§ 11.5 am
§ Mr. Tim Boswell (Daventry)
I should say at the outset that, although the debate may have lost a few moments because of the points of order, they were about matters that are of great concern to all Members of this House, and I do not resent the exchanges that have taken place. I shall go on immediately to the problems of the horticulture industry.
I am delighted and honoured to have the privilege of initiating a brief debate on the important topic of horticulture. It is nice to have the support of a number of my hon. Friends and other hon. Members, although I am conscious that some hon. Members with important constituency interests in horticulture are not able to attend the debate—in particular, my hon. Friend the Member for Broxbourne (Mrs. Roe) and my hon. Friend the Member for Mid-Worcestershire (Mr. Luff), the Chairman of the Select Committee on Agriculture, who has duties in respect of that Committee. However, there is a good attendance, because this is an important subject.
I shall give a little context. Many of my family traditionally have been growers in the Vale of Evesham and, although I have never lived there, I retain close links with the area and with those of my family who still practise horticulture there. It is perhaps a sign of the change in the industry that a number of them have either restructured their businesses or have gone out of the industry.
I used to be a plum grower on my farm in my constituency, and that provided valuable experience in terms of the technology of growing and the requirements of marketing, either directly at the farm gate or through wholesale markets. Therefore one has seen the tremendous changes that have taken place, and continue to take place, in the industry. I shall return to that point.
My second experience of horticulture is not unrelated, because I asked for the horticulture portfolio when I was posted to the Ministry of Agriculture, Fisheries and Food in the years 1995 to 1997, as Parliamentary Secretary. I can assure the House that I do not intend to rehearse the difficulties, or the triumphs, of that time, but I should record my personal appreciation for the high quality of the advice given by MAFF officials to Ministers—I am sure that that continues—and for the lively involvement of distinguished members of the industry in the fortunes of that industry. That is a helpful and constructive partnership.
It is necessary at the outset to establish two major and distinctive features of the British horticulture industry, in comparison with its perhaps better known farm equivalent. Not all farmers know nothing about horticulture and, especially on the field vegetable side, there may be a close relationship.
The horticulture industry, as broadly defined, has an output valued at slightly under £2 billion a year. Such definition is difficult, partly because of the greater retail involvement of horticulture in comparison with the majority of agriculture, which represents foods that go on for further processing before sale.
The industry is worth slightly under £2 billion and, although it is an imprecise measure, I used to calculate that it was worth about 10 per cent. of British agricultural 847 output. Despite being comparatively small proportionately, horticulture represents almost as much diversity as the rest of the agriculture industry. For example, many producers of salad onions or salad crops have been doing relatively well—although some will probably write to me to say that they have not—because of their specialist production. Ethnic foods such as ochre are produced for an ethnic minority market and, increasingly, for a British market as well, because people have diversified their tastes. Others produce bedding plants, nursery stock and traditional top or soft fruit, so the industry is extremely varied.
One of horticulture's distinctive features is that it is an intensive labour employer, whereas most of agriculture is not. My hon. Friend the Member for Faversham and Mid-Kent (Mr. Rowe) was telling me only today that there are an estimated 30,000 full-time equivalents in Kent alone. I have always worked on a figure of more than 50,000 full-time workers engaged in horticulture, which is almost as many as there are salaried farm workers in the rest of agriculture.
A second feature is that, traditionally, horticulture has relied little on Government support. Like pig and poultry farming, but unlike most of the traditional agricultural regimes, it has been a light or unsupported regime. Long may that continue, because no one in horticulture would want to send the signal that stepping up the subsidy would benefit the industry. That could have the effect that we have seen elsewhere in the common agricultural policy, where successive Governments have tried to remove some of the subsidy and reduce the unnecessary costs in the system, so that the outcome is more market related.
§ Mr. Michael Jack (Fylde)
I am grateful to my hon. Friend for giving way at that important point in his remarks. Although I accept his point about subsidy, does he agree that it is important that the Government of the day encourage and support the industry? Does he find it worrying, as I do, to read continuing reports in the Grower magazine about the number of occasions when the Minister directly responsible for horticulture, the noble Lord Donoughue, has had to cancel those encouraging engagements?
§ Mr. Boswell
I am grateful to my right hon. Friend for his intervention. He was a most distinguished horticulture Minister before my time and he gave great encouragement to the industry. He is entitled to comment. I realise some of the difficulties of this debate. The noble Lord with day-to-day responsibility for horticulture is in another place and, in fairness, some cancellations have taken place because of factors outside his control. May I revert to the point about perceived support for the industry by Ministers as I bring my remarks to a close? My right hon. Friend makes a substantial point when he says that what we do not want from Government is lots of money, but what we do want is lots of encouragement and perceived attempts to solve the industry's problems.
§ Mr. Clifton-Brown
Will my hon. Friend cover in his speech the issue of changes in Government employment 848 legislation? Increasing employment costs, particularly for some horticultural activities that require large gangs of lowly paid people who would otherwise have no employment whatever, could put the horticulture industry at a serious competitive disadvantage.
§ Mr. Boswell
My hon. Friend reads the runes of what I have already said about the importance of horticulture as an employer, as a clear precursor to my remarks later in my speech. His analysis is entirely right. At this point, I simply say that the most important and in many ways the most refreshing element of horticulture is that it has traditionally been an unsupported or lightly supported sector. That has left it close to the market. People have been entrepreneurial and have reacted in a variety of ways. The issue now before the House is whether that native spirit, which Keynes called an animal spirit—that determination to seek a market and exploit it to make a profit—is enough to take people through the current difficulties.
Many sectors of the industry now face severe market conditions and low profitability. It will be no service to the industry to cry wolf or to say that this is the end of the industry. It is easy for tabloid newspapers to write, as they have on one or two occasions, "This is the end of the English apple industry—there will be no more Coxes". Neither the Minister nor most hon. Members who know about horticulture believe that that is so. However, to prevent it from happening, we must recognise that there are some problems.
Let me return to what I said about diversity. It is important that we analyse coolly the problems in the various sectors. Some specialist growers may be relatively prosperous at present. Large integrated businesses that may be listening to this debate may have found ways of controlling their costs and have a strong tie-up with the marketing chain. They may be using high technology and running extremely successful and professional businesses. However, people in between may be caught between a number of stalls and have to find the right niche. Although there are no large growers in my constituency, there are many relatively small businesses that supply bedding plants or nursery stock, and they are an extremely important part of diversification and providing competition in the market.
Although we must not oversell the problems, I should like to draw a number of them to the House's attention. Some come from within the industry—what one might call the MAFF sector—and others, importantly, come from elsewhere. I shall begin by dealing with the MAFF-related problems. First, there is the question of marketing support. As has already been mentioned, the regime is not generally heavy. The last thing that we would want is a return, for example in the European structure, to the old tradition of a heavy reliance on intervention, often in a wasteful and useless way.
I was pleased that, during my time at MAFF, we achieved agreement on restructuring the European marketing regime support and a new emphasis was placed on producer organisations and market development. It would be helpful if the Minister of State could, in responding, bring the House up to date on that matter. Obviously, there was a surge which happened, coincidentally, at about the time of the change of Government as people made their initial bids—MAFF was particularly helpful in securing some flexible regimes 849 for them to do so. However, I am not clear whether the trail has gone dead yet or how much that is continuing to be developed as market conditions change.
The second area where market support is important is in relation to objective 5b. The hon. Member for South-East Cornwall (Mr. Breed) is in the Chamber and may seek to participate in the debate. We all know that objective 5b may, in turn, be subject to change under the European negotiations on the matter, but it is important that areas of economic strain should be able to raise the value added of their produce and find suitable and distinctive market niches. Objective 5b, or something like it, is an important vehicle for doing that.
One area in which I took great interest was the south-west Horticulture 2000 initiative. I hope to have the privilege of launching Cornish King, which was a successful result of that initiative, and I hope that it will lead to other things. That area of market development, which does not always involve large sums, but levers in partnership approaches and other resources, is the sensible way to proceed in terms of public support for marketing.
The third area is that of research, which is also complex. Horticultural Research International and its institutes and new privatised technology arm are of high quality. They are world-class operations. I know many of the operators and I have a tremendous regard for what they have done. There is always a debate in Government about how much can be given to research, and it is terribly important that the Government support the industry by providing research infrastructure, basic research and the ability to call on specialists to deal with problems that develop. I hope that we will have the Minister's assurance on that.
Following, but in no sense subordinate to, that is the much more close-to-market involvement of the Horticultural Development Council. This year, there is to be another poll to ratify, as it were, the continuation of that council. I hope that the Ministry will give as much lead as it properly can, and that the House will give a lead to the industry to ensure that the poll endorses the HDC's work. It is important not only for the cash that it raises and spends on behalf of the industry, but as a sign to all arms of government and to the marketing chain that growers take this matter seriously. They want the council to progress and be successful.
I should flag up the only fly in the ointment, as the National Farmers Union has mentioned it to me. The NFU is concerned that MAFF has recently cut funding for PhDs in this area. Perhaps the Minister will also comment on that. We need a continuing flow of high-quality people into the industry at doctorate and skilled technician level. This is not a task that can be done by second-rate people, at whatever level of their employment. It needs the best research brains and the best technologists trained to the highest level. The margins do not allow for anything other than that approach.
The third area where the market situation is relevant has an impact on the others. I am talking not about public money, but about the involvement of the supermarkets. Horticulture is distinctive because much, although not all, of its produce is sold to the consumer in a recognisable form—we can see an apple or a pear, but we cannot see the grain that an arable farmer produces because it is 850 turned into bread. A high proportion of final output goes through the multiples. The NFU's estimate is that upwards of 75 per cent. goes through the multiples.
In many areas of agriculture—as in horticulture—there is a lively debate about the role of the multiples. I have always felt that megaphone diplomacy is unhelpful. One side tells the other that it is being ripped off, and there is no mutuality of interest. I believe that it does not matter how it is operated, or what the legal form of the contract is, but both parties—the grower and the supermarket—must work together to provide an acceptable and preferred product for the customer. There is an emphasis on working together, and that is positive, but it does not remove the need for fair treatment.
We should welcome the way in which the industry as a whole has worked together on product assurance, and has established crop protocols. Supermarkets should not, at the final point of sale, mix or dilute British produce that has been raised to that protocol level with a product imported from the European Union or elsewhere that has not been grown to that standard. In an ideal world, the British protocols should form the international standard for good practice for the production of the product in question. It is much better if British produce is marketed as British, unless it is not available on a continuing basis—one hopes that it will be.
§ Mr. Andrew Rowe (Faversham and Mid-Kent)
My hon. Friend is making an important point. One of the crucial elements of the intervention of the supermarkets is that they are increasingly and properly demanding higher standards from British growers. However, whenever they are short of British produce, they are quite willing to import products for which there is no guarantee that they meet the protocol on the use of pesticides or fertilisers. Will my hon. Friend comment on that?
§ Mr. Boswell
My hon. Friend is on to a very good point. That problem is of concern, and we need to find ways to prevent such practice.
We should also consider horticultural markets generally, because they comprise more than just supermarkets. I hope that MAFF will continue to seek practical opportunities to bring parties together to ensure that the horticultural market system, which has not worked as well as it might in the recent past, is rationalised, made efficient and provides an important additional service for the catering trade and specialist outlets that can best be served in that way.
I shall deal briefly with some of the concerns that are outside the narrowly agricultural sector. In the past two years, the strength of sterling has caused as many difficulties for growers as anything else. I do not intend, or have the time, to go on about that today. The state of the weather has also affected sales, as it has affected the growing experience.
I want to leave three specifics with the Minister. First, planning varies hugely from area to area. In areas where horticulture is understood, such as the Sussex plain or the fens, it is often easier to obtain planning permission than it is in areas adjoining major conurbations, such as South Ribble—I visited the constituency of the hon. Member for South Ribble (Mr. Borrow), who is present for the debate—or parts of the Vale of Evesham. I hope that the Minister will give the right guidance to his colleagues.
851 Secondly, I do not intend to rehearse the arguments about the national minimum wage and the fairness at work package, but three major conceptual problems in agriculture must be resolved in discussions. We must ensure that there is a proper fit with the Agricultural Wages Order 1998, which is not easy. There should be an acceptable form of treatment to produce a fair basis for piecework and for the analysis of rest periods. There should also be an acceptable way of keeping records. However responsible a gang master may be, if there are 50 people in a field, a practical way must be found of keeping score. That may get more complex when we get into the rest of the fairness at work package.
Thirdly, I have been surprised by the vehemence of representations on the pesticides tax. The Minister should acknowledge that huge progress has been made in integrated crop management and in crop protection, particularly for crops grown under glass in a glasshouse. It is completely incorrect to say—although people still believe it to be the case—that horticultural produce in this country is drenched in chemicals. There are likely to be fewer chemicals on a British product than on its imported equivalent, but, in any case, they will be controlled by statute and there is a strong commercial interest right across the sector for them to be reduced to a minimum.
We should also acknowledge that horticultural produce is offered directly and needs to be visually attractive. Pest control is a way of achieving that. Our concern is that the pesticide tax, if imposed, could be another imposition of costs without a matching benefit to the industry. Frankly, given the horticulture's present economic position, it could not take much more of that.
I readily acknowledge that Ministers cannot solve all those problems, certainly not this morning. However, they need to be seen to be caring about them, raising the profile of this important and excellent industry and, above all, consulting its practitioners on the best way of overcoming them.
§ Mr. David Borrow (South Ribble)
I welcome the opportunity to discuss horticulture. As a new Member, in the past 20 months, I have been struck by the extent to which the agriculture debate in the House has been dominated by areas of agriculture that are directly dependent on support either from the Government or through the common agricultural policy. I suppose that that is understandable, but horticulture is an important sector. The Government's involvement may not be as direct as it is in livestock or dairy farming or in the grain sector, but they could play a more proactive role in leading horticulture forward.
My constituency is mainly suburban, but parts of it that were previously represented by my hon. Friend the Member for West Lancashire (Mr. Pickthall) are dominated by a growing horticultural sector. The villages of Banks, Tarleton and Hesketh Bank have, for many generations, been market gardening. They have produced vegetable and salad crops, and there are many glasshouses.
It is interesting to note the way in which the industry has changed over the past 20 or 30 years, and the reasons for the problems that have arisen. When I first went to live in Preston in the mid-1970s, it was said that the cheapest fresh produce in the country could be found 852 there, because of the town's wholesale market and its proximity to market gardening in west Lancashire and Fylde. During the past 20 or 30 years, however, there has been a change in the way in which the horticulture sector sells its products. Little of the produce of market gardeners and salad crop growers is now sold through the wholesale market; the vast majority is sold directly to the supermarket chains, a handful of which effectively control the salad and vegetable market.
Another effect has been the consolidation of the sector. Many of the small family enterprises—such as small family farms—that existed 20 or 30 years ago have disappeared. Smallholdings that existed in my constituency then have since been sold. Some are operating as part of a larger company, while others have had houses built on them, and are not producing anything. Although there are still many small growers in my constituency, the industry there is dominated by five larger growers, the biggest of which—a company called Huntapak—employs some 300 people. Many small growers are therefore at a disadvantage in negotiations with supermarkets.
Only last weekend, I talked to a couple of growers in Hesketh Bank about lettuce growing in Lancashire, and the relationship with supermarkets. Many growers are not big enough to have direct contracts with supermarkets; a lorry comes round, each of them puts a certain number of boxes on to it, and it goes to the supermarket. If the first box from the first grower is opened and its contents are not considered to be up to scratch, it is not uncommon for not just that grower's boxes but the whole consignment to be returned, and to end up being ploughed into the ground and wasted.
I regularly hear of growers in my area being paid 8p or 9p per cauliflower, and then seeing them priced at 60p in the supermarket. They would like a better relationship between the two amounts, but they are reluctant to put their criticisms on record, because they depend on contracts with the supermarkets.
I have been investigating supply chain networks in my constituency. Huntapak has land in East Anglia where it grows carrots, which are sent to Lancashire to be processed at its plant in Tarleton. They are then sent, in little boxes, to supermarket warehouses in Birmingham or London, ending up—probably—on supermarket shelves in Norwich or Southport. One wonders how much of the shelf price reflects the cost of moving fresh produce around the country. In many supermarkets—certainly in my part of Lancashire—it is virtually impossible to buy salad crops and vegetables that were grown within 20 miles of Preston, although some of the best in the country are. Indeed, it is virtually impossible to know where the produce that is available has come from. Serious questions must be asked about the role of supermarkets, and the way in which the industry is to develop.
As I know from speaking to growers, the situation is difficult. Farmers, by their nature, are very independent, and, unlike farmers in the rest of Europe, have no tradition of co-operation. Given that the retail sector is snow dominated by a handful of major retailers, the producing sector must try to find a mechanism to remove the imbalance between producer and retailer. The classic market forces mechanism has led to an unfair market consisting of a multiplicity of small growers and a handful of major purchasers. I do not know how much of a role 853 the Government can have, but the industry must consider how it can become competitive vis-a-vis the supermarket chains. As there are pressures on the supermarkets to sell food as cheaply as possible, they exert downward pressures on their suppliers, who are in a weak negotiating position.
Let me mention some minor issues, some of which have already been referred to. One is training in horticulture. Lancashire Growers, an employer-supported organisation based in Banks, in my constituency, but with members in several Lancashire constituencies, has operated a training agency for many years. Unfortunately, pressure is being exerted through the training and enterprise councils to reduce not the number of places, but the amount that is available per trainee. That makes it difficult for small training organisations to carry out first-class training.
The number of horticulture trainees is not vast. We are talking not about establishing engineering training courses in the middle of towns and cities but about agricultural communities, and the need to ensure that training is available in young people's localities, where they live and work. I fear that, if the pressure continues, Lancashire will lose local training opportunities provided through local agencies. I shall not go into more detail, as I shall pursue the issue elsewhere, but I wanted to flag it up.
Others have mentioned planning conflicts. During the short time in which I have been an MP, I have been involved in a number of planning disputes, many of which have arisen in the villages of Tarleton, Banks and Hesketh Bank. Villages which, a generation or two ago, were essentially farming villages—albeit with a reasonable population and fairly high employment in the growing industry—are now becoming both agricultural and suburban. People who work in Preston, Manchester or Liverpool but live in those villages expect to find what they would find in a suburb of a major city, rather than hearing enormous trailers delivering produce, or returning empty, in the middle of the night. There will always be nuisance, conflict and difficulty when an agricultural industry co-exists with domestic, suburban-style village life.
One of my concerns is that a number of companies in my constituency have grown out of the agricultural sector and are now involved in packaging or such industries. They were set up usually in a shed on a farm to supply a product that was needed by the horticultural sector. They have been successful and developed, but they face planning constraints as to whether they continue to exist, even in those villages where they grew. If they do not continue, what happens to the people who live in those villages and work in those industries? The conflicts in relation to that matter are interesting. Perhaps guidance in those sectors would be useful.
One of the remarkable things that arose in the meetings that I had with growers is that wage levels are above the minimum wage. That is not an issue. In my constituency, the unemployment rate is about 1.8 per cent., so we are not talking about a vast number of unemployed people, but I know of growers who have struggled to fill their vacancies. They have worked through jobcentres and many of the people whom they have recruited have been from the constituency of my hon. Friend the Member for West Lancashire—from Skelmersdale and such areas. The 854 difficulty has been getting people who have been out of work and have no tradition of working in the agricultural industry to do what is expected of them in the agricultural industry.
Few people in my constituency would want to work in agriculture who do not already do so. Therefore, the industry recruits from urban areas. In doing so, it recruits people with no tradition of working in the industry. The Employment Service needs to recognise that in terms of the support that it gives. In addition, when people, particularly youngsters, are recruited into the industry, there needs to be follow-up support from the service, recognising the difficulty when people get involved in a work culture that is different from what they would normally expect in an urban area.
There is the difficulty of finding accommodation for people in the agricultural sector on relatively low wages. I am sure that Conservative Members will have similar problems to those which I have experienced. Many people who work in agriculture and were brought up in the industry have to move out of the area and commute 20 miles each day because no property is available in the agricultural villages where they were born within the price range that they can afford.
I make a general point that follows from many of the discussions that I have had with the sector. I recognise that the Government's role is not one of giving big subsidies. The sector expects to compete and to compete fairly, but there are concerns that the regime throughout Europe is not all together fair.
On issues such as pesticides and fuel taxation, there is concern that the climate on this side of the English channel should also exist on the other side. It is difficult when imports of salad goods or vegetables from Spain or Holland can come to the UK and undercut those of our producers. They can do that because of conditions that have been influenced by Government decisions in those countries, which make it difficult for UK producers to compete. The onus is on the Government to seek a level playing field across Europe, so that our growers can compete with growers in the rest of Europe.
§ Mr. Andrew Rowe (Faversham and Mid-Kent)
I want to be brief because other hon. Members wish to speak.
I emphasise the fact that the horticulture industry is big. It employs many people. If the threats to employment in horticulture arose in some other industries, there would be a huge furore in the press and so on.
The minimum wage issue is important, not because anyone is trying to run out on his or her obligations, but because of the difficulty that, if employers pay piece rates, one person may decide that he or she wants to earn as much as possible and spend 10 minutes eating a sandwich, and someone else may decide that it is a lovely afternoon and spend two hours eating one. It is difficult to police.
If the minimum wage is to be calculated on so many hours a day, it gives a terrific bonus to those people who do not want to do any work and may be below the minimum wage level because they have not done any work—not because the money is not there for the taking. Ministers need to look at that carefully.
I should like to raise again an issue that I have often raised. When he was the Minister responsible for social security, the right hon. Member for Birkenhead 855 (Mr. Field) came to my constituency and had a look at the problems. There is an absurd difficulty that it sometimes takes up to six weeks for people to get back into the social security system if they have left work because they think that there will be the opportunity for picking.
If there is no picking because it rains all the time, those people have a problem. They are not the ones with savings; they do not have any savings to rely on. Many people in my constituency who would like to go picking are saying that it is not worth the candle. We need to look at that matter because they want to work, and they would be happy to work, but the meshing with the social security system makes it extraordinarily difficult for them to do so.
The quotas on foreign pickers—foreign students coming in to pick—need to be re-examined. I share the Government's general view that work permits should not be given for jobs that could easily be filled in Britain. That is wholly appropriate, but, again and again, pickers cannot be found among the local population; they simply are not there.
Many of my farmers, some of whom have a wages bill of £1 million a year, are finding themselves wholly dependent on the reliable work that is done by foreign students and others who have come in because they have a vested interest in getting as much pay as they can and taking it home. I hope that the Minister will look carefully at that issue.
The issue of distribution costs is important. The hon. Member for South Ribble (Mr. Borrow) painted a graphic picture of the pilgrimage of a carrot across the United Kingdom. If the Government continue to push up the price of fuel, the costs of distribution will mount rapidly—much more rapidly than the industry can possibly support.
I should like the Minister to have a careful look at planning regulations. I understand—the point has been made by one of the growers in my constituency—that the waist-high troughs in which, for example, strawberries are grown and which make picking and disease control much easier and so on, may be subject to formal planning regulation that is out of date. Apparently, if a crop is grown whose roots are not in the soil, growers face the full rigour of planning regulation. That must be negotiable, but we perhaps need some help from the Government on it.
I should like to reiterate that very big growers in my constituency and neighbouring areas are frightened of making any form of recognisable complaint about the way in which they are treated by supermarkets. There should be some mechanism to enable people to blow the whistle on supermarkets which, from time to time, abuse their market power and treat growers badly. That does not happen all the time; many of my growers are dependent, and happy to be dependent, on the efforts by supermarkets to drive up quality and all the rest of it. However, when things go wrong, supermarkets can rely on the fact that growers are not prepared to complain because the market to which they can go is tiny. That really does matter.
Finally, I have an entirely constituency point. Brogdale, the site of the national apple and pear collection, has made and is making bold attempts to break out of a debt incurred when the estate was bought, when the market was at its highest conceivable point. Even by the time the negotiations had been finally completed, the estate's value had fallen by about 25 per cent., and it then fell well below that. The debt was colossal.
856 An element in the debt, over which the Minister has control, is the fact that the Ministry of Agriculture, Fisheries and Food, under its regulations, is fully entitled to claim back part of any planning gain that may be negotiated on a part of the estate. If Ministers felt able to assist Brogdale in that way, a valuable national asset—not just in historical and tourist terms, but in terms of genetic development—would be much assisted. After all, MAFF received a huge price for the estate in the first place—an unrealistically high price. I would be grateful if the Minister would look carefully at that matter.
§ Mr. Colin Breed (South-East Cornwall)
I welcome a debate on horticulture, which is important to Cornwall and my constituency. Horticulture has clearly faced a difficult year, for a variety of reasons, such as the strength of the pound and the weather, to which reference has been made, which resulted in a lack of demand for items such as salad crops and garden plants. Little can be done about climatic disadvantages which visit us from time to time, but the main difficulty lies with the fact that we are increasingly trading in a global market.
Everywhere in Britain, we are subjected to the rigours of a global marketplace, and that manifests itself in two ways. One is the change in consumer habits. The fact that so many more people now go on holiday abroad has promoted their desire for more exotic fruits and vegetables. Secondly, supermarkets have increasingly responded to the opportunities of global marketing. They can purchase fruit and vegetables all year round, regardless of the season, and that has undermined domestic production.
The environmental impact has been seen in so-called food miles. Transporting large quantities of fruit and vegetables in order to comply with supermarkets' desire for a distribution network that provides them with the means of supplying their stores in the most competitive way has an environmental impact.
All that has meant that, recently, the United Kingdom has become a net importer of fruit and vegetables. There is now a huge gap between the value of imported fruit and vegetables and home-grown fruit and vegetables. In 1996–97, the value of imported fruit was estimated at £1.5 billion, and that of home-grown fruit at about £240 million.
The major multiples are taking a larger share of the retail market, perhaps up to as much as 75 per cent. Their central purchasing and distribution systems give importers easy access to outlets capable of handling large volumes of produce. Such volumes are necessary to provide the competitive edge for the importer from abroad and the supermarkets. The supermarkets are now the main force in the marketplace. They give consumers a wide variety of fresh fruit and vegetables. We can now eat strawberries all year round.
Strawberries form an important part of the soft fruit growing in my constituency, and some of the contracts that have been drawn up between strawberry growers and supermarkets have been alarming, forward purchasing vast quantities of strawberries and tying up huge acreages so that strawberry growers really have only one marketplace. Strangely enough, written into those contracts is a sale-or-return clause. If strawberries are not 857 going well, or if there is a bit of a glut, a supermarket can telephone its grower saying that, unless the grower prefers them to go in the bin, it intends to return them.
§ Mr. John Hayes (South Holland and The Deepings)
I am concerned not just about the sale-or-return clause, but about the way in which supermarkets are dictating a specific type of strawberry. The small sweet English strawberry has virtually died out, not because it is not a better product and people do not like to eat it, but because supermarkets prefer the large strawberry with a longer shelf life which is typically grown in California or Spain. Therefore, they dictate the product as well as the terms that the hon. Gentleman points out.
§ Mr. Breed
I entirely agree. A longer shelf life is often coupled with the fact that the strawberry tastes like wet blotting paper—no taste at all.
Often, strawberries are not returned to the growers but are consigned to waste, and the grower has to bear the cost because, if he does not want to operate on those terms, or if he kicks up a fuss, he is unlikely to get a contract next time. His opportunities to sell elsewhere are extremely limited.
Growers are squeezed by supermarkets' demands in a variety of ways. Not only do they require products of a certain size, shape and colour, with a particular packaging, but they use the domination of their purchasing departments. In the Tamar valley, one of the premier soft fruit-growing areas in the country, the decline of small shops in Devon and Cornwall diminished growers' opportunities to market their crops. Their ability to sell into the large supermarkets has also diminished because of the amount and type of strawberry that they produce and its seasonality.
The idea that the UK is now a net importer of fruit and vegetables does not lie happily with the concept of a food standards agency. Food producers in other EU countries are not subject to the stringent health and safety regulations imposed on UK producers, particularly with regard to fertilisers and pesticides. Therefore, major retailers are often better off importing fruit and vegetables from other EU countries. That will cause some headaches for the way in which a food standards agency will police some of the products that are increasingly being sold in our multiples.
In addition, climatic conditions in other EU countries, such as the Mediterranean, mean that producers in Spain, Portugal and Italy have an inherent advantage. The UK horticulture industry can survive in an increasingly global marketplace only through innovation. That is where the Government may be able to help. There are opportunities to market specific crops in an innovative way and to produce specific crops for specific markets. I highlight the success of the flower growing industry on the isles of Scilly. It has recognised that it has large competitors in Europe and on the mainland, but it has marketed itself. Scilly flowers, a definable and developing product, are now sold directly, rather than through the multiples or the marketplace.
There is a clear opportunity for those involved in organic produce. That is a growing market in which huge amounts are imported, but, if we get our act together, innovation should allow Britain to produce more.
858 The Horticultural Development Council is an important element in ensuring that the necessary research and development goes into creating an innovative approach to the challenges that face the industry. Some improvements may be necessary. Added impetus is needed for organisations that will help the industry to innovate and compete properly.
Many residents complain to me about the difference between use and scale in planning applications. Many operations had their planning use agreed many years ago, but the scale of such operations, particularly to meet the demands of the large multiples, means that increasing quantities are being produced on the same amounts of land. That means heavier traffic and increased disruption to the site. The planning authorities need to consider not just the use of land, but the scale of use, because that important aspect of the process is not taken into account.
§ 12.1 pm
§ Mr. Howard Flight (Arundel and South Downs)
I am grateful for the opportunity to refer to seven issues that have been raised by the horticulture industry in my area. West Sussex is one of the largest areas of activity in the industry, with several thousand employees, many of whom are from my constituency. The area concentrates on the glasshouse side of the industry, which requires heavy capital investment. The smaller producers can survive only in a niche environment. Many of the large producers, who already use robotics and other new production methods, are trading at very narrow margins, despite having taken all the business decisions that they can to survive.
The minimum wage and working time directive have added substantial costs to the industry and brought confusion and conflict with the Agricultural Wages Board. Those problems need to be sorted out. The glasshouse industry feels that the Agricultural Wages Board is no longer relevant to it.
Finance at universities has been mentioned. The Ministry of Agriculture, Fisheries and Food has contributed £1.5 million a year and PhDs have been regarded as crucial conduits into the new technology aspects of the industry. That finance is being phased out, but the same conduit is needed if we are to keep up.
I am advised that there are delays in getting new and better pesticides because of the high cost of label registration, which can be up to £50,000 per registration in this country, as against £6,000 in France and only £1,000 in Spain. There should be no political divisions over EU harmonisation on that issue. As has already been said, the industry does not regard the proposed pesticide tax as necessary, because it is already minimising the use of pesticides. There is a particular problem with methyl bromide, the steriliser of land, which was to be phased out in 2005. The Government have advanced the date to 2000, but there is no replacement for that product. If one is not available by 2000, the ban will have to be deferred.
We have had problems of foreign produce, grown with pesticides, appearing in local boxes and being mistested in supermarkets and identified as UK-sourced. Surely supermarket testing should be done at the depot so that it is clear where produce has come from. The rules on pesticides are more lax elsewhere. Consumers should know whether the food that they buy in the supermarket has been grown under the higher standards in force in the UK or has come from somewhere else with lower standards.
859 I am delighted to hear that the Scilly flower industry is doing well. Flowers are a huge growth industry at outlets, increasing by more than 30 per cent. per annum, but UK grower participation is stagnant, if not declining, because of the different levels of VAT in Europe. I believe that 11 member states have substantially lower VAT rates on flowers, making it hard for our producers to compete. The high-tech flower growers in my part of the world have margins of less than 2 per cent. They will not be investing any further capital. We have also heard about clear cases of planning getting in the way of productivity.
After spending two days with those in our industry, I wrote to Lord Donoughue, the Minister with responsibility for horticulture, setting out my points in greater detail. I was disappointed that my request for a meeting has not been granted and there is no apparent intention to do so. I should like to conclude cheekily by suggesting that if the noble Lord thinks that the issue will not be his responsibility for much longer, he should get a move on. If he thinks that he is going to stay at the Ministry, he should realise that the industry needs a Minister who will listen to it and understand its problems. This is not a party issue.
§ 12.5 pm
§ Mr. John Hayes (South Holland and The Deepings)
I am delighted to be able to contribute to the debate. I thank my hon. Friend the Member for Daventry (Mr. Boswell) for securing it.
My constituency is richly horticultural. It can justly claim to be the food production centre of the UK, although other hon. Members might contest that—I see one or two waving their heads about—and claim an equal share to that title.
As well as food, my area produces a large number of bulbs and cut flowers. Many people are familiar with the Spalding flower parade and festival. The skills, enterprise, energy and initiative that contribute to that advertisement for my constituency are also prevalent in the horticultural enterprise there. A great deal of innovative and imaginative work is going on in the cut flower and bulb industries, from both glasshouse and outdoor producers.
Against that background, I should like to raise three points in the few minutes at my disposal. The first concerns research and development, which has already been mentioned. I am sure that all hon. Members share my welcome for the Government's commitment to the Horticultural Research Institute at Kirton. However, I have two questions for the Minister. How does that £1.7 million investment compare with our principal competitors; and will the project be extended when it reaches the end of its life? We are in the fourth year of a five-year programme. What plans are there to extend the project or replace it with something similar?
My second point is on marketing. We have heard a lot about the need for collaborative marketing, which I endorse. Although the UK is the home of gardening, the industry is sometimes seen as small scale and peripheral compared with those in Holland and other countries, so it requires Government support. I think that the industry would acknowledge that the HDC is doing an excellent job, even though levy-based organisations are never particularly popular. However, we need marketing funds and programmes to allow our industry to take advantage of some of the export opportunities in Europe and elsewhere. The HDC should be given a boost by Government support.
860 My third point is about competition. Part of the problem is that many of our competitor countries enjoy more indulgent fiscal regimes. Payment terms are more generous and it is easier for their industries to start up, to survive and to export. Spanish producers of apples, strawberries and cauliflowers are nibbling away at the edge of our market because of their climatic advantage and putting our producers under enormous pressure.
Some say that the answer is to opt for niche market specialism, but that makes producers more fragile. Relying on a targeted niche market means that a producer cannot go in and out of a product according to economic circumstances. The ability to switch products year by year has always given growers and farmers financial and economic insulation. The focus, targeting and capital investment that niche market production necessitates removes that.
Finally, on the subject of retailers, I can say little that has not been said already, but I want to amplify some of the comments made by hon. Members on both sides of the House. Surely it is wrong that the profit margin of a typical retailer, for example, a supermarket, in the ornamental cut flower market can be between 25 and 30 per cent. when the pre-packer and the grower are making between 2 and 5 per cent. profit—a generous estimate in many cases. It is nonsensical that contracts setting retail prices cover periods of between six months and 18 months, regardless of any changes in cost prices; and that the consumer therefore pays the same price, regardless of the plight of the producer.
That matter requires Government attention. Discussions taking place with the British Retail Consortium must establish not only binding agreements but proper systems for auditing and monitoring commitments made by the BRC's members in respect of procurement and labelling of British products. I hope to hear a commitment on that from the Minister today.
§ Mr. James Paice (South-East Cambridgeshire)
I congratulate my hon. Friend the Member for Daventry (Mr. Boswell) on having obtained this debate—I cannot remember when we last had a debate solely on horticulture. The industry is a large one, running from field-scale vegetables and salad crops—for example, hundreds of acres of celery, lettuce and other salad crops are grown in my constituency—to ornamentals and nursery stock. There are many issues that affect the industry; some are unique to individual sectors, whereas others are more general.
Let us examine the overall health of the industry. As my hon. Friend said, it operates mainly in the free market. It receives little or no support from the British Government or from any other European Government, although the European aid for marketing schemes for producer groups is welcome and I am glad that the take-up rate has been high. This week's edition of "Horticulture Week" reports that the findings of the latest Plimsoll portfolio analysis of horticulture show that 27 per cent. of companies failed to make any profit in 1997; and that an examination of accounts from slightly more than 2,000 horticultural companies shows that 591 companies have above-average borrowings and three quarters of the latter are in financial difficulties. The overall picture of the horticulture sector is not entirely one of blooming roses, although some sectors have done better than others.
861 Horticulture is important to the British economy and to trade—the figures have already been quoted, so I need not repeat them—but some sectors have now been contracting for several years. That contraction is most severe in the top-fruit sector: apple output has declined by almost one third over the past 20 years, and the area covered by apple orchards has almost halved. Apples were once grown extensively in my constituency, but there are now only a few vestiges left of the old orchards. This country is now only 36 per cent. self-sufficient in apples. Tomato output is fairly stable, but our self-sufficiency is now only 28 per cent. and continues to decline, despite huge investment in new glasshouses, such as the one opened last summer by the then Minister of Agriculture, Fisheries and Food, the right hon. Member for Copeland (Dr. Cunningham), which is the largest in the United Kingdom. We have to look for ways both to arrest the decline in those sectors and to help other sectors to thrive.
Yesterday, the National Farmers Union ran its "proud to serve British" reception in the Members' Dining Room of the House of Commons. At that event, Lord Donoughue, the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food, lauded British produce, which was welcome; however, as my right hon. Friend the Member for Fylde (Mr. Jack) said, the Minister's record on supporting horticulture on other occasions is lamentable. An article in the journal "Fresh Produce" dated 16 October 1998 starts:Probably the least surprising feature of next week's Marden Fruit Show is that horticulture minister Lord Donoughue will not be attending.It notes that the Ministerhas consistently dodged trade events…since he took up office.That does not smack of great support from the Minister with responsibility for the industry.
Our fair deal for farming campaign applies equally to horticulture. Imported fruit and vegetables should be produced to the standards required here: no produce should be imported into this country for British consumers if it has been treated with chemicals that are banned in this country. I hope that the Government will take action to ensure that that happens.
That brings me to the subject of the pesticides tax. We realise that that proposal is driven by the Treasury and the Department of the Environment, Transport and the Regions, but I hope that the Minister will tell us what MAFF's attitude is. In Whitehall, is the Ministry standing up for farmers and growers? Is it being made clear to the Treasury that no farmer or grower uses expensive pesticides unnecessarily; and that a tax will not reduce pesticide usage, but will merely raise growers' costs? It should also be borne in mind that consumers might not want the misshapen or slightly less attractive produce that may result if the use of pesticides is reduced or abandoned.
The main issue mentioned by almost every speaker today is the impact of the minimum wage and the working time directive, especially in respect of casual workers, who are extremely important to the horticulture industry. Such workers have been recognised by the Agricultural Wages Board for many years. They are engaged to work by the hour or by the day; there is no continuity of work guaranteed; and they are paid by the day, often through 862 piecework rates. Only if they are employed continuously for 20 weeks do they become classified as being in regular employment.
Such workers are drawn from sections of the population who actually want to work in that way. Many of them are itinerant people: in my area, travellers coming to pick crops in the right season are part of our history. However, there is a particular group, mentioned by my hon. Friend the Member for Faversham and Mid-Kent (Mr. Rowe), of workers who operate under the terms of the seasonal agricultural workers scheme. They are foreign students, mainly from central and eastern Europe, who come to this country with Home Office consent under a scheme that is registered by the Home Office as a youth mobility and cultural exchange scheme. Ten thousand such students come each year and many employers, including some in my constituency, employ tens or even hundreds of them, often providing accommodation for them as well. Without those workers, lettuces would not be cut and fruit would not be picked.
The simple fact is that those students want to work. They are motivated by a good work ethic and by sums of money that they could never dream of earning at home. The money they can earn in one summer here can set them up for life, enabling them to buy a house in their home country. It has been impossible to obtain British workers for those jobs, despite sterling efforts by the Employment Service, which I encouraged when I was a Minister in the Department of Employment.
That scheme is now under threat: the AWB proposes that, after 13 weeks, such workers should cease to be classified as casual and the working time regulations and the minimum wage be brought to bear. Let me quote from a briefing kindly given to me by Boxford Suffolk Farms Ltd., which is a large producer of top-fruit used for Copella apple juice. In 1998, it employed more than 1,500 people under the scheme to help with the harvest. The company states:The present procedure is for the worker to sign the Daily Work Sheet on the field at the beginning of the day, but they are then free to work the hours that they want, when they want and for however long they want. If they feel like walking away and not returning then they are free to do so… This is how the majority of the casual workers like it, it gives them flexibility.However, if we are now to pay holiday pay then this will have to be carefully monitored thus adding cost and administrative burden to the operation. If, indeed, it is possible to police at all.The company also sent me a costing, although the House will be relieved to hear that I shall not go into the details, because I must allow time for the Minister to respond to the debate. Based on the 1998 statistics, the company has worked out that there would be an overall increase in the per head cost of employing such students of 34.5 per cent. No business can afford that, so the proposed changes jeopardise the industry's ability to get the crops harvested.
Several issues have been raised in the debate about this important industry, of which casual work and the Agricultural Wages Board are by far the most urgent, and I hope that the Minister will tell us what MAFF is doing to address those questions. I know that he will stress the independence of the wages board, but we want to know whether MAFF is making representations on behalf of growers to ensure that, in its review of casual workers, the board understands the horticulture industry's need to have ready access to such people.
§ The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Jeff Rooker)
This has been an interesting and a pleasant debate in which hon. Members from both sides of the House have spoken about an industry that makes a great contribution to British food supplies. I suspect that many of us have been associated with the industry at some time. Although I did not make enough money to buy a house, when I was about 19 and an industrial engineering apprentice in central Birmingham, I spent a fortnight's holiday fruit picking in Scotland. It was a totally different life. So, although I was not treated as a foreigner, I am familiar with the joys and the difficulties of fruit picking.
It is clearly impossible for me to respond to many of the points raised in the debate, so I shall pick and choose. I promise to write to hon. Members regarding any points of substance that I do not cover. I had hoped to respond more positively to the hon. Member for Faversham and Mid-Kent (Mr. Rowe), who mentioned Brogdale, as I was fairly convinced that I would be able to announce a decision. However, although one sees the papers and agrees the decision, such matters take a while to progress through the Ministry. We must protect public funds and MAFF must obtain a planning gain. I assure the hon. Gentleman that that will be done positively, and we hope to make an announcement as quickly as possible.
I shall not repeat the points raised by the hon. Member for Daventry (Mr. Boswell) in introducing this subject. I congratulate him on obtaining this debate about a very important industry that is worth almost £2 billion at farm gate level. Every hon. Member who has spoken has extolled the virtues of the industry and its excellent, wholesome and diverse produce. Although the Government do not tell people what to eat, we urge them to eat more fresh fruit and vegetables—and preferably those grown in Britain. I suspect that the common market policemen will criticise me for that remark.
I congratulate the National Farmers Union and retailers on initiating the assured produce scheme, in which 70 per cent. of British producers and retailers participate. MAFF is not involved in the scheme as the Government do not necessarily play a part in those sorts of relationships. It is as plain as a pikestaff that home-grown British fruit and vegetables are fresher than imports. However, hon. Members referred to national cycles as a result of supermarket distribution throughout the country and we know that people want to buy exotic fruits and vegetables that we cannot grow in Britain.
There is dynamism in the industry and we applaud grower ingenuity. We are world leaders in horticulture and are responsible for much ground-breaking technology. Tasty small British strawberries can be grown almost the whole year round as a result of research and development that is funded by MAFF and the industry. People soon realise that the big imported strawberries do not have a taste—I just wish that they would do so sooner.
I reject the attacks upon my noble Friend Lord Donoughue. It is nonsense to claim that he does not speak in support of British produce when he did so just the other day. My noble Friend certainly gets around the country. It may surprise Opposition Members to learn that, because the Labour party has more trouble winning votes in the other place, the whipping regime in the House of Lords 864 is much more severe than in this place. Despite that, however, my noble Friend is doing a good job on behalf of the industry.
I do not deal with horticultural issues on a daily basis, but I was astonished to learn last November that I was the first serving MAFF Minister to visit Spitalfields market since its relocation to Waltham Forest in 1991. It is a major market which distributes both imported and home-grown produce throughout the country. It has a turnover of £400 million a year and is a major distributor of food to the catering industry—a particular growth area to which many hon. Members referred.
I hope that I have applauded the assured produce scheme sufficiently. Although some hon. Members have mentioned the minimum wage's impact on the industry, more hon. Members have referred to the possibility of a pesticide tax. That is a very important issue. Page 13 of last week's edition of Farming Weekly carries a story about my right hon. Friend's address to the Soil Association conference. It states:The Minister also told delegates that pesticide taxes were not the best way to protect the environment from pollution. Such taxes would merely increase the cost of pesticides.Between 1986 and 1996, the tonnage of pesticides used in this country was reduced by 15 per cent. We have a ruthless regime for the control, monitoring and surveillance of pesticide use in Britain. The working party on pesticides—which is somewhat more than a working party; it is not a casual ad hoc arrangement—took 1,000 samples of fruit and vegetables from around the country, imports and exports, to check the level of pesticides. The quantities vary each year. It conducted tens of thousands of tests on the produce, checking for pesticide residue. It found no residue in 70 per cent. of the samples and detected minimal residue levels in about 30 per cent. Its discovery that less than 1 per cent. of samples contained residue above the minimum level resulted from its targeting of particularly dodgy areas. However, all samples were well within safety limits.
The Government recognise concern about the impact of a tax, especially on the economic competitiveness of the agriculture industry. I shall share with the House the contents of a paper from the Agricultural Development Advisory Service which recently came across my desk—and which will no doubt be published in due course—outlining a qualitative assessment of the impact of a pesticide tax. It said that pesticide taxation will not necessarily reduce pesticide usage or offer environmental benefits. With more focus on cost, farmers will use the older, cheaper and often less environmentally friendly products, and there might be an increase in the use of less well evaluated pesticide mixtures.
According to the paper, the repeated use of a narrow range of cheaper products would increase the risk of pesticide resistance. Pesticide taxation would stimulate greater demand for research into application techniques. Nitrate leaching would increase and farmers might adopt weed control strategies that are more dependent on cultural methods, many of which are more damaging to wildlife than herbicide use.
The introduction of a pesticide tax may reduce sea bed quality, and spillages and exposure to treated seeds will lead to increased potential damage to wildlife, including farmland birds. A pesticide tax would increase the amount of pesticides imported for own use and, as a consequence, 865 larger quantities of pesticides would be stored on farms, possibly in sub-standard conditions. Reduced profitability would decrease the amount of investment in new machinery, which would be beneficial to the operating environment.
I make no apology for relating a one-sided view of the argument. I make it absolutely clear that MAFF Ministers are fully seized of the upside and the downside of a pesticide tax. It may sound superficially attractive as a way of reducing pesticide use, but, perversely, it may have the opposite effect. Such a tax may lead to the use of not only more, but more damaging, pesticides. We are not prepared to tolerate that threat to the safety of the food chain.
In the minute remaining, I shall turn to research and development. We spend what might be alleged to be a disproportionate amount of MAFF's research and development budget on horticulture, and we make no apologies for that. By and large, the industry receives no support from common market subsidies. We are therefore very pleased to contribute between £11 million and £17 million—depending on whether we add in the Biotechnology and Biological Sciences Research Council money—and we hope to continue that funding.
I regret the changes that we were forced to make to educational grants, but that is a matter for the Department for Education and Employment to address, given the constraints of the comprehensive spending review. I regret also that I have not been able to respond to all the points raised in the debate.