a package that gave security and, importantly, time. However, that time is now running out. A recent Welsh NFU press release stated:The rescue package"—for the BSE crisis—put in place during 1996 helped considerably".We all know how difficult it has been for hill farmers recently. According to a recent NFU survey, that has led to more than 55 per cent. of farmers deciding that hill farming is not an attractive career option.
An impressive farming lobby came to Parliament before Christmas. We held three sittings in the Grand Committee Room off Westminster hall, and we still did 281 not see all the farmers present. NFU chiefs told us that if the Government's package was not sufficient to help Welsh farmers, they would be back. That package was announced, and the NFU will return on 20 January. We have rehearsed the problems facing the industry so many times that it is fast becoming a mantra. What is the use of repeating those problems if the Government refuse to provide any meaningful help? Will the Minister tell the House today that the industry is receiving enough assistance? Will he say that he has nothing to add to what has been said already, and that that is that? Will the Minister's words be a death sentence for thousands of farmers who will go bust—in effect, will the Government nail down the coffin lid on the industry?
Several hon. Members have mentioned problems with the compensation package and the green pound revaluation. There have been five interest rate rises since 1 May, and further increases are threatened. That has led to the revaluation of the green pound, the sucking in of imports and the depression of domestic prices. The Government must tell farmers why they refuse to apply for money to help the industry out of this problem.
The £85 million aid package for beef farmers, which was announced just before Christmas, is simply not adequate. It is a one-off payment which is insufficient to counter the lifetime charges and costs that the industry has heaped on it—including hygiene costs, renderers' charges, double tagging, traceability imperatives and measures necessary to assure suppliers and consumers. Those measures are adding to farmers' costs, while prices for the end product are falling through the floor. If the farming industry dies, many other industries will fail as well. As a result, communities will die. It is estimated that every direct farming job generates five others—the chilling reality is that the reverse must also be true.
Lifting the beef ban, which is now 21 months old, would assist the industry greatly. The news today that the Commission will ask for a partial lifting of the ban in Northern Ireland is a step forward. However, before the cheering starts, we must recognise that the Commission is only one hurdle and that many others must be cleared over many months before we see light at the end of the tunnel. The issue of specialised herds with traceability throughout the rest of the United Kingdom must also be addressed.
United Kingdom farmers want to see parity among farmers throughout Europe. The same standards should apply so that United Kingdom consumers know that the quality of the meat that they consume is assured, and that imported meat is of the same high standards as United Kingdom meat. Meat labelling must be examined. As the hon. Member for Monmouth (Mr. Edwards) said, if consumers have information about where their wine comes from, what is the problem with clear labelling of meat? That must be logical. The conning of the public by using fancy words—for example, regarding British minced beef or British beef which has been minced—must stop. There are many forms of misleading labelling. Supermarkets must listen to the plea that is made on behalf of farmers in terms of labelling and the price at which the product is sold in supermarkets. Farmers are receiving lower prices, and that fact should be reflected in supermarket prices.
282 Another area of grave concern is the over-30-months scheme. In March 1996, before the BSE crisis, the average price reported by the Meat and Livestock Commission for a grade 1 cull cow was 95.3p per kilo live weight. That made an 800 kg cull cow worth about £760. Following successive revaluations, cuts imposed by the Government and the introduction of a maximum weight limit of 560 kg, the value of the same animal is now only £311, a loss in value of about £450. Farmers are selling their meat at a loss, and that cannot continue.
I do not understand why the Government cannot take the simple step of lifting the imposition of the maximum weight limit in terms of the compensation that is payable under the over-30-months scheme. A realistic valuation must be placed on the animal.
The beef-on-the-bone announcement, which was made just before Christmas was a disgrace. The Government's handling of the matter was completely over the top. There was no consultation with the industry, and that was quite wrong. Many consumers are asking to be able to buy beef on the bone because they have made a judgment about the risks of catching anything from eating such meat. We must listen to those consumers.
The problems that have been aired during the debate are hitting every part of the farming industry. I shall not repeat what other hon. Members have said, but they have drawn attention to the problems facing the dairy and sheep industries, where prices have collapsed. Imports are increasing and depressing domestic prices, and farmers cannot export their goods. The crisis is hitting everyone.
As has been said, farmers are the custodians of the countryside. If they go, the impact will be felt by everyone. The rural economy is under threat. The Minister has come to the Dispatch Box three times so far to respond to concerns similar to those that have been expressed today that have been raised by Members throughout Wales. We have heard the words before, and farmers will be listening for something that will help them to deal with the problems that they are now facing. Let us not just have words now, Minister; please may we have action?
§ The Parliamentary Under-Secretary of State for Wales (Mr. Win Griffiths)
I, too, congratulate the right hon. Member for Caernarfon (Mr. Wigley) on his success in the ballot and on taking the opportunity to raise matters of current concern to all rural communities in Wales.
We had a constructive debate in November last year when the hon. Member for Ceredigion (Mr. Dafis) introduced a debate on the issues that we are discussing this morning. Since then, my right hon. Friend the Secretary of State and I have met representatives of farming communities on a number of occasions. My right hon. Friend the Minister of Agriculture, Fisheries and Food made a statement to the House on 22 December last year in which he announced that, subject to consultation with the European Commission, the Government proposed to provide additional support to agriculture amounting to about £85 million.
Perhaps I should say at the outset that in the eight minutes that are available to me it will be impossible to cover every point that has been raised in the debate. Therefore, I undertake to write to hon. Members. The Hansardrecord will be scoured and I shall ensure that I respond to everyone who has contributed to the debate.
283 In the United Kingdom as a whole, agriculture represents 2 per cent. of the economy. I recognise that in Wales the figures are different. For example, agriculture represents about 3.4 per cent. of the economy in Gwynedd and 7.5 per cent. in Dyfed and Powys. Agriculture is very important and we are acutely aware of its importance to Welsh communities. It is not only an economic matter, because social and cultural matters are also involved.
Planned expenditure on agriculture in Wales this year is about £260 million. That shows the Government's support for the rural economy, and reflects a major contribution by the taxpayer.
Reference has been made to all the problems and to all the changes on the world scene, which mean that agriculture will have to adapt to meet the demands of the 21st century. We want to tackle the challenges. Reforms will come within the European Union. Market trends will have an impact on the industry. We know that markets are becoming more open to competition from the rest of the world. By and large, our beef, lamb and milk products are sold within the EU at much higher prices than those on world markets. Our market position in the world as a whole is weak and vulnerable. We must tackle the problems of overproduction. We must recognise that consumers are increasingly concerned about health issues, and that concern goes beyond the food that they eat. Consumers are concerned about the welfare of animals and the way in which herbicides and other chemicals are used in the growing of crops. These important environmental issues and long-term trends will not go away.
Against that background, we are looking to fundamental reform of the agricultural policy, but we recognise that that will not happen overnight. As a former Member of the European Parliament, I am acutely aware that the wheels involved grind extremely slowly. There is, however, a clear direction that we must follow. We shall do everything possible to encourage Welsh agriculture to begin to adapt now to ensure that our communities meet the challenges that face them.
My right hon. Friend the Secretary of State and I believe that there is tremendous potential in Welsh agriculture for driving up the prosperity of our rural areas. It may not be a very good time to say this when we are on the verge of a serious crisis, but the chairman of the National Farmers Union in Wales, Mr. John Lloyd Jones, argued in his new year message that the way to keep Welsh farming successful in the 21st century was by producing the best. I whole-heartedly agree with that view. In the Welsh Office, we want to work with farmers to ensure that the best is produced. We want to see Welsh farmers and food processors producing more well-branded premium products that can command premium prices, which will mean a greater value-added element in the food supply chain in Wales. We look to being able to 284 meet consumer concerns. There are potential opportunities in terms of farm-assured and organic productions in Wales and we believe that Wales is ideally suited to take that course.
Today, a White Paper will be published on the Food Standards Agency by my right hon. Friend the Minister of Agriculture, Fisheries and Food. The FSA is an independent agency, which will be protecting the public. I believe that it will meet the public's expectations, restore confidence in our food markets and be of benefit to the industry.
In Wales, we want to ensure that we fully take part in the process that I have just set out and, therefore, our commitments remain strong. I understand the difficulties that the industry is facing at present, especially the beef sector. The additional money—it is additional—will go to many farmers in Wales and it will help to make a difference, even if it covers only some of the extra costs that Welsh farmers have to face.
§ Mr. Wigley
Given that the Minister acknowledged a moment ago that the industry is on the verge of a crisis and given that he has just acknowledged that the December money may go to cover only part of the additional costs placed on it by the Government, will the Government be prepared to look again at how much money will be given to the farmers of Wales and elsewhere to ensure that if the crisis really develops, there will be more resources to help them?
§ Mr. Griffiths
We are hoping obviously that the indications that we have made will help Welsh farming get out of the crisis. There are a number of issues relating to payments, and payments are now coming through. There were problems because the audit system in the Community changed this year and all the computer programs had to be rewritten. Our systems are not the same as those in England and Scotland. However, we are working to reconfigure completely the way in which our payment system works so that in future we will not have these problems.
We are doing all that we can to support Welsh food promotion, about which there has been much publicity recently, and have agreed additional funding to get it through this year. That requires approval from Brussels, because state aids are involved, but we are working on that. We have a number of projects to promote Welsh food. I assure all hon. Members that we are working hard on all these issues. We hope that the lifting of the Northern Ireland beef ban will go through. It has to go to the Community's veterinary committee first and the Council—