§ [Relevant documents: ECD No. 10934/97 relating to the common organisation in the market in beef and veal; ECD No. 13380/97 relating to agricultural production methods compatible with the requirements of the protection of the environment and the countryside; ECD No. 13111/97 relating to a Community aid scheme for forestry measures in agriculture; ECD No. 5102/98 relating to the second Commission report on the functioning of the ewe premium; ECD No. 5733/98 relating to the common organisation of the market in raw tobacco; ECD No. 5939/98 ADD 1, 2 and 3 relating to the prices for agricultural products ( 1998/99); ECD No. 6752/98 relating to measures and compensation relating to appreciable revaluations that affect farm incomes; and ECD No. 7072/98 relating to the granting of aid for the production of olive oil.
§ Mr. Deputy Speaker (Mr. Michael Lord)
I have to inform the House that Madam Speaker has selected the amendment in the name of the Leader of the Opposition. Also, Back-Bench Members' speeches will be limited to 10 minutes for this debate.
§ The Minister of Agriculture, Fisheries and Food (Dr. John Cunningham)
I beg to move,That this House takes note of European Community Document No. 7073/98 relating to reform of the Common Market Organisations for beef, cereals and milk and for the development of rural development policy in the European Union, and the Second Report from the Agriculture Committee, Session 1997–98, 'CAP Reform: Agenda 2000' (HC 311) and the Government response thereto (HC 719); and supports the Government's intention to negotiate an outcome which takes account of the interests of UK producers, consumers and taxpayers alike and of developing countries and to press for a reformed Common Agricultural Policy with substantially reduced overall costs, which is more economically rational, which reduces the bureaucratic burden on farmers, which provides a better framework for targeted environmental and rural development support, which contains fair and common rules to ensure that the UK's farm and food industries can exploit their competitive advantage in European and world markets, which facilitates the accession of associated countries and which offers the medium-term prospect of benefits to developing countries.The debate is about Agenda 2000 reform of the common agricultural policy and related matters, but no doubt other issues will arise during our exchanges. Reform of the CAP is an important issue, not only for farmers, but for consumers, taxpayers and the environment. The Government are determined to see progress in these matters—indeed, enlargement of the European Union to the east, and the next round of World Trade Organisation negotiations make change essential, even inevitable. The Government's stance is generally shared by the National Farmers Union, the Country Landowners Association, the Liberal Democrats, many consumer and environmental organisations, and, in some respects, I am pleased to say, by Her Majesty's official Opposition.
During our presidency, we have given the reform negotiations a powerful start. A special Agriculture Council in March launched the debate. The presidency then initiated intensive technical examination of the proposals in Brussels, which continues. In Newcastle upon Tyne last week, Agriculture Ministers from all member states held a thorough debate on the subject of livestock farming in environmentally fragile areas, such as our own less-favoured areas.
The Labour Government continue to take a lead in Europe, unlike the Conservatives, whose posturing while they were in government did untold damage to British 1131 interests and to our farmers' interests. Judging by the speech by the Leader of the Opposition this week, they still have not learnt any lessons on Europe. We believe that it is better to influence the debate while it is happening, rather than stand on the sidelines sniping; only then can we ensure that the views of our country and of our farmers and rural communities are effectively represented.
A further discussion of the Commission's proposals at the Agriculture Council next week will enable initial conclusions to be drawn and impetus given to the continuing negotiating process. Our work provides a sound basis for agreement to be reached, probably in the first part of 1999. The Government have argued for reforms that will be less costly overall, which encourage a more competitive, sustainable agriculture, and which are fair to British farmers and enhance the rural environment and rural economy.
We have welcomed the Commission's general proposals. The proposed substantial cuts in support prices will save British consumers some £1 billion a year. They will encourage a more market-focused response from farmers and improve competitiveness on world markets. The proposed rural development regulation will create a welcome new framework for promoting agri-environmental measures and rural development. Farmers will receive compensation for the price cuts, and will benefit from the effective ending of compulsory set-aside.
However, the proposals do not meet all our concerns; nor do they go as far in some respects as we would wish. The initial costs of compensation payments are high, and the Commission has made no proposal for those payments to be time-limited, degressive and decoupled from production, as we believe they should be. It is also by no means clear that the proposals are sufficiently radical to permit successful enlargement of the European Union; nor might they be sufficient for the Union to avoid challenge in the forthcoming round of negotiations within the World Trade Organisation.
§ Mr. David Curry (Skipton and Ripon)
The right hon. Gentleman said a moment ago that it was Government policy not to stand on the sidelines but to be part of the debate while it was happening, but it was reported this morning that the Prime Minister told Mr. Rupert Murdoch that the Labour party would not commit itself either way to the single currency at the next general election. Is that true, and, if so, is that being part of the debate or standing on the sidelines?
§ Dr. Cunningham
I do not believe that that newspaper report is true; nor is it relevant to what I was saying. However, let me say that both my right hon. Friend the Prime Minister and my right hon. Friend the Chancellor of the Exchequer have made the Government's position on the single currency absolutely clear. Incidentally, our position on that matter is supported by the National Farmers Union, unlike that of the Conservative party.
To return to the subject of reform of the CAP, the proposed dairy price cuts are insufficient to enable milk quotas eventually to be abolished. We shall press hard for arrangements permitting a quota-free regime after 2006, although that is a desperately late time for the changes to 1132 be made. In the meantime, I am not prepared to accept increases in milk quotas that discriminate against our efficient, competitive British dairy farmers, as the current Commission proposals would do.
§ Charlotte Atkins (Staffordshire, Moorlands)
Is my right hon. Friend aware of the devastation caused to dairy farmers in my constituency by bovine tuberculosis? Since January, there have been 46 new outbreaks, with farms closed down. Will he tell us what progress is being made on the implementation of Krebs and the identification of new hot spots, as that is crucial to dairy farmers in my patch?
§ Dr. Cunningham
My hon. Friend raises a matter which is important to dairy farmers and to the nation generally. We are aware of the outbreaks in dairy herds, although, fortunately, they remain at a relatively low level. We have given a clear statement of our acceptance of the principles of the Krebs report—an investigation quite properly set up by the previous Administration; and we have set up an expert group under Professor John Bourne to advise how matters may be taken forward in that respect. We shall move with all possible speed consistent with accepting and having available to us the best scientific advice, but we know that the problem is an urgent and serious one which affects many dairy farmers, and we shall act as quickly as possible.
§ Mr. Michael Jack (Fylde)
Before the right hon. Gentleman leaves the subject of milk quotas, will he tell the House, in the light of his request to the Agriculture Council in respect of the 30 per cent. cut in intervention prices, what increase in milk quotas he will now press for in order to compensate our farmers?
§ Dr. Cunningham
As the right hon. Gentleman knows, the Commission proposals envisage a 2 per cent. across-the-board increase in milk quotas for those member states which "have mountainous areas". With that very phrase, six member states, including the United Kingdom, are totally excluded from the proposals, and I regard that as arbitrary and unacceptable. We have made our position absolutely clear and shall continue to oppose the proposal on that as well as other grounds.
We will not accept a ceiling on farmers' payments which is applied at EU level and therefore takes no account of this country's larger and more efficient farm structure. If there are to be ceilings, they must be a matter for member states and member states alone to decide. In that event, it would be logical for any savings to remain available to the member state to finance agri-environmental and rural development measures, and not, as is envisaged, for savings to be returned to the CAP general fund for redistribution.
Improving the rural environment is an important component of the reforms. Cutting support prices should bring environmental benefits in many areas—for example, where it leads to reduced use of agro-chemicals. The rural development regulation will form an important new environmental pillar of the CAP. It will be important to ensure that measures under that regulation are not limited to farm-based activities, but can be used to foster a wide range of rural development activities to enable rural communities to prosper.
§ Mr. Tim Collins (Westmorland and Lonsdale)
The right hon. Gentleman is referring to the idea of reforming 1133 the CAP in the direction of transferring subsidies towards rural development. In that context, can he say anything about the proposals, which we believe are being discussed in Whitehall, to restructure the Ministry of Agriculture to become a rural affairs Ministry of the sort that the Select Committee on Agriculture recommended?
§ Dr. Cunningham
The hon. Gentleman tempts me, but the answer is no; I cannot say more than I have said—that matters are being considered. However, ultimately, decisions on reorganisation of Whitehall responsibilities are determined by the Prime Minister. No such decision is about to be announced.
I return to changes in the CAP. The Government's policy is ultimately to phase out direct production-linked support, and use some of the savings to reinforce the new rural development pillar. We believe that that is the best, most cost-effective, way to secure further environmental benefits.
The negotiations on CAP reform will inevitably continue for some months before they reach conclusions. Throughout those negotiations, I shall press for reform in the interests of farmers, consumers, taxpayers and the environment. They are, of course—
§ Dr. Cunningham
No; I shall not give way at the moment.
There are many other important issues confronting British agriculture, both in Brussels and at home.
As everyone recognises, British farmers have been going through an especially difficult time, due principally to the strength of sterling and the continuing ban on the export of British beef. While acting within necessarily tight budgetary constraints, we continue to discuss these issues in partnership with farmers and their representatives, to ensure that the Government, wherever possible, can provide the best possible framework of policies to assist our farmers.
§ Dr. Cunningham
No; I am not giving way to the hon. Gentleman.
I shall say something about changes that we can make while discussion about CAP reform continues.
§ Mr. Edward Leigh (Gainsborough)
Will the right hon. Gentleman give way on the subject of exchange rates?
§ Dr. Cunningham
No; I am not giving way to the hon. Gentleman at the moment.
I know that specified risk material controls have had an especially heavy impact on the returns of our sheep farmers, and have caused them difficulties in the sale of cull ewes. Those difficulties have been brought to my attention by hon. Members on both sides of the House, including my right hon. Friend the Secretary of State for Wales, and I undertook to inquire into how we might help. As a result of the requirement for ewe carcases to be split 1134 in abattoirs or cutting plants, and the spinal cord removed, French demand for whole carcases has been taken up by producers in other countries.
Following those representations from Liberal Democrat Members and other individual Members of Parliament, I and my officials have discussed with the French authorities whether they would agree to changes in that trade, and I have decided, since they have agreed, to amend our SRM regulations so that our producers may regain a share of that market. It will be necessary to continue to ensure that spinal cord is removed from the carcases before the meat is sold, but, by agreement and negotiation, we have reached a deal whereby that can be done in designated French abattoirs.
Depending on the outcome of the statutory consultation, which I am obliged to undertake, with interested organisations on our proposals to amend SRM rules, it should be possible for exports of whole ewe carcases—by which I mean ewe carcases from which the head has been removed—to resume this summer. I know that that will be welcome news to sheep farmers throughout the United Kingdom. [HON. MEMBERS: "Hear, hear."]
I now discuss another aspect of negotiations, on an important measure—agrimonetary reform. An important negotiation we face now, and throughout the remainder of the year, concerns the new agrimonetary system needed to take account of the single currency. That will provide an opportunity to secure a more transparent system, less costly to taxpayers and consumers, and less complicated for business. At the same time, it will be important that the new arrangements are fair to all parties, whether or not their country is part of the single currency. We shall also want to ensure that the transition to the new arrangements avoids excessive shocks for farmers and others in related businesses.
In the meantime, at the April Agriculture Council meeting, we secured a continuation of the freeze, so that CAP payments will not, in the main, be affected by currency movements until the end of the year. I believe that that, too, is good news for our farmers, but, of course, there are difficult negotiations to conclude.
§ Mr. Leigh
Representations have been made to me, as a rural Member, about the strength of the pound, which is costing farmers £300 million a year. They have asked me to urge the Minister to press Brussels for the introduction of transitional compensation arrangements. Will he comment on that and reply to the National Farmers Union case on that point?
§ Dr. Cunningham
In so far as the hon. Gentleman is speaking about the transition to new agrimonetary arrangements, I have just mentioned them. I understand the justified concern of the hon. Gentleman's constituents and farmers. It is important that we get this matter right. As I have just assured the House, we shall do everything we possibly can in the negotiations to achieve that objective.
I shall now focus on the continuing problems caused to our livestock producers as a consequence of the BSE crisis and the beef ban. As we all know, that is a major issue for all our beef farmers, throughout the United Kingdom.
We have made an important breakthrough with the decision enabling beef to be exported from Northern Ireland under the export certified herds scheme. During 1135 April, the European Commission's inspectors visited Northern Ireland. Earlier this week, they informed the Standing Veterinary Committee that they were largely content with the arrangements that they had seen were in place in Northern Ireland. I understand that the Commission intends next Wednesday, 27 May, to adopt a decision that would allow exports of beef from the Province to resume from 1 June. [HON. MEMBERS: "Hear, hear."] That is excellent news for Northern Ireland farmers, and for the Northern Irish economy as a whole.
§ Mr. Richard Livsey (Brecon and Radnorshire)
I wonder whether, in that context, the right hon. Gentleman would comment on his progress on the date-based scheme for beef cattle to be exported.
§ Dr. Cunningham
The next paragraph of my speech deals with that. The hon. Gentleman obviously has a reasonable crystal ball, as well as farm management expertise.
We have made good progress on negotiations on the date-based export scheme, which I recognise is of far greater significance to our farmers than the progress made in relation to Northern Ireland. However important it was to solve the Northern Ireland problem, the date-based scheme will apply to all animals born after 1 August 1996, and apply throughout the United Kingdom. The scheme would permit the export of meat from animals born after that date—the date from which we believe there was no risk from contaminated feed.
The scheme that we have proposed has strict rules, designed to take account of the only known source of infection after that date—maternal transmission—and we have proposed an offspring cull as part of the proposals. My officials and I have been working very, very closely with the Commission on this. As a result of our most recent negotiations, we expect a proposal on the lines that we have suggested to be tabled for discussion by the Commission very soon.
I would not want to mislead the House: subsequent negotiations on that proposal will not be easy—I have no illusions about that. We finally secured support for the Northern Ireland scheme by 11 votes to two, with two abstentions. I should be happy if we could repeat that outcome, but I believe that, this time, it may be more difficult. Nevertheless, we shall use all our endeavours to secure a positive result.
The scheme is soundly based and robust. It can be effectively managed. Our beef is more rigorously safeguarded than that produced anywhere else in the world. I am sure that our industrialists and farmers, and our meat industry, will do everything possible to comply with the scheme. They have suffered long and hard as a result of the BSE crisis and the export ban. I hope that the Government can count on the support of everyone in the beef industry, and in the House, in reaching the next important milestone in the lifting of the ban.
§ Mr. James Paice (South-East Cambridgeshire)
I am sure that we all wish the Minister well in his efforts to get the date-based scheme into operation. On the assumption that he will sooner or later be successful, many farmers 1136 are asking whether it will lead to an unwinding of the over-30-months scheme as new cattle come into the frame.
§ Dr. Cunningham
The OTMS is an important safeguard, and is strongly supported by the Spongiform Encephalopathy Advisory Committee. One can see that, if the date-based scheme is accepted, it would seem logical that animals born after 1 August 1996 may not have to go into the OTMS. We may therefore see the beginning of the end of that scheme, but I stress "beginning". With the livestock sector as it is, animals will go into the OTMS for some considerable number of years.
§ Dr. Cunningham
In a moment.
I want to make it clear that I would have to secure the agreement of the Commission and of SEAC before I could make any such change to the scheme.
§ Mr. John Swinney (North Tayside)
I want to go back to the Minister's point about securing agreement on the date-based scheme among our European partners. What will be the principal obstacles to persuading representatives of other countries that the features of the scheme are as strong as possible?
§ Dr. Cunningham
I can answer the hon. Gentleman with a single word—politics. There is no valid case on the basis of medical or veterinary science for preventing support for the scheme. I have said that repeatedly, not only in the House, but in the Council of Ministers. We have gone to extraordinary lengths to fulfil our obligations under the Florence terms and to ensure that our beef is safe to eat. I reiterate my firm belief that there are no safety, health or veterinary science grounds on which the scheme should not be accepted.
§ Dr. Cunningham
I will give way once more, to the right hon. Gentleman who is my constituency neighbour, but that is the lot.
§ Mr. Maclean
I am grateful to the right hon. Gentleman.
I listened carefully when the Minister said that there might be circumstances once the date-based scheme is up and running in which it might be possible to eat away at the OTMS. Will he consider specialist beef herds, such as dexters, Galloways and others, in which there have been no—or very few—cases of bovine spongiform encephalopathy? Perhaps they might be first in line.
§ Dr. Cunningham
The special arrangements of the beef assurance scheme are already there if producers want to take advantage of them. It was introduced by the previous Administration, and I am disappointed that there has not been a better take-up. I emphasise what I have 1137 already said: the ending of the OTMS is not something I can simply do with a stroke of a pen, and I have properly qualified our ability to move forward on that.
We have made good progress in creating a computerised cattle tracing system for Great Britain. It will become operational in September and will record the birth, movements and death of all cattle moving into the national herd from late September. Holding details on cattle on a central database will provide swift and accurate information to help trace animals easily if there is a disease outbreak and it will give greater assurance to buyers and consumers about an animal's history.
The new system is an essential part of rebuilding confidence in British cattle and British beef, at home and abroad. We recognised that and began implementation as soon as we came to office. We took an early decision about the site for the new service that will run the cattle tracing system. That site is ready and the equipment has been delivered and installed. Some staff are engaged in test runs and more are being recruited, including a number of Welsh-speaking staff so that farmers from Wales may communicate effectively in their own language with the centre at Workington.
Over the next few months, there will be intensive testing of the new system before it is launched. We have already demonstrated the scheme with an audiovisual presentation to other European Agriculture Ministers at the recent informal Council in Northumberland. We were fortunate to host the Council and to be able to make the presentation.
The audiovisual presentation was followed by a practical demonstration at Park farm, Alnwick, of live animals being electronically tagged; then the food chain was followed right through to a meat counter that we had installed with the help of the Meat and Livestock Commission. That showed the absolute traceability of beef that was bar-coded, down to portions for sale in a butcher's shop or on supermarket shelves. It was an excellent bit of work, and I congratulate all involved, including staff of the Ministry of Agriculture, Don Curry, the chairman of the Meat and Livestock Commission, and, last but by no means least, Tim Mallen of Park farm, who showed unfailing courtesy and patience over months of visits from my staff and me to ensure that everything possible was being done to convince our European colleagues of the scheme's effectiveness.
§ Mrs. Ray Michie (Argyll and Bute)
I welcome, as I am sure we all do, the fact that the headquarters at Workington will have Welsh-speaking staff to assist Welsh farmers. Will it also have Gaelic speakers to assist Gaelic-speaking farmers?
§ Dr. Cunningham
We will probably have a few Geordie speakers, too. I shall look into the possibility. In the interests of efficiency, of course, we would much prefer electronic communication with the centre, but we recognise that that is not yet possible for all farmers.
Let me turn to a more difficult issue, which, although not strictly speaking directly to do with CAP reform, has to do with management of MAFF. It relates to the Central Science Laboratory at York and Norwich.
The health and well-being of consumers and the protection of the environment are, as everyone knows, at the top of our agenda domestically, in the CAP reform 1138 negotiations and elsewhere. In Britain, the Central Science Laboratory, which is an integral part of MAFF, provides essential scientific and technical services in support of those objectives.
However, I inherited a very unsatisfactory financial situation. As the design of the CSL's new laboratory at York was approved, the Department's research and development budget has been reduced. The budget has also been subject to heavy and increasing demands from BSE-related research, an area in which the Central Science Laboratory is not involved. As a result, the modern facilities at York have been under-utilised. That was the set of circumstances which I inherited from the previous Government.
Against that difficult background, I have been reviewing the previous Government's decision that the CSL should continue to operate on two sites—principally the York site, but also a smaller presence at Norwich. In order to ensure a more secure future for the agency and a better return from the investment in the excellent facilities at York, I have decided, after long and detailed consideration, that the work done at CSL Norwich should be relocated to the York laboratory. The relocation will be completed during 1999.
Consolidation of the Central Science Laboratory at York will produce a unique and financially robust centre, with strengths throughout the food chain. It will improve the CSL' s ability to compete for public and private sector work, and will strengthen its position as a world-class scientific facility. I know that this announcement will be as welcome in York as it will be unwelcome in Norwich.
§ Dr. Cunningham
If I did not announce the decision to the House, I would be criticised and there would be points of order because I had not faced hon. Members and made the announcement in the Chamber. I advise the Opposition to keep quiet and stop whingeing.
§ Mr. Deputy Speaker
Order. It is entirely a matter for the Minister from whom he takes interventions.
§ Dr. Cunningham
I hope that the hon. Gentleman is not complaining that I have not given way sufficiently during the debate.
I understand and respect the vigorous, sustained and continuing campaign of my hon. Friend the Member for Norwich, South (Mr. Clarke) on behalf of his constituents, and I pay full tribute to him for that. I have met him 1139 several times on the subject, we have corresponded regularly, and my hon. Friend the Minister of State has answered innumerable questions from our hon. Friend.
I also understand the consequences of the decision—the upheaval for staff and their families. More welcome news was announced yesterday by the Government: the Institute for Food Research will relocate to Norwich, so that will be some compensation.
§ Mr. Charles Clarke (Norwich, South)
I thank my right hon. Friend for his kind personal remarks. I pay tribute to the way in which he and my hon. Friend the Minister of State have tried to deal with the matter in an open way. However, the entire food science community will regret that shoddy decision, which will damage food science research in this country.
I acknowledge that it was an extremely difficult decision for the Minister, but I believe that it would have been better to wait for the establishment of the Food Standards Agency before taking such a destructive decision, particularly as it was taken for the bureaucratic reasons that he set out, to fill a laboratory that is a white elephant. As he said, it was an inherited—
§ Dr. Cunningham
I understand my hon. Friend's strength of feeling on the subject, but it is certainly not a shoddy decision. It is a decision in the best interests of the long-term viability of the Central Science Laboratory, although I understand that it is controversial.
§ Mr. Hugh Bayley (City of York)
The decision will be warmly welcomed in York. We already have a community of 1,500 bioscientists, who have a combined research spend of £80 million a year. Although the decision was difficult, it was the right decision for British science, MAFF and the farming community.
I, too, thank my right hon. Friend for the careful and patient way in which he has listened to arguments from me and from other hon. Members, including my hon. Friend the Member for Norwich, South (Mr. Clarke), and I hope that he will continue to listen carefully to the York case for building on the Sand Hutton site to allow additional work on novel foods, and a seedbed for small bioscience businesses.
§ Mr. Owen Paterson (North Shropshire)
On a point of order, Mr. Deputy Speaker. We have three hours to debate the reform of the CAP, which is a matter of great interest to the constituents of Conservative Members, but the debate has degenerated into a private discussion among Labour Members about where a quango should be located.
§ Mr. Deputy Speaker
This afternoon's debate can cover a wide range of topics, and that is exactly what the Minister is doing. Points of order only take time out of the debate.
§ Dr. Cunningham
I am grateful, Mr. Deputy Speaker.
1140 The distinguished scientists at York, in a leading institution established by the previous Government, will take careful note of the derogatory description of them and their institution by the rather foolish and ill-informed hon. Gentleman who just introduced a bogus point of order.
I want to move on quickly—
§ Dr. Cunningham
I am not giving way any more. [Interruption.] Opposition Members have just complained about shortage of—
§ Dr. Cunningham
I shall move on quickly to farm health and safety issues, which I raise in discussions in Brussels as well as in the United Kingdom
Health and safety on the farm is an area where we must all work for major improvements. Everyone has a right to a safe working environment. We should devote more time to discussion of these matters, whether in the context of CAP reform or elsewhere, because of the appalling record.
I recently asked the Health and Safety Executive to brief me on the agricultural industry's safety record. I am deeply concerned that agriculture has one of the worst health and safety records—
§ Mr. James Gray (North Wiltshire)
On a point of order, Mr. Deputy Speaker. The Minister has been speaking for some 40 minutes, and is moving on to a new subject that has nothing whatever to do with the subject that we are supposed to be debating.
§ Mr. Deputy Speaker
I have explained that the debate can range widely. I have also explained to hon. Members that points of order take time out of the debate. We have had far too many points of order.
§ Dr. Cunningham
I am grateful, Mr. Deputy Speaker.
The record shows that, since 1986, 620 people have been killed in farming, and thousands more have been seriously injured. I have made it clear that that is unacceptable and I welcomed the Health and Safety Executive's confirmation that safety in agriculture is now one of its highest priorities. The HSE outlined a range of measures that it is taking, which I welcomed. The Government have allocated the HSE an extra £4.5 million for 1998–99. The money is being targeted on inspection and enforcement, with agricultural safety a key priority.
I shall deal briefly with the amendments on the Order Paper, starting with that in the name of the Leader of the Opposition and his right hon. and hon. Friends.
My first observation is that the amendment is twice as long as the motion tabled by the Government. That tells us something about the verbosity of the Opposition. Secondly, it refers to farm incomes and the difficulties faced by farmers. We know that those difficulties did not 1141 start on 1 May last year. We have no better authority for that statement than the right hon. Member for Fylde (Mr. Jack), who stated in his election address:I have fought for Fylde farmers during a very difficult time"—the very difficult time being 18 years of Conservative government.
The amendment goes on to refer to rising unemployment in rural areas, when in fact unemployment is falling in rural areas, including the right hon. Gentleman's constituency. According to the Rural Development Commission figures, rural unemployment as a whole has fallen by almost 4 per cent. since July last year.
In the amendment, the Conservatives—as ever—complain about CAP reforms costing more money, yet they call for British taxpayers to pay more agrimonetary compensation. They call for reform of the CAP, yet oppose the extra short-term costs that that entails. They call for the Government to get the best from the reforms in European negotiations, yet the Conservative party is increasingly dominated by Eurosceptics who refuse to deal with anyone in Europe.
In view of the time, I can be much kinder about the amendment standing in the name of the Liberal Democrats.
We shall lead the debate in Europe through the Agenda 2000 reforms, so that our farmers are well placed to take advantage of the changes. Reform of the CAP to bring about a more market-oriented and environmentally positive policy is widely recognised by farmers as being in the industry's long-term interests. It is also in the interests of our rural communities and of the economy more widely. My aim is to help bring about such reform. It is the way to secure profitable, competitive and sustainable farming in the United Kingdom. I urge the House to support the Government motion, and to reject the Opposition amendment.
§ Mr. Michael Jack (Fylde)
I beg to move, as an amendment to the motion, to leave out from '(HC 719);' to end and add:'albeit against the background of the Government's failed stewardship of British agriculture which has seen farm incomes plummet by 45 per cent, a rise in rural job losses, and a failure to utilise fully all the resources available to the Ministry of Agriculture, Fisheries and Food for the benefit of farmers; urges the Government to negotiate an outcome that works to the advantage of Britain's efficient farming industry as well as to the interests of United Kingdom producers, consumers and taxpayers, and of developing countries and to press for a reformed Common Agricultural Policy with substantially reduced overall costs, which does not act against farms larger than the European average, which is more economically rational, which reduces the bureaucratic burden on farmers, which provides a better framework for targeted environmental and rural development support, which contains fair and common rules to ensure that the United Kingdom's farm and food industries can exploit their competitive advantage in European and world markets, which facilitates the accession of associated countries and which offers the medium term prospect of benefits to developing countries; but regrets the fact that, so far in the discussions on Agenda 2000, the United Kingdom Government has not advanced proposals designed to allow Britain's farming industry to realize its full potential under the revised arrangements.'.Hearing the Minister of Agriculture, Fisheries and Food come to life is a bit like watching his beloved Newcastle United: they only show any fire in the last five minutes of a game. I wish that the Minister's presentation had been 1142 a bit more lively at the beginning, because there are many issues that we wanted to raise with him. I welcome the Minister's opening remarks, particularly his comments about cull ewes which will be widely welcomed by those in the sheep trade. It is a matter of concern, and I congratulate the Minister on making a breakthrough in that area. I thank him also for at last having the candour to admit what the real timetable is likely to be for lifting the beef ban. I recall Labour's rhetoric during last year's election campaign about how it would lift the beef ban. Judging from the Minister's comments, that will take about two years—but at least farmers now know the true situation.
§ Mr. Jack
No, not at this stage. I must make progress, because, unlike the Minister, I do not want to speak for 40 or 50 minutes.
The Minister's careful and measured tones throughout the majority of his speech could not hide the real crisis in British farming. We have seen a textbook exhibition of complacency on the part of the Minister in responding to the real concerns of farmers and growers in this country. I am delighted that the Minister has found time to come to the House after a year in office at least to discuss agriculture. It is a pity that some of his Ministers cannot find time to join me when I meet real farmers at the Devon county show tomorrow. Lord Donoughue is in Devon, but he refuses to meet farmers. We shall hear the true and authentic voice of British farming when we are out and about at the agricultural shows.
This debate will enable us to see in stark terms how hard the shoe is pinching in rural Britain as a result of the way in which the Government have conducted their stewardship of their farming responsibilities. The rural economy in this country is really suffering. For some who are listening to the debate, Agenda 2000 will seem a distant prospect because farmers and agribusinesses are going to the wall now. We shall say more about that later in the debate.
The debate will also give the House an opportunity to assess whether the Agenda 2000 proposals will allow Britain's efficient farmers to prosper in an ever more competitive world or merely do the minimum required to get the World Trade Organisation off our backs. As I said a moment ago, the harsh reality of farming today in this country—which the Minister did not want to talk about—is illustrated by the Ministry's own figures. Farm incomes fell last year by 45 per cent. and the value of farming output fell by £1.9 billion. The value of subsidies was down by £322 million, including the hill livestock compensatory allowances which are so vital to the Minister's farming constituents, and which were cut by £35 million. Farmers also know that price fixing for next year—consideration of which is part of the debate—offers them little prospect of additional help or relief.
§ Mrs. Campbell
Is it not true that current farm incomes are at about the same level as they were more than a decade ago in 1985–86? Can the right hon. Gentleman confirm those figures?
§ Mr. Jack
The hon. Lady should try convincing real farmers that that kind of retrospective analysis has any 1143 relevance to their current situation. That is typical of Labour's lack of understanding, lack of sympathy and lack of appreciation of the real problems facing farmers. In any event, I think that the hon. Lady has cited cash figures rather than real figures.
As if that is not enough, farmers have had to face the endless uncertainty surrounding the lifting of the beef ban. The Minister has today removed a little of that uncertainty, but we clearly do not know what other member states will say. I have received letters from the Danish and German Ministers asking questions about the procedures that we have in place. I hope that they were convinced by the Minister's display. If it was as good as he says, let us hope that they will stop prevaricating, agree that we have met the Florence agreement terms and lift the beef ban once and for all.
Farmers have also faced the beef-on-the-bone ban this year. Perhaps the Minister should spend a little time reading Farmers Weekly. If he did, he would read how Rev. Ian Hall, the vicar of Eskdale in the Minister's constituency, describes that policy as a "pig's ear" and as "draconian". The Minister is condemned out of the mouths of his own constituents. What was his response?
§ Mr. Jack
I will not give way at the moment. The Minister's response to the problems of agriculture was to spend the equivalent of half the annual income of a Cumbrian hill farmer on an antique reproduction desk for his office. It is little wonder that another of the Minister's constituents, Joss Naylor of Bowderdale, told Farmers Weekly that the Ministerhas gone very wrong, like a lot of people when they get into a job like that … his heart is set on doing away with the little farms that have made the Lake District what it is today.I am glad that my constituents are not saying that about me or any of my right hon. and hon. Friends.
§ Mr. Charles Kennedy
I am interested that the right hon. Gentleman has chosen to refer to the ban on beef on the bone. He will remember that when we debated that issue in the House, the Conservatives and the Liberal Democrats voted together. I am sure that he, like me, welcomes the initial outcome of the decision at Selkirk sheriff's court in the Scottish borders, which went against the case advanced by the Government—although the matter is still before the Court of Session in Edinburgh. If he does welcome that result, what is his view about the Scottish Tory party's claim that that case should not have gone to court in the first place?
§ Mr. Jack
The case did go to court, and the hon. Gentleman's remarks have shown clearly that the Minister is incapable even of doing the wrong thing correctly.
We have heard much about Labour's views on reform of the common agricultural policy. In its publication, "The CAP—Time for a Change", Labour said:the family farm structure of much of the industry and the role of farming in the rural areas … these factors together make farming deserving of special attention".1144 What kind of special attention have the Government given farming? If the Minister had spoken to any of the farmers who demonstrated at our ports or who marched in London, he would know that they believe that they have received no sympathetic consideration whatsoever—and certainly no special treatment.
Anyone who heard the Minister's hard-nosed speech at the annual general meeting of the National Farmers Union will know exactly what I mean. It made a mockery of Labour's claim that things could only get better. The situation in farming has got considerably worse since 1 May. Family farms will be £20 a week worse off as a result of tax rises in the Budget—so much for special treatment for farmers.
Part of the crisis in British farming is a result—
§ Mr. Jack
The hon. Gentleman should be patient; he is irritated because I am getting under his skin. He always interrupts me when we get to the truth of the matter.
Part of the problem is that the Government subcontracted the setting of interest rates to the Bank of England. The pound soared because rates were too high. There have been three green pound revaluations. That has cost farming £522 million, according to the NFU, and has encouraged a flood of imports that has kicked the floor out from under agricultural prices. That is what has caused the crisis in farming. What did we get from the Minister when farmers appealed for help? We got the usual mantra that no money was available because of the self-imposed public spending position and that agrimonetary compensation arrangements were not available to farmers.
Even on the last point, we found the Minister wanting. We analysed the MAFF annual report and, as verified by the Library of the House of Commons, clearly showed that he had underspent his budget last year by £139 million, and that he planned to underspend by £46 million this year. Before he gets to his feet, I should say that I accept the line of argument in his rebuttal that his Ministry is not sitting on a pile of money. In strict public expenditure terms, however, if he had had the real interests of farming at heart, in these exceptional times he would have used that as a bargaining chip in asking the Chief Secretary to the Treasury about using that money. Instead, British farmers' own money has gone back into the Treasury. The Minister does not have the courage to ask for it from the Treasury; if he had done so, he could have levered in £200 million of agrimonetary help to farmers, or provided special help schemes to see them through these difficult times.
§ Dr. John Cunningham
The right hon. Gentleman came out with that utter rubbish on 30 April during agriculture questions, and I immediately wrote to him. He is comparing estimated and forecast expenditure with outturn expenditure. He is a former Treasury Minister, so that says a lot about his failure to understand Government accounting. As he knows, there was no underspend in my departmental budget last year, and there is no planned underspend this year. His remarks are not only rubbish, but deeply misleading to farmers, and he should be ashamed of himself.
§ Mr. Jack
It is great to hear the Minister rubbishing the Library of the House of Commons and the IFS. I am sorry that he has contradicted them; I wanted to make sure that my facts were right, and he has proved that they were.
The Minister talked about agrimonetary arrangements. When he pays attention, I shall ask him two questions—the ones that farmers want answered. Will farmers be able to receive their payments in euros after 1 January? Will the Minister be more specific about what will happen at the end of the year, because if we do not save the current 11 per cent. shield on agrimonetary arrangements, farming will lose £400 million?
I asked Farmers Weekly whether there were any questions that farmers wanted to ask the Minister at this stage in our debate. Mr. Peter Hall, of Wrexham, asked:Why is it that in just 12 months of a Labour government, the confidence of farmers has declined so dramatically?That sums up the mood of farming. Mr. Rich, of St. Buryan, asked the Minister:Do you want us? If so, let us know your forward planning. If not … lie low.Mr. Leslie Foss asked:What is the future for … young farmers?Mr. Ward, of Rotherham, asked whether the Minister would do anything to help lowland suckler herds. I could go on and on, but I shall send the Minister those searching questions. If the Government are the people's Government, the people's farmers deserve a reply from him.
The rural economy is suffering as a result of the Government's policies. For example, is the Minister proud of the findings of a report by the Welsh Institute of Rural Studies in Aberystwyth, which forecasts a loss of 5,000 rural jobs in Wales over the next decade? That is a rather odd statistic to discuss when the Government's welfare-to-work scheme is coming into play, but that is the situation in Wales, a key part of the United Kingdom which is dependent on agriculture.
The situation is similar in the rest of the country, and agricultural jobs are being lost. For example, there have been 23 redundancies at Ryehill Farm Services in Malton, Carter Agricultural in Norfolk has reduced its work force by 25 per cent., and the labour force at Lumeter Ltd. in Oldbury is down by 20 per cent. There are many more examples of where the shoe is pinching tightly as a result of the Government's stewardship of agriculture. My hon. Friend the Member for Meriden (Mrs. Spelman), if she catches your eye, Mr. Deputy Speaker, will give more information.
§ Mr. Alan W. Williams (East Carmarthen and Dinefwr)
The right hon. Gentleman mentioned Wales and has dwelt on farmers' incomes. The leading article in last week's Farmers Guardian discusses the effect of the euro and is based on Barclays bank's suggestion that farmers should ask for payments to be made in euros and open accounts so that they can borrow at European interest rates of 3 or 3.5 per cent. Where does the Conservative party stand on the euro? In view of the comments of the 1146 Leader of the Opposition last Tuesday, are the Opposition in serious danger of being overtaken by events? All farmers will want us to join the single currency.
§ Mr. Paterson
My right hon. Friend might like to reflect on the fact that, outside the Welsh Grand Committee, farmers booed the hon. Member for East Carmarthen and Dinefwr (Mr. Williams) when he tried to speak to them in public.
§ Mr. Jack
I thank my hon. Friend for that observation; I think that I have dealt with the matter.
I put to the Minister four key points on Agenda 2000 which deserve a reply: they are the acid test for the way in which we should consider it. First, will it make British farming more competitive? Secondly, will it avoid knock-on or distortive consequences? Thirdly, will it simplify bureaucratic procedures? Fourthly, will it leave farming profitable? An inevitable consequence of it is that agricultural decision making must become ever more market based, and the cost of the CAP must be reduced for Europe's taxpayers. In the past, we supported reform of the common market agricultural policy, and we favour fundamental reform now. It is ironic, however, that the Labour party backed reduced cost for the CAP in its pre-election rhetoric; the policy before the Council of Ministers is costed at more than the CAP.
The way in which Agenda 2000 has been introduced represents a lost opportunity for Europe fundamentally to rethink its agricultural policy. If it was interested in more competitive agriculture in Europe, there would not have been a proposal to put 1 per cent. of additional milk quota—as the Minister rightly reminded us—up the mountains and in the hands of some of Europe's least efficient dairy producers. There would have been a very different regime. There is no discussion in Agenda 2000 of the new agriculture, products and crops being pioneered in this country by organisations such as Anglian Industrial Crops. The current policy is being chipped away to make it friendly in the eyes of the WTO.
We strongly back the proposals in Agenda 2000 further to decouple support from production, while recognising that farmers have wider responsibilities as strategic food producers and environmental custodians of the countryside. Where will the measures be subjected to the greatest pressure? It is a pity that Ministers are engaging in conversation while we are asking relevant questions on behalf of farmers. I repeat the question. Where does the Minister think that the measures will come under the greatest pressure, either from within the EU or from the World Trade Organisation? Does he think that the current reform package, which tries to be all things to all men, is the best way in which to approach these crucial negotiations?
I welcome the Minister's commitment to defend the interests of Britain's more efficient and larger farms. I should like to examine his language in responding to the Select Committee on this issue. He said that he would seek to avoid conclusions that discriminated against the interests of UK agriculture. Why did he not employ more 1147 vigorous language in his reply by committing the Government to negotiate with our partners to convince them that Agenda 2000 must not discriminate against efficient, larger farms, especially those in the United Kingdom?
Can the Minister give a cast-iron assurance that he will oppose ceilings that would reduce payments according to farm size? Will the continued existence of subsidies that are linked to production be acceptable to the WTO? Can he say more about his environmental requirements on cross-compliance, on the loss of income and on the factors that will have an impact on farmers who breach the cross-compliance requirements? What about national envelopes? Will he guarantee that all the money that is taken under the terms of national envelopes will be spent on United Kingdom farms, or will he do as he did with his underspend and simply return the money to the Treasury?
We need to know more about the Minister's flexibility under the new proposals. We should like to hear more about the operation of the new objective 3 rural policies. Will fewer people be covered by them? How will the Minister ensure that tenant farmers in new agri-based businesses will be able fully to take advantage of the new arrangements? Such farmers are a significant and important part of British farming, but, under the current law, their tenancy agreements prevent them from diversifying in the way that is suggested by Agenda 2000.
My right hon. and hon. Friends will highlight the problems of British agriculture and the challenges that it will face under Agenda 2000. They will highlight the fact that while the Minister has had stewardship of British agriculture, he has shown little sympathy or understanding for the real needs of Britain's farmers. It is only through the Opposition that their voice can truly be heard.
§ 6.2 pm
§ Mr. Eric Martlew (Carlisle)
I have spoken in many debates on agriculture but in none of them have there been more Labour Members than Conservatives. That shows the Government's interest in agriculture and suggests that Conservative Members have caught the early train home.
I congratulate my right hon. Friend the Minister of Agriculture, Fisheries and Food on the excellent job he has done over the past 12 months. He had a difficult job and took over from the worst Minister this century. He has been criticised by the right hon. Member for Fylde (Mr. Jack), who was a MAFF Minister in the previous Government. The right hon. Gentleman spoke about the ban on beef on the bone. During the statement on that ban, the right hon. Gentleman did not criticise it, and the leader of the Conservative party supported it. It was only when Conservatives thought that they could make a party political issue out of it that they opposed the ban, and that has happened again in this debate.
I shall not spend any more time speaking about Conservatives because some local issues have worried me over the years. One of them is the sale of green-top milk, which is raw and unpasteurised. It is said that people should be given the freedom to buy it, but I worked in the dairy industry for 20 years and I do not think that it is safe. The Government are putting the facts together, and if the scientific facts show that green-top milk should be banned, they should ban it. If that happens, there will 1148 be an outcry in the press, and the Opposition and perhaps some spin doctors will say that it should not be banned. However, if we are not careful there will be an outbreak resulting in fatalities. Outbreaks from such sources often affect the young, and I should not like to be here if a Labour Government put young people at risk.
Milk quotas were introduced because of a milk surplus in Europe, but that merely swapped one problem for another. Quotas were traded and no milk was involved. I am sorry that quotas will not be phased out much faster. To do that may mean reducing milk support to world levels, but it would be worth it, especially for British farmers who are probably the most efficient in Europe. Cumbria contains many efficient farmers, but they are not producing milk on the fells. It is nonsense to give extra quota to the mountainous areas of Europe. It should be given to places such as the Eden valley, Solway plain, Cheshire and the south-west.
I visited a local farmer at the end of March towards the end of the quota term. He had to stop good milk entering the system because he was over quota. He had a major problem, but he could not pour the surplus down the drain because, if he had, the Environment Agency would have chased him. We must get rid of quotas as soon as possible. I recently spent a weekend in Buttermere, which is probably one of the world's most beautiful places. It is in the constituency of my hon. Friend the Member for Workington (Mr. Campbell-Savours), as is Borrowdale. I first visited the area 30 years ago as a schoolboy. [Interruption.] Well, perhaps more than 30 years ago.
In that area, I noticed a difference in the landscape that was not due to tourism, because that is controlled by the Lake District planning board. The difference was not even the yellow lines on country roads. It was the effect of overgrazing on the fells. The system encourages farmers to put too many sheep on the hills, and that is destroying the habitat. When I was there, a gale was blowing and many of the old trees were being felled. However, there is no natural regeneration of the woodlands. They have gone because Europe pays farmers to produce more, although demand for beef and sheep meat is going down. We must quickly take action on that.
When major changes in agriculture occurred in New Zealand, marginal land was abandoned, but Britain will not accept such a policy because, to many of us, such land forms the most beautiful parts of our country. Therefore, we must have a system whereby we target money to those farmers, so that they continue to farm, but at a less intensive rate and we keep them in that area. We have to do that by specifically saying to them that we will help them to maintain the countryside and give them extra money.
§ Mr. Cynog Dafis (Ceredigion)
In that case, does the hon. Gentleman agree that the line that is being pursued by the Government—that we need to reduce the number of people who farm in upland and mountainous areas—is exactly the wrong approach?
§ Mr. Martlew
That is a misinterpretation of what the Government are saying. There is a feeling that farmers who farm marginal land are not very well rewarded, which they never have been, and that we should perhaps encourage some of them to amalgamate and give them extra resources. What we should not do is force them off 1149 the land. We should have a system whereby they can stay. However, we have a difficulty in giving taxpayers' money to farmers because we appear to give the money to all farmers. That creates resentment among the general public. Often, people see that farmers live in bigger houses, drive better cars and have greater capital assets than they do, yet they are expected to subsidise them, so we must specifically target farmers who have real problems.
§ Mr. Martlew
I am sorry. I have only 10 minutes. I am not going to give way.
Animal welfare is another issue which concerns me. As some hon. Members may remember, I introduced a Bill to ban the export of calves to Europe in veal crates. It was stopped by the previous Government, but then the trade was stopped by BSE, which was caused by them.
Animal welfare in this country is the best in Europe. I give credit to the previous Government. They brought in legislation that was far in advance of that anywhere else in Europe. We pressured Europe to improve conditions. I am sure that, under the ministry of the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food, my hon. Friend the Member for Scunthorpe (Mr. Morley), that will continue, but we have to say to people that if we are paying billions of pounds of taxpayers' money to the CAP, we should make animal welfare a major priority.
I do not wish to say any more because many other hon. Members wish to speak, but I am pleased to say again that the Minister of Agriculture, Fisheries and Food has done a very good job, under difficult circumstances.
§ Mr. Charles Kennedy (Ross, Skye and Inverness, West)
Obviously, it is very difficult to follow a speech as savage as the one that has just been delivered, particularly the peroration. Therefore, I hope that the Minister of State, Ministry of Agriculture, Fisheries and Food will be—I am sure he will—robust enough to deal with constructive criticism that is not quite as overly wired-in and sycophantic as the remarks of the hon. Member for Carlisle (Mr. Martlew). It is very good that those remarks will appear in Hansard, because, if the hon. Member is seeking higher things in the Labour party, it will do him good to have that confirmation coming from occasional partners on certain constitutional issues on the Liberal Democrat Benches. [HON. MEMBERS: "Oh."] I think that that is an open secret; I do not think that there is much doubt about that.
The speech of the right hon. Member for Fylde (Mr. Jack) was disappointing; in a way, the Government got rather an easy ride from the so-called official Opposition—[Interruption.] I am glad that they have come to life. They did not come to life during the right hon. Gentleman's speech; it is nice that they have come to life during this one. It is none the less an important debate and it is timely for two reasons. First, there is a genuine crisis—crisis is a word which is much overused in politics by all of us—in agriculture throughout the UK. Secondly, the Minister of Agriculture, Fisheries and Food and the Government as a whole hold the presidency of the Council of Ministers.
1150 It is a bit bizarre—it says a lot about this place—that more has not been said about the presidency. People have very short memories. When, a few months ago, the Prime Minister unveiled at Waterloo station, in all that glitzy, glamorous style of his, his headline objectives for the presidency, he singled out CAP reform as one of the principal objectives. Then, after the discussions with Chancellor Kohl and the German Government made it clear that, with the elections coming up in the autumn, which looked problematical then and look even more problematical now, they were not willing to countenance any significant or fundamental changes to the CAP before those elections, reform slipped drastically down the agenda.
That was a disappointment. We read in the newspapers about what European agriculture Ministers were eating, what they were going to see and what delights they were going to sample—I am sure that they had an excellent time when they were hosted by the Minister of Agriculture, Fisheries and Food—but we have heard precious little during or since last week about what was achieved in practical terms. I found it telling that the Minister had nothing whatever to say about that.
One would have thought that, in a round-robin debate highlighting CAP reform, the Minister would have been able to give the House more of an indication of the progress that had been made under his chairmanship during the six months. That speaks volumes for the Government's approach. The style is good, but the substance, when we begin to look at the detail, simply is not there. It is that detail which I want to deal with in my remarks on behalf of the Liberal Democrats.
The first detail—detail is perhaps the wrong term to use; let us say the first item—is the strength of currency. My hon. Friend the Member for North Cornwall (Mr. Tyler) made a speech to that effect in the House earlier this week. Without going through all the details of that again, there is not a shadow of doubt that the sheer strength of sterling is placing the most profound pressure on every section of manufacturing industry, and agriculture is a primary example.
It is extremely significant—I do not blame the Conservative spokesman for not wanting to delve into the issue—and pertinent that the NFU leadership has come out as unequivocally as it has in favour of a single European currency. It recognises two things: first, the way in which events are moving; it recognises that if that famous train is departing, it is better to be coupled to it than to be left on the platform. Secondly, the leadership hears what its constituents, its fee-paying members, are telling it at the grassroots: the strength of sterling at present is a massive disincentive to their agricultural efforts.
That is why we remain not just committed to the single European currency on principle, but frustrated that the Government are not seizing the golden opportunity that the presidency has given them to drive that event forward and to be in the driving seat. That would have been a major psychological and practical boost to farming incomes. Farming incomes in Wales are, I think, worse than those in any other part of the UK, but they are by no means the exception. They have been driven down over the past 12 months.
Reading the Conservative amendment, one would think that the world suddenly started at the stroke of midnight on, or into the early hours of, 1 May last year, and that 1151 all the policy initiatives that the Conservatives suddenly seem to favour and all the things that they are against were a road to Damascus conversion that happened some time on 1 and 2 May last year. Of course, that is not the case, and farmers, perhaps more than most sections of the community, tend to have long memories. They are traditional people and, often, several generations of the same family have managed the plot of land and business. They will not forget that many of the difficulties that are highlighted in the Conservative amendment, and replicated in the Liberal Democrat amendment, did not arise in the past 12 months. The root of them lies in the difficulties that attended farming during the previous Administration.
§ Mrs. Ray Michie
Does my hon. Friend think that the Minister really understands rural parts of Wales, for example, and the highlands and islands, where crofting and family farms undoubtedly sustain the economy, the population and the environment? We are not talking about amalgamations and agribusinesses. We need to keep people in such areas, and agriculture is one of the ways of achieving that.
§ Mr. Kennedy
I am grateful to my hon. Friend. Her intervention brings us to the heart of CAP reform. We should be trying to protect and promote the family farm, not just for reasons of sentiment but for reasons of sense. The Minister talks about restructuring agriculture. I remember Margaret Thatcher talking about restructuring coal, steel and various other industries in the 1980s. Restructuring is a very ominous term. My worry, which is shared widely outside the House, is that the Government's approach to Agenda 2000 and CAP reform is to restructure, as my hon. Friend the Member for Argyll and Bute (Mrs. Michie) rightly acknowledged, in a way that we do not want—into agribusiness and much bigger holdings, so that the family farm will be lost.
The Government have not given nearly enough sensitive thought or attention during their presidency to the fact that if we want more sustainability, more environmental responsibility and more active husbandry of the landscape, we need people to achieve it. Mr. Fischler can come out with the most amazing ideas, the Council of Ministers can modify them in the most brilliant ways, but if, in the interim, the Government's restructuring instincts bear fruit, we will not have the personnel to deliver the desired policy.
§ Mr. Swinney
Does the hon. Gentleman share my concern that there is a danger of two forms of restructuring: one due to the strength of sterling, which is forcing people out of the industry, and the other due to the fact that, potentially, we are sleepwalking into Agenda 2000, which favours larger holdings and forcing people off some of our most fragile land?
§ Mr. Kennedy
I am grateful to the hon. Gentleman for his intervention. He is absolutely right. His part of Perthshire, for example, is a classic example of an area that could be endangered in the longer term if we go blindly—sleepwalking is a very good way of putting it—into such a cul de sac. There is no viable option for many people in such areas short of some land-environment- 1152 conservation-husbandry role in the local community. The Government have not given sufficient sustained thought to that.
§ Mr. Kennedy
Having been so critical of the right hon. Gentleman, it would be churlish not to give way to him.
§ Mr. Kennedy
That is at the heart of the matter, too. It was interesting what the Minister alluded to in his speech. If modulation is applied in the way in which it is being suggested at European level, it will be doubly damaging to UK fanning interests because of the issue of size. I hope that we might hear a little more about the matter in the Minister of State's winding-up speech.
I noted that the Minister referred to the national application of modulation. I am not quite sure what he meant by that. If he meant what I hope he means, the phrase is encouraging. I hope that, as and when modulation is introduced, the Government intend there to be repatriation—that is a dirty word to use in politics due to the late Enoch Powell, but I use it in the best sense—of degrees of decision making. As the UK is evolving, with the Welsh assembly, the Scottish Parliament and, let us hope, a Northern Ireland assembly, I hope that discretion will be devolved to this member state to apply modulation sufficiently sympathetically and sensitively to UK agricultural interests.
§ Mr. Kennedy
No, I will not—but it is very nice to see the hon. Gentleman.
I hope that the Government will take on board points made about modulation and that we are able to make common cause across the Floor of the House on it, because we recognise something of a east-west divide in Scotland, England and Wales over the issue.
We are considering a very difficult situation against the backdrop of CAP reform, and, perhaps, this debate has not so far addressed that. However, we would be wrong not to hold the Government to account or absolve them from responsibility for the extra costs that they are choosing to impose on agriculture. We know that there are already higher charges in the knackery sector. We know that there will be extra costs for pig and poultry farmers in order to comply with EU environmental and pollution legislation. Incidentally, such farmers do not receive EU support.
There are new costs for pig accommodation, new rules on calf accommodation, proposed tagging of sheep and pigs, proposed changes in standards for poultry, likely new EU groundwater directive supervision charges and unilateral rules imposed on specified risk material. Those are significant add-on costs to any business, but to impose them on agriculture during an agricultural recession is perverse.
The Government and the Liberal Democrats disagree in principle about the use of tax revenue. As they well know, we favour more largesse and, if necessary, more taxation 1153 to provide it. None the less, we argue strongly that imposing additional charges on the farming community without introducing sufficient compensatory measures makes a very bad situation even worse. We urge the Government to reconsider.
The way forward on CAP reform generally and Agenda 2000 in particular must surely be towards family-farm based agriculture that conforms with the size of local communities and places greater emphasis on husbandry of local land. The deep dilemma for so many people in agriculture is that they are listening to a Government who are paying lip service to CAP reform, but talking about restructuring British agriculture. The net effect of their policy will be not only contradictory and self-defeating but utterly disastrous for the future of family farms, particularly in marginal parts. If the Government take any message from this debate it should be that, as they approach the end of a rather dispiriting and disappointing UK presidency, they should think afresh and think again.
§ Mrs. Anne Campbell (Cambridge)
I am very pleased to have the opportunity of speaking in this debate. I congratulate my right hon. Friend the Minister of Agriculture, Fisheries and Food on the progress that he has made in having the Northern Ireland beef ban lifted, and on the database scheme for all animals born after 1996 in the United Kingdom. Those developments represent huge progress, and belie the final remark made by the hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy) on the Government's performance in the European Union presidency.
Tremendous progress has been made, and I know that my right hon. Friend will continue to make such progress. Common agricultural policy reform is one of the Government's priorities, and I am pleased that it has the Government's backing.
Agenda 2000 is preparing the European Union for enlargement to the east, and to deal with pressure in the World Trade Organisation to liberalise European agriculture. Enlargement is desirable, and it is vital that the states of central and eastern Europe are brought into the European Union. If they are not, the likely result will be economic, political and, potentially, military instability.
Enlargement will bring two problems, the first of which is institutional design. There is growing criticism of using the same institutions to govern 20 or more member states as were used in governance of the original six member states.
Although the institutional issue has never really been comprehensively addressed, I think that the budgetary implications of enlargement are more immediate and urgent. Because of the Maastricht convergence criteria, the European Union budget will not expand significantly after enlargement, thereby putting pressure on the major item of European Union expenditure—the common agricultural policy.
I do not think that anyone would quarrel with the policy goals—which I have re-examined—incorporated into the treaty of Rome: a fair standard of living for farmers, reasonable prices for consumers, and creation and fostering of stable markets for agricultural commodities. However, the mechanism by which those goals were to be achieved is ineffective. It is certainly outdated.
1154 The mechanism is essentially Commission central planning within a market structure. Wholesale price floors and ceilings have been established for a range of commodities. The European Union purchases intervention stock if the market price falls below the floor, and it pays export subsidies to producers when the market price rises above the ceiling. Although I am critical now of the mechanism, initially it was successful, and the sector moved into structural surplus in the 1970s.
The common agricultural policy transformed the European Community from a net importer to a net exporter, which was crucial to achieving the goals of European security and economic recovery. However, by the end of 1990, despite the export subsidy regime, there were 14.4 million tonnes of cereals, 600,000 tonnes of dairy produce and 530,000 tonnes of beef in public intervention storage. Spending on the CAP doubled in real terms between the mid-1970s the mid-1980s. Even the extra expenditure was not sufficient to control the overproduction that was inherent within the system.
Market price support is a highly inefficient way for Governments to give aid to a sector of the economy. Such support requires, among other things, very large and unpredictable levels of Government expenditure, while offering no way of ensuring that the most needy farmers receive the most subsidy. I hope that, in our presidency of the European Union, we will address that issue, which is one of the most important principles of social justice.
§ Mrs. Campbell
I am not giving way, as I have only 10 minutes and should like to put as much as I can into them.
The common agricultural policy isolates producers from the market, providing a financial incentive simply to produce the maximum possible quantity, as producers know that anything that cannot be sold on the market will be purchased by the European Union. The very good brief that we have had from Compassion in World Farming states that that organisation feels that it is unacceptable to incentivise livestock overproduction, and then either to slaughter or export that livestock to limit the effect of that surplus. I could not agree more.
The CAP also raises many environmental concerns. Maximum-quantity production entails the use of large amounts of fertilisers and fungicides—chemicals to reduce plant growth, and sprays to reduce disease—which have potentially harmful effects on local water supplies and the food chain.
Soil erosion is becoming a serious problem. My hon. Friend the Member for Carlisle (Mr. Martlew) mentioned the problem when he was describing the overgrazing problem in high areas near his constituency. Soil erosion occurs also in lower areas. I well remember that—during the general election campaign, when I was driving to help my hon. Friend the Member for Norwich, South (Mr. Clarke)—I saw soil blowing off the fields because of soil erosion caused by intensive farming practices. The soil blown off fields ends up as silt in rivers and streams, which is a major cause of flood damage—an issue to which I have drawn the House' s attention on a number of occasions.
Price support creates artificially high food prices in Europe, and depresses world food prices, as the export subsidy allows European Union produce to be sold below 1155 the world price. Price support makes life very difficult for farmers in developing countries, who cannot sell their output at a fair price.
The common agricultural policy is also deeply untransparent in its financial dealings. Through price support, it makes a large resource transfer from EU consumers to producers. If its revenue were raised through direct taxation rather than high food prices, there would be huge public dissatisfaction with current policy.
The 1992 MacSharry reforms were introduced to strengthen the European Union's hand in the Uruguay round of the general agreement on tariffs and trade, trying to create a shift from price support to direct payments to farmers. Intervention prices were cut, and removed altogether for some commodities.
The reforms had some very minor effects. Arable farms were subjected to rotation or set-aside, for example, although we discovered subsequently that the practice may encourage more intensive farming methods on fields. That reform has not been successful in reducing production.
Labour reduction on farms was achieved by introducing favourable early retirement terms, thereby reducing the number of people working in the industry. Additionally, environmental guidance was given, although I feel sure that it could be strengthened.
The 1992 reforms had some successes. However, I think that the Agenda 2000 proposals will attempt to deal more radically with the structural problems in the European Union—although perhaps not as radically as many Labour Members would like. I certainly encourage the Government to continue to press, within the European Union, not only for more radical reform than is currently on the table but for the much-needed structural change—decried by the hon. Member for Ross, Skye and Inverness, West—that is so badly needed if we are to provide more and better support for the most needy farmers, and not necessarily for big agribusinesses.
§ Mr. David Curry (Skipton and Ripon)
I am tempted to begin by recommending to the Government that they take a firm stand against any type of common agricultural policy reform, on the ground that most reformed CAP systems cost more than their predecessors. I recommended to the previous Government that they take that unique stand in their general election manifesto. Although I was not successful in getting that suggestion accepted, history may show that there may have been a grain of truth in the idea.
Even if we were to take the stand that I suggested, we would be in a wholly untenable position, as two great juggernauts are bearing down on the CAP. The first one is enlargement, with which Agenda 2000 attempts to deal. The key element in enlargement is Poland. In determining the future shape of agriculture in Europe, Poland is more important than all the other countries put together.
The second, and more important and inescapable development, is the Singapore round of the general agreement on tariffs and trade, or the World Trade Organisation. It is important to realise the extent to which the decisions that we shall have to make in that round 1156 have already been conditioned by the decisions that we made in the previous round. The framework has already been set by those decisions.
If the European Union wants to attack world markets and be free to take advantage of, for example, consumer opportunities in south-east Asia and of the productivity gains that remorselessly occur in agriculture—whether or not they are convenient—it must free itself from its dependence on export subsidy. While the EU is dependent on export subsidy, it is locked into having fixed quantities to put on the world market. We effectively have no choice if we want our agriculture to look outwards, towards an international competitive environment.
Of course, farmers will react differently. There will inevitably be a generation gap in agriculture. For some in the dairy industry, particularly elderly farmers who are locked into farm tenancies in difficult areas, the milk quota is their pension. They would be reluctant for quotas to disappear because that is the only pension to which they can aspire. Their sons might well consider the milk quota an imprisonment that prevents them from getting more productivity out of their farm. They may face having to de-intensify and produce less because of the cost problems of having to hire extra staff.
An important third force, which is just as powerful and must be understood, is consumer demand and what the marketplace is asking for within our shores. The demands for traceability, farm assurance, better welfare standards, health undertakings and environmental protection and conservation represent, initially, costs to the farmer; but they are also conditions that he must meet so that the marketplace is willing to take, and will be satisfied with, his product.
Farmers may rail, as I know they do from time to time, at what they see as the iniquities of Tesco and Sainsbury's, but that is futile because the supermarkets are at the cutting edge of consumer demand. They provide one of the major outlets for farmers, and it is in farmers' long-term interests to work alongside the supermarkets and produce what they require.
It is interesting that, in the present circumstances, those pressures come together in a series of outcomes to reform. A move to direct aid divorced from production is, first, the essential policy underlying Agenda 2000. Secondly, it is the key formulation required to achieve a successful outcome in the World Trade Organisation. Thirdly, it is the outcome which most commends itself to environmental and consumer interests. For once, we have the opportunity to square the circle—or, at least, the triangle—by having a method of sustaining agriculture that meets with the approval of consumers and taxpayers, conforms with the requirements of GATT and opens the way for the enlargement of the Community and the eastward extension of the liberal society, which is what almost every hon. Member desires.
We need to work out the scenarios by which we can achieve an effective construct of non-production aids. We have a great deal of experience with relatively small-scale schemes, such as the environmentally sensitive areas and countryside stewardship. I know that in Wales there are schemes that work very effectively. We need a codification or a menu of those schemes, so that, before we take part in the GATT talks and consider the outcomes, we have an idea of the offers that we will be able to put before farmers. That might help us to come 1157 out of the GATT round with a clear idea of how to use those schemes constructively. That is a proposal which the Select Committee could consider, but it will not be easy.
In the Yorkshire dales, in my constituency, it is obvious that we would want to preserve environmental assets such as stone walls, barn roofs, meadows and woodlands—and in Somerset, the water meadows—but it is less obvious in Cambridgeshire and parts of East Anglia. It is important to begin setting out what environmental aid farmers would be eligible for as we move towards greater dependence on that aid and away from production aid.
I am not an enthusiast for cross-compliance because it is too linked to output, and the two should be divorced. However, I understand that it has attractions as a transitional instrument.
There are implications for reform, and on that point I agree with the hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy). We shall inevitably see the development of more corporate agriculture, which, with the demand for agricultural investment, the possibility of expansion, the pressures on costs—including labour costs—and inputs, and the requirements to conform to quality standards, represents a push towards greater size in agriculture.
That development is occurring in the dairy sector, where about 11,000 producers now account for well over 50 per cent. of output, and in pig production, where 80 per cent. of pig meat is produced by 2,000 mainland British producers out of 10,000. It can also be seen in the continuing change in the arable sector: when a farm comes up for sale, the land is sold to the neighbouring farmer and the household to an individual.
Conversely, an expansion of part-time farming is also likely. That trend is already occurring on farms where the income depends on a second source that is not identified with production. We need to sustain and support such agriculture. Agriculture should not be viewed as an activity unto itself, divorced from the wider needs of the rural economy, or as a religious practice, separate from the wider rural community.
The long-term future must depend on market orientation for agricultural output and, therefore, the ability of farmers to bid into programmes. I would not object if we experimented with competitive programmes to deliver environmental and other assets. Indeed, I should be interested to examine—I know that this idea is being discussed in Wales—the possibility of developing social assets, such as farmers' employment and housing, to be capable of being delivered or safeguarded as part of the wider reform of agriculture. I wanted to focus on the long term because I thought that much of the debate would necessarily focus on the immediate concerns.
In the short term, we need for agriculture, as for much of business, a clear path to the single currency set out by the Government. We have a pound that is too high and volatile. We have five tests set by the Chancellor—only one matters, but getting five ducks in a row is not possible for anybody at any time. We have an uneasy triangle between the Prime Minister, the Chancellor and Mr. Murdoch. We have doubts over the period of exchange rate stability before we are eligible to join a single currency.
We desperately need clarification and an indication to the market of the Government's intentions, because the market takes note and deals with the currency in the light 1158 of those. At the moment, the market does not know what intentions to attribute to the Government. That is a major problem for everybody in the United Kingdom, and farmers suffer most immediately because of the green pound effects. Change is inescapable, but the present coruscating crisis can be alleviated only by the Government accepting their responsibilities.
§ Mr. Paul Marsden (Shrewsbury and Atcham)
When I read the official Opposition's amendment to the motion, I wondered who had written it because it is misleading and full of errors. I then listened to the right hon. Member for Fylde (Mr. Jack) and realised that he must have had a hand in it because his tub-thumping speech—which was completely devoid of reality—was meant simply to rouse farmers and farming communities by rhetoric, not fact.
I was also amazed at the Opposition's proclamation that the common agricultural policy should be brought under stricter financial control. I agree with that, but I found it a little strange coming from the right hon. Member for Fylde, because, over the 18 years of Tory Government, the UK contribution to the CAP rose by 79 per cent., which meant a net outflow of £2.1 billion from this country. Obviously the right hon. Gentleman has a short memory. I hope that my hon. Friend the Minister can start correcting some of the horrendous mistakes in those finances that date from the Tory past.
Under Agenda 2000, I shall focus on the plight of the rural areas. That, too, has been caused by the Tory Government. Rural areas have been left with 29 per cent. of parishes not having a village hall, while 43 per cent. have no post office. Under the Tory Government, who withdrew investment from local authorities and did not care, post offices, shops and schools closed, and the bus route network collapsed. The Labour Government are now trying to turn that situation round, and I urge the Minister to continue with his endeavours towards an integrated rural policy within Agenda 2000.
§ Mr. Marsden
No, I would like to make some headway first.
As things stand, only about 4 per cent. of the budget proposed under Agenda 2000 will go towards rural development. That is not good enough. We must take a more holistic approach to rural development, and include social, economic and environmental factors as well as agricultural factors. That is vital if our rural communities are to survive.
I make a special plea for greater investment. I welcomed the news in the Budget that there would be £50 million for rural transport, and I hope that we can find even more money for that purpose, because access, especially to jobs, is so important for young people. They can be stranded in rural areas, with few job opportunities. I welcome, too, the Government's ventures into IT, and their attempts to open some of the village halls and provide more facilities for young people in rural areas.
§ Mr. Hayes
I agree with much of what the hon. Gentleman is saying about the need for an integrated rural policy, but how does he square that idea with the savage 1159 cuts to shire counties in the local government settlement? The settlement does not even enable the shires to maintain their level of services in rural areas, let alone to improve them as the hon. Gentleman suggests.
§ Mr. Marsden
Absolutely, and the answer is simple: it was the Tory party that saddled the Government with the spending plans by which we had to abide. We agreed at the election that we would abide by those plans, so the fault lies fairly and squarely with the Tory Government. [Interruption.] They are your spending plans.
§ Mr. Peter Bradley (The Wrekin)
I make no secret of the fact that this year Shropshire, the county that my hon. Friend and I have the honour to represent, did not get the deal that we hope it will get next year. However, Shropshire's problem is the fact that this year's settlement came on top of four successive years of settlements under the previous Government, and the cumulative impact was a bridge too far for the county.
Is my hon. Friend aware that because of the Tory Government's deregulation of buses, 86 per cent. of parishes in rural Shropshire have no daily service? Fortunately, the Government are providing £700,000 for Shropshire's transport system to be improved, but, until we can reconnect people to employment, to schools, to health care, to training—[HON. MEMBERS: "Speech."]—to family, to friends and to shopping, we shall get nowhere in the rural areas.
§ Mr. Marsden
I thank my hon. Friend for that interesting—[HON. MEMBERS: "Speech"]—set of points. I concur with what he said. Over the past five or six years, Shropshire has suffered cuts of about £40 million, thanks to the Conservative Government, and the sort of damage that that inflicted in terms of schools closing—
§ Mr. Marsden
I have already given way. Time is short and I wish to press on now.
The Government have taken the right approach and I support their actions. They have new-found respect in Europe and are making great headway. In his absence, I put it to the right hon. Member for Fylde that, when he asks when the beef ban will be lifted, I remember the former Prime Minister, the right hon. Member for Huntingdon (Mr. Major) saying that it would be lifted six months after it was first imposed—in November 1996, I believe. I put the question straight back to the right hon. Member for Fylde: his right hon. Friend missed that deadline, did he not?
Labour Members firmly believe that the beef ban will be lifted. It is encouraging that it is to be lifted in Northern Ireland, and we now have a date that we can look forward to when exports from there will be allowed. I welcome the development of the cattle tracing system, the organic 1160 aid scheme, and improvements to animal welfare. Those are just some of the things that the Government have achieved in 12 short months, despite having had to pick up so many of the pieces left by the previous Government. I am confident that my constituents will bear with us while we continue to sort out the mess that we inherited.
I emphasise the need for a Ministry for rural affairs. We need a Department at Cabinet level that can adopt an integrated approach to rural affairs, which must embrace the socio-economic and environmental aspects as well as the agricultural aspects. It is important that those are all dealt with together, and rural communities will then have a clear focus and support at Cabinet level.
The Government have made great strides, and it is a bit rich when we hear from the Opposition Benches—
§ Mr. Marsden
I shall not give way, because my time is almost up.
It is a bit rich when Conservative Members try to seize the rural areas as their own. Rural areas do not belong to the Conservative Party; they did not at the general election, when far more Labour Members than Conservatives were returned for rural areas, and people clearly saw through the hypocrisy of the Tories' words.
We focus on the issues of health and education and on the importance of agriculture in those areas. That is what people want to hear, and that is what we shall deliver. Through my hon. Friend the Minister, we have made great progress in tackling CAP reform, and we are delivering on our promises—unlike the Tory Government, who repeatedly broke theirs.
§ Mr. Peter Luff (Mid-Worcestershire)
As Chairman of the Agriculture Committee, I am tempted to respond to the words of the hon. Member for Shrewsbury and Atcham (Mr. Marsden) in a slightly more partisan way than I probably should. The hon. Gentleman is a fine Member of the Select Committee and I agreed with much of what he said. However, I have to say that this year's local government settlement really rigged things against the shire counties, for which Worcestershire is paying a heavy price.
I am sorry that there is so little time for the debate today. There will be time for only about eight Back-Bench contributions in what is probably one of the most important debates on agricultural issues that the House can have. It is also one of the most important debates in connection with the build-up to enlargement of the European Union, so it is a matter of regret that those on the Front Benches on both sides of the House agreed to allow only three hours for it. I hope that the usual channels will be able to arrange for another debate on agricultural issues to be held in the near future, to give the many Members on both sides of the House who would have liked to speak a chance to contribute on this important subject.
It is difficult to discuss reform of the common agricultural policy at a time when farm incomes have fallen so sharply. Inevitably, that will make farmers more nervous about the consequences of such reform. However, 1161 the House needs to send out a clear message that there is very broad cross-party consensus about the need for CAP reform, and also about the general shape of the reform needed.
No wonder farmers are concerned. My right hon. Friend the Member for Fylde (Mr. Jack) has kindly shown me some of the questions sent to him by the readers of Farmers Weekly. Concern has been expressed by Mr. David Steed, from near Ramsgate, about the future of small farms; Mr. Robinson of Willow lodge, West Dereham, King's Lynn, has written about the possibility of a level playing field within the common agricultural policy. I understand and respect those concerns, but I think that we must press ahead with reform.
The Select Committee produced a report on CAP reform on 25 February. I am grateful to the Government for mentioning it in their motion and, indeed, for their response to it—there was no point of disagreement between the Committee and the Government, which is encouraging. It is also encouraging that the Committee was itself unanimous, despite comprising a broad range of views of European matters. The report said:The CAP, and its disproportionate spending, disfigures and discredits the European Union, turning an effort to build unity into unseemly horse-trading dominated by entrenched national and sectoral interests. The time has come for Europe to think radically and bring agriculture into the changed world. If the countries of Europe try to resist, they will be deluding themselves. The international pressure for freer trade and the consequences of enlargement are both irresistible.I am grateful to members of the Select Committee for their hard work, and to our advisers, Professor Alan Buckwell of Wye college and Professor Alan Swinbank of Reading university. I think that our report made an important contribution to the debate on CAP reform.
The Committee made three background points in its report. First, we were concerned that the Government and their predecessor did not have a sufficiently clear strategy or vision for the future of United Kingdom agriculture, which inhibited their ability to negotiate effectively in the UK's interests. Secondly, we were deeply concerned that the Agenda 2000 proposals would increase, not reduce, CAP expenditure—we found that unacceptable. Thirdly, we found the Commission's outline proposals very timid. We felt that it should have taken a much more positive lead, forcing the Agriculture Council—which meets next week under the United Kingdom's presidency—to grasp more forcefully the nettle of CAP reform.
As my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) said, the EU faces two huge challenges on CAP that cannot be ducked, no matter how much our colleagues on the mainland of Europe think that they can be. The first is the World Trade Organisation negotiations on agriculture, which are due to begin next year. The Commission' s proposals are an inadequate basis for those discussions. The United States and the Cairns group will seize the moral high ground, whereas the Commission's proposals will give us little more than a base camp in the foothills.
Secondly, the proposals do nothing to deal with the problem of enlargement. How can there be two separate regimes for agriculture in a single market? There cannot possibly be two separate milk quota regimes, for example. Do we really believe that milk quotas can be imposed on Poland when Italy, as it freely acknowledges, found it 1162 very difficult to enforce them? The idea that the proposals will do anything to assist enlargement will, I fear, prove to be folly.
§ Mr. Luff
I should love to give way, but, as I have only 10 minutes, I do not have time, for which I apologise—I wish that we had more time for this debate.
I draw the attention of the House to some of the Committee's main recommendations. Direct compensatory payments are made to compensate farmers for reduced levels of price support, so we feel that, by definition, they cannot be permanent. They must be used to help farmers to adjust to new circumstances. Moreover, they must be time-limited and decrease over time—they must be, to use an ugly word, degressive. They must also be fully decoupled—they must provide no incentive to increase production.
The term modulation causes much confusion. In fact, two types of modulation are under discussion—differentiation and ceilings. I see the attraction of differentiation—varying the amount paid on the basis of a farm's characteristics—but, as we see no long-term role for the payments, we do not believe that that is the right way in which to deal with the concerns about the interests of smaller farms, for example. We believe that separate policy instruments are needed to deal with those concerns.
Similarly, what is the point of cross-compliance on environmental conditions to payments if the payments are to be stopped? If they are not to be stopped, we believe that conditions should be attached provided that they are satisfactory and can be imposed without requiring a huge new bureaucracy in the CAP. Better still, let us get rid of the payments.
The other form of modulation is the imposition of ceilings to limit payments to a farm. I think that that would have very adverse consequences for UK farmers, so I hope that the Government will strongly oppose the proposal, as they said they would.
I had hoped to speak in some detail about the individual commodity sectors, but I do not have time. I am grateful to the Government for agreeing with the Committee's views on the arable sector, on which the Commission proposes only partial decoupling, which does not go far enough, although it is a welcome step in the right direction.
I am also grateful for the Government's endorsement of the Committee's views on beef, but I draw the attention of the House to our third report, in which we highlighted the need for restructuring—another ugly word—the domestic beef sector, but only as part of EU-wide restructuring. There is no doubt that the British beef industry is taking too much of the pain of the necessary restructuring across Europe—we must ensure that that does not continue. There is overproduction in Europe, so Europe as a whole, not only this country, must face the consequences of that. That must be one of the Government's major negotiating objectives in the debate on Agenda 2000.
On dairy farming, the Committee believes that the Government are right to seek the abolition of milk quotas—we hope that that will be one of their principal objectives in the negotiations. I am glad that the Government are making progress in building a coalition 1163 of support for that proposal, including countries such as Italy, which was previously opposed to the abolition of quotas. Abolition will create problems for UK farmers; as has been said, quotas are the major capital asset of too many farmers. Currently, British farmers are producing milk close to world market prices, but they cannot produce as much as they want to; they have the worst of both worlds—low prices and lower production than they can manage. I hope that the Government succeed in ensuring that something is done.
I also hope that the Government are successful in their proposals to reform the tobacco regime, although I suspect that that will be a difficult objective, especially when it comes to building coalitions to secure our other objectives.
The future of the CAP clearly lies in agri-environmental and rural policy. It is a matter of great regret that Agenda 2000 is based not in rural policy proposals, but in agri-rural proposals, so to speak—it does not deal with the wider rural dimension. I hope that the Government will do something to correct that shortcoming. That is why, in the next stage of its examination of Agenda 2000, the Select Committee will consider rural development in detail. As the hon. Member for Shrewsbury and Atcham said, rural development will be one of the key components of the CAP in the future—which, incidentally, is a good reason for giving the Ministry of Agriculture, Fisheries and Food a wider remit than agriculture alone, as MAFF Ministers will have to negotiate rural policy in the years ahead.
On CAP and the consumer, the Committee found it unacceptable that the Commission had failed to provide any estimate of the benefits that could accrue to consumers from reform—that was an extraordinary omission. It was left to the UK Government to make the assessment. They noted that, if lower market prices fed through to the consumer, there could be savings to consumers of up to £1 billion a year in the UK alone, and of up to 10 billion ecu—£6.77 billion—across Europe. I hope that the Government will keep the consumer firmly in mind. As my right hon. Friend the Member for Skipton and Ripon said, all interests, including the consumers, march together on this.
CAP reform holds the key to prosperous rural economies, EU enlargement and freer world trade. Much rides on it, and the whole House must wish the Minister every success in the negotiations.
§ 7.7 pm
§ Mr. Mark Todd (South Derbyshire)
I shall focus on the longer-term future of the UK's agriculture industries, but first I make an assumption: because of the changes imposed through the next World Trade Organisation round, the increasing ideological bias against market intervention, and declining consumer and taxpayer tolerance, I believe that, within a dozen years, British agriculture will have no or almost no—production-based subsidies or quotas from either United Kingdom or European sources. Any support will have to be based on other public policy criteria—care for the environment, higher standards of animal welfare than the global market demands, or employment and rural development goals.
1164 Given the varied nature of UK agriculture, its future will be diverse. In mapping our futures, we need to understand the present, but we badly neglect research on it. We need a proper understanding of the strengths and weaknesses of our agricultural economy. I compliment the National Farmers Union on its initial report on the competitiveness of the UK farming sector, but much more needs to be done.
We must answer questions such as in what sectors we are already competitive in continental and global terms, and how those strengths and weaknesses are evidenced in our regional economies. We need far stronger research on how our food chain industries fit together to produce a competitive economy for the export sector.
§ Mr. David Drew (Stroud)
Does my hon. Friend agree that one of the ways in which farmers can achieve success is by the localisation of supply, especially through the consequent reduction in transport costs, but also through initiatives such as organic farming? Could British agriculture get back on the world stage in that way?
§ Mr. Todd
Yes, I agree entirely.
Some sectors, such as horticulture, poultry and pigs—industries which are substantial contributors to the South Derbyshire economy—already compete without support. We have heard tales of gloom and woe, and I do not doubt their truth, but we should also talk about our successes: industries that thrive and prosper in a competitive market.
Some larger producers in the protected sectors could survive without protection. Smaller producers and those in less-favoured areas will face the prospect of radical change, towards niche production, in which quality and added value are critical, volume is less important and extensive methods are viable; environmental maintenance and protection; merger with larger, more competitive producers; diversification into other compatible industries; supported departure from the land, with the land returning to a managed nature; or a combination of those.
Government should ensure that our farming communities have genuine choices. We need to identify the role of Government in the process. In most industries, restructuring would be driven by the market alone, but the historical role of the United Kingdom Government before the common agricultural policy and the European Union came on to the scene, distorting the market and managing much of our agricultural decision making, means that there is a legitimate demand for Government assistance for change.
That assistance can be won only if there is a clear strategy, a clear methodology for implementing it, and an exit point for Government, leaving its role confined to the public policy objective that I set out earlier. Government assistance can then focus on transitional support and initial risk sharing; skills development; international marketing assistance to regain markets that we may have lost; ensuring that public policy concerns do not impinge unduly on competitiveness; and backing all that up with appropriate research.
That is all made far more challenging by our obligation to act in step with our European partners, but that is not an excuse for failure to progress the agenda. We can persuade others only when we are clear about our own goals and strategies, and we can negotiate competently 1165 only within a coherent, long-term policy framework, which we currently lack. Our farming policies are, understandably, too much driven by short-term crisis management, and, less justifiably, by a peculiar British delight in the beauties of bureaucracy.
§ Dr. Ian Gibson (Norwich, North)
Does my hon. Friend agree that the new genetic technologies give us a great opportunity to produce good-quality foods, with good regulation? If we do not do that on a European basis, the Americans will be well ahead of the game, so European co-operation and CAP reform are very much part of producing new quality food.
§ Mr. Todd
I agree entirely.
We must concentrate on reform of the CAP on the basis that I have set out. The EU reforms are extremely disappointing and limited: tariff measures remain; there is a substantially increased role for national determination that may lead to inconsistency in the implementation of the measures in individual member states; compensation for price cuts appears to have no time limit or phase-out; continued price support and quotas are inconsistent with likely World Trade Organisation directions; capping may work against the most market-oriented producers and discourage farm mergers; further complexities have been added to an already arcane and bureaucratic system; milk quota increases are targeted at the most marginal producers or new entrants; and continued bureaucratic intervention stifles innovation in a sector that desperately needs it.
There has been useful recognition of environmental obligations, rural development goals and job creation measures, but it is predictable that we will fail in the WTO round to occupy an area that we can defend adequately.
It would have been far better to have a range of agri-environmental and rural development measures that were accessible to some degree to most, if not all, farmers; a focus on area payments rather than price supports or quotas; much more active support for diversification, training and early retirement, perhaps with subsidised insurance and marketing support to aid transition; and an identification of the best in European agriculture, using policy tools to support the transition to a free market. Instead, some reforms foster the least efficient forms of farming. It seems likely that the reforms will have a short life span, perhaps taking us up to the WTO round.
We all subscribe to the protection of the rural environment, without even knowing what we mean by it. In most places in Britain, we have to combine our aspirations for the environment with the need to earn a living and feed our people from the land. When society places those obligations on a farmer, beyond the norm of good practice—I recognise that most UK farmers care deeply about the environment—society should pay the costs.
We must accept that there may be some areas in which it is no longer appropriate to attempt commercial farming; define where they are; and devise measures to allow farmers to withdraw or to transfer to environmental maintenance. We must define what we are seeking to protect in our farmed environment; how we will measure the achievement of that protection; and how policy tools can be devised to secure that protection.
To me, the opportunity is great. We already have, overall, the most competitive farming concerns in Europe. Demand for quality food is growing world wide as 1166 economies mature. Every year, we commit about £4 billion as taxpayers, and a further £3 billion or so as consumers, to a byzantine bureaucracy and subsidy process, controlling individual entrepreneurs at micro-level, in a way not attempted in much of the former Soviet bloc. Poland, which is about to be admitted to the European Union, had a private sector agricultural system throughout the time of Soviet domination. It probably had, and has, a less controlled agricultural sector than the European Union.
Could we not spend the money better and achieve far superior outcomes for both producers and consumers? Few politicians welcome the idea of drip feeding an industry into the future. I have set out an exit strategy that I think will work, and I commend it to the House.
§ Mrs. Caroline Spelman (Meriden)
I want to demonstrate accurately the full scale of the crisis that faces British farming. Agenda 2000 ought to have been a bold expression of what the Commission set out to do in 1995 in reforming and moving towards greater trade liberalisation in agriculture, but I agree that the proposals are timid.
I cannot agree with the Minister, who described the beginning of the negotiations as a powerful start. Several members of the European Union have already rejected the proposals, so it is difficult to understand how that could be called a powerful start. While Europe delays, our competitors make hay—to use an agricultural analogy—and the United States in particular is exploiting the opportunity of greater liberalisation and the decoupling of agricultural support to take advantage of its greater farm size; of its economies of scale; and of better public acceptance of technology that delivers greater productivity in farming.
The tragedy is that, on the face of it, British agriculture, with its large farm structures by comparison with the rest of Europe, would be well placed to take advantage of such decoupling and reform. Despite those advantages, no other member state in the European Union goes into the Agenda 2000 negotiations from such a poor base.
The damage caused by the high pound, the ban on beef exports and the industry's loss of confidence in its Minister have produced a state of despair. Without over-dramatising the situation, I had a letter only last week from the National Farmers Union county secretary noting that one of my constituents, a small dairy farmer, had taken his life because he could see no way forward.
We know that the Minister questions why agriculture should be treated differently from any other industry. No one in private business expects to be bailed out, but politicians have set the framework within which these businesses try to thrive. The framework has many constraints, quotas and regulations. It is only right that farmers should hold us politicians to account if they find that the framework is not serving them well. It is not only the straitjacket of the CAP that is causing problems. They are within their rights to call their Minister to account when our domestic economic policy is making it even more difficult for them to compete and secure livelihoods from their farms.
Part of our effective opposition must be to try accurately to assess the scale of the crisis. We have conducted a comprehensive survey of all parts of the 1167 United Kingdom, which reveals that every farm sector and region is affected by the crisis. The answers that we received from our correspondence identify the most serious impact of any decision by the new Government that has adversely affected farming and related industries as that of the Government's refusal to act against the high pound.
Export companies are obviously the most seriously affected. The cereal sales of Ellingham Grain Ltd. in Suffolk are down 80 per cent. Its sales of beans have been halved. A less obvious, but telling, example involves a company affected by imports sucked in by the high pound. A small family mushroom supplier on the Leckford estate in Hampshire is finding it difficult to remain in business because of mushroom imports.
Another telling example was given to me by my right hon. Friend the Member for Maidstone and The Weald (Miss Widdecombe). A Kentish hop grower is struggling to survive in the international marketplace with the high pound. He stored hops on his farm for two years, receiving no income from them. Meanwhile, cheap imports of hops are flooding into the UK from the United States and former eastern bloc countries. There has been a slight weakening of the pound in recent weeks, but the short to medium-term prospect is of continuing difficulty for British farmers. They are deeply frustrated because they know that the Minister has a tool at his disposal to compensate under the CAP, but it lies idle on his desk.
How is the industry responding to that cold shoulder? Like the good business men they are, they are forced to tighten their belts. Milton Mills engineering in Dorset has frozen pay, made one mechanic redundant, and stopped donating time charitably. Agropharm in High Wycombe has not replaced retiring staff, and has reduced overheads to contain erosion of its profitability. Many farmers are considering amalgamating into larger units to survive the crisis, reducing the number of the traditional family farms to whose support the Government pay lip service.
For others, it is already too late. My hon. Friend the Member for East Yorkshire (Mr. Townend) told me of the Agrisystems company in Boroughbridge, which has gone into receivership. Knight Farm Machinery has shed 11 jobs. Robert D Webster is closing a depot, and John Wood and Son is closing a branch. Those are examples from the real world. It is not only farms but the companies on which agriculture depends that are badly affected.
It does not matter where one goes—north, south, east, west, livestock, arable or horticulture—the picture is the same. The full extent of the problem can be appreciated only when we consider businesses that serve agriculture. Philip Moss and Son in Cheshire told me that farmers do not have the finance to buy even second-hand farm machinery from it. When we asked those businesses whether they felt optimistic or pessimistic about the future, a classic MORI-type question, the answer was overwhelmingly the latter.
The general manager of Milton Mills in Dorset wrote:The current Government seems increasingly reluctant to take note of the very strong fanning voice which has been expressed and I believe it is evident by their apparent reluctance to approach the EU for special consideration and strong economic support for British Agriculture.We only get one chance a year to debate price fixing and the future of the CAP. We should have before us a set of radical proposals to reform the CAP. Instead, 1168 we have a tame document that offers little of relevance or comfort to British agriculture in crisis. The Government hide behind platitudes to protect inactivity and apparent indifference. With only this one chance, we have no choice but to speak up for the serious needs of rural Britain.
§ Mr. Cynog Dafis (Ceredigion)
I wish to speak briefly from a Welsh perspective. We have been provided with documentation of various sorts for this debate, but it is important to remember another report, which was published yesterday: the Welsh Affairs Committee report entitled, "The present crisis in the Welsh livestock industry". I shall give three quotations from it to emphasise the extreme gravity of the situation.
The report states:It is no exaggeration to suggest that much of Welsh agriculture will be destroyed within a decade unless urgent action is taken to reverse the decline.It also says:The collapse of Welsh family farming would be a disaster for Wales as a whole—culturally, environmentally and socially, as well as economically.Thirdly, it states:unless immediate action is taken to assist farmers, there will not be a livestock industry in Wales left to develop.There will be nothing left to build on, to change or to make more competitive—to use the language that has been used commonly tonight. I hope that the Government note carefully what the report says and recognise that their credibility is on the line in Wales. They need to think hard about that.
The Welsh view of CAP reform is, in many ways, different from the positions of the UK Government, of the Conservative Front-Bench spokesman and of the Select Committee report. There are two points. First, there is the idea that too much is being spent on agricultural support in Europe. Less than 1 per cent. of European GDP is being spent. If much of that is being spent inefficiently and untargeted—as it is—and on persuading rich farmers not to grow corn, that is unacceptable and must be changed. We agree that there must be radical reform. If that sum were spent to guarantee food security by maintaining Europe's capacity to be self-sufficient in food, which is an issue for the longer term, to provide wholesome food and high animal welfare standards, to maintain the natural environment, the landscape and the richness of natural habitats and biodiversity, and to strengthen rural communities and create a lively rural economy and culture, it would be well spent. That range of benefits, for both rural and urban dwellers, is well worth paying substantially for. It would be irresponsible not to pay substantial sums for such benefits.
Secondly, the Welsh view of modulation is different from that expressed in many quarters tonight. The Farmers Union of Wales supports the Commission's proposal to vary direct payments according to the amount of labour employed on the farm, on the understanding that moneys released in that way would be allocated within the member state for agri-environmental schemes. Modulation within a member state and according to that state's priorities, but within the framework of common European rules, is an appropriate way to proceed. The 1169 flexibility in the Commission's proposals overcomes the issue of discrepancy in farm sizes between different countries, of which much has been made.
Modulation to strengthen family farms is justified; it is not a way to prop up the weak and uncompetitive, which is the language commonly used. In many ways, small farms are not weak and uncompetitive, and they are certainly not inefficient. Such modulation is justified to maintain adequate human resources in the countryside to deliver the benefits that I have mentioned. I strongly dissent from the view of the Select Committee that modulation based on labour units is contrary to promoting competitiveness.
The documents that we have been given emphasise integrated rural development—linking food production, processing and marketing. That is very much in keeping with the analysis of the Welsh Affairs Select Committee report, which emphasises not only the severity of the present crisis, but the opportunities for Welsh agriculture—in common with other sectors of British agriculture—to meet consumer demand for quality, traceability and sustainable methods of production. The right kind of CAP reform, with an attractive agri-environmental scheme, could assist strongly in that.
In the short term, the crucial issue is whether Wales will get what it undoubtedly qualifies for under the European structural funds from 1999 onwards. Objective 1 status for western Wales could deliver as much as £2 billion between 2000 and 2006. That status is absolutely crucial at this time for the viability of our economy and our communities. There is no doubt about the eligibility of the region or the appropriateness of the payment. What has to be decided is whether the British Government are seriously committed to that at this time. On objective 1 status, as in negotiating CAP reform, it is reasonable for us in Wales to expect the Government to represent our views and our interests—along with those of others, of course—and if they fail to do that, they cannot expect to have political support in Wales.
§ Mr. Steve McCabe (Birmingham, Hall Green)
If there is one European policy that is designed to undermine confidence in the European Union, surely it must be the complex, expensive, fraud-ridden and inefficient support systems of the common agricultural policy. That is why the Government are right to press for reform of the CAP.
We have heard a lot about farmers in this debate, but is it not the case that British consumers are the losers under the present policy? Should we not be at least as concerned about them as we are about farmers? Is it not also the case, as my hon. Friend the Member for Cambridge (Mrs. Campbell) pointed out, that reform of the CAP is now essential because an expanded European Union simply could not afford it?
As we have heard, the current reform proposals could save British consumers as much as £1 billion a year, and I welcome that. Surely after years of butter mountains and wine lakes, any sane person must welcome a shift from the current system of production-related support. Is it not much better that we move to environmental subsidies, which encourage protection of the land and safety for consumers?
I welcome the idea that member states should be allowed to withhold up to 20 per cent. of payments from farmers who fail to meet proper environmental standards. 1170 I hope, particularly in the light of the BSE scandal, that we might use some of that money to encourage grass-reared beef.
If there is a criticism of the Agenda 2000 proposals, it is that they do not go far enough. We must press for a steady reduction in the level of subsidy paid through the CAP. We must move to income support compatible with the requirements of the World Trade Organisation, which will encourage exports as world markets grow. Of course, no system of support can be totally cost free, but a policy based on lower prices and income support is in the interests of the British consumer.
I am somewhat concerned at the suggestions by Commissioner Fischler that present member countries should continue to receive support, but that new entrants should not. That could lead to the situation in which two farmers grow an identical crop on the same number of hectares, but one receives a subsidy and the other does not. That is a recipe for discord and for continual difficulties as the European Union expands.
The right hon. Member for Fylde (Mr. Jack) called for more agrimonetary compensation for farmers. I am sure that he knows that 70 per cent. of that money must come from the British taxpayer, which means that we have a choice. We can have more handouts for farmers, but at the expense of pensioners, hospital patients, school children and many other people in our society. Is that what he wants? Is that fair?
§ Mr. McCabe
I will not give way on this occasion because in a similar debate in 1995, the right hon. Gentleman told the House:I … have first-hand experience of what it is like to operate in a sector that … has no direct intervention. I know what it is like to live on my wits to serve the needs of customers."—[Official Report, 21 March 1995; Vol. 257, c. 237.]The Conservatives are now calling for compensation for farmers which they never once applied for when they were in government. Should we not also recognise that, far from being hard done by, farmers are receiving £85 million of agrimonetary compensation from the Government and can expect to receive about £3 billion in subsidies this year?
I recognise that some small-scale farmers have problems, but I am simply not convinced that the majority of farmers are that hard done by. They may shout about the strength of the pound now, but did they not enjoy tremendous gains during the early 1990s as CAP payments increased rapidly to compensate for weak sterling? Also, is it not the case that, after 1992, EU farmers continued to receive price compensation even though world grain prices had risen rather than fallen? Is it not also true that the Conservative Government's intervention in the 1992 reforms of the CAP, far from producing a fairer system, allowed a small number of fat cat farmers to receive arable area payments ranging from £500,000 to more than £2 million per year?
§ Mr. Drew
Does my hon. Friend agree that the way in which that Government set up the milk market, so that dairy processors had a vested interest in driving down the 1171 price of milk, was a recipe for disaster? Thank goodness that the Monopolies and Mergers Commission is now looking into that case.
§ Mr. McCabe
My hon. Friend is absolutely right. Can anyone seriously argue that the behaviour of the previous Government with respect to the CAP benefited the British consumer, either in terms of prices or food safety? Should we not today support the motion and encourage the Government to negotiate a deal that, although it might have some in-built costs at the outset, could lead to a progressive reduction in the overall size of CAP subsidies? Should we not support the Government in seeking a deal that will encourage a simpler and more efficient system, recognise the rights of consumers, help to create a sustainable rural development policy and protect our environment?
§ Mr. James Paice (South-East Cambridgeshire)
First, I must declare an interest as I have a small acreage of land and, therefore, would be affected by Agenda 2000.
§ Mr. Paice
Ten. We must consider the Agenda 2000 proposals against a clear picture of what we expect of British farmers and the British countryside. Do we want British agriculture to become a corporate activity, with no regard to the community or the environment? Or do we, as some do, want not merely to stop the clock but to turn it back and to use public money to support a rural way of life and a rural community in some sort of yokel agriculture, immune to the changing needs of consumers and, inevitably, with a constantly increasing cost to the taxpayer?
Or is there a third way—the Government seek to find one in other ways—of encouraging our farmers to be efficient by removing the constraints on their production, stimulating enterprise and making targeted payments for specific activities, whether they be environmental or social, but payments that are decoupled from production, transparent about their intention and, at the same time, reflect our genuine concern for family farms in our farming communities? In its report of 12 November, the Select Committee on European Legislation asked:Is the primary purpose of the CAP to ensure a fair standard of living for the agricultural community, or as Article 39 of the Treaty says 'to increase agricultural production by promoting technical progress and by ensuring the rational development of agricultural production and the optimum utilisation of the factors of production, particularly labour'?I find it difficult to square that article with some of the proposals before us, especially those for labour unit modulation and the continuation of quotas.
In considering the whole issue of reform, we have to look back to the last round, which became known as the MacSharry reforms. My right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer), who was Minister at that time, fought hard to ensure that British farmers were not disadvantaged by those reforms—indeed, the idea of modulation was proposed then. If the Minister today does half as good a job of defending the interests of Britain's farmers, taxpayers and consumers as did my right hon. Friend, he will do well.
1172 My hon. Friend the Member for Mid-Worcestershire (Mr. Luff) and my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) spoke about enlargement and the requirements of the World Trade Organisation. Both expressed concern about whether the Agenda 2000 proposals are enough. It is important that compensation should be degressive, but it is also important to distinguish between payments that are compensation and those that are made for specific activities, whether environmental or anything else. There is clearly considerable confusion, not only inside the House, but in the wider world of agriculture, about those two issues.
My hon. Friend the Member for Meriden (Mrs. Spelman) spoke well about the wider implications of fanning economics and the pressures on farmers' welfare and the welfare of many businesses.
On structural funds, we welcome the clearer rural objective described by Agenda 2000 and the bringing together of measures under one heading. We welcome the fact that money will be shifted from the guarantee part of the budget towards rural development, but, like my hon. Friend the Mid-Worcestershire, we do not believe that the proposals fulfil that laudable objective. There is little doubt that, under the new objective 2, rural areas will receive less money than they currently get under objective 5b; and even the new objective, which is sometimes called objective zero, may not be enough, especially given that less-favoured area payments are to be included. We have reservations about whether the proposals will meet the challenges of the WTO or of other objectives, such as diversification for job creation, which is so important. Those elements of the package are necessary if we are to create opportunities for farmers to earn income from non-farming activities.
The issue is not only one of resources; it involves the attitude of the many officials whom farmers encounter and who affect their businesses. The officials responsible for planning and for the many different regulations, such as those on health and safety, have to understand that the development of a different enterprise may mean the difference between survival or bankruptcy.
I ask the Government to examine the issue of business rates, because, if they want to stimulate enterprise in rural areas, they have to look at the way in which, as soon as a farmer develops an enterprise that is not classified as pure agriculture, he immediately gets clouted by business rates. Even providing a few stables can lead to a huge rates bill. It was the previous Conservative Government who introduced the rate relief for village shops, for which the current Government sought to obtain the credit. Has not the time come to consider applying that principle more widely to help farmers?
As my right hon. Friend the Member for Fylde (Mr. Jack) said, the Opposition are not calling for huge increases in public expenditure—indeed, one of our criticisms of Agenda 2000 is that it does not reduce the cost to the taxpayer. We believe that the Government have a duty to help farmers to adjust to the new world. Small sums of money to help new marketing initiatives, or an increase in research into non-food uses of crops, or, as the hon. Member for South Derbyshire (Mr. Todd) said, developing and identifying those areas where we can compete more effectively in a free market could help that adjustment.
1173 Will the Minister tell us how we will address the issue of cross-compliance and environmental assistance? Do the Government support the principle of cross-compliance? Will he assure the House that, as the House of Lords report said, any aid for environmental measures should be available for all farmers, including those in the fens of East Anglia, which I partly represent? Does he agree with the Royal Society for the Protection of Birds, which said:There is no clear connection between economic or physical size of a farm and its environmental sensitivity"?There are many examples of large farms that achieve significant environmental benefits along with efficient farming. However, as any farmer knows, conservation costs money. Loss of income and land area, and development and maintenance costs can be justified only against a profitable farming enterprise, or by specific targeted payments.
Some hon. Members referred to removing support from agriculture, but it is important to differentiate agriculture from all other industries, simply because it is British farmers who manage about 75 per cent. of the land area of this country. Our landscape has been fashioned by agriculture over the millennia, and our people value it as a leisure resource. It is a matter of regret that the Government did not take the opportunity of the debate to lay out their views on the future of agriculture in the United Kingdom. We have heard a little of their views, and we agree with and will support some of them, especially their opposition to the capping of support for individual farms. However, we heard nothing about a vision for agriculture.
Farmers in this country do not want handouts and do not want to be seen as seeking handouts. They repeatedly tell me that they want fair treatment compared with farmers in other countries whose products are coming into this country and with whom they have to compete. Do the Government want no public money to be spent on agriculture? What is the Government's policy toward marginal areas of the country? Do they want vast areas of marginal land to revert to wasteland and moorland and the communities of people living there to fade and die? Do they have a vision for revitalising those rural communities with new policies and continuing public support to keep people living in those fragile areas and to maintain the landscape that millions of people value?
We have not been told the Government's policy towards the idea of labour unit-based modulation within a national envelope—indeed, the Ministers remarks on that issue were somewhat vague. Nor have we heard about their view on livestock quotas, although I hope that the Minister will adopt the same view on those as on milk quotas. The Minister has proclaimed that he will not accept any policy that discriminates against British farmers, yet, on 22 December, he stated that in future there would be fewer producers, but a more viable beef industry in the United Kingdom. Beef farmers throughout the country now believe that they are to be sacrificed by the Government to reduce the supply of beef; but reducing the number of producers does not necessarily reduce production.
We have had a good debate, even though the Labour party has yet again paraded its belief that it represents rural areas. If Labour represents the countryside, why has not a single one of the 180-odd new Labour Members of Parliament registered agriculture as a special interest? 1174 That demonstrates the paucity of Labour's argument and the tragedy facing the British countryside, which is now governed by an urban party.
Conservative Members believe that agriculture has a strong and prosperous future, operating in a marketplace, producing what the customer wants and playing a major role in rural communities and the rural economy. The Agenda 2000 proposals will have to be changed significantly if they are to help, rather than hinder, British agriculture's efforts to face up to the future. They go a certain distance in the right direction, but I ask the Government to be resolute in ensuring that Britain's farmers, taxpayers and consumers are properly defended.
§ The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Jeff Rooker)
By and large, the hon. Member for South-East Cambridgeshire (Mr. Paice) made an excellent speech. [Interruption.] I mean that. It was extremely thoughtful, especially at the start. Admittedly, later we got to the third way, but we could wholly agree with the requirements that he set out. I was not so sure that I could agree with him when he got on to the subject of rates, which has long been contentious. I remind him that agricultural land is not rated—an exemption which, one assumes, no one has ever costed. Nevertheless, it was an excellent speech.
That speech was in marked contrast to the opening speech by the right hon. Member for Fylde (Mr. Jack), but we all know that today he was the prize in a magazine contest. That was the result of his speech today. There was a litany of questions. Did anyone read last week's competition in Farmers Weekly? The winner of the competition received a speech from the right hon. Gentleman. He was first prize in a competition. It was not a fairly structured speech. The second prize would have been a winding-up speech by the right hon. Gentleman.
It has been an interesting debate. The occupants of the two Front Benches are not responsible for the time constraints—the usual channels and business managers agreed them—but we have had a fascinating debate. At one time, four hon. Members representing Shropshire were on their feet at once—two from each side of the House. At another time, no fewer than four hon. Members representing Cumbria were on their feet at once—two from each side of the House. Obviously, the idea that there is a monopoly of provision for, and representation of, rural areas is nonsense. That was the only remark by the hon. Member for South-East Cambridgeshire to which I took exception.
On Tuesday night—my right hon. Friend the Minister of Agriculture, Fisheries and Food and my hon. Friend the Member for Scunthorpe (Mr. Morley), the Parliamentary Secretary, were there—there was hardly any room in the Committee Room when we met the rural group of Labour Members of Parliament. The Room was packed to the gunwales with people with an interest in the rural economy, who believe that the rural economy extends beyond agriculture. That is a key factor.
Many hon. Members have made important points tonight. I shall try to respond to some of them, but it would be impossible to cover them all. My hon. Friend the Member for Carlisle (Mr. Martlew) kicked off by drawing attention to overgrazing on the fells. That behaviour contrasts with that of the people who, over the 1175 millennia, have left us a massive, beautiful landscape, apparently managed and cultured to great success. As my hon. Friend said, obviously that is not the case throughout the country.
My hon. Friend was also the first person to raise the issue of animal welfare. It is impossible to divorce the issues of the CAP and its reform from the incredibly important but narrow issues of simple price support—including animal welfare issues.
The hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy) demanded to know—unfairly, I thought—the decisions taken at the informal meeting of Agriculture Ministers at Newcastle last week, where, by definition, no decisions are reached. Like him, we do not, as a matter of policy, want a diminution of family farms—which is the way that some people would wish to drive it. He also, very fairly, pointed out that not all problems started in May 1997. We accept that farmers are going through a difficult time, but one must be absolutely realistic about the history of the problems that confront us today.
The right hon. Member for Skipton and Ripon (Mr. Curry) made a measured speech—in contrast to the bawling and shouting. He rightly pointed out that farmers were affected more than most by the strength of the pound because they were affected earlier than anyone else. I would be the first to say that all manufacturing industry is affected—I know that from constituency experience in Birmingham—but farmers are affected first, because of the operation of the green pound.
If I were to reply to all the points made in the speeches by my hon. Friend the Member for Shrewsbury and Atcham (Mr. Marsden) and the hon. Member for Mid-Worcestershire (Mr. Luff) I would take up all the remaining time, because they raised important issues on a range of CAP policy issues, including the cattle-tracing system, about which I shall say a few words. My hon. Friend said that we need to look at rural affairs in the round, not only from an agricultural perspective but from an environmental and social one.
I was on a farm yesterday—and indeed last week—and met not just farmers and country landowners, but those involved in the wider rural economy. My fellow Ministers and I visit farms regularly. We are in contact with, and listen to, people at the sharp end, not just in our Whitehall offices. We are very conscious that those people are keen to discuss wider rural affairs, not just the narrow agricultural aspects.
The hon. Member for Mid-Worcestershire, as Chairman of the Select Committee on Agriculture, referred to the valuable report that had been produced. This is not a love-in. The Government were able to respond because the Committee had produced a report that we did not wholly support but which was a credit to the Select Committee system. That is not to say that the Committee will produce such a good report every time, but it was a valuable contribution. I wish that forced reading of that report had been a requirement for speaking in the debate.
Many hon. Members mentioned the cattle industry, especially regarding the beef ban. The myth persists that this Government are responsible for the beef ban. We are responsible for legislating it, because the previous Government forgot to do so. There are aspects of the beef industry, however, to which we must pay special 1176 attention, because any problem in our food industry, especially the beef industry, affects our capability to negotiate our way out of the ban.
Confidence in food is affected in many ways. In negotiating our way out of the ban, we have been affected by questions of quality in the slaughter industry and meat-cutting plants. We now have higher levels of inspection by the Meat Hygiene Service, and that confidence must be communicated to the European regulators. In addition, we now publish the hygiene scores of more than 1,000 red and white meat slaughterhouses.
The staff on that vital inspection work do it on behalf of the public as well as the industry, but I regret that there are continued instances of intimidation of meat hygiene staff to prevent them from carrying out their duties to protect public health. We—I hope that I speak for the whole House—will not tolerate the intimidation of veterinary surgeons and meat hygiene inspectors, carrying out their work in the slaughterhouses of this country.
We recently had the first successful prosecution for intimidation and assault on an official veterinary surgeon, carried out by Mr. R.B. Crowther at the plant of D.S. Cooper of Shelley Bank abattoir in Huddersfield against a female official veterinary surgeon in pursuance of her duties. We shall expose and prosecute on every possible occasion when intimidation of the people doing those jobs, in defence of the beef industry and food safety, is brought to the notice of the authorities. I give that pledge on behalf of—
§ It being three hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Order [18 May].
§ The House divided: Ayes 151, Noes 230.1179
|Division No. 285]||[7.58 pm|
|Ainsworth, Peter (E Surrey)||Davey, Edward (Kingston)|
|Amess, David||Davies, Quentin (Grantham)|
|Ancram, Rt Hon Michael||Day, Stephen|
|Arbuthnot, James||Duncan Smith, Iain|
|Atkinson, David (Bour'mth E)||Evans, Nigel|
|Atkinson, Peter (Hexham)||Faber, David|
|Baldry, Tony||Fabricant, Michael|
|Ballard, Mrs Jackie||Fallon, Michael|
|Bercow, John||Flight, Howard|
|Blunt, Crispin||Foster, Don (Bath)|
|Boswell, Tim||Fowler, Rt Hon Sir Norman|
|Brady, Graham||Fox, Dr Liam|
|Brazier, Julian||Fraser, Christopher|
|Brooke, Rt Hon Peter||Garnier, Edward|
|Browning, Mrs Angela||Gibb, Nick|
|Bruce, Ian (S Dorset)||Gill, Christopher|
|Bruce, Malcolm (Gordon)||Gillan, Mrs Cheryl|
|Burnett, John||Goodlad, Rt Hon Sir Alastair|
|Burns, Simon||Gorrie, Donald|
|Burstow, Paul||Gray, James|
|Butterfill, John||Green, Damian|
|Cash, William||Greenway, John|
|Chapman, Sir Sydney (Chipping Barnet)||Grieve, Dominic|
|Gummer, Rt Hon John|
|Chidgey, David||Hamilton, Rt Hon Sir Archie|
|Chope, Christopher||Hammond, Philip|
|Clappison, James||Harvey, Nick|
|Clifton-Brown, Geoffrey||Hawkins, Nick|
|Collins, Tim||Hayes, John|
|Colvin, Michael||Heath, David (Somerton & Frome)|
|Cotter, Brian||Heathcoat-Amory, Rt Hon David|
|Cran, James||Hogg, Rt Hon Douglas|
|Curry, Rt Hon David||Horam, John|
|Howard, Rt Hon Michael||Rendel, David|
|Howarth, Gerald (Aldershot)||Robathan, Andrew|
|Hughes, Simon (Southwark N)||Robertson, Laurence (Tewk'b'ry)|
|Hunter, Andrew||Rowe, Andrew (Faversham)|
|Jack, Rt Hon Michael||Ruffley, David|
|Jackson, Robert (Wantage)||Russell, Bob (Colchester)|
|Jenkin, Bernard||St Aubyn, Nick|
|Keetch, Paul||Sanders, Adrian|
|Kennedy, Charles (Ross Skye)||Sayeed, Jonathan|
|Key, Robert||Shephard, Rt Hon Mrs Gillian|
|King, Rt Hon Tom (Bridgwater)||Simpson, Keith (Mid-Norfolk)|
|Kirkbride, Miss Julie||Soames, Nicholas|
|Laing, Mrs Eleanor||Spelman, Mrs Caroline|
|Lait, Mrs Jacqui||Spicer, Sir Michael|
|Lansley, Andrew||Spring, Richard|
|Leigh, Edward||Stanley, Rt Hon Sir John|
|Letwin, Oliver||Steen, Anthony|
|Lewis, Dr Julian (New Forest E)||Streeter, Gary|
|Lidington, David||Swayne, Desmond|
|Lilley, Rt Hon Peter||Syms, Robert|
|Livsey, Richard||Taylor, Sir Teddy|
|Loughton, Tim||Tonge, Dr Jenny|
|Luff, Peter||Townend, John|
|MacGregor, Rt Hon John||Tredinnick, David|
|McIntosh, Miss Anne||Trend, Michael|
|MacKay, Andrew||Tyler, Paul|
|Maclean, Rt Hon David||Tyrie, Andrew|
|McLoughlin, Patrick||Viggers, Peter|
|Madel, Sir David||Wallace, James|
|Malins, Humfrey||Walter, Robert|
|Maples, John||Wardle, Charles|
|Mawhinney, Rt Hon Sir Brian||Waterson, Nigel|
|Michie, Mrs Ray (Argyll & Bute)||Wells, Bowen|
|Moore, Michael||Whitney, Sir Raymond|
|Moss, Malcolm||Whittingdale, John|
|Nicholls, Patrick||Widdecombe, Rt Hon Miss Ann|
|Norman, Archie||Willetts, David|
|Oaten, Mark||Willis, Phil|
|Ottaway, Richard||Wilshire, David|
|Page, Richard||Woodward, Shaun|
|Paice, James||Yeo, Tim|
|Prior, David||Tellers for the Ayes:|
|Randall, John||Mr. Oliver Heald and|
|Redwood, Rt Hon John||Mr. John M. Taylor.|
|Ainger, Nick||Campbell, Mrs Anne (C'bridge)|
|Ainsworth, Robert (Cov'try NE)||Campbell, Ronnie (Blyth V)|
|Alexander, Douglas||Cann, Jamie|
|Allen, Graham||Caplin, Ivor|
|Anderson, Donald (Swansea E)||Chapman, Ben (Wirral S)|
|Atherton, Ms Candy||Chaytor, David|
|Atkins, Charlotte||Clark, Paul (Gillingham)|
|Austin, John||Clarke, Charles (Norwich S)|
|Banks, Tony||Clelland, David|
|Barnes, Harry||Coaker, Vernon|
|Bayley, Hugh||Coffey, Ms Ann|
|Beard, Nigel||Colman, Tony|
|Beckett, Rt Hon Mrs Margaret||Cooper, Yvette|
|Bell, Stuart (Middlesbrough)||Corbett, Robin|
|Benton, Joe||Corbyn, Jeremy|
|Berry, Roger||Corston, Ms Jean|
|Betts, Clive||Cox, Tom|
|Bradley, Keith (Withington)||Crausby, David|
|Bradley, Peter (The Wrekin)||Cryer, Mrs Ann (Keighley)|
|Bradshaw, Ben||Cryer, John (Hornchurch)|
|Brinton, Mrs Helen||Cunningham, Rt Hon Dr John (Copeland)|
|Brown, Rt Hon Gordon (Dunfermline E)|
|Brown, Rt Hon Nick (Newcastle E)||Darling, Rt Hon Alistair|
|Buck, Ms Karen||Darvill, Keith|
|Burden, Richard||Davey, Valerie (Bristol W)|
|Burgon, Colin||Davies, Rt Hon Denzil (Llanelli)|
|Byers, Stephen||Davies, Geraint (Croydon C)|
|Campbell, Alan (Tynemouth)||Davis, Terry (B'ham Hodge H)|
|Dawson, Hilton||Lock, David|
|Denham, John||Love, Andrew|
|Dobbin, Jim||McAvoy, Thomas|
|Dobson, Rt Hon Frank||McCabe, Steve|
|Doran, Frank||McCafferty, Ms Chris|
|Dowd, Jim||McCartney, Ian (Makerfield)|
|Drew, David||McDonagh, Siobhain|
|Eagle, Angela (Wallasey)||McDonnell, John|
|Edwards, Huw||Mackinlay, Andrew|
|Efford, Clive||McNamara, Kevin|
|Ellman, Mrs Louise||MacShane, Denis|
|Ennis, Jeff||Mactaggart, Fiona|
|Etherington, Bill||McWalter, Tony|
|Field, Rt Hon Frank||Mallaber, Judy|
|Fisher, Mark||Marsden, Gordon (Blackpool S)|
|Fitzpatrick, Jim||Marsden, Paul (Shrewsbury)|
|Flint, Caroline||Martlew, Eric|
|Follett, Barbara||Merron, Gillian|
|Foster, Rt Hon Derek||Michael, Alun|
|Foster, Michael Jabez (Hastings)||Michie, Bill (Shef'ld Heeley)|
|Foster, Michael J (Worcester)||Milburn, Alan|
|Gapes, Mike||Miller, Andrew|
|Gardiner, Barry||Mitchell, Austin|
|George, Bruce (Walsall S)||Moffatt, Laura|
|Gerrard, Neil||Moran, Ms Margaret|
|Gibson, Dr Ian||Motley, Elliot|
|Godman, Dr Norman A||Morris, Ms Estelle (B'ham Yardley)|
|Godsiff, Roger||Morris, Rt Hon John (Aberavon)|
|Gordon, Mrs Eileen||Mudie, George|
|Grant, Bernie||Mullin, Chris|
|Grocott, Bruce||Norris, Dan|
|Grogan, John||O'Brien, Mike (N Warks)|
|Hall, Patrick (Bedford)||O'Hara, Eddie|
|Hanson, David||Organ, Mrs Diana|
|Healey, John||Pearson, Ian|
|Hepburn, Stephen||Pendry, Tom|
|Heppell, John||Pike, Peter L|
|Hesford, Stephen||Plaskitt, James|
|Hewitt, Ms Patricia||Pollard, Kerry|
|Hill, Keith||Pond, Chris|
|Hoon, Geoffrey||Pope, Greg|
|Hope, Phil||Prentice, Ms Bridget (Lewisham E)|
|Howarth, George (Knowsley N)||Primarolo, Dawn|
|Howells, Dr Kim||Purchase, Ken|
|Hughes, Ms Beverley (Stretford)||Quin, Ms Joyce|
|Hughes, Kevin (Doncaster N)||Radice, Giles|
|Hutton, John||Rammell, Bill|
|Iddon, Dr Brian||Raynsford, Nick|
|Illsley, Eric||Reed, Andrew (Loughborough)|
|Jackson, Ms Glenda (Hampstead)||Reid, Dr John (Hamilton N)|
|Jenkins, Brian||Robinson, Geoffrey (Cov'try NW)|
|Johnson, Alan (Hull W & Hessle)||Roche, Mrs Barbara|
|Johnson, Miss Melanie (Welwyn Hatfield)||Rooker, Jeff|
|Jones, Mrs Fiona (Newark)||Ross, Ernie (Dundee W)|
|Jones, Helen (Warrington N)||Ruane, Chris|
|Jones, Dr Lynne (Selly Oak)||Russell, Ms Christine (Chester)|
|Jowell, Ms Tessa||Ryan, Ms Joan|
|Kaufman, Rt Hon Gerald||Salter, Martin|
|Keeble, Ms Sally||Sawford, Phil|
|Keen, Alan (Feltham & Heston)||Sedgemore, Brian|
|Kelly, Ms Ruth||Sheerman, Barry|
|Kemp, Fraser||Sheldon, Rt Hon Robert|
|Kennedy, Jane (Wavertree)||Singh, Marsha|
|Khabra, Piara S||Skinner, Dennis|
|Kidney, David||Smith, Rt Hon Andrew (Oxford E)|
|Kilfoyle, Peter||Smith, Angela (Basildon)|
|Kingham, Ms Tess||Smith, Rt Hon Chris (Islington S)|
|Kumar, Dr Ashok||Smith, Miss Geraldine (Morecambe & Lunesdale)|
|Lepper, David||Snape, Peter|
|Leslie, Christopher||Soley, Clive|
|Lewis, Ivan (Bury S)||Spellar, John|
|Linton, Martin||Squire, Ms Rachel|
|Livingstone, Ken||Starkey, Dr Phyllis|
|Lloyd, Tony (Manchester C)||Steinberg, Gerry|
|Stewart, Ian (Eccles)||Ward, Ms Claire|
|Stuart, Ms Gisela||White, Brian|
|Sutcliffe, Gerry||Whitehead, Dr Alan|
|Swinney, John||Wicks, Malcolm|
|Taylor, Rt Hon Mrs Ann (Dewsbury)||Williams, Alan W (E Carmarthen)|
|Winterton, Ms Rosie (Doncaster C)|
|Taylor, Ms Dari (Stockton S)||Woolas, Phil|
|Thomas, Gareth R (Harrow W)||Wright, Anthony D (Gt Yarmouth)|
|Todd, Mark||Wright, Dr Tony (Cannock)|
|Touhig, Don||Wyatt, Derek|
|Turner, Dennis (Wolverh'ton SE)|
|Twigg, Stephen (Enfield)||Tellers for the Noes:|
|Vis, Dr Rudi||Janet Anderson and|
|Walley, Ms Joan||Mr. David Jamieson.|
§ Question accordingly negatived.
Main Question put and agreed to.
That this House takes note of European Community Document No. 7073/98 relating to reform of the Common Market Organisations for beef, cereals and milk and for the development of rural development policy in the European Union, and the Second Report from the Agriculture Committee, Session 1997–98, `CAP Reform: Agenda 2000' (HC 311) and the Government response thereto (HC 719); and supports the Government's intention to negotiate an outcome which takes account of the interests of UK producers, consumers and taxpayers alike and of developing countries and to press for a reformed Common Agricultural Policy with substantially reduced overall costs, which is more economically rational, which reduces the bureaucratic burden on farmers, which provides a better framework for targeted environmental and rural development support, which contains fair and common rules to ensure that the UK's farm and food industries can exploit their competitive advantage in European and world markets, which facilitates the accession of associated countries and which offers the medium-term prospect of benefits to developing countries.