Livestock Producers

HC Deb 21 October 1999 vol 336 cc555-8

3. Mr. Archy Kirkwood (Roxburgh and Berwickshire)

What plans he has to support the profitability of hill and upland producers of livestock; and if he will make a statement. [93387]

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Elliot Morley)

We have committed an extra £60 million to next year's hill livestock compensatory allowance scheme. Upland producers will also benefit from the other measures we have announced recently to ease pressure on the livestock sector.

Mr. Kirkwood

Will the Minister concede that the profitability of hill livestock producers has collapsed recently? It has done so to the extent that, for the first time, thousands of families in the hills who produce livestock, have dependent children and have capital assets of less than £8,000 are eligible for the working families tax credit. Surely it is in no one's interests that people have to rely on the benefits system to supplement agricultural wages. I acknowledge what the Government have done, and the £60 million is welcome, but we have had £60 million a year on a one-off crisis basis since 1996. Is it not time that we had a long-term strategy for the future viability of livestock producers which does not sentence them to starvation incomes?

Mr. Morley

We concede that there are difficulties in the hill livestock sector, which is why we have found the extra £60 million for that sector. That money is on top of the £700 million that is already going to beef and sheep producers in the sector. There are long-term issues, and that is why we are discussing the reform of the hill livestock compensatory allowances system into area-based payments. We have allocated environmentally sensitive area payments and stewardship payments. We are also talking to groups such as the National Sheep Association about the future of livestock. There are complex issues about prices and markets and there has been a considerable increase in the size of the national flock, which has risen by 1.27 million in the past year alone.

Charlotte Atkins (Staffordshire, Moorlands)

Is not one of the problems the profiteering of the supermarkets, which buy cheap and sell expensive?

Mr. Morley

There is certainly an issue of sales and markets which must be addressed. However, my hon. Friend will be aware that supermarkets are currently subject to investigation by the Competition Commission.

Mr. David Maclean (Penrith and The Border)

Does not the Minister recognise that it is not a matter of "just some difficulties out there", to use his words? The whole farming industry is in crisis, and the Government are presiding over the devastation of our upland areas, with huge environmental consequences unless we get action from the Government soon—and more action, not just a promise from the Minister not to drink Beaujolais Nouveau in future.

Mr. Morley

The right hon. Gentleman does not seem to have noticed the £150 million aid package recently announced by my right hon. Friend the Minister. There certainly are difficulties in the agricultural sector. Some of those difficulties are the result of short-term cycles, but some of them are much more persistent and are caused more by structural problems. The upland sheep sector falls into the latter category.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy)

I remind the Minister of the crisis in the sheepmeat industry. Will he consider very carefully a ewe cull system, which is urgently required? If the only objection to a calf cull system in Wales is the fact that it would be treated differently from England, why do not we have a UK-wide calf cull system?

Mr. Morley

On the first point, the ewe cull system must be subject to state aid rules, and it is unlikely that it would be approved by the European Commission. Indeed, the Commission has already made an announcement on the proposals by the Welsh Assembly.

We have no plans to introduce a calf cull scheme. The date for the end of that scheme was made very clear. The scheme has been extended twice already, and there are signs that a market for cull calves is establishing itself in the meat sector.

Mr. Tim Yeo (South Suffolk)

Does the Minister agree that the lifting of the ban on beef on the bone would be one of the best things that could happen to livestock producers? Why is policy in England now being made by unelected bureaucrats in Cardiff and Edinburgh and not by the elected Minister? How much longer will it be before English consumers are allowed to eat beef on the bone, as the chief medical officer for England has now recommended it is safe to do?

Mr. Morley

My right hon. Friend has made the position clear several times. We have always said that we shall advance on the basis of independent scientific advice. I am very surprised that the hon. Gentleman has made it clear that the Conservatives, apparently, would ignore the advice of chief medical officers, no matter what it was. Surely it is much more sensible to approach the issue on a UK-wide basis. That is why discussions are taking place with the devolved assemblies to try to reach agreement on that. That is a sensible way to proceed on this issue.

Mr. Dennis Skinner (Bolsover)

Does my hon. Friend agree that one of the problems about handing out these subsidies is that, for example, in the last year during which the Tories were in power, nine separate agribusinesses got £1 million each in subsidies? The system has been skewed towards the big business farmers, as opposed to hill farmers and all the rest. Now that the Government are waging war against the forces of conservatism, when are we going to see the back of this common agricultural policy?

Mr. Morley

My hon. Friend is absolutely right in that one of the problems with agriculture is the distorting effect of the subsidies from the common agricultural policy. We have made it clear that we want to progress with reform of the CAP, to move away from production-based subsidies and to direct that money towards the rural development programme, agri-environment and the broader rural economy. That is the way forward for a long-term future for agriculture, and we intend to pursue that as part of our strategy.