HC Deb 26 October 1998 vol 318 cc81-129
Mr. Deputy Speaker (Mr. Michael J. Martin)

We now come to the debate on farming and the food industry. I wish to announce that Madam Speaker has selected the amendment in the name of the Prime Minister.

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

I beg to move, That this House welcomes moves made by Her Majesty's Government in recent weeks to address some of the problems facing the British agricultural industry but believes these problems would be more successfully addressed by measures such as accessing agri-monetary compensation funds, ensuring that animal welfare standards are enforced uniformly across the EU and that UK standards are applied to imports, encouraging supermarkets to support British farming in their buying policies and addressing the imbalance in the bargaining power between producers and the supermarkets, implementing a 'Buy British' policy in central government and its agencies and encouraging local government to do likewise wherever possible, retaining the Calf Processing Scheme, reducing inspection charges on farmers, ensuring that payments to farmers are made promptly, stabilising exchange rates by making an early declaration of intent of the Government's commitment to join the European Single Currency, implementing longer-term measures that are also needed to secure the future of British farming, including the clear labelling of products including imports, and ensuring that CAP reform does not discriminate against British farmers and any uptake of an early retirement scheme does not lead to compulsory amalgamation of holdings; further believes that confidence in the safety and quality of British food will only be restored when a fully independent and authoritative Food Standards Agency is established; and regrets any delay in its creation. This is one of our two half-day debates being held shortly after the resumption of the parliamentary Session. This motion, together with the question that my party leader, my right hon. Friend the Member for Yeovil (Mr. Ashdown), asked the Prime Minister last week at the first Prime Minister's questions since the recess, underscores the fundamental importance that the Liberal Democrats attach to the crisis in British agriculture, and to the knock-on ramifications for the food chain and for wider rural policy.

Before I turn to the Government and to the new Minister of Agriculture, Fisheries and Food, I must express my surprise at the Order Paper. Given the countryside march and the high priority that the leader of the Conservative party has placed on these matters in recent months, it was astonishing to see that the Conservatives either agree lock, stock and barrel with Liberal Democrat policy—if so, I am delighted—and do not feel the need to table their own amendment, or have nothing new or original to say on these matters, which I suspect is the case.

I further gather from my friends in the Tory party—the few that are left—that they are on a one-line Whip. Given that they have been making such a song and dance in the House about these issues, one wonders why they are not on a three-line Whip and joining us in trying to put the Government under constructive pressure. They cannot all be having tea with General Pinochet—even genetically modified tea.

Mr. James Gray (North Wiltshire)

Is the hon. Gentleman aware of early-day motion 1688 about beef-on-the-bone regulations? It is signed by 34 members of the Conservative party, but not one Liberal Democrat has signed it.

Mr. Kennedy

The hon. Gentleman may not recall the occasion on which the Liberal Democrats tabled a motion opposing those regulations, and I well imagine why he may not wish to do so. The Conservatives, to be fair, were happy enough to support us on that occasion, the reason being that our position is established in terms of the progress of legislation.

As I pointed out to the hon. Gentleman generously on the occasion to which I refer—for the benefit of those who were not present then, I will share it with him again—I always welcome interventions of that kind from him, because he was my defeated Conservative opponent in 1992.

The Conservatives seem to be removing themselves from the field of battle in this regard. That is no wonder, given what happened at their party conference. The party has an unreal attitude to Europe and, in particular, to European monetary union. That means that, in the long term, in respect of the broad parameters of agricultural policy and reform of the common agricultural policy—and, as we all know, the big decisions will be made in that context—the Conservatives have nothing to say for the next eight years.

I am glad that the Conservatives have clarified that, because it means that it is possible for a debate to take place this evening between the Government and Liberal Democrats. In speaking to the motion, I am mindful of the fact that the post of agriculture spokesman is a rather sticky wicket in all the parties. We are on our second Minister, and I wish him well. We are on our third Conservative party spokesman: one has diversified; one, presumably, has been "set aside"; and I wish the third well in his debut performance.

Wisely and carefully, we drafted our motion to encompass more than just farming. We have referred to the food industry in general, and there is a reason for that. In agriculture debates, we may all at times overlook the value to the United Kingdom economy of not just agriculture, but agriculture and the entire food-and-drink sector, in the context of the manufacturing base that we debated earlier.

The gross value added of UK food manufacturing is about £16 billion. It is a huge sector, and the food-and-drink sector's share of employment in manufacturing is about 11 per cent. That accounts for about half a million employees. No fewer than 1 million farmers, farm workers and food industry workers are employed in farming and food manufacturing. It is therefore appropriate for us to consider the issues on a slightly wider basis than that of agriculture, although I want to focus on the problems afflicting farming.

Over the summer, there have been repeated leaks, hints, press reports and speculation about legislation on the Food Standards Agency, culminating in a recent speech by the Minister in Yorkshire. Those of us who represent agricultural seats, and have participated in debates such as this over the years, know how opinion has moved in agriculture. I remember when I first stood for Parliament in 1983. I stood up in front of my constituency branch of the National Farmers Union, and argued that its interests would be better served by the hiving-off of the consumer-food safety side of the Ministry of Agriculture, Fisheries and Food to a free-standing agency—that was what the alliance then supported—with the Ministry looking after only the production side. The response to that was pretty hostile.

Nowadays—largely as a result of the disasters that have been visited on agriculture and the food chain—those who talk to farmers throughout the country will find that they are as anxious as anyone else for the Government to proceed with all due haste. They know that the signal that will send to the consumer is profoundly important to the industry. The issue is wider than it might have been even a few years ago. The Government have rightly committed themselves to the introduction of an independent Food Standards Agency. If that is not in the Queen's Speech in a few weeks' time, not only will they have slipped in terms of their manifesto commitments; it will be damaging to the interests of both the UK agriculture sector and the UK consumer. It will be doubly damaging. I hope that the Minister will reassure us that the Government are not back-pedalling or stalling on their commitment, because, if they are, it will be a great setback.

In that context, let me say a word about supermarkets, which, in recent weeks and months, have been the subject of observations in various Select Committee reports. I hope that the Minister will be able to meet representatives of the retail sector soon: that is vital. When he does, he should—as well as bearing in mind one or two items on which I shall touch—have a constructive dialogue with the supermarkets, which are in an immensely privileged, powerful and monopolistic position. He must make it clear that they must play their part in encouraging consumer purchasing habits that will benefit UK agriculture.

Mr. Oliver Letwin (West Dorset)

Is it not regrettable that the Monopolies and Mergers Commission is not looking at the wholesale as well as the retail side of the market?

Mr. Kennedy

I think that a broader analysis would have been better, but at least an analysis is being made in response to Select Committee reports—and, indeed, to the excellent report of my hon. Friend the Member for South-East Cornwall (Mr. Breed) about the activities of supermarkets in this respect. However, I agree that the canvas could have been broader.

A dialogue between the Minister and the retail sector is essential. We urge him to do more to ensure that UK content means legitimate UK content, as opposed to content that is cut up, packaged and dispensed in this country but reared elsewhere; but, much as we want him to take such action, we cannot divorce that important facet from the Government's abysmal behaviour since they came to office in regard to the accessing of European Community funds.

The country is in a cycle of insanity. The United Kingdom taxpayer is paying into EU funds; those funds are being accessed by nearly every other member state to help its farmers—farmers who, frequently, are employing lower animal husbandry and other standards than are imposed on our farmers. Their products are then imported into this country, packaged and labelled as UK content, and sold, cut-price, to the UK consumer. In the process, our farmers are being put out of business. The Minister will have to address that issue with alacrity. He cannot, in all integrity, engage in the necessary dialogue with the supermarkets while his Government preside over such a policy.

Throughout the country, we see the dreadful state of British agriculture. It is said that farmers often complain—that whatever is right in one sector is not right in another, that if the weather is right for one part of the country it is not right for another, and so forth. The current crisis was summed up very well by a Yorkshireman who remarked to me, in typically ebullient fashion, "You know how bad things are, lad, when even the guys who won't pay stop ordering." That—put, albeit, in fairly rumbustious fashion—reflects the extent of the difficulty.

Hill farmers in Wales are probably suffering more than farmers in any other part of the United Kingdom, but there is no part of the United Kingdom that is not suffering. There is no sector that is not experiencing a drastic drop in prices and a bad harvest, as well as all the knock-on effects of BSE and the madness of the ban on beef on the bone. I was encouraged to note that the Minister was anxious to do something about that; perhaps he will reassure us further tonight. There is also the continuing difficulty caused by our failure to take a sufficiently positive approach at a European level.

In Scotland, if I may say a word in regard of my country, there is a disastrous ministerial regime under Lord Sewel. Given his recent defeats in another place, it is high time that he were allowed to concentrate all his energies on devolution and to pass to the Under-Secretary of State for Scotland, the hon. Member for Western Isles (Mr. Macdonald), interim responsibility for agricultural matters. I say "interim" because I hope that, after next May, we will have a Scottish Liberal Democrat in charge of Scottish farming policy and dealing with the difficulties in the Scottish Office, which have not been witnessed south of the border, with regard to arable payments.

The Secretary of State for Scotland has made a great headline announcement, saying that arable payments will be available to help the current income crisis, but such are the bureaucracy and failings in the system that those payments are not, in large measure, getting in time to the people whom they need to hit. These are serious issues with which government in all parts of the United Kingdom should deal.

Mr. John Swinney (North Tayside)

Is the hon. Gentleman aware that, in relation to arable aid payments, there is still a hangover from the previous financial year for a number of farmers because of mapping difficulties and the flow of information to the Scottish Office?

Mr. Kennedy

The hon. Gentleman is correct. Those farmers face a double whammy because, as he rightly says, there is the hangover from the previous year, as well as difficulties with the present set of payments. When a Minister makes a great announcement about some additional help—remember, this additional help is targeted only at the short-term income crisis; it does not deal with the longer-term strategic crisis of UK agriculture—and even that help does not come forward in time and is not delivered where and in the way it is supposed to be delivered, it has a doubly depressing effect on those who are left in the agriculture sector, given the collapsed state of morale in the sector.

The Parliamentary Under-Secretary of State for Scotland (Mr. Calum Macdonald)


Mr. Kennedy

Having perhaps destroyed the hon. Gentleman's career by praising him as the possible Minister with responsibility for agriculture in Scotland, the least I can do is allow him to make his debut.

Mr. Macdonald

The hon. Gentleman's remarks are a little beneath him. His arguments would be better balanced if he would reflect that support to the farming community of Scotland is at its highest level ever—£500 million a year—and that, in this current year, that support has been further increased by an extra £50 million, a 10 per cent. increase. It would be better if he took that on board when he assessed the Government's help to farmers in Scotland.

Mr. Kennedy

As the hon. Gentleman knows, I always listen to him with respect and affection. I do not think that these arguments are beneath me or anyone else because, to a greater extent than any other Minister with responsibility for agriculture in any of the four nations of the UK, it is Lord Sewel who has tramped the country using the demon word "restructuring".

What does restructuring suggest to an agricultural community that is already in the depths of crisis? It suggests what the steelworkers, the coal miners and shipbuilders all experienced under Thatcherism. It means that this Government's mindset is to allow a significant proportion of traditional family farming throughout the UK to disappear. If they allow it to go to the wall, the great irony is that, when people retreat from the land, when the family farms are sold, when there are more amalgamations and more agri-businesses, when we do not have the families there who, for generation on generation, have looked after these areas, be it Cornwall, Devon, Somerset, the highlands or rural Wales, the very objectives on which there is all-party consensus in terms of CAP reform—that more funds should go into rural development, diversification, conservation, management of the habitat—will not be met and we will not be able to develop the post-CAP reform, Agenda 2000 approach to which the Government pay lip service.

Mr. Richard Livsey (Brecon and Radnorshire)

Does my hon. Friend agree that what is needed is an immediate package to rescue the industry, and that one of the most important things for family farms in upland areas is to have hill livestock compensatory allowances jacked up to the 1992 level, plus inflation? It is the Tories who cut the allowances and it is Labour who should restore them. We would support Labour if it did that.

Mr. Kennedy

I agree with my hon. Friend, who has made a notable contribution, both professionally and in his membership of the Select Committee on Welsh Affairs, to matters agricultural. He is right to say that, for hill and upland farmers, particularly in less-favoured areas, HLCAs are the most immediate, most targeted and most responsive assistance that any Government can come forward with.

Mr. Michael Jack (Fylde)


Mr. Derek Foster (Bishop Auckland)


Mr. Kennedy

I had better give way to the last but one shadow Minister.

Mr. Jack

Will the hon. Gentleman confirm just one fact? When we left office, hill livestock compensatory allowances were £160 million; currently, they are £125 million.

Mr. Kennedy

The point that. my hon. Friend the Member for Brecon and Radnorshire (Mr. Livsey) has made deals with that adequately. We do not support this Government's approach towards HLCAs. It must be remembered that the freezing took place in 1992, so the right hon. Gentleman cannot, as Conservatives are all too prone to do, believe that all the problems that we are discussing in this and other debates began at the stroke of midnight on 2 May a year and a half ago. Many of them are deep-rooted and, in part at least, the legacy of the previous overlong Conservative Administration.

Mr. Foster

I was going to compliment the hon. Gentleman on his powerful speech, but I should point out, before he leaves HLCAs, that he did not manage to cover my constituency, which includes Teesdale. I have 600 sheep farmers there, 400 of whom depend on HLCAs. It is the worst crisis that I remember in 20 years as their Member of Parliament. Clearly, the most effective thing that my Government can do is to increase HLCAs substantially.

Mr. Kennedy

I hope that one of the positive signals that can emerge in the direction of the Treasury Bench and the Minister tonight is that, the more all-party support we can have behind the continuance and upgrading of HLCAs in coming weeks and months, the better it will be. The Government can make a difference there and it is something that is well worth them responding to positively, if not tonight, at some later stage. I reflect only on the fact that I do not know which career has been more damaged—that of my friend the Under-Secretary of State for Scotland by my praising him, or mine by the distinguished right hon. Gentleman praising me.

The essential difficulty in terms of what we outline in our motion is that, the immediate crisis apart, and I do not think that there is any serious doubt that "crisis" is the appropriate word in this context, we now have a society—I have been interested by what the Minister has been saying in recent weeks in this respect—where there is perhaps too much polarity between urban and rural Britain.

The Minister and I are of a generation where we can recall our parents telling us how, in the last world war, children were sent out of urban conurbations to farms, parts of the country that they would not, otherwise, have seen or experienced. That is not happening these days. Even with greater social mobility, there is not the same fundamental understanding of the rural economy, and of agriculture in particular, that was a feature of that particular generation.

Therefore, it is incumbent on the Government and on the House as a whole to do more to support our agricultural base, to recognise that one of the important ways of so doing is to ensure the highest standards in the food safety chain, and to give reassurance and realistic positive support where it is so desperately needed. That is the clarion call that the Liberal Democrats express on behalf of the UK agriculture sector. It is one to which I hope that the House in general and the Government in particular can respond positively.

7.38 pm
The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Jeff Rooker)

I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof: welcomes the Government's strong commitment to the UK farming industry and to the wider rural economy; welcomes in particular the steps which the Government has taken since May 1997 to support the beef and sheep industry via EU agri-monetary compensation and relief from charges; acknowledges the steps taken specifically to help the sheep, pig and cereal sectors with targeted EU measures; and endorses the Government's intention to bring about a secure and viable future for the UK farming and food industries through a market-orientated reform of the Common Agricultural Policy. I am grateful to the hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy) for the content of his speech, with much of which—particularly his concern for the rural economy—we can agree. We are particularly at one on the comments that he made in the final part of his speech.

The hon. Gentleman said that he would curtail his comments so that as many hon. Members as possible would be able to speak in this debate. He therefore could not deal in his speech with every item listed in the Liberal Democrats' motion on today's Order Paper. I do not criticise him for that brevity. Although I shall not respond to every item in the motion, I shall try to deal with some of the key issues that he raised. I should be happy to try to deal with all the issues, but, in a short debate, that would only cause complaints.

I welcome the hon. Member for South Suffolk (Mr. Yeo) to his new position in the shadow Cabinet. However, he is not the third shadow agriculture spokesman that the Government have faced in the past 18 months but the fourth. One of his predecessors as agriculture spokesman held the post for a little while, in May 1997, until changes were made. There has been—I do not criticise it—a high turnover in the position.

I know that the House expects me to deal with the much-needed support that is going to agriculture. Although no one makes any complaint about that support, at the end of an agriculture debate, one should never try to leave the impression, or make a public pronouncement, to the effect that the sector is devoid of support from the taxpayer, because it is not. Public support for agriculture amounts to billions of pounds. Although I shall not deal with the catalogue of issues affecting the sector, I shall deal with the main ones, because they are extremely serious.

I accept the comments made by the hon. Member for Ross, Skye and Inverness, West at the beginning of his speech, and agree that, for the first time ever, many factors have come together simultaneously to affect agriculture. We have examined the ups and downs of the various sectors of the industry, and confirmed that, although all the sectors have never flourished at the same time, there has never before been a time when almost every sector has, for different reasons, been attacked and undermined as almost every sector is being attacked and undermined at present. The assault on all those sectors has had a cumulative effect on many farmers and food producers. We shall seek to make as much progress as we can in our negotiations on the package that we shall put together to meet the immediacy of farmers' and food producers' demands.

Mr. Barry Jones (Alyn and Deeside)

May I emphasise the severity of the crisis on the hillsides in Wales, and tell my hon. Friend of the problems faced by sheepmeat and beef producers, even on the lower pastures and in the dairy industry? The National Farmers Union county delegate, Mr. Terrig Morgan at Fferm Carreg y Llech, Mr. Idris Roberts of Pwll farm, Trevddyn, and Mr. Clive Swann of Ffrith farm have told me of the real difficulties faced by their members. They hope very much that urgent action will he taken. The good news is that the Under-Secretary of State for Wales, my hon. Friend the Member for Cardiff, Central (Mr. Jones), has agreed to meet my Trevddyn and Llanfynydd members—who I am sure will receive a favourable reply.

Mr. Rooker

I am grateful to my hon. Friend for mentioning those locations, as it saves me having to do so. I am grateful also for the presence in the Chamber of my hon. Friends who are Ministers in the Welsh Office and the Scottish Office, as agriculture is an issue that affects people across the United Kingdom.

I should mention some aspects of the financial assistance available from taxpayers. Although I know that it annoys some people when we mention it, the fact is that, so far, £2.5 billion has been spent on BSE-related measures, some of which are market-support measures. The situation today would be far worse than it is if we did not spend that money provided by taxpayers. Moreover, beef producers are receiving annually in normal beef subsidy payments approximately £500 million. Furthermore, in 1996–97, some £450 million in ewe premium payments were paid to sheep producers. Although slightly less was paid in the subsequent year, several hundreds of millions of pounds were paid.

Sir Robert Smith (West Aberdeenshire and Kincardine)

Will the Minister give way?

Mr. Rooker

I shall be happy to give way to the hon. Gentleman after I have made a little progress in my speech.

Should sheep prices remain low this year, producers will benefit from the higher ewe premium. Moreover, in response to currently low lamb prices, we have successfully urged the European Commission to grant private storage aid for sheepmeat in the United Kingdom. The Commission has very promptly responded to our request, providing private storage aid for a maximum of 2,400 tonnes. Early indications are that, because of the storage, significant quantities of lamb will be removed from the market.

The Government have also just agreed to an increase in advances payable under the beef special premium and the suckler cow premium scheme, from 60 to 80 per cent. The increase in the level of advance payments will, in the very near future, bring to the industry some £100 million, which would otherwise not have been available until spring 1999.

We have also persuaded the Commission to extend beef intervention coverage in Northern Ireland for the last four tenders in 1998 and to provide for an increase in the maximum carcase weight of animals purchased.

Although the hon. Member for Ross, Skye and Inverness, West did not mention some matters in his speech, they are part of the Liberal Democrats' motion, and I shall deal with them. Some matters are more important than others, because they are more pressing.

One such matter is the calf processing scheme. During the summer recess, we announced our decision on the statutory implications of that scheme, which will end on 30 November. As of today, that is still the position. [HoN. MEMBERS: "Oh."] No, nothing has been ruled in or ruled out. The Ministry is seriously considering a range of options, and we are genuinely considering all the points that have been made to us over the summer recess. To do anything other than that would be a derogation of our responsibility as Ministers to the House. We are genuinely considering all the points that have been made to us.

I have not said that there has been any change in the scheme. As of today, the scheme will end as we have announced that it would. The statutory scheme ends on 30 November. However, as I said, we are genuinely considering all requests that have been made to us over the summer recess. Although that matter was dealt with in the Liberal Democrats' motion, I cannot say any more about it now. I had hoped to deal with the matter in such a manner that I would not have to deal with it at greater length, but perhaps I will have to.

Mr. David Curry (Skipton and Ripon)


Mr. Kennedy

The Minister is trying to be very upfront about the matter. Perhaps the way in which he is expressing himself—using double negatives—is almost making him sound disingenuous. Is he saying that the Government are considering extending the scheme, which is what we are asking for?

Mr. Rooker

No. I said that the scheme would close. However, we are considering each and every request that has been made to us over the summer recess by the farming and livestock communities. That is the current position. I cannot go beyond that.

Mr. Curry


Mr. Rooker

I shall give way to one of the other former shadow agriculture spokesmen.

Mr. Curry

This one is lying fallow.

Does the hon. Gentleman agree that, unless the scheme is continued or something that has equivalent effect is introduced, there will be a real welfare problem, and that farmers simply will not pay £2.50 for a tag for a worthless calf? Does he agree also that much poor-quality beef from the dairy herd will be reared and hang over the beef market, ultimately costing the Government much more than if they had produced a scheme to take that beef out of the marketplace?

Mr. Rooker

That may be true. However, I tell the right hon. Gentleman that, although dairy farmers in particular have pressed for continuing the scheme, the animal welfare lobby and abattoir operators have welcomed the decision to end it. The matter is not clear cut, and there is no uniform support in the industry for one particular option one way or the other. It is not correct to say that there is such uniform support. It is also quite clear that it would be a considerable time—into 2000—before the effect of ending the scheme was felt in the beef industry.

I am simply trying, as concisely as possible, to tell the House that we are seriously and genuinely considering all the requests that were made over the summer recess to me, my right hon. Friend the Minister of Agriculture and other Ministers. I am not in a position to announce any decisions. Therefore, the position must today remain as we announced it in the summer. I do not want to give anyone a false impression.

Mr. Christopher Gill (Ludlow)

Will the Minister give way?

Mr. Rooker

Not now, although I shall give way to the hon. Gentleman in a moment. I should like to deal with the points made by my hon. Friend the Member for Alyn and Deeside (Mr. Jones) and the hon. Member for Ross, Skye and Inverness, West.

I accept that hill farmers are facing considerable difficulties. I know that from personal experience, having visited several over the recess, professionally—as a Minister—and as a tourist in the hills. I have gone out of my way to listen to as many as possible. Nevertheless, the fact is that £600 million of subsidies will this year be distributed to hill farmers alone, so the Government's commitment to support farming in the hills is in no doubt. I make it absolutely clear that we fully intend to continue supporting it.

The autumn review of economic conditions in the uplands is well under way. The hon. Member for Ross, Skye and Inverness, West referred to the hill livestock compensatory allowance rates. These are, of course, a structural measure. It is our intention to replace the scheme with one that will deliver support more effectively to hill farmers to meet social and environmental concerns, the very points that the hon. Gentleman made, albeit in a different form of words. However, the scheme is being considered in the context of Agenda 2000, which envisages a switch from headage payments to an area-based scheme.

The hon. Member for Ross, Skye and Inverness, West was a little unfair on Lord Sewel. Everyone understands that change is never easy, but we plan to consult fully on options for a new scheme later this year.

Sir Robert Smith

Will the Minister give way?

Mr. Rooker

Yes, I promised that I would give way to the hon. Gentleman.

Sir Robert Smith

Does the Minister not understand the frustration felt by the farming community as it faces the crisis now? Lord Sewel talks about the future but wants to implement the scheme in the United Kingdom before it is implemented in the rest of the European Union. Farmers in this country are operating in an open single market and, unless the Government operate by the same rules as the rest of the EU, our farmers will be made to fight the crisis with one hand tied behind their back. There will be reform, but it must involve the whole of the EU, not just the United Kingdom unilaterally.

Mr. Rooker

It is no part of Government policy that the restructuring of agriculture within the EU should be on the back of a vanguard move by farmers in this country. That would be utterly unfair, and it is not something that we would support. However, the fact is that we have to discuss the restructuring of the industry without sending the wrong signals.

Mr. Gill


Mr. John Greenway (Ryedale)


Mr. Rooker

With respect, I want to make progress. It is not possible to take too many interventions.

The hon. Member for Ross, Skye and Inverness, West referred to the beef ban. We understand that it is a symbolic issue for many people. Progress is being made in Northern Ireland. Movement so far has been small—I understand that 60 tonnes have so far been exported, which is a drop in the ocean. It will take time to rebuild markets, but it is a top priority for the Ministry to get the ban lifted as quickly as possible.

Mr. Gill

Will the Minister give way?

Mr. Curry

Will the Minister give way?

Mr. Rooker

No, not at the moment.

The date-based export scheme proposed by the Commission is one that we are actively negotiating in Brussels, virtually on a daily basis. The Commission has undertaken inspections in this country in recent months, which have been positive and helpful. We have a problem—

Mr. Curry

Will the Minister give way?

Mr. Rooker

No. There are problems with some of its demands in respect of bone-out beef, but we are seeking to overcome them.

The hon. Member for Ross, Skye and Inverness, West also referred to the ban of beef on the bone. No one ever claimed or demanded that it was for ever. I said as much in February when I put the relevant regulations to the House. It is self-evident that, as time goes by, different considerations prevail. The Spongiform Encephalopathy Advisory Committee and the chief medical officer will look into the problem. Everyone can count 30 months from August 1996.

We have to be careful. We do not yet have the experimental results in respect of bone marrow, so we are not yet in a position to make an announcement. However, British people know that we are taking massive safety precautions to make sure that British beef is safe. What we are doing goes far beyond anything being done elsewhere in Europe, so consumption of British beef by British people has gone up again this year—it now accounts for around 79 per cent. of our beef consumption, compared with 72 per cent. last year. People know that the checks that we have put in place ensure that British beef is safe, and confidence is returning. We are not going to take a hasty decision, but the ban was not intended to be for all time. We never hinted that it would be so, and we want it lifted as quickly as possible.

Mr. Paul Tyler (North Cornwall)

The Minister has just said something that all hon. Members believe, which is that the controls on British beef are much greater and more effective than those that exist anywhere else in Europe. Will he assure the House that substandard imports of beef from other EU states and, indeed, from other parts of the world, will now be controlled, so that he can give a perfectly straightforward guarantee to the British people that they can eat British beef with safety and that they will not be subjected to substandard beef from other sources?

Mr. Rooker

I shall give the hon. Gentleman an example of something that crossed my desk only the other day. Substandard beef is a constant problem in a single market. In some ways, the European Union is the inspector of third-country imports. Recently, Australia was the subject of an EU inspection in respect of its meat industry and the processing side of it—the abattoirs and cutting plants. The EU inspectors were not satisfied with what they found, and Australia has been given six months to put its house in order. If it does not, there will be serious repercussions for its exports to the EU. That is something that happened only recently. It is a matter of public knowledge, although it did not make the headlines.

Inspections of third countries are taking place, and we do not intend to allow substandard food into this country or, indeed, into the EU as a whole. There are also problems relating to, for example, welfare conditions, with which I shall deal later.

The hon. Member for Ross, Skye and Inverness, West did not mention this, but another example of support for the industry—especially the beef sector—from the taxpayer and the Government is the start-up of the cattle movement service on 28 September. The reason why I have heard nothing about this service, either inside or outside Government, is that it is working. It works as a very successful information technology project, and I pay tribute to MAFF staff, our consultants and, of course, the industry. We have been working hand in glove for 18 months to get the system up and running.

The service's capital start-up costs and the first year's running costs represent an investment of some £35 million of taxpayers' money in the cattle industry. It could not have been done without massive co-operation. The service now has 200-plus new staff and, in the first four weeks, it issued 193,000 passports, processed 80,000 cattle movement notifications and handled some 30,000 calls from farmers. It will add credibility to our negotiations in Brussels in respect of the lifting of the ban, although it is not a requirement for it. We are well ahead of the European Union requirement for a computerised cattle tracing system, which is an EU requirement for every country by December 1999.

Mr. Lembit Öpik (Montgomeryshire)

Does the Minister accept that the scheme will in effect be a tax on British farming if the Government do not enforce the same standards for imports, as mentioned by my hon. Friend the Member for North Cornwall (Mr. Tyler)? Will he confirm that he recognises that it is not only beef farmers who are affected, but those who produce pigs and lamb?

Mr. Rooker

I shall deal with pig farming. I take the hon. Gentleman's point. We imposed unilateral controls on the removal of specified risk materials on beef imported into this country. My right hon. Friend the Member for Copeland (Dr. Cunningham), the former Minister of Agriculture, Fisheries and Food, told the House that he would do it if the EU did not get its act together, and we did it. We said that we would not have that beef in this country. We are not allowed to carry out random checks because of the single market, but we check the paperwork and have advance notification of the paperwork at the ports of entry. I understand that more than one load has been sent back because the paperwork was not in order. Vigorous attention is being paid to the import of beef into this country.

Mr. Letwin


Mr. Rooker

I shall not give way. I must move on.

The hon. Member for Ross, Skye and Inverness, West mentioned the "Buy British" policy. That suggestion comes from the Liberal Democrats who would, by and large, have had this country in the EC before 1972 without any negotiation. A "Buy British" campaign is contrary to our obligations under the treaty of Rome and would be outlawed straight away—[Interruption.] I am referring to the motion, which states that there should be such a policy in central government and its agencies". As the hon. Gentleman knows full well, we are unable to do that. It is always the point, in opposition, to ask the Government to do something that they cannot do, but that does not mean that we are taking no action. Consumers and importers of food into the United Kingdom can operate a "Buy British" policy without falling foul of the treaty of Rome, but the Government cannot, as we act for a member state.

We persuaded the Commission to make intervention beef stocks available to the Ministry of Defence. The MOD hopes that all its requirements for beef for forces serving in the United Kingdom can now be met with products of UK origin. It is also considering whether it can source some of its requirements for lamb from the UK, but that is more difficult. First, there are no intervention stocks and, secondly, frozen lamb from overseas is competitively priced and there is a problem in respect of ordering contractors to purchase from a particular area.

We will go as close to the wire as we legally can on the treaty of Rome in encouraging our importers and producers to buy British. We cannot cross the wire. We have put it to our lawyers and legal advisers that we want to go as close as we possibly can. However, as the hon. Gentleman well knows, we cannot order people to buy British.

Mr. Livsey

Will the Minister note that the National Farmers Union, the Farmers Union of Wales and the Young Farmers Clubs visited the MOD in Bath? We tried to persuade the Ministry that the British forces should eat British lamb. At present, no one serving in the Army, Navy or Air Force eats British lamb. I was informed in answer to a parliamentary question that 52 per cent. of lamb consumed by the forces comes from New Zealand and 48 per cent. comes from Uruguay. Surely that is quite wrong.

Mr. Rooker

I have just explained the position regarding lamb, to which intervention stocks do not apply. We have acted where there are intervention stocks.

The hon. Member for Ross, Skye and Inverness, West also mentioned the major problems in the pigmeat industry because the EU pigmeat regime is very light. When one gets through the jargon, that means that, by and large, pigmeat producers are not on the receiving end of what can be described in shorthand as Common Market subsidies. They have operated in what is very much an open market over the years and, as a result, they have done better than beef and lamb producers. However, over-production causes difficulties with the pricing structure, which was also badly affected by the massive fire in Northern Ireland which created catastrophic problems. It is a vital sector of the industry. Total annual production is 1.3 million tonnes, worth more than £1 billion at the farm gate. The sector is very much reliant on the market, so scope for Government action is extremely limited.

The UK supported a Commission proposal for a scheme providing aid to private storage which came into effect on 28 September. It will allow payment for storage for four to six months, although rates may vary according to the length of storage and the cut. I hope that that will have a steadying effect on the market. We need an orderly pattern because of the massive disruption caused by the economic problems in Russia. Most people do not make the connection between events in Russia in recent months and the effect on European producers. I did not know until the issues were raised and we asked questions about them that the biggest purchaser of lamb skins from the United Kingdom was Russia, which has been completely wiped out as a market because of the catastrophic problems there. Of course that has caused difficulties for our producers.

The motion refers to prompt payment to farmers. I repeat that we are making excellent progress and I can confirm that advance payments under the beef subsidy scheme will begin early next week. The second advances under the sheep annual premium will follow shortly after that.

As I said earlier, we have agreed with other member states that the advance payments on the beef premium schemes will bring an increase of –100 million six months earlier than would otherwise have been the case. We have also made a prompt start on this year's arable area payments—98 per cent. of the advance oilseed payments were made by the end of September. The main arable payments started last week and are due for completion by the end of December. By the end of October, 40 per cent. of the payments will have been made. We are making massive progress in trying to speed up the payments of those subsidies to our farming communities. I understand that cash flow is extremely important.

The hon. Member for Ross, Skye and Inverness, West—joined by the Conservatives—made his usual attack on agrimonetary compensation, not a penny of which was ever paid by the Conservative Government. For the avoidance of any doubt, there is no agrimonetary compensation in the kitty for sheep farming; at present it applies only to beef and cereals, so we must not give the impression that demanding the payment of agrimonetary compensation will help the sheep sector.

Mr. Gill

In respect of agrimonetary compensation, does the Minister recognise that the present crisis in agriculture is far more serious than it was under the Conservative Government? If the objection to paying agrimonetary compensation is based on the fact that the Treasury has to pay 71p for every £1 that is paid to the industry, does he recognise that, notwithstanding the fact that 71 per cent. has to come from the Treasury, every £1 going into the industry counts at this time of crisis? Inevitably, every £1 going into the industry finds its way back into the general economy and is good for jobs and services in the rest of the economy and, inevitably, the Treasury gets some of that money back in taxation.

Mr. Rooker

How can the hon. Gentleman dismiss with a flight the fact that 71 per cent. of the money comes from the British taxpayer because 100 per cent. goes into the sector? I have to say to the hon. Gentleman, whom I respect enormously for his contributions to debates, not least the number of his Adjournment debates that I have answered, that the Government cannot ignore that. Neither the Treasury nor any other Ministry can ignore the fact that 71 per cent. of the money will be paid by the British taxpayer. Hon. Members should remember that we paid £85 million of agrimonetary compensation to the livestock sector earlier this year in recognition of the exceptional circumstances. We recognise the current difficulties and we are keeping the situation under review. We shall continue to meet farming unions and other interested organisations and we are keenly aware of their case. I make no bones about it, as I said in my opening remarks.

Let me say a few words about producer negotiating power. I make no attempt to be a spokesperson or defender of the supermarkets. Far from it—they are more able to speak for themselves and have more money than my Ministry. Producers have to be able to deal effectively with major buyers in a global market. The UK has a historical and cultural problem in that the agricultural sector has been slower than others to respond. There is sometimes embarrassment when I ask farmers about getting together and working as producers. The fact that, for whatever reason, they have not done so in the past has allowed them to be the victim of a pincer movement by the supermarkets. The Ministry gives every encouragement—as it did under the previous Government—to any initiatives within the farming interest to encourage producers to get together and not to be isolated and picked off by those who have control of our food chain.

Mr. Paddy Tipping (Sherwood)

Do not supermarket chains have enormous power? It must be right that British meat, which is of the highest quality, produced with good animal welfare standards, should be promoted and sold in our supermarkets. The reductions in prices at the farm gate should be passed on to consumers. Will my hon. Friend talk strongly with supermarkets to ensure that British farmers and British consumers get a fair deal?

Mr. Rooker

I can certainly answer yes to my hon. Friend's main question. My right hon. Friend the Minister of Agriculture and I are meeting representatives of the British Retail Consortium next week. We have been discussing the issue throughout the summer because of the apparent mismatch and some of the media stories. We have looked for evidence. The Ministry has neither the expertise nor the power to demand information about prices at different points in the chain, between animals leaving the farm and the meat arriving on our supermarket shelves. There has been great suspicion in the media that some of the practices of some retailers are not helpful to our farming industry—that is a polite way of putting it.

We welcome the efforts made by many retailers to ensure that their sourcing practices meet or exceed consumer expectations. I was talking to one of the supermarkets last week. I shall not name it—it is not one of the big four, but it is the fifth one; small in terms of food, but big in the high street. I was told that from 1 January it will require its suppliers of any imported pigmeat—be it bacon or Parma ham—to meet the same welfare standards as British producers. If those standards are not met, the supermarket will not import the meat. That is a fair point. The supermarket does not need the force of the Government—we have no legal authority in that area—but it is right and proper that that is being done. In due course, the supermarket will make known its policy to give it a competitive edge and to show what it is doing to help British industry. The message is: "We are interested in animal welfare; we want standards to be driven up; and we will use our purchasing power to do that." That is what that chain has said openly to me. I encourage all others to follow that example.

We have to be very careful or we shall end up pushing down the road to price controls and a fixed market. We know that that leads to empty shelves in shops. That is the reality that we have seen from the siege economies of the Soviet countries.

Mr. Norman Baker (Lewes)

Will the Minister look at the labelling laws, which allow imported chicken from Thailand to be labelled as British because it is processed in this country, even though it was reared under conditions vastly inferior to those in this country?

Mr. Rooker

Under the beef labelling scheme, beef must be reared, slaughtered and packaged in this country to be called British. The same rules do not apply to poultry, but we are making moves in the European Union to rectify that. People must not be misled by labelling. The words "Packaged in the EU" do not mean that a product was produced by a European Union farmer or food producer. People have to look at labels carefully. We want more progress on making labels meaningful. We do not want them to give a false impression that produce was nurtured by European Union farmers. The hon. Gentleman is right to make that point. Some of the issues can be dealt with on a voluntary basis, but there are difficulties with labelling. As a member of the European Union, we have to ensure that we get EU-wide agreement, otherwise it is nonsense for our farmers.

Mr. Michael Colvin (Romsey)


Mr. Rooker

This is the last time that I shall give way.

Mr. Colvin

I should like to declare an interest, as a farmer. The Minister mentioned supermarkets earlier and talked about price regulation. He is no doubt aware of the Office of Fair Trading report that suggested that the big four supermarkets were operating a cartel. How soon will the Monopolies and Mergers Commission report be available, so that we can know whether a free market is operating among the supermarket chains?

Mr. Rooker

I cannot tell the hon. Gentleman. I have not referred to that because I cannot cover every point. There is an inquiry going on. The Welsh Affairs Committee produced an important report earlier in the year. It is right and proper that some of the concerns that were highlighted should be investigated by the competition authorities as soon as possible. However, I have no information on that and we cannot interfere during the inquiry.

The first point that the hon. Member for Ross, Skye and Inverness, West raised was on the Food Standards Agency. It is one of the most popular promises in the Labour party manifesto. I do not remember any of the 1,100 submissions that we received on the White Paper earlier this year opposing the establishment of an agency. Obviously, there are different views about its powers, structure and charging. Last Friday, I was at a one-day conference in York organised by the Food Advisory Committee—the Ministry's most important committee on the subject—on that and related issues. The whole food production chain was represented and every speaker was in favour of the concept of an agency. I cannot pre-empt the contents of the Queen's Speech on 24 November. The Government are determined to take the Food Standards Agency project forward. I cannot say whether there will be a slot for the Bill in the next parliamentary Session, but my right hon. Friend the Minister of Agriculture will outline immediately after the Queen's Speech how we shall proceed. We have a manifesto commitment to deliver a Food Standards Agency. However, I cannot go into greater detail because of the nearness of the Queen's Speech.

There have been unfounded press reports on the subject. There has been no back-door or front-door attempt in the Ministry to neuter the Food Standards Agency. I have heard no suggestion of that and neither have my civil servants. There have been arguments about nutrition, but everyone accepted the compromise reached in the White Paper "The Food Standards Agency: A Force for Change". There has been no backtracking on that. Our commitments remain as they were earlier in the year.

Mr. Charles Kennedy

I appreciate that the Minister cannot anticipate the contents of the Queen's Speech, although if the commitment was one of the most popular in the Labour manifesto, as he says, it would be perverse in the extreme if it did not appear in the first two Queen's Speeches of the Parliament.

The restructuring of the Ministry of Agriculture, Fisheries and Food is a related issue. What will be the relationship with the Department of the Environment, Transport and the Regions on planning, and with the Department of Health on health issues? Even if legislation does not come forward immediately, thinking about the Food Standards Agency must be pretty well advanced. What is envisaged for the future of the Ministry? Will we have a Ministry for the countryside? If so, will it have a planning remit?

Mr. Rooker

That goes much wider than the Food Standards Agency. I could take another 10 minutes on that, but I want to conclude. The key area is the relationship of the Ministry with the Department of Health. The joint food standards and safety group is a unified group across both Departments, headed by one civil servant reporting to Ministers in both Departments. All key decisions on food standards and safety are taken jointly by MAFF and the Department of Health. There is no unilateral action. The joint group consists of 300 civil servants, of whom 250-odd are from MAFF and the rest are from the Department of Health. It is headed by a civil servant of great seniority—a Department of Health civil servant who was already on secondment to MAFF. It operates as a unified structure across both Departments and is working very well. As I heard last Friday in York, all the outsiders who have contact with it speak with great respect about how they are treated. The future of the Ministry and our relations with the Department of the Environment, Transport and the Regions are matters for the Prime Minister and go well beyond this debate.

Agriculture is intrinsic to the rural economy. We grow our food in the countryside. Some 70 per cent. of the country is used for food production—a very different situation from that in Canada or the United States, as my right hon. Friend the Minister of Agriculture and I said last week to the House of Lords Select Committee investigating genetic modification. It is clear—-there is no secret—from what my right hon. Friend has been saying on the record recently that we shall be making an announcement as quickly as possible on our decisions on the requirements of agriculture and the food production industry in this extremely difficult period. Prospects for the immediate future do not look good. I regret that I had to say that a year ago, too.

We are looking at a package of measures. We must ask ourselves what the package is for. It must meet short-term needs and not destroy the industry or grow like Topsy and make long-term restructuring more complicated. That would not serve anybody's purposes. That is one of the reasons why we are moving as quickly as we can towards bringing forward payments. We understand the urgency of the situation and will make our conclusions known to the House as quickly as possible.


Mr. Tim Yeo (South Suffolk)

I warmly welcome the fact that the House is debating agriculture. I congratulate the Liberal Democrats on choosing the subject for this half-day debate. Alas, I am not able to congratulate the hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy) on the way in which he opened the debate. The first quarter of his speech was devoted to an extraordinarily trivial series of party political points. When he reads Hansard tomorrow, even he will be ashamed of the way in which he opened the debate. Even the deplorably low standards of the Liberal Democrats were plumbed to a new low.

The Conservative party believes that the crisis in agriculture is far more important than scoring party political points. [Interruption.] That seems to be a matter of mirth on the Government Benches. The Conservatives had decided that half of the first Opposition day available to us following the summer recess would be devoted to this very subject. The seriousness with which we take the issue is reflected by the presence of not only my hon. Friends the Members for Cambridgeshire, South-East (Mr. Paice) and for Teignbridge (Mr. Nicholls) but my two predecessors, my right hon. Friends the Members for Skipton and Ripon (Mr. Curry) and for Fylde (Mr. Jack). I am delighted that they continue to take an interest in the subject.

I shall turn in a moment to the comments of the Minister of State, Ministry of Agriculture, Fisheries and Food, the hon. Member for Birmingham, Perry Barr (Mr. Rooker), but must first say that I had expected by now to be responding to a speech from the Minister of Agriculture. I am amazed that he did not choose to speak in this debate. He has been in the job for 13 weeks—is that not long enough? He said on television yesterday that he knew that agriculture was going through difficult times, but does he understand just how difficult? At this very moment, farmers who are on the verge of quitting a way of life that has sustained them, their parents, their grandparents and, in some cases, many generations before that are waiting to hear from him. Their decisions may depend on whether hints of a rescue package, which have been so tantalisingly dropped over the past few days, turn out to be true or false.

The Minister has spent much of the past 13 weeks trying to show that he is different from his predecessor. I grant that he has had some success—although the standard by which he has been judged is not a very demanding one. This evening, that hard-won progress has been thrown away. For as long as the Minister occupies his new office, on which his predecessor lavished so many hundreds of thousands of pounds just when he was cutting help for Britain's poorest farmers, he will be known as the Minister who refused the chance to debate the worst crisis to hit agriculture for half a century.

After a two-and-a-half month parliamentary recess, during which conditions in farming have steadily worsened, the Minister has nothing to say. His silence today confirms what we all knew: new Labour does not care about the countryside. As far as the Government are concerned, farmers can go bust. Perhaps there is a reason for the Minister's silence; perhaps he does not know what to say. On this issue, as on so many other countryside issues over the past year and a half, Ministers have moved from denying that there is a problem, through panic at discovering that there is a problem, to confusion about how to tackle that problem.

Last week, the spin doctors were hard at work. On Saturday, we read that a package of help was to be unveiled by the Minister after the Prime Minister—no less—had intervened. On television on Sunday, 24 hours later, the Minister denied that. On Sunday morning, the newspapers said that the Prime Minister had asked the Minister to investigate supermarket prices. Then, on television, the Minister denied that as well. Just what is going on? Who is in charge of agricultural policy? Is it the Minister, No. 10 or the spin doctors? Those issues are too important to be trifled with in such a misleading way. I hope that, when the Minister eventually has something to say, he will say it in the House and not try to leak it to the newspapers through spin doctors, as he and his colleagues have clearly been doing over the past few weeks. The situation is too serious for that.

As the president of the National Farmers Union, Ben Gill, pointed out yesterday, farm incomes this year will probably be less than a fifth of those two years ago. In case anyone thinks that that is just like a few City dealers losing their Christmas bonus, I remind the House that average farm incomes in Wales last year were less than £160 a week and less than half that this year. That is an insulting reward for a demanding job. I notice that the issue is not one about which Labour Members have much to say at the moment. Many farmers are working for pay below the minimum wage. Indeed, it is hard to find a price of any commodity that is not lower than it was in May last year.

This crisis will destroy many farmers. Businesses that have provided a living for two or three people for generations are disappearing. Closure of a microchip factory in the north-east may make the headlines, but the trauma for the men and women who are being forced off the land every week by a Government who do not care is just as great. The crisis is not just hurting farmers and their families; it is hitting the entire rural economy.

Mr. Öpik

Does the hon. Gentleman agree that the crisis to which he refers is most particularly hitting smallholdings and family farms, which have existed for generations but could be pushed entirely out of the industry?

Mr. Yeo

The hon. Gentleman is quite right; I fear that that is exactly what is happening.

The Secretary of State for Trade and Industry would probably say that the idea of helping farmers was pretty gut-wrenching, but if farmers—large or small—do not survive, many other businesses in other industries will be threatened, too. The effects of the agricultural depression which is only just around the corner will not be confined to the economy. Soon, the entire fabric of our countryside will deteriorate. Those beautiful landscapes, which are cherished even by urban dwellers, and those precious green fields—if, indeed, any survive the Deputy Prime Minister's attempt to cover them with houses—will suffer neglect.

I do not suggest that all the problems in agriculture started on 1 May last year. Some of them are clearly long-term difficulties. The tragedy is that, faced with such problems, the Government do things that time and again make matters worse. The average strength of the pound over the past 18 months of Labour Government has been a serious problem for many farmers. That is the direct result of Government policy. If a Government choose to tax savings and investment and announce spending increases without knowing how they will be paid for, inevitably, financial markets worry, interest rates are forced up and the pound starts to rise. The level of the pound is nothing to do with what the Bank of England has done and everything to do with what the Government have done.

Let us take the problems of the beef industry. Instead of trying to boost confidence in British beef, the Government ban beef on the bone.

Sir Robert Smith

Given what the hon. Gentleman has said about the fault not being the Bank of England's, does he support the independence of the Bank of England, now that he is happy with the way in which it is behaving?

Mr. Yeo

The hon. Gentleman does not appear to have followed my argument. The point is that, if the Government give the Bank of England a remit but then follow policies such that the only way that the Bank can achieve that remit is by raising interest rates, it is the actions of the Government, not those of the Bank, that have led to higher interest rates.

Mr. Bob Blizzard (Waveney)

If the hon. Gentleman is so concerned about the effect of exchange rates on the farming industry, why does his party show no interest in what the National Farmers Union wants—early entry into the European single currency—and instead rule that out for 10 years? How can the Conservative party be the farmers' friend when it would deny farmers what they want for the next 10 years?

Mr. Yeo

How farmers react depends entirely on the level at which we enter the single currency and on the relationship between sterling and the euro. The single currency solves no problems for farmers if, at the point of entry, the relationship between sterling and the euro is the wrong one.

Beef is a more immediate issue for farmers. Instead of trying to boost confidence in British beef, the Government chose to introduce the ban on beef on the bone. The previous Minister of Agriculture said that banning beef on the bone would help to get the European Union to lift the export ban, but it has totally failed to do so. Indeed, the ban on beef on the bone now appears to have become part of the problem. Lifting that ban would not cost consumers, taxpayers or farmers a single penny and it should be lifted today. If the Government do not lift it, there is a risk that the EU will try to make it permanent. What an extraordinarily disgraceful outcome that would be—a gratuitous act against British farmers committed by the Labour Government.

Mr. Gordon Prentice (Pendle)

Is it not true that the controls in abattoirs that we were promised by Conservative Ministers were not rigorously enforced? The Labour Government have to deal with that problem, which was created by the Conservatives.

Mr. Yeo

The hon. Gentleman might be aware that the ban was described by the Selkirk sheriff court as "a manifest absurdity". It was described by the Institute of Trading Standards as "unenforceable". That underlines how ludicrous it is to attempt to introduce a ban to reduce an almost unmeasurably small risk. There is more risk of being killed by a lightning strike than by eating beef on the bone.

Mr. Rooker

The ban on beef on the bone was introduced on the advice of the Spongiform Encephalopathy Advisory Committee and the chief medical officer. If we had not introduced the ban, we would have been the first Government knowingly to allow BSE—at whatever level—into the food chain. We are not yet aware of the results of the experiments on bone marrow, and for the hon. Gentleman to advance his arguments on the very day that the families are before the BSE inquiry is quite despicable.

Mr. Yeo

I do not think that the ban was justified when it was introduced; I do not think that is has been justified at any stage since its introduction; and I certainly do not think that it is justified today. I maintain that the ban on beef on the bone should be lifted forthwith.

Mrs. Angela Browning (Tiverton and Honiton)

Does my hon. Friend recall that, when the Minister banned beef on the bone and we debated the subject in the House, I put it to him that, if he were genuinely concerned about human health, he would ban those bovine bones, classify them as specified bovine material and have them properly disposed of? However, it is the only part of the bovine carcase for which advice has been given stating that it should not enter the human food chain that is not properly disposed of. That shows how bogus the Minister's argument is.

Mr. Yeo

My hon. Friend speaks with great expertise and passion on the subject and she is absolutely right.

Mr. Curry

Would not my hon. Friend be more convinced by the Government's argument in respect of beef on the bone if there were any consistency in the Government's treatment of green-top milk? Why is green-top milk apparently unsafe for Scots to drink, but safe for the English to drink? Actuarially speaking, is not the risk from such milk far greater than that from beef on the bone?

Mr. Yeo

My right hon. Friend is absolutely right, and I hope that the Minister will address that point when he winds up the debate.

I welcome the signs of a rethink on the end to the calf processing aid scheme, although it appears that, on this subject as well, the Government are in a state of confusion. The Minister said that he was not thinking of extending the scheme, but that he was reconsidering the present position. I hope that he will sort out his views on the subject as soon as possible.

I realise that the Minister might encounter difficulty with the Treasury, which has been no great friend to the Ministry of Agriculture, Fisheries and Food—MAFF was one of the Departments that did particularly badly under the terms of the comprehensive spending review. Presumably, the Treasury is one of the reasons why the Minister will not access further agrimonetary compensation, although that might also remain in the balance—the Minister was not absolutely clear on that point.

Still on the subject of money, I come to the hill livestock compensatory allowance. The Secretary of State for Wales let the cat out of the bag when he said, in the context of the hill farming review, that there was no money available. Will the Minister confirm that? A fat lot of good the consultation process will be if the decisions have already been set in concrete, but the public has not been told.

While the Minister tries to persuade his colleagues that farming is in crisis, may I suggest five things he could do instead, none of which involves public spending? Although one or two might require him and his colleagues to stick up for British interests in Europe to a greater extent than they have been willing to do so far, all five would help to secure a fair deal for British farmers—a chance to compete on equal terms.

Mr. Hilton Dawson (Lancaster and Wyre)

Would the hon. Gentleman care to remind us exactly who got us into such a dreadful mess over the beef export ban and the subsequent debacle affecting British agriculture?

Mr. Yeo

The hon. Gentleman has just illustrated more eloquently than I could why we are in such a mess. If Labour Members do not understand that the situation affecting farming is infinitely more serious today than it was two years ago, there is little hope that Ministers will be persuaded to take the action that is needed.

Mr. Dawson

Will the hon. Gentleman give way?

Mr. Yeo

No, not again. The hon. Gentleman has demonstrated such ignorance of the issue, it is not worth wasting the House's time.

The first part of the fair deal is that we want farmers to have a fair deal when competing against imports. Pig farmers are now producing under conditions that, quite rightly, are more demanding than in the past. Their competitors abroad will not have to meet those conditions for several years, yet when bacon appears on the supermarket shelf, how is the shopper to tell whether or not it comes from a humanely reared British pig? Is it right for consumers to be offered pigmeat products produced under conditions that are not allowed in this country, without their being warned that that is the case?

Against a background of rising bankruptcies in the pig fanning sector, will the Government encourage retailers to ensure that consumers know whether or not the pig from which the product on the shelf has come was reared in Britain? If the Government will not give that encouragement, every pig farmer in Britain will know that the Labour Government are not on his side. Every consumer in Britain will know that the Minister is happy to deny him or her a chance to support a home industry that is leading the way towards higher animal welfare standards.

Mr. Tyler

I am delighted to hear that the hon. Gentleman now supports the policy that we urged the previous Conservative Government to adopt. Can he explain why he has undergone such an amazing transformation? Is it a case of the swine going over the cliff?

Mr. Yeo

I am amazed to learn that, even after the interventions from Labour Members, the hon. Gentleman has not spotted that there has been a sea change in the extent of the problems facing farmers. The situation facing pig farmers today could not be more different than the one facing them when the Conservative Government were still in power. If the hon. Gentleman has not bothered to go out and talk to enough farmers to discover that for himself, what hope is there for the Liberal party?

Mr. Colvin

My hon. Friend referred earlier to 1 May last year. It might be of interest to hon. Members to hear from a working farmer whose family normally benefits from about a 1 to 2 per cent. return on capital invested in our farm. On 1 May last year, we had profits almost equalling my salary as a Member of Parliament—about £45,000. Over the past year, under the Labour Administration—I do not blame them entirely—that profit, which was fairly regular, has turned into a loss of £60,000. That is a graphic illustration of what my hon. Friend is telling the House. There has been a drastic collapse of farming across the country, not only in hill areas.

In Hampshire, where I farm—it is probably one of the most innovative and successful counties in the country—every sector of farming is being hit. Admittedly, the smaller farms are coming off worse, but the whole industry and the rural economy are being drastically hit.

Mr. Yeo

My hon. Friend clearly points out how severe are the difficulties that farmers now face. In view of the extent of those difficulties, it is right for the Conservative party to state that new responses are needed to deal with a wholly new position.

The second part of the fair deal for farmers is to cut the burden of regulation. As we are running short of time, I shall give only one example. Four weeks ago today, the Meat (Hygiene and Inspection) (Charges) Regulations 1998 came into force. That involves a massive increase in the supervision of abattoirs by official veterinary surgeons and meat inspectors. A small abattoir in Norfolk now faces the prospect of having two slaughtermen overseen by four supervisors. Does the Minister believe that the same degree of regulation will be applied evenly across the European Union? What is the cost of implementing those regulations? In view of his party's commitment to open government, will he release the so-called reasoned opinion document in which the European Union attempts to justify that interpretation of the regulations? If he is unable to answer those questions tonight, will he write to me and place a copy of his letter in the Library?

The third part of the fair deal for farmers concerns the Government's purchasing policies. The Minister explained that he cannot have a "Buy British" policy, but it seems that the spin doctors have been at work here. They are keen to suggest that Ministers are trying to encourage the buying of more British food.

Six weeks ago, I wrote to the Secretaries of State for Health, for Education and Employment and for Defence and the Home Secretary to ask about the policies followed for buying food in hospitals, schools, prisons and the armed services. So far, not one of those four Ministers has replied to my letter. It does not seem that helping the British farmer ranks very high in their priorities, but it so easily could. Will the Minister tell the House what discussions he is having with his colleagues? Will he ask them to answer my letter before another six weeks go by?

The fourth part of the fair deal for farmers concerns supermarkets, which are a popular target at the moment. Many retailers in Britain are highly efficient because they have responded to consumer tastes. They exercise great power, especially in relation to farmers, and that power carries responsibility. Supermarkets have some explaining to do about why falling farmgate prices are not reflected on the supermarket shelf. It is not in their interests or those of the consumer for large numbers of British suppliers to go out of business. Imported alternatives may not always be cheaper. I am glad that supermarkets such as Asda have responded to public opinion about lamb. I hope that they will show the same sensitivity over prices. The catering trade might also think about how it can help British farmers.

The fifth and final point about the fair deal for farmers concerns the wider issue of the Government's attitude to the countryside. Rural communities whose incomes are falling face serious challenges. Their morale and, therefore, their ability to cope with those challenges are greatly weakened by a series of Government attacks on the rural way of life, including the threat of a law giving an unrestricted right to roam, the attempt by Labour Members to ban traditional country sports and the cut in cash support for councils in rural areas. When will the Government abandon those attacks on the countryside?

Does the Minister realise that the first sign of whether the Government have had a change of heart will come when the Deputy Prime Minister announces the distribution of the revenue support grant—the cash support for councils for 1999–2000? That announcement is only five weeks away. Will the £100 million taken from the rural councils by Labour last year be given back this year? Has the Minister pleaded the cause of the countryside with the Deputy Prime Minister? Does he realise that the decision will be a litmus test of whether the Government's hostility to the countryside continues?

Those five issues form the core of the Conservative party's fair deal for farmers. They will not cost a penny of public money. They do not need European Union approval. All could be achieved right away. Of course the list is not exhaustive; there are plenty of other measures, such as improving cash flow by accelerating integrated control and administration system payments. Time does not allow me to deal with all the important issues; there will be other opportunities to do so.

The subject of the debate is crucial. Many questions have been asked and not many have been answered. The Minister must understand that the delay in responding to the crisis in agriculture will not only be a political embarrassment but damage the industry, hurt thousands of small businesses and weaken the morale of men and women across rural Britain. The Opposition are ready to support any measures proposed by the Government that will deal with the crisis, but we suggest that the Minister makes a start by accepting our proposals for a fair deal for British farmers.

8.45 pm
Mr. Huw Edwards (Monmouth)

I rise to speak in this debate as a member of the Select Committee on Welsh Affairs, which in the past few months has produced a detailed report on the crisis in livestock in Wales and recommended that the role of supermarkets should be referred to the Office of Fair Trading. We await the outcome of that investigation.

I speak also as a Member who represents a constituency where agriculture is the dominant industry. Nobody can deny that it is an industry in crisis. Six or nine months ago, farmers in my constituency who were affected by the beef ban were saying, "At least the price of lamb is holding up." I am afraid that, over the summer, the price of lamb has plummeted, which has affected farmers throughout my constituency and throughout Wales.

On top of that, this weekend we had some of the most severe floods that south Wales has experienced for 20 years. I shall never forget witnessing the distressing sight of dozens of drowned sheep at a farm near Abergavenny, or hearing stories of cattle floating down the River Usk being rescued by farmers. As if there has not been enough of a crisis for farmers, they had to experience those traumas. I take this opportunity to pay tribute to all those involved in helping during the aftermath of the floods: the police, the fire services, public servants, local authority workers and all the volunteers, such as councillors, who assisted my constituents and those of other hon. Members.

There is undoubtedly a crisis. It is estimated that 15 per cent. of farmers may go out of business in the next two years. In Abergavenny market a few weeks ago, lambs were selling for £1 per head.

Mr. Öpik

Is the hon. Gentleman aware that that is also common in Welshpool and mid-Wales? Only this morning, a farmer received, after commission had been subtracted, a net income of £8.69 for 44 cull ewes. That is even worse than the price quoted by the hon. Gentleman.

Mr. Edwards

The hon. Gentleman has a strong interest in the matter, and I do not deny the figure that he quoted.

There is a crisis in farming which needs to be referred to the social exclusion unit. We have never sufficiently applied the concepts of social inequality and poverty to people in rural areas, and now is the time to do so.

I welcome my right hon. Friend the Minister of Agriculture, Fisheries and Food to his post and I congratulate him on having the guts to face the farmers who attended the rally at Blackpool football club at the beginning of the Labour party conference.

Mr. John Hayes (South Holland and The Deepings)

Will the hon. Gentleman give way?

Mr. Edwards

Not now.

That must have been the biggest crowd that Blackpool football club had seen since the great days of Stanley Matthews. People were not there to watch Labour Members beating the press in a football match earlier that morning. I do not underestimate the significance of that rally—8,000 farmers attended, as did I and other Labour Members.

The new Minister showed that he has an understanding of and an empathy with the farming community and its crisis. He showed farmers that there is a commitment to getting the beef export ban lifted by Christmas and that a package of short-term measures will be introduced as soon as possible. He demonstrated that he will consider agrimonetary compensation and consider extending the calf processing scheme, and that he will make progress on the date-based export scheme. He will also consider the early retirement scheme. I understand that some 8,000 farmers in Ireland have taken early retirement, and I hope that such a facility will be made available to farmers in Britain also.

Mr. Hayes

I am grateful to the hon. Gentleman for giving way. I acknowledge his comments about the new Secretary of State. Is he not as disappointed as I am—and as all the farmers of Britain will be—that the Secretary of State is not present for tonight's debate? What signal does that send to rural Britain and to the farmers who have been so badly hit?

Mr. Edwards

My right hon. Friend has attended the debate, but I shall continue with my speech. Wherever the Secretary of State may be, I hope that he is working in the interests of British farmers.

I think that macro-economic policy can make a greater contribution. I looked through the quarterly bulletins of the Bank of England and I found no recognition of the rural economy. There is information about manufacturing prices and factory gate prices, but there is nothing in macro-economic discussion and deliberations about farm gate prices and the impact of interest rate policy on the farming community.

The Governor of the Bank of England has been in trouble in the past week as a result of certain comments that he is alleged to have made. I suggest that the Monetary Policy Committee should meet not just in Threadneedle street, but in the community. Perhaps it should start in the north and explain what the Governor meant to say last week. The committee could visit Wales, Northern Ireland and the regions of the United Kingdom, and see the impact that its deliberations have on our rural communities. I suggest that the committee visits Abergavenny on a Tuesday afternoon following market day to see the impact of its policies and deliberations on the farmers in my constituency.

I also urge the Treasury to look in more detail at the social and economic costs of a recession in fanning. There is little discussion of that topic. When there is a crisis in manufacturing, there is considerable public debate about the problem. However, there is hardly any public debate about the crisis in the rural economy and hardly any consideration of the social, economic and financial costs to the rest of the community.

Mr. Jack

Will the hon. Gentleman give way?

Mr. Edwards

No, I will not. The right hon. Gentleman may wish to speak in the debate so I shall draw my comments to a close as quickly as possible.

We clearly need a new long-term strategy, which includes the overhaul of the common agricultural policy. This country cannot be paralysed by Europe. Like the Irish Government, the British Government must have more scope for determining agriculture policy. We have received some good news in Wales in the past few days as it is likely that we shall be eligible for objective 1 status. However, I make one suggestion about the use of those funds should they be secured by Wales.

The Welsh Grand Committee recommended that there be support for the construction in this country of a large-scale freezer facility for lamb. Apparently there is no such facility in the whole of the United Kingdom. I hope that the Government will consider using objective 1 funding to construct such a facility, to construct more and better slaughtering facilities, to improve infrastructure throughout Wales and to improve transport.

We have seen in Wales the amalgamation of the Welsh Development Agency and the Development Board for Rural Wales. My area of Wales was never within the sphere of the DBRW, but it will now be covered by the new, revised Welsh Development Agency. I hope that the agency will consider how it may invest in agriculture and in agricultural infrastructure in the same way that it has invested successfully in manufacturing in Wales.

Our universities and further education and agricultural colleges can clearly play a greater role in agriculture. People in the farming industry do not have the opportunities for retraining that are available in other areas of business. Our agricultural and further education colleges and business schools could do more to assist farmers in improving their basic skills and gaining business skills.

There is no doubt that farming is in crisis as a result of a combination of world market conditions, the substantial costs of the BSE crisis, the control of the supermarkets and the failure of long-term policy throughout the whole post-war period—apart from the immediate post-war period when there was a British agricultural policy. Governments of both political persuasions must take some of the blame for the lack of a long-term policy. The Government recently conducted a strategic defence review and they should establish a strategic agricultural review as well.

Farmers produce the food that makes our people healthy and they tend the beautiful countryside. However, they receive scant rewards for their efforts at present. Our farming community deserves a better deal and I urge the Government to do all in their power to respond to its great needs.

8.54 pm
Mr. Michael Jack (Fylde)

I listened to the speech by the hon. Member for Monmouth (Mr. Edwards), but I am afraid that I did not hear him denounce the independence of the Bank of England, which led to the interest rate policy that has forced up sterling. That lies at the heart of the rural crisis on which this debate has touched so far. I did not hear the hon. Member for Lancaster and Wyre (Mr. Dawson) denounce that self-same policy in his intervention. I did not hear either of those hon. Gentlemen denounce the ban on beef on the bone. Labour Members are long on the rhetoric of denunciation when it comes to the previous Government's policies, but short on doing something tangible to benefit the farming communities whom they purport to represent.

I turn initially to the bizarre speech by the hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy). He is so interested in the debate that he has left the Chamber and is not here to face the music.

Mr. Tyler

Will the right hon. Gentleman give way?

Mr. Jack

I shall make this point and then give way with pleasure to the hon. Gentleman.

The hon. Member for Ross, Skye and Inverness must think that he is still on the "Any Questions?" programme last week when he did his usual humorous turn. It appears that he forgot to switch off when he entered this Chamber to contribute to the debate. I listened carefully to his speech in the hope of hearing coherent Liberal Democrat policies on pigs, poultry, livestock prices, the Government interest rate policy, the issue of farm suicide, tertiary industries in agriculture, the calf processing aid scheme and the strength of sterling. However, the hon. Gentleman set out no such policies.

Mr. Tyler

I was going to point out that many of the right hon. Gentleman's colleagues left the Chamber when he rose to speak, but that would be uncharitable. I have two questions for the right hon. Gentleman. First, does he recall that the previous Conservative Minister of Agriculture, the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg), supported the beef on the bone ban? Secondly, in view of the fact that the right hon. Gentleman appears to support our motion, will he give an undertaking to vote with us in the Lobby tonight?

Mr. Jack

The hon. Gentleman has illustrated how some hon. Members chose to oppose—as we did—the ban on beef on the bone. Other hon. Members talked at length about their support for farmers, but were short on acting to do something about it.

There was no constructive content in the speech by the hon. Member for Ross, Skye and Inverness and I repeat my comment that I am disappointed that he is not present to listen to the rest of the debate. I believe that we are entitled to know the Liberal Democrats' views. If the motion is the product of constructive opposition, every constituency represented by a Liberal Democrat Member of Parliament knows that it has won absolutely nothing for its agricultural communities by voting Liberal Democrat.

There could be no finer illustration of that fact than a glance at the latest piece of paper produced by the Ministry of Agriculture, Fisheries and Food. In my mail today, I received a piece of paper that purported to come from the Minister of Agriculture, Fisheries and Food, headed "Agriculture Latest". It is so late that I have not received a copy until edition No. 12. It purports to come from the Minister, but is signed by his special adviser. In it we see a list—totalling some £145 million—of the aids that are supposed to have gone to farming.

It is remarkable how the Government put spin on everything. They forget the fact that they did not maintain HLCAs at the £160 million figure at which we left them, and they forget that that cost farming £35 million. They have completely forgotten the fact that, even now, when a quarter of a point has been taken off interest rates, farmers must pay very substantially more for their ever-increasing amounts of working capital, which wipes out, at a stroke, whatever help the Minister of State listed in his remarks.

There is even a difference between Labour Front-Bench and Back-Bench Members. I pay tribute to the hon. Member for Monmouth. He was honest when he said that there was a crisis in agriculture, but I remind him of the way that Ministers describe it in the document "Agriculture Latest": Farmers are facing considerable difficulties". That is the way in which the Ministry of Agriculture describes it—"considerable difficulties".

Ministers have variations on that theme. I wondered whether, during this period of learning and consulting with the farming industry, MAFF had come up with any constructive ideas. I looked at the titles of the MAFF October press releases. What do we find that Ministers are busy doing during this period of considerable difficulty? They are issuing press releases on "Changes to Licensing Arrangements for Killing or Taking of Bullfinches". It may be very important to bullfinches, but it is not exactly relevant to the crisis in British agriculture.

A MAFF study was published, which confirms that wild boar are in the countryside. Judging by the Minister of State's boring speech, I think that some have penetrated into the House of Commons tonight, because I find the way in which the Government are playing fast and loose with farmers' expectations totally unacceptable. When I read headlines like the one in Farmers Guardian for Friday 16 October—"Brown Gives Hint of Extra Aid for the Industry"—I realise that it is a case of fiddling while Rome burns. It appears that the Government completely fail to understand that, by and large, over the decades, politicians have formed the marketplace in which agriculture now exists. It is hardly surprising, therefore, that farmers turn to politicians for help when the going gets tough.

The detail is interesting. Earlier, the noble Lord Sewel was cited in debate. When there were difficulties in the pig industry in Scotland, he found £150,000 to help with marketing initiatives. The Minister of State has been silent tonight on whether pig producers in the rest of the United Kingdom can hope for help in any form. Likewise, he has been silent on the question whether, if the beef ban is lifted, there will be any help to rebuild markets. He talks about the need for it, but he offers farmers no substantial help.

The Minister of Agriculture, Fisheries and Food could do three things that would be of particular help to farmers. The Ministry used to run the marketing development scheme—a small, low-cost scheme, providing small-scale but much-needed help to improve the marketing of British-produced products. The Government removed it. My first suggestion is that the Minister should consider setting up such schemes. They do not cost much, but they boost farmers' confidence, and they represent something that the Minister could do now.

Secondly, not every farmer can afford an agronomist to help him farm better. The Minister might inquire into the possibility of small-scale consultancy schemes to help those who run smaller and medium-sized farms—the family farmers, the backbone of British farming—to find ways in which to farm better, and perhaps to farm their way out of some of the trouble.

Thirdly, I suggest an idea that would cost nothing. The Minister says that he will meet and talk to the British Retail Consortium, which is good, but why not bring all branches of the food industry around the same table? The Ministry is the sponsoring Ministry for agriculture, fisheries and food in this country. Why does not the Minister create a council or forum in which these matters can be thrashed out across the table to improve the understanding, communication and sense of partnership between British farming and the supermarkets? He could have done so already; yet, in August, the Minister of Agriculture, Fisheries and Food disappeared completely from the scene, on so-called Foreign Office-arranged business. Perhaps he was visiting Chile—I know not why. Whatever he was doing, he was not here, and ever since then, he has tried to use that "Let me put my arm around the farmers and buy them a pint" approach, thinking to himself, "That will buy them off for another week, then another week, then another week"—and the situation in agriculture gets worse by the week.

There has been no new initiative since the new Minister took up his post. I am glad that he is listening—he may be getting the message. Even on the one token—totem, perhaps—of the state of British agriculture, the lifting of the beef ban, we seem to be getting further away from our objective than when the previous incumbent, the Minister for the Cabinet Office, the right hon. Member for Copeland (Dr. Cunningham), was in the job. If the beef ban were lifted, it would do a great deal psychologically to assist British farming.

Mr. Hayes

Will my right hon. Friend give way?

Mr. Jack

I must bring my remarks to a conclusion, as I know that other right hon. and hon. Members want to speak in the debate.

The Secretary of State for International Development encourages the consumption of fair trade coffee through her messages to commercial Britain. Perhaps the Minister should consider that.

I shall speak briefly about the situation relating to pigs. I wrote to every Secretary of State and Minister in the Cabinet asking what his or her Department was doing to help the consumption of British pigmeat. I received a telling letter signed "Yours sincerely, Nick" from the Minister of Agriculture. In that letter, he refers to the 14 MAFF canteens, which are all run by contracted caterers. The letter tells me that those are all profit-making companies—would not farmers like to be profit-making companies? The Minister states: it would be wrong for us to interfere in their profit making decisions. Many farmers would like to make profit-making decisions. The letter continues: We cannot therefore specify to them how to source their products. Nowhere does the Minister state in his letter that he has written to the companies and told them about the quality assured pork or British charter quality bacon and ham, or that he has written to draw their attention to the welfare issues that are vital to Britain's pork producers. There was no initiative in the Minister's letter on that subject. The situation is worse in the world of Labour-controlled local authorities.

I ask the Minister to look at part II of the Local Government Act 1988, section 17(5)(c). I discovered that that legislation effectively inhibits any local authority from intervening with its own suppliers of products such as pork, to help and guide them on all the arguments that we have deployed in the House about welfare standards and the quality of British pork, and other products. I hope that the Minister will have discussions with his right hon. and hon. Friends in the Department of the Environment, Transport and the Regions to see what can be done.

Farming is in a state of crisis. The Government look as though, like Nero, they are fiddling while Rome burns. I appeal to the Minister not to leave it too late before he acts.

9.7 pm

Mr. John Grogan (Selby)

One of the most significant remarks during the debate was made by the hon. Member for South Suffolk (Mr. Yeo) when he was responding to an intervention from the hon. Member for Waveney (Mr. Blizzard) about the effect on farm incomes of Britain joining EMU. He seemed to say that the effect on farming incomes would depend entirely on the rate at which we joined the single currency. It surprises me that the Opposition rule out joining the single currency over the next 10 years, if that depends entirely on the rate.

On the day of the first countryside rally, I was invited by a group of my local farmers in Selby to present the prizes at the first annual Selby horse ploughing competition. They said that it would be a unique experience for a politician to contemplate ploughing a straight furrow for a whole afternoon. There was plenty of time for contemplation that afternoon. One of the many attractions of horse ploughing as a spectator sport is that it makes indoor bowls, for example, look like a form of rapid activity.

As I was contemplating the state of British agriculture that afternoon, one of the local farmers showed me with some glee The Daily Telegraph of that day, which reported on its front page that my constituency, Selby, was one of the four most rural Labour marginal seats. Indeed it is. There are 5,000 people in my constituency who depend on farming, part-time or full-time. There are many more who supply the agriculture industry, or who run village shops and depend largely for their income on the wealth of farmers and their families. That community in my constituency and elsewhere—we have heard about Wales, for example—is going through extremely hard times. We have heard many reasons for that. My hon. Friend the Minister of State mentioned Russia. Perhaps it is not the most crucial factor, but it is one of the most immediate. We are not talking about skins alone, because a third of European Union pigmeat went to Russia before the collapse of the economy. Much of that meat is now being diverted to the British market, especially Danish bacon.

There is a Chinese proverb that says that unless someone lives in the countryside he cannot really appreciate what hard times are. Perhaps that is pushing it a bit in the modern British economy, but the hard times that farmers are facing are different—not better or worse—from those that miners and steelworkers have faced in the past decade. At least miners and steelworkers have the strength of community that comes from living in a pit village or a steel town. Many farmers face their individual hard times very much individually. They have to shoot their own stock. If necessary, they themselves have to go bankrupt.

The figures are stark. Net farming income only a couple of years ago was about £4 billion. The best estimates this year tell us that that income is about £1 billion. Net farming borrowing is up to £6.2 billion this year, which is a 10 per cent. increase. Pigmeat, to take one example, was selling for about £1.40 a kilo a couple of years ago at Selby market. The best price to be obtained tomorrow would be, perhaps, 60p.

Mr. Hayes

Judging from the tone of the hon. Gentleman's speech, I am sure that he will try to make a positive response to my intervention. We have heard much about Russia, China and many other places. We have heard also about cultural and long-term problems. What proportion of the blame for the crisis does the hon. Gentleman lay at the Government's door? As an honourable man, he must surely acknowledge that the Government have some responsibility. The Minister of State acknowledged none. What proportion does the hon. Gentleman acknowledge?

Mr. Grogan

I think that the Government are doing an extremely good job. I shall come on to various things that I think the Government should do, if the House will bear with me.

I shall quote a farmer who wrote to me only last week. He is one of my constituents, and a typical family farmer. He works with his son and employs one person on his mixed arable farm. He wrote to me as follows: Ours is a typical family farm and has been successful over many years. Last year, however, saw the start of our troubles as our profits plummeted to 36 per cent. of those of the previous year … This year so far has been a complete and utter disaster. Our barley harvest is showing a loss of £93 per acre … As for pigs, we are currently losing over £1,000 per week … I am now in the situation of seeing my life savings swiftly slipping away— £28,000 on pigs alone since April, according to my accounts … Please can you help? I spend long nights awake trying to find ways of keeping this business solvent but to no avail. I am faced with the prospect of putting a loyal worker and good friend on the dole, slaughtering all my stock and being unable to pass on a viable business to my son and his family. That farmer is doing what many other farmers are doing and running down his savings. However, we must recognise that the mid-1990s were good years for farmers for many reasons, which were largely to do with the green pound. Deloitte and Touche found in its survey that the net incomes of arable farmers increased from £146 a hectare in 1990 to a peak of £354 in 1995. It fell to £129 in 1997.

In response to the hon. Member for South Holland and The Deepings (Mr. Hayes), I think that there are four areas of hope for the farmer in my constituency whose letter I have quoted, and for others like him. First, we have heard much about supermarkets. The referral of British supermarkets to the Office of Fair Trading will be welcomed by those in the countryside, including farmers in my constituency. There seems a prima facie case that supermarkets are not passing on the fall in commodity and agricultural prices to the consumer.

British supermarkets make a third more in profits than their counterparts in Europe and America. A recent OECD survey, based on a common basket of groceries, revealed that British supermarket prices were near the top of the league in OECD countries. There are three supermarkets in Selby and supermarket staff have raised the issue of prices with me. They refer to the sourcing and pricing policies of their employers. They recognise that times have changed and that we now live in a stakeholder economy. Supermarkets cannot afford to opt merely for short-term profits for their shareholders; they are part of the wider community.

Mr. David Drew (Stroud)

My hon. Friend is introducing a valuable summary of how we feel that supermarkets could make more of an effort. Does he agree that they could tell the consumer about welfare standards? They could insist that the welfare standards that we are introducing in the United Kingdom should be the same, if they are to sell imports, in exporting countries.

Mr. Grogan

I entirely agree with my hon. Friend. One of the great aspects of British agriculture is its high welfare standards. We should make more of that.

The second reason why British farmers have cause for hope is the development in tone and style of British agricultural policy since my right hon. Friend the Member for Newcastle upon Tyne, East and Wall send (Mr. Brown) took over as Minister of Agriculture. It is easy to mock such things, but they are important. He has shown a greater capacity to listen than any Minister of Agriculture in the past 20 years. That is much appreciated in the countryside. Although it has sometimes been a case of listening not to strong words softly spoken but to strong words strongly spoken and repeated, it has been valuable.

It is worth remembering that we put more money into agricultural support than into the rest of British industry. However, further steps are necessary to resolve the problems of hardship that British farmers face. For example, under the traceability scheme it was good that the capital and revenue costs were funded for the first year, but we must now start to think about the second year. I am glad that my right hon. Friend the Minister is putting the case for more agrimonetary compensation to Cabinet Ministers. It is not easy, as there are many competing demands on resources. The community in Selby and I trust him to put that case forcefully in Cabinet.

The third reason for hope is the reform of the common agricultural policy and Agenda 2000. Any short-term extra help that we give farmers should not conflict with that aim, because that will be the salvation of British farming in the medium term. Agricultural support should be concentrated on paying farmers for countryside and environmental management. British agriculture at its most efficient is well able to compete in a more open and free market with its European Union competitors.

The fourth and final reason for hope is the attitude of farmers themselves. They realise that they must rebuild the bond of trust between themselves and the rest of the community—consumers and so on—because it has been weakened in recent years. British agriculture has high standards in terms of animal welfare and the environment, and must be marketed more aggressively.

Mr. Öpik

Does the hon. Gentleman agree that that bond of trust has been broken largely by the Government's statements and their efforts to imply that producers are to blame? To that extent, does he agree that rebuilding that bond of trust requires investment by the Government as well as a charm offensive by farmers?

Mr. Grogan

There are many partners in rebuilding the bond of trust and the Government have a crucial role to play.

There are 5,000 farmers in my constituency. I do not know how many voted for me. By examining the number of posters on trees in farms at the election, I could see that I would certainly have lost if trees had the vote.

Ironically, previous Labour Governments have delivered for farmers far more than Conservative Governments, right back to the days of Attlee and the agricultural legislation of the 1940s, which was never challenged until we joined the European Union. I am sure that, once again, the Labour Government will do well by the British farming community.

9.17 pm
Mrs. Angela Browning (Tiverton and Honiton)

First, I wish to focus on my constituency. It is a large, rural constituency which covers most of the Mid Devon district council area and a large chunk of east Devon. It comprises some 90 parishes, and farming and related industries are extremely important.

During the summer, two pieces of work have been done in the south-west which clearly identify the problems that farmers in my constituency and the rest of Devon face. The first was a study done by PROSPER, the Devon and Cornwall training and enterprise council, which has assessed the present position and reported how it sees the future for farmers in my area. It said: What makes this agricultural 'crisis' unique in modern times is that every sector has been affected. In respect of our mixed farms, of which we have a lot in Devon, one sector may have been affected in previous crises, but cheques from another helped to balance the cash flow. Today, all sectors are affected. The industry's net income this year is forecast to be no more than£700 million, compared with £4.1 billion in 1996, and major banks suggest that about 70 per cent. of all farms in the south-west will make a loss this year.

In addition, a study by the university of Exeter makes startling reading. Its forecasts for the current financial year, which have been commissioned by the Ministry of Agriculture, Fisheries and Food, put the average net farming income for lowland livestock farmers in the south-west at £100—down 99 per cent. on last year. The average dairy farming net income is estimated at £10,300—down 65 per cent. Hill farming incomes are estimated at £7,800—down 59 per cent. Arable farming incomes are down to £12,000 a year—a fall of 56 per cent. We have small arable farms; they are not like the large arable plains of East Anglia.

Those are statistics, but individuals are behind them. Already, they are coming to my surgery, asking, "How long have we got to hang on at these rates of income before we can see some light at the end of the tunnel?" That is the problem which the Government must now address.

I welcome the fact that the Minister said that he is considering a short-term package of help, because such measures are clearly needed urgently. As I went around my constituency during the summer recess, I noticed more and more farm sales. More and more farmers have decided that they cannot hang on and that they will not wait for the inevitable—they are putting their farms on the market.

At the moment, land prices in Devon are holding up. So long as they do so, I believe that the banks will continue to support the farming industry, but land prices will drop the moment that a glut of farms comes on to the market. That will affect not only those people whose farms are on the market at any given time, but those who want to stay in agriculture and continue farming. Land prices will drop, however, and collateral value against borrowings will become more vulnerable. Although banks in my area are hanging in there at the moment, that cannot be guaranteed for the longer term.

That is why I will support and welcome any short-term measures that the Minister can find to help the industry today and in the short term. The Ministry must look to the medium and long term, however, because the current crisis will not be brief.

I must declare an interest as a vice-president of the Devon young farmers, although some people might be surprised that I have been called a young farmer. [HON. MEMBERS: "Spring chicken."] Hon. Members are too kind. There is hope among the young farmers. They accept change, perhaps more readily than an older generation who have been used to a method of farming that clearly will not be sustained for ever. If those young people are to have a future, a long-term policy must be introduced.

I want to pick up on an issue that was mentioned by hon. Members on both sides of the House and was touched on briefly, although somewhat acerbically, by the hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy), who mentioned the steel and coal industries during what he described as the Thatcher years. Should a number of farmers and farms go out of business, there will be a related fallout for other industries and jobs. If the medium to long-term fallout in the country or even in specific sectors of farming is comparable to that experienced by other industries in the 1980s, I hope that the Labour Government will follow the Conservative Government's example and recognise that they need to help certain communities, either by region or by sector. [Interruption.] Hon. Gentlemen are jeering, but the record speaks for itself. Money went to the iron and coal communities, and rightly so.

The hon. Member for Monmouth (Mr. Edwards), in his excellent speech, referred to the social exclusion unit. The Minister should take that recommendation seriously. Although farmers are not an organised group, they none the less represent an industry. If many small farmers in my constituency sell their farms or go bankrupt in the next four to five years, I shall put a strong case to the Minister, because that is a genuine example of an industry and of a geographic area that deserves to be considered for support, as other geographic areas were supported in the past.

The motion refers to sourcing British food. In the public sector, that is subject to competitive tendering. The Liberal Democrats are urging the Government to use their efforts to source British food. I hope that the Liberal Democrats, where they have responsibility, will show us that they are prepared to translate their words into action.

A month ago, I was informed by local butchers and farmers that, in the county of Devon, children who eat beef as part of their school meal no longer eat British beef. Under the new contract given to Devon Direct Services—the in-house contractor of Devon county council—a large catering company supplies Devon schools with Irish beef. In a letter to me last week, the chief education officer of Devon county council informed me that the majority of beef used in school meals in Devon is either minced or diced in a frozen free flow form and that the supply is of Irish origin. I have written to the Liberal Democrat leader of Devon county council to ask him, in the light of his colleagues' wording of the motion before the House, to ensure that the council does all it can to restore to Devon farmers the opportunity to provide beef for schools in Devon, as they did just a few months ago. I particularly hope that Liberal Democrat Members who represent Devon constituencies, and who have some influence with Devon county council, will support that move.

9.27 pm
Mr. Hilton Dawson (Lancaster and Wyre)

Thank you, Mr. Deputy Speaker, for the opportunity to take part in this exceptionally important debate. We hear many protestations from the Conservative party about its commitment to the countryside. In my meetings with local farmers, I am often complimented on the fact that their Member of Parliament has deigned to speak to them. That shows that the Labour party is listening and is working in the countryside to address a monumentally serious problem. Let us make no bones about it: we have an appalling situation in the countryside.

That was recently brought home to me when I went to meet one farmer at his farm and found 12 farmers there: small farmers, sheep farmers, mixed farmers and dairy farmers. I met contractors and people who had been involved in agricultural contracting for many years. I saw despair at that meeting. I saw the faces of people who were confronted with the break-up of farms that had been farmed by their family for generations. I saw people who wanted to retire: they were tired and exhausted by the daily round of farming. They wanted and needed to get out of farming but were unable to do so. I heard stories about the basic animal husbandry of the countryside not being done on small farms. I heard stories about the basic environmental work of the countryside not being done.

Mr. Lindsay Hoyle (Chorley)

Will my hon. Friend give way?

Mr. Dawson

I will.

Mr. Hoyle

I thank my hon. Friend. I do not think that every hon. Member who wished to speak will be able to do so, owing to the length of some of the speeches that have been made.

Does my hon. Friend agree that the north-west has suffered more than any other region, except one? I feel that there should be a special intervention to support farmers in the north-west.

Is my hon. Friend aware that, although some £25 billion is spent on catering in this country, only 50 per cent. of the product is produced by British farmers? Think of that: only 50 per cent. of all the food that we buy in restaurants throughout the country is provided by the British farmer. Here is a golden opportunity for people who are involved in hotel and restaurant chains to play their part by supporting British farmers—along with the supermarkets, which also neglect our farmers.

Mr. Dawson

I endorse my hon. Friend's north-west "patriotism".

The people about whom I am talking need help now. I do not accept the criticisms of the Government's policies that we have heard tonight. The Government have clearly aimed to secure extra help for hill farmers, and, indeed, to secure extra help for agriculture across the board, but more help is needed. We need a retirement package. We need support enabling farmers to diversify. We need support for local purchasing schemes. We need support for co-operatives. We need a new way of approaching work in the countryside.

We also need to put pressure on the supermarkets. Producers are in an intensely vulnerable position: their prices are being driven down. That is not reflected in the supermarkets. I see, hear and feel the frustration of my constituents who, having been to the markets, go into the major supermarkets in the towns and see the price of basic commodities rising, despite the prices that the producers are receiving.

Mr. Drew

May I return to my hon. Friend's earlier point? Does he agree that tenant farmers are especially vulnerable at present? One measure that would help them is a reduction in the price of land, which was mentioned by the hon. Member for Tiverton and Honiton (Mrs. Browning); but it is particularly important to tenants that farm rents should not increase. Indeed, they could be lowered, to ensure that those tenants continue to produce.

Mr. Dawson

My hon. Friend is entirely right. My constituency contains a large proportion of tenant farmers, who, even during the best times, have operated on the margins of viability. They are clearly being hit very hard. I think that large landowners have a big responsibility, in terms not just of rents but of helping diversification, and helping to alter the way in which the rural economy operates.

I do not intend to take any more of the House's time. We have a monumentally serious situation on our hands, and we need the package that is, I hope, on its way. We need that package very quickly. Some farmers face destruction. The word "suicide" comes to mind: some farmers are extremely low.

This is a human issue. We have heard what happened to mining and steel communities in the 1980s. I know that there are hon. Members who will do everything possible to ensure that the communities we represent will never be in the same state.

9.34 pm
Mr. John Burnett (Torridge and West Devon)

I am happy to declare an interest. I am no longer directly concerned in agriculture, but I am a landlord of agricultural property.

Time and again in the debate, the Minister has been told by both sides of the House of the catastrophe that is visited on UK agriculture. Each of the agriculture sectors is on its knees. South-west agriculture, and agriculture generally, is greatly indebted to the PROSPER report, to which the hon. Member for Tiverton and Honiton (Mrs. Browning) referred: "The Hopes and Fears of South West Farmers".

That was published by PROSPER and the National Farmers Union two weeks ago. It was the result of a survey of NFU members throughout Devon, Cornwall, Somerset and Dorset. Ten thousand questionnaires were sent out and 2,854 replies were given.

I am happy to pay tribute to the Western Morning News and its agriculture editor, Carol Trewin, who asked PROSPER and the NFU to undertake that comprehensive survey. It was conducted from June to mid-August this year. I have a copy of the survey for the Minister. It makes bleak and depressing reading.

Morale is at rock bottom. Farmers are working longer hours for decreasing returns, coping with increasing red tape and regulations. The report highlights the dreadful state of agriculture, where last year net farm incomes dropped by 50 per cent. It is estimated that, this year, they will fall by a further 70 per cent.

As the House will know, the problem does not stop there. Agriculture is the prime industry of the rural economy and this agricultural recession has a domino effect on allied trades and services such as machinery, transport and livestock markets.

The sources of the immediate problem have been BSE, an over-valued currency and high interest rates. There are signs that the latter two problems are correcting themselves, but the industry has been knocked so hard that there must be some short-term relief to protect viable farm businesses from insolvency.

Mr. Patrick Nicholls (Teignbridge)

In view of the point that the hon. Gentleman is making—I entirely accept the sincerity with which he is doing it—will he make representations to the Liberal Democrat leader of Devon county council, urging a rethink on the points that my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) was making?

Mr. Burnett

I am grateful to the hon. Member for raising that point. I was going to address it in my speech, but I make it clear that British beef is best and that there is no reason why it cannot be fed to British schoolchildren.

Mr. Nicholls

Will the hon. Gentleman make representations?

Mr. Burnett

Of course I shall.

Some Ministers are inclined to preface any discussion about agriculture support by invoking the costs that the Treasury has to bear towards eradicating BSE. I must make it clear that that is not support. It is part-compensation—I emphasise, part-compensation—for gross negligence in the 1980s; it nowhere compensates for the loss.

The indictment that I make against this Government and the previous Government is that, other than the £85 million drawn down last December, both Governments have failed to draw down agrimoney compensation. As a result, UK agriculture has lost about £700 million.

It is not for this Government or their predecessor to plead the Fontainebleau problem and the clawback. The UK has saved hundreds of millions of pounds in its contributions to the European Union by virtue of the strength of sterling. UK taxpayers have subsidised and are subsidising agrimoney compensation drawn down by other EU countries. The House should be aware that all other EU countries that qualify draw down that compensation. Our industry should be treated fairly and put on the same footing as other competitor countries.

Because the money has not been claimed by the Government and the previous Government, the compensation is now worth only about £160 million. As I have said, we have lost £700 million. I hope that the Government will draw that remaining money down without delay. The Treasury should also allow a one-off opportunity to average farm incomes for income tax purposes over the past five years. That would go some way towards making good the immediate cash flow crisis for many farmers. The Minister will recall that it was a Labour Government in 1978 who introduced tax averaging over two years.

Others in the debate have highlighted unfair competition and what appears to be a cartel of the superstore operators. Will the Minister explain, for example, why, in the pigmeat sector in September 1995, the supermarkets' retail price was 242 per cent. above the producers' price, whereas by September this year it had risen to 462 per cent?

There was a report in yesterday's newspapers that an inquiry is about to be ordered into why the market is not allowed to operate in the meat sector. The price paid to farmers has plummeted, whereas the price paid by the consumer has remained the same. Will an inquiry be constituted into that extraordinary anomaly?

It seems that progress is being made in lifting the beef ban. I hope that the Minister will remind our European Union partners, first, that there was a ban on meat and bonemeal and that traceability was in place by 1 August 1996; and, secondly, that no bullock over 30 months can be sold for human consumption in the United Kingdom. There can therefore be no reason for any ban after 31 January 1999.

Although we all realise that there has to be a long-term strategy for agriculture, the crisis is now. We await the Government's response to it.

9.40 pm
Ms Sally Keeble (Northampton, North)

I do not represent an agricultural constituency, and had planned to speak in this debate primarily about the food safety aspect of farming and the food industry. However, after listening to the debate, I feel compelled to examine some of the other issues in agriculture.

If I have one disagreement with my hon. Friend the Minister of State it is that he has been far too gentle in this debate in responding to Liberal Democrat Members. I am sure that he would not be quite so gentle in dealing with Conservative Members or with their failure to deal with the issues.

There can be no real doubt about the problem, which we have all witnessed. Although, as I said, I do not represent a farming community, I have spent much of the summer going around farms and speaking with farmers; I also saw parts of the food industry and spoke with food producers. There can no doubt about the problem facing farmers and food producers. Nevertheless, in this debate, we have not heard a possible solution from Opposition Members—[Interruption.] No, we have not. Although we heard much from Conservative Members about a fair deal for farmers, they seem to be caught in a real Conservative dilemma of advocating spending ever more money while not wanting to be the party of public spending.

Conservative Members have produced no options to deal with the long-term structural problems facing British agriculture which have been building up for a long time and which have now been compounded by a series of specific issues affecting crops and food prices. Conservative Members said nothing about problems of over-production, world prices or economies of scale in farming. However, we did hear a suggestion that the preservation of hunting might be part of the solution.

Liberal Democrat Members talked about solving farmers' problems by increasing agrimonetary compensation funds. Ministers have explained that they have targeted a series of measures, to the tune of £255 million, to deal with specific problems. It is especially ridiculous for Liberal Democrat Members—who belong to a party that everyone respects as being pro-European—to talk about agrimonetary compensation, as they really support, or say that they support, restructuring the common agricultural policy to change the way in which funds are provided to support farming.

Liberal Democrat Members have said also that CAP reform must not discriminate against British farmers. They overlook the point that the British Government, above all others, have been leading the argument for CAP reform. The issue is not whether we will get sufficient reform but whether we will get even the very diluted proposals being considered by Europe.

We have heard a great deal in this debate about the crisis in farming, which is being hit by the worst slump in prices since the 1930s. We have heard also various comments about the beef on the bone ban, which the Government are not only tackling but making great progress in resolving. It must be recognised that consumers also have an interest in farm prices and that measures that change the way in which CAP works have to be transparent to the public—they must not simply provide support for farmers in a discredited way.

It is understood that much remains to be done, and the Government have set out their proposals. Huge amounts of advice have been given to the Government, and my advice to them is to keep their nerve and to make sure that, in pursuing the interests of the farming community, we do not end up with short-term measures that do away with any real hope of providing a secure, long-term future for British farming and the British food industry.

9.45 pm
Mr. Paul Tyler (North Cornwall)

Liberal Democrat Members represent agricultural and livestock communities from Shetland to the Isles of Scilly, so it is entirely appropriate that a Scotsman should open the debate and that a Cornishman should wind up for the Liberal Democrats.

We face a national and a nationwide crisis. I was impressed by contributions from all parts of the House which clearly showed that the recess has been put to good use. I especially praise the contributions of the hon. Members for Selby (Mr. Grogan), who made an excellent speech, and for Lancaster and Wyre (Mr. Dawson). It was also a relief to hear a sober and careful analysis of the crisis from the hon. Member for Tiverton and Honiton (Mrs. Browning), in contrast to the absurd histrionics that we heard from another former Minister.

I am extremely grateful to my hon. Friend the Member for Torridge and West Devon (Mr. Burnett) for referring to the excellent report produced by the Western Morning News and based on a survey undertaken by PROSPER and the National Farmers Union, to which I shall refer again.

Two facts are unchallengeable. The first is that every sector of agriculture is now under severe threat. The old country saying, "Horn up, corn down; corn up, horn down" has been swept away in the 1990s. Secondly, everyone has to agree, even if it cannot be admitted in public, that the crisis did not begin on 2 May 1997.

There may have been a severe deterioration after the general election, but the situation was already deteriorating fast. Because they plan long and because they have long memories, farmers know perfectly well that that is the case. No farmer whom I have met in any part of the United Kingdom believes that the disastrous slide started as a result of the political change. The devastation built up over several months before the election and has continued since.

Both facts were eloquently underlined in the report to which I referred which was published by the Western Morning News. It emphasised the conclusions reflected in many speeches that we heard this evening. It states: What makes this agricultural crisis unique in modern times is that every sector has been affected. The industry's net income this year is forecast to be no more than around £700 million, compared with £4.1 billion in 1996. If one bears in mind the fact that many large agricultural businesses will still be profitable, it is clear that the average is going to be much worse. That means that many medium and smaller agricultural businesses will be firmly in the red. The Western Morning News also reports banks as saying that around 70 per cent. of all farms in the south-west will make a loss this year. That brings me to the second fact.

In a continuing series, the Western Morning News published an extremely interesting graph—I wish that I could use visual aids to greater effect in the House. The graph shows the difference between farmgate prices and the retail prices index. From 1987 to 1995, there was a steady rise in both. By 1995, the overall RPI had risen by nearly 50 per cent. and the food RPI by about 33 per cent. Farmgate prices has risen much less dramatically—they were up by 25 per cent.

In contrast to the views of the hon. Member for South Suffolk (Mr. Yeo), the collapse started in 1996—before the general election—not 1997. The collapse began when the total RPI went on increasing to nearly 60 per cent. last year and then levelled off. However, food prices collapsed back to 10 per cent. One has only to look at this graph, which I think the Minister can see, to realise that the deterioration started in 1996. By 1998, farm incomes will have fallen to below what they were a decade ago, while the cost of living will have increased by 70 per cent. or more.

The emergency package, to which we refer in our motion, to which the National Farmers Union referred and which was hinted at by the Minister of State, is extremely urgent. We need that rescue package now. Hon. Members on both sides of the House have reflected not just the consternation but the growing anger in the farming community at the discrepancy between farmgate prices and the prices in the shops. The fury that successive Governments have been so cowardly in the face of profiteering by the middle men is now all too apparent.

Last weekend, I spoke to about 80 farm households in my constituency. One farmer's wife told me that, in a week when they had sold a steer for less than it had cost them to produce it, the price of beef in the supermarket was simply beyond the means of her household. Farmers cannot afford supermarket prices for the very products that they are selling.

During the last Parliament, I urged on successive Agriculture Ministers the need to investigate the growing disparity between farmgate prices and the retail food prices. As has already been said, my hon. Friend the Member for South-East Cornwall (Mr. Breed) produced an excellent report on the supermarkets and we welcome the fact that, not before time, the Government have now initiated an inquiry into their profitability and the way in which they have been treating producers.

The Independent today points out that the market share of the big four has increased from 25 per cent. in 1987 to more than 50 per cent. in 1997, yet the Conservative Government did nothing about the growing monopolistic tendencies during that period.

Mr. Nicholls

Will the hon. Gentleman give way?

Mr. Tyler


Given the extent to which the supermarkets and the food processing giants have screwed down the prices that they pay to primary producers, we should not be surprised that the Conservative party has now appointed to central office the managing director of one of the largest supermarkets. The supermarkets and the giant food processors have bucked all the trends of the recession and have banked record profits.

The agriculture industry is in serious decline. There has also been a deterioration in public confidence in the quality and safety of British food. Therefore, it is essential that we proceed as fast possible to the Food Standards Agency that was promised in the Government's manifesto. I notice hon. Members on both sides of the House nodding in agreement. I hope that the Minister will take a leaf out of his predecessor's book and stand up to his colleagues in Cabinet and say that it is something that the British people are entitled to expect and that the consumer and the farmer need such a powerful weapon to ensure that, in future, the middle men do not dominate the market to the extent that they have in the recent past.

We need more transparency in food pricing to make sure that farmers get a fair crack of the whip and we need an end to the cosy relationship between some of the big boys of the food processing and retail industry and the Ministry.

Last week, it was said that the permanent secretary at MAFF had an unusually cosy relationship with Tesco's director of corporate affairs. That is scarcely surprising, because they are married to one another, so it should not be a matter for conjecture or criticism, but it highlights the fact that, at a time when serious issues are raised, the sensitivity of the relationship between MAFF and the industry is under the spotlight. The Government must take courage and bring forward the Bill as soon as possible.

The Minister may not have noticed that the Modernisation Committee has provided him with a weapon to take a short cut through the normal legislative jungle to ensure that the Bill reaches the statute book. Farmers and consumers now demand that there should be greater confidence in the way in which British food is produced and sold. We need the Food Standards Agency. We must give the British people back the confidence in their food that they should have, used to have and need to have again.

9.54 pm
Mr. Rooker


Mr. Hayes

On a point of order, Madam Speaker. I understand that it is the normal protocol and courtesy of this House for the Secretary of State of the relevant Department to sum up in a debate of this kind when he is present.

Madam Speaker

It does not concern me which Minister is summing up. Does the House give leave to the Minister to speak again?

Hon. Members


Mr. Rooker

I was about to ask the leave of the House to speak again. I am grateful for the opportunity to do so in the short time available. We have had an interesting debate. In many ways, it has been predictable, but I make no complaint about that. The comments of hon. Members on both sides, particularly Labour Members, have been useful for Ministers in our consideration of the points made by the food industry.

I have to disabuse the hon. Member for North Cornwall (Mr. Tyler) of a notion. I have found no evidence in the past 18 months of a cosy relationship between MAFF and the big supermarkets. There is no evidence of that in the functioning or attitudes of the Ministry. That does not mean that the difficulties of old MAFF are all out of the way; they are not. We have tried desperately in the past 18 months to change the culture of MAFF so that we put the consumer first and are not simply seen as the producers' Ministry. However, we are responsible for sponsoring the food industry and, until the Food Standards Agency is established, we are also responsible for the consumer side.

Criticism has been made of one of the first points that I made. I repeat, the cost of dealing with BSE—not all of it; I did not claim that—represents a contribution by the taxpayer to market support. There is no doubt about that. Under the over-30-months scheme, 2.5 million cattle—none with BSE—have been taken out of the food chain and slaughtered. Some 350,000 tonnes of meat and bonemeal are stored around the country as a result of the scheme, occupying more than 500,000 cu m. To give an idea of the volume, that is the equivalent of 44 Big Ben towers, all of which has to be burnt at public expense to destroy it under the terms of the Florence agreement. Removing 2.5 million cattle in that way has to be a contribution to market support.

I am grateful to my hon. Friend the Member for Monmouth (Mr. Edwards) for his speech—the first speech from the Back Benches. He put the position very well for his constituents and those whom he had met at the market. My hon. Friends the Members for Selby (Mr. Grogan) and for Lancaster and Wyre (Mr. Dawson) also put the case. My hon. Friend the Member for Northampton, North (Ms Keeble) seemed to go out of her way to cause the Liberal Democrats to press for a Division. Nevertheless, as a member of the Select Committee, her comments have to be respected. I agree with the hon. Member for North Cornwall that the hon. Member for Tiverton and Honiton (Mrs. Browning), who is a former Minister, made a positive contribution, unlike some of her colleagues.

No one underestimates the current difficulties of the livestock industry. For the first time, all the difficulties that one could imagine have been brought together. It is a catastrophe for many who have been in the industry for a lifetime. It causes further problems for young people entering the industry. I have asked some of those at agricultural college why they are contemplating going into the industry. The reasons include the force of community, heritage and responsibility to the family and what has been left to them by parents and grandparents. They are full of foreboding for the future. However, to their credit, some young people are still seeking to enter the industry. We have to ensure that the conditions for the future are positive. Initially, we have to consider emergency, short-term aid, but that must not interfere with long-term plans in this country and the European Union for restructuring the food industry.

As I said, my right hon. Friend the Minister will meet representatives of the food industry, supermarkets and the British Retail Consortium next week. We cannot order them to do anything, but we shall put it to them in the strongest possible terms that there is a moral obligation not to impose conditions on British farmers then seek to buy abroad where those conditions are not applied. As I said, we know that some supermarkets are taking a wholly positive view in sourcing only from the same type of suppliers as in this country. We will report to the House as quickly as possible on the results of our consultation with industry and colleagues in government.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 45, Noes 340.

Division No. 366] [10 pm
Allan, Richard Fearn, Ronnie
Ashdown, Rt Hon Paddy Foster, Don (Bath)
Baker, Norman Hancock, Mike
Ballard, Jackie Harris, Dr Evan
Beith, Rt Hon A J Harvey, Nick
Brake, Tom Heath, David (Somerton & Frome)
Brand, Dr Peter Hughes, Simon (Southwark N)
Breed, Colin Jones, Nigel (Cheltenham)
Bruce, Malcolm (Gordon) Keetch, Paul
Burnett, John Kennedy, Charles (Ross Skye)
Burstow, Paul Kirkwood, Archy
Cable, Dr Vincent Livsey, Richard
Campbell, Menzies (NE Fife) Maclennan, Rt Hon Robert
Chidgey, David Michie, Mrs Ray (Argyll & Bute)
Cotter, Brian Moore, Michael
Dafis, Cynog Oaten, Mark
Davey, Edward (Kingston) Öpik, Lembit
Ewing, Mrs Margaret Rendel, David
Russell, Bob (Colchester) Wallace, James
Smith, Sir Robert (W Ab'd'ns) Webb, Steve
Swinney, John Willis, Phil
Taylor, Matthew (Truro) Tellers for the Ayes:
Tonge, Dr Jenny Mr. Andrew Stunell and
Tyler, Paul Mr. Adrian Sanders.
Abbott, Ms Diane Cooper, Yvette
Adams, Mrs Irene (Paisley N) Corbett, Robin
Ainger, Nick Corbyn, Jeremy
Ainsworth, Robert (Cov'try NE) Cousins, Jim
Alexander, Douglas Crausby, David
Allen, Graham Cryer, Mrs Ann (Keighley)
Anderson, Janet (Rossendale) Cryer, John (Hornchurch)
Armstrong, Ms Hilary Cummings, John
Ashton, Joe Cunliffe, Lawrence
Atkins, Charlotte Cunningham, Rt Hon Dr Jack (Copeland)
Austin, John
Banks, Tony Cunningham, Jim (Cov'try S)
Barnes, Harry Darling, Rt Hon Alistair
Battle, John Darvill, Keith
Bayley, Hugh Davey, Valerie (Bristol W)
Beard, Nigel Davidson, Ian
Beckett, Rt Hon Mrs Margaret Davies, Rt Hon Denzil (Llanelli)
Begg, Miss Anne Davies, Geraint (Croydon C)
Bell, Stuart (Middlesbrough) Davis, Terry (B'ham Hodge H)
Benn, Rt Hon Tony Dawson, Hilton
Benton, Joe Dean, Mrs Janet
Bermingham, Gerald Denham, John
Berry, Roger Dismore, Andrew
Best, Harold Dobbin, Jim
Betts, Clive Dobson, Rt Hon Frank
Blears, Ms Hazel Donohoe, Brian H
Blizzard, Bob Doran, Frank
Blunkett, Rt Hon David Dowd, Jim
Boateng, Paul Drew, David
Bradley, Keith (Withington) Drown, Ms Julia
Bradley, Peter (The Wrekin) Eagle, Angela (Wallasey)
Bradshaw, Ben Eagle, Maria (L'pool Garston)
Brinton, Mrs Helen Edwards, Huw
Brown, Rt Hon Nick (Newcastle E) Efford, Clive
Buck, Ms Karen Ennis, Jeff
Burden, Richard Field, Rt Hon Frank
Burgon, Colin Fitzpatrick, Jim
Butler, Mrs Christine Fitzsimons, Lorna
Byers, Rt Hon Stephen Flint, Caroline
Caborn, Richard Follett, Barbara
Campbell, Alan (Tynemouth) Foster, Rt Hon Derek
Campbell, Mrs Anne (C'bridge) Foster, Michael Jabez (Hastings)
Campbell, Ronnie (Blyth V) Foster, Michael J (Worcester)
Campbell-Savours, Dale Foulkes, George
Canavan, Dennis Galloway, George
Cann, Jamie Gapes, Mike
Caplin, Ivor Gardiner, Barry
Casale, Roger George, Bruce (Walsall S)
Chapman, Ben (Wirral S) Gerrard, Neil
Chisholm, Malcolm Gibson, Dr Ian
Clapham, Michael Gilroy, Mrs Linda
Clark, Rt Hon Dr David (S Shields) Godsiff, Roger
Clark, Dr Lynda (Edinburgh Pentlands) Goggins, Paul
Golding, Mrs Llin
Clark, Paul (Gillingham) Gordon, Mrs Eileen
Clarke, Eric (Midlothian) Griffiths, Jane (Reading E)
Clarke, Rt Hon Tom (Coatbridge) Griffiths, Nigel (Edinburgh S)
Clarke, Tony (Northampton S) Griffiths, Win (Bridgend)
Clelland, David Grocott, Bruce
Clwyd, Ann Grogan, John
Coaker, Vernon Gunnell, John
Coffey, Ms Ann Hain, Peter
Cohen, Harry Hall, Patrick (Bedford)
Coleman, Iain Hamilton, Fabian (Leeds NE)
Colman, Tony Heal, Mrs Sylvia
Connarty, Michael Healey, John
Cook, Frank (Stockton N) Henderson, Doug (Newcastle N)
Henderson, Ivan (Harwich) McDonagh, Siobhain
Hepburn, Stephen Macdonald, Calum
Heppell, John McDonnell, John
Hesford, Stephen McGuire, Mrs Anne
Hill, Keith McIsaac, Shona
Hinchliffe, David Mackinlay, Andrew
Hodge, Ms Margaret McNamara, Kevin
Hoey, Kate McNulty, Tony
Hood, Jimmy MacShane, Denis
Hoon, Geoffrey Mactaggart, Fiona
Hope, Phil McWalter, Tony
Hopkins, Kelvin Mahon, Mrs Alice
Howarth, George (Knowsley N) Mallaber, Judy
Howells, Dr Kim Marsden, Gordon (Blackpool S)
Hoyle, Lindsay Marsden, Paul (Shrewsbury)
Hughes, Ms Beverley (Stretford) Marshall, Jim (Leicester S)
Hughes, Kevin (Doncaster N) Marshall-Andrews, Robert
Humble, Mrs Joan Martlew, Eric
Hurst, Alan Maxton, John
Hutton, John Meacher, Rt Hon Michael
Iddon, Dr Brian Meale, Alan
Illsley, Eric Merron, Gillian
Jackson, Ms Glenda (Hampstead) Michael, Alun
Jackson, Helen (Hillsborough) Michie, Bill (Shef'ld Heeley)
Jamieson, David Milburn, Alan
Jenkins, Brian Miller, Andrew
Johnson, Alan (Hull W & Hessle) Mitchell, Austin
Johnson, Miss Melanie (Welwyn Hatfield) Moffatt, Laura
Moonie, Dr Lewis
Jones, Barry (Alyn & Deeside) Moran, Ms Margaret
Jones, Mrs Fiona (Newark) Morgan, Ms Julie (Cardiff N)
Jones, Helen (Warrington N) Morgan, Rhodri (Cardiff W)
Jones, Ms Jenny (Wolverh'ton SW) Morris, Ms Estelle (B'ham Yardley)
Mountford, Kali
Jones, Jon Owen (Cardiff C) Mudie, George
Jones, Dr Lynne (Selly Oak) Mullin, Chris
Jones, Martyn (Clwyd S) Murphy, Denis (Wansbeck)
Jowell, Ms Tessa Naysmith, Dr Doug
Kaufman, Rt Hon Gerald Norris, Dan
Keeble, Ms Sally O'Brien, Bill (Normanton)
Keen, Alan (Feltham & Heston) O'Brien, Mike (N Warks)
Keen, Ann (Brentford & Isleworth) O'Hara, Eddie
Kelly, Ms Ruth Olner, Bill
Kennedy, Jane (Wavertree) O'Neill, Martin
Khabra, Piara S Osborne, Ms Sandra
Kidney, David Palmer, Dr Nick
Kilfoyle, Peter Pearson, Ian
King, Ms Oona (Bethnal Green) Pendry, Tom
Kingham, Ms Tess Perham, Ms Linda
Kumar, Dr Ashok Pickthall, Colin
Ladyman, Dr Stephen Pike, Peter L
Lawrence, Ms Jackie Plaskitt, James
Laxton, Bob Pollard, Kerry
Leslie, Christopher Pope, Greg
Levitt, Tom Pound, Stephen
Lewis, Ivan (Bury S) Powell, Sir Raymond
Lewis, Terry (Worsley) Prentice, Ms Bridget (Lewisham E)
Linton, Martin Prentice, Gordon (Pendle)
Livingstone, Ken Prescott, Rt Hon John
Lock, David Primarolo, Dawn
Love, Andrew Prosser, Gwyn
McAllion, John Purchase, Ken
McAvoy, Thomas Quinn, Lawrie
McCafferty, Ms Chris Radice, Giles
McCartney, Ian (Makerfield) Rammell, Bill
Rapson, Syd Stuart, Ms Gisela
Raynsford, Nick Sutcliffe, Gerry
Reid, Rt Hon Dr John (Hamilton N) Taylor, Rt Hon Mrs Ann (Dewsbury)
Robertson, Rt Hon George (Hamilton S)
Taylor, Ms Dari (Stockton S)
Robinson, Geoffrey (Cov'try NW) Taylor, David (NW Leics)
Roche, Mrs Barbara Temple-Morris, Peter
Rogers, Allan Thomas, Gareth R (Harrow W)
Rooker, Jeff Timms, Stephen
Rooney, Terry Tipping, Paddy
Ross, Ernie (Dundee W) Todd, Mark
Roy, Frank Touhig, Don
Ruddock, Ms Joan Trickett, Jon
Russell, Ms Christine (Chester) Truswell, Paul
Ryan, Ms Joan Turner, Dennis (Wolverh'ton SE)
Salter, Martin Turner, Dr Desmond (Kemptown)
Savidge, Malcolm Turner, Dr George (NW Norfolk)
Sawford, Phil Twigg, Derek (Halton)
Sedgemore, Brian Twigg, Stephen (Enfield)
Shaw, Jonathan Vaz, Keith
Sheldon, Rt Hon Robert Vis, Dr Rudi
Shipley, Ms Debra Walley, Ms Joan
Singh, Marsha Ward, Ms Claire
Skinner, Dennis Wareing, Robert N
Smith, Angela (Basildon) Watts, David
Smith, Rt Hon Chris (Islington S) White, Brian
Smith, Miss Geraldine (Morecambe & Lunesdale) Whitehead, Dr Alan
Wicks, Malcolm
Smith, Jacqui (Redditch) Williams, Rt Hon Alan (Swansea W)
Smith, John (Glamorgan)
Smith, Llew (Blaenau Gwent) Williams, Alan W (E Carmarthen)
Soley, Clive Winnick, David
Southworth, Ms Helen Winterton, Ms Rosie (Doncaster C)
Spellar, John Wise, Audrey
Squire, Ms Rachel Wood, Mike
Starkey, Dr Phyllis Woolas, Phil
Steinberg, Gerry Worthington, Tony
Stevenson, George Wray, James
Stewart, David (Inverness E) Wright, Anthony D (Gt Yarmouth)
Stewart, Ian (Eccles) Wyatt, Derek
Stinchcombe, Paul
Stoate, Dr Howard Tellers for the Noes:
Straw, Rt Hon Jack Mr. David Hanson and
Stringer, Graham Mr. Mike Hall.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to the Order [this day], and agreed to.

MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved, That this House welcomes the Government's strong commitment to the UK farming industry and to the wider rural economy; welcomes in particular the steps which the Government has taken since May 1997 to support the beef and sheep industry via EU agri-monetary compensation and relief from charges; acknowledges the steps taken specifically to help the sheep, pig and cereal sectors with targeted EU measures; and endorses the Government's intention to bring about a secure and viable future for the UK farming and food industries through a market-orientated reform of the Common Agricultural Policy.

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