HC Deb 20 May 1999 vol 331 cc1199-201
4. Mr. Colin Pickthall (West Lancashire)

If he will make a statement on the outcome of the May Agriculture Council concerning the recent agreement on common agricultural policy reform in relation to farm incomes. [83850]

The Minister of Agriculture, Fisheries and Food (Mr. Nick Brown)

The reform will increase the market orientation of European agriculture and assist producers in their efforts to improve the competitive position of their businesses. In the short term, before the adjustments take place, there may be a small negative impact on aggregate incomes, but the hard-pressed beef sector is fully protected.

Mr. Pickthall

Does my right hon. Friend agree that the possibility for modulation according to national priorities could be a great opportunity to make the common agricultural policy more acceptable to Britain? Does he expect to be able to use the system to provide more assistance to small family farms and possibly to new entrants into fanning?

Mr. Brown

I am not an advocate of modulation, but it is permitted by horizontal measure 4 of the agreement. We consulted on the issue in principle in January, before the final phase of the negotiations, and the majority of farmers liked the idea in principle and responded positively. We are consulting further and we shall be consulting the Agriculture Ministers of the devolved authorities.

Mr. Robert Walter (North Dorset)

Two years ago farmers were told that things can only get better under Labour. Since then, farm incomes have collapsed. Will the so-called reform of the common agricultural policy give farmers any long-term hope? It appears that the reform is totally incompatible with the next world trade round and takes no account of the cost of EU enlargement. Can the Minister reassure fanners?

Mr. Brown

I want to make it absolutely clear that I would have liked to have seen the reform agenda advocated by the United Kingdom and others go further and be introduced more quickly than it was in the negotiations that were concluded in Berlin. The common agricultural policy is undoubtedly moving in the right direction and there are substantial benefits in it for British agriculture. The task for Ministers and, dare I say it, for Parliament is to ensure that we make use of all the measures now open to us, including the rural development measures, to ensure that small, medium and large farms come through the present downturn in the agricultural cycle to profitability, a decent return on the work that farmers are doing, on the capital they have invested and on the investment in their livestock and crops.

Mr. Dale Campbell-Savours (Workington)

My right hon. Friend will know that the Conservatives are always telling us that they want to keep the veto. Is the retention of that veto helpful in renegotiating the CAP?

Mr. Brown

It is important that the Government have been able to get our country back to the heart of the negotiations with our partners in the European Union. We have been able to make substantial progress on our reform agenda in each and every area of the CAP and stabilise the budget in a way that the previous Government failed to do.

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

Given that the Minister has correctly acknowledged, today and previously, that the interim CAP reform will have to be revisited—for the very correct reasons referred to by the hon. Member for North Dorset (Mr. Walter)—will he confirm that the British Government's efforts in the matter will be concentrated on making the case, with renewed vigour, for shifting more funds, and fresh funds into wider rural development? We have to do that if we are to maintain the viability of our agricultural sector, particularly in the United Kingdom's less viable parts in terms of incomes.

In answering the initial question, the Minister mentioned the emerging devolved structure in the United Kingdom. Will he amplify a little more on how he sees the agricultural representatives in Edinburgh and in Cardiff contributing under that structure, and does he welcome the fact that part of the coalition deal between the Labour party and the Liberal Democrats in Scotland—[Horn. MEMBERS: "Sell out."] I am interested to hear Conservative Members use that phrase. I should have thought that they would welcome the fact that we shall see the introduction of an independent arbitration service for agriculture, for which we have long been calling. Now that one is being established in Scotland, when will similar services be established across the United Kingdom?

Mr. Brown

I welcome the thrust of the hon. Gentleman's question. I set big store by the rural development measures. I am looking forward to working closely with the Agriculture Ministers from the devolved authorities—the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly. The House will want to know that the mechanisms that I propose to use for consultations with the other Ministers are exactly the same as ones now operating within the Government, except that meetings of officials before the Council of Ministers will—I hope; it is subject to agreement with the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly—be supplemented by ministerial meetings between me and the other Agriculture Ministers.

On the hon. Gentleman's final point, I am examining whether it would be possible to introduce such arrangements into England. However, I do urge people not to place too much hope in such a mechanism, as all that it could do would be to confirm that the regulations—which are very rigidly drawn—are being properly operated. The scope for altering decisions that have been made is very tightly circumscribed, and there is not as much discretion in the matter as would perhaps be normal in United Kingdom law.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy)

Will the Minister confirm that, prior to the previous general election, the Labour party was in favour of modulation in support payments? May I, please, impress on him the need for a really serious look at modulation—which would assist upland farmers, who are most under strain in the current economic climate?

Mr. Brown

I am taking a hard look at it, and the consultation is a serious one. I have been struck by the response to my January consultation from farmers across a range of agricultural sectors. They were in favour of it, at least in principle, and wanted the idea to be explored further. Modulation is, of course, divisive in the agricultural sector, as those who believe that they could be beneficiaries of it are advocates, whereas those who believe that they could lose out by it are sceptical of it. We therefore have to proceed carefully.

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