Farm Incomes

HC Deb 02 July 1998 vol 315 cc504-6

3. Mr. John Bercow (Buckingham)

If he will make a statement on farm incomes in the year to 1 May 1998. [47158]

The Minister of Agriculture, Fisheries and Food (Dr. John Cunningham)

Total income from farming is estimated on a calendar year basis. In the last year for which figures are available, 1997, total income from farming fell by 37 per cent. in real terms.

Mr. Bercow

I thank the Minister for his answer, but I hope that he does not underestimate the damage that is being inflicted by current policies. What has he to say to Mr. Godfrey Caldwell, who runs a grass-drying business in my constituency? The strength of the pound has slashed the prices of his products by 40 per cent. over the last year, has cut a quarter of a million pounds from his turnover although the same amount of work has been undertaken, and has caused him to make a loss for the first time in his 42-year career in the industry. Does the Minister understand why Mr. Caldwell considers him to be the worst occupant of his high office in living memory?

Dr. Cunningham

I understand—as, I think, does every hon. Member—that the strength of sterling causes problems to farmers, and, for that matter, to manufacturing industry. I also understand—as the hon. Gentleman was a special adviser to the Chief Secretary to the Treasury in the last Conservative Government, I hope that he recalls this—that two thirds of the increase in the strength of sterling happened under that Administration, and not once was one penny of agrimonetary compensation paid.

Mr. Lawrie Quinn (Scarborough and Whitby)

My right hon. Friend will know that the incomes of many farmers have been suppressed because of the legacy of the BSE crisis. Is he in a position to update us on the cattle traceability scheme, which I think will do much to help farmers in my constituency?

Dr. Cunningham

I am grateful to my hon. Friend. It is certainly true that, in addition to the strength of sterling, lower commodity prices have impacted adversely on farm incomes. It is for that reason, among others, that we announced £85 million of agrimonetary compensation earlier this year, and it is also for that reason that the Government have invested £30 million in the establishment of the cattle traceability scheme, which is located in Workington. I shall visit it tomorrow with the president of the National Farmers Union to get an on-the-spot update on progress, but I can tell the House that we are on course for the scheme to be fully operational in September.

Mr. Charles Kennedy (Ross, Skye and Inverness, West)

Following our exchanges at our last agriculture Question Time about the continuing crisis in farm incomes, and the related increase in the number of farmers and their families who are now receiving various social security benefits, does the Minister share my surprise at what was revealed yesterday by the answers to my written questions to the Department of Social Security?

Those answers reveal that the Department has no reliable data on either the number of farmers involved, or the percentage who are in need of state benefits. They also reveal that the Department's figures do not correlate with the Ministry's census figures in regard to the number of farmers in the country.

Will the Minister undertake an urgent inquiry to try to rectify the position? As he is meeting the president of the National Farmers Union tomorrow on other business, will he take this opportunity to tell us in the House—as a means of approaching the farm incomes crisis—whether he shares the NFU leadership's view that early entry into European monetary union would help to alleviate many of the current difficulties?

Dr. Cunningham

In answer to the hon. Gentleman's last point, let me say that the Government have made their position clear. It is interesting to note that the National Farmers Union shares the Government's view of the importance of this issue to farmers—unlike the Conservative Opposition, whose policy continues to be extremely damaging to Britain in general and to farmers in particular.

As for the first part of the hon. Gentleman's question, I have not seen the answers that he has received from my right hon. Friend the Secretary of State for Social Security, but I give him an undertaking that I will consider them urgently. If there is any need to improve the liaison between my Ministry and the Department for Social Security—I acknowledge that there are always opportunities to improve the way in which we perform—we shall certainly do so.

Mr. Alan W. Williams (East Carmarthen and Dinefwr)

Does my right hon. Friend agree with the analogy of bringing a supertanker to a halt, as suggested by my right hon. Friend the Secretary of State for Health? The Government took over an industry that was devastated by the BSE crisis, with farm incomes plummeting since March 1996, and it takes time to stop such a precipitious fall. The decline has now halted and we can look forward to recovery and subsequent growth in farm incomes in the final years of this Parliament.

Dr. Cunningham

My hon. Friend is absolutely right. Farm incomes were in steep decline at the time of the general election. The previous Administration did nothing about it, and certainly never paid any agrimonetary compensation. I share my hon. Friend's hope that we can turn round the disastrous circumstances affecting farmers, and especially livestock farmers and the beef industry, as a consequence of the Conservative Government's abysmal policy failures.

Mr. James Paice (South-East Cambridgeshire)

Is not it time that Ministers stopped blaming BSE for the crisis in agriculture and recognised that BSE has nothing whatever to do with the collapse in milk, sheep or grain prices? Does he recall the Parliamentary Secretary saying at a previous Agriculture Question Time that 50 per cent. of farmers have borrowings? Why, then, do all the agriculture managers of the major banks say that the figure is between 70 and 90 per cent., and that those borrowings are going up by about 8 per cent. overall and 16 per cent. in Scotland? Is it any wonder that farmers throughout Britain think that the Government do not know and do not care?

Dr. Cunningham

The hon. Gentleman's synthetic anger is misplaced. If he talks to beef farmers, he will find that they really do think that the ban on their product resulting from the previous Government's failures is one of the biggest problems that they face; they say that repeatedly. The information that we get from the banks is very different from the figures that he has just cited.