Common Agricultural Policy

HC Deb 11 May 2000 vol 349 cc1024-109

[Relevant documents: European Union Document No. 9311/99, European Court of Auditors special report 2/99 on the effects of the CAP Reform in the cereals sector; the Seventh Report from the Agriculture Committee of Session 1998–99, Outcome of the CAP Reform Negotiations, HC 442, and the Government's response thereto, HC 825 of Session 1998–99]

Madam Speaker

I have selected the amendment in the name of the Leader of the Opposition.

1.17 pm

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

I beg to move, That this House takes note of European Union Document No. 6629/00, a Commission proposal on the prices for agricultural products (2000–01); supports the Government's intention to negotiate an outcome which takes account of the interest of UK producers, consumers and tax-payers alike; and also takes note and approves of the action which the Government has taken in partnership with the industry to launch the new Action Plan for Farming to ensure that British agriculture is more sustainable, dynamic and diverse, and more consumer and market-orientated.

We last debated agriculture on a Government motion in October. A great deal has happened in six months. Ambitious rural development plans have been devised, the Food Standards Agency has been established and considerable extra public aid has been given to farmers. Three important reviews of agricultural red tape have been completed and the Government have established a new direction for agriculture, supported by a 62-point action plan, which was launched during the Prime Minister's summit in March. The annual debate on common agricultural policy price-fixing arrangements is a good opportunity for the House to discuss the current position in agriculture and prospects for the future.

This is the third year of depressed farm incomes. Times are hard for many whose livelihoods depend on agriculture. The causes are well known and have been much discussed. They include the legacy of BSE, the weakness of the euro relative to sterling, and low world commodity prices through over-supply. In 1998–99, there was record pig production in several member states. That led directly to the over-supply of our market. When that was combined with the economic crisis in Russia and the far east, where demand for pigmeat fell, the inevitable result was low market prices.

The market for sheepskins has also recently collapsed as a result of the economic crisis in Russia and the far east. Skins used to add to the value of lamb. However, sheepskins, which were worth between £7 and £8 two years ago, are now worth only 50p.

I am doing everything that I can to help farm businesses to adapt to new market demands and the evolution of agricultural and trade policy. Only by looking to the market will farming become prosperous, forward looking and sustainable.

I shall set the Commission's price-fixing proposals in context by outlining the key points of last year's Agenda 2000 reforms. The outcome was a success for the United Kingdom, and the final deal represents an important step in moving the common agricultural policy in the right direction. The reforms will help agriculture to meet the challenges of further liberalisation of world trade. They provide for a significant shift from price support to more transparent direct payments and, for the first time, an integrated European Union rural development policy has been created.

Agenda 2000 was a success for the United Kingdom and for Europe. European agricultural policy has started to move in a new direction. Member states have agreed to increase the market orientation of their agricultural economies. That is absolutely necessary for a viable European agri-food sector.

Mr. Patrick Nicholls (Teignbridge)

The right hon. Gentleman clearly speaks with great sincerity, but is not the bitter truth that he, as the British Agriculture Minister, does not set the policy for British agriculture? That is done by the EU. Until this sovereign Parliament can reassert the proposition that British law should prevail when British law and interests conflict with those of Europe, there will be no long-term future for British agriculture—nor, indeed, for the British nation.

Mr. Brown

I do not agree with the conclusions that the hon. Gentleman draws, although he is correct to say that the CAP—and the Council of Ministers, which sets that policy—is an over-arching policy instrument. Much of what I can and cannot do is shaped by the CAP. That is why the debate about reform is so important to those who, like me, believe that our future lies in Europe. The hon. Gentleman's perspective is very different; he looks to leaving the EU as a way forward. That is a fundamental difference between us, but if we start from my premise, it logically follows that we need a CAP that can work for European agriculture. That is why I am so keen on reform.

Dr. Norman A. Godman (Greenock and Inverclyde)

rose—

Mr. Nicholls

rose—

Mr. Brown

I give way to my hon. Friend the Member for Greenock and Inverclyde (Dr. Godman).

Dr. Godman

Will applicant nations be able to sign up to the EU-wide rural development policy if their applications are successful? As my right hon. Friend knows, I have long argued that an unreformed CAP will harm the interests of countries such as Poland and other applicant nations.

Mr. Brown

The agricultural aspect is crucial to our ambitions for enlargement. Like my hon. Friend, I believe that a reshaped CAP has an enormous role to play in facilitating the enlargement of the EU. As he knows, discussions between the Commission and the applicant countries continue on that and other issues even as we speak.

Mr. Nicholls

I know that the right hon. Gentleman would not want to misrepresent my views. Will he accept that in no sense is it my position that we should simply withdraw from the EU? I want us to acknowledge the fact that if we cannot achieve a fundamental renegotiation of the terms of our engagement, we could still leave. We must recognise that we will be able to establish terms for our participation in Europe only if we make the point that Parliament must retain that ultimate ability. That is a very different point.

Mr. Brown

I am grateful to the hon. Gentleman for setting out his position so clearly. My objective is to remain in the EU to ensure that we are right at the heart of every negotiation of significance to this country—and, moreover, to add to the value of the EU rather than to stand slightly to one side and criticise it. That is a fundamental difference of approach.

Having welcomed the creation of the second pillar of the CAP, it is also fair to observe that the pressures of EU enlargement and the next World Trade Organisation round will strengthen our case for further reform. As I have often told the House, I attach enormous importance to the second pillar—the rural development regulation—as an appropriate instrument to reform the CAP.

Mr. Nigel Evans (Ribble Valley)

With all the changes that are taking place, will there be any light at the end of the tunnel for the dairy sector in this country? As the Minister will know, I have many dairy farmers in my constituency. They are simply no longer making any money. Farmgate prices for milk have been tremendously depressed. What hope can he give dairy farmers that, in the short term, they will be able to turn a profit again?

Mr. Brown

Only yesterday, I met a group of dairy farmers and their Member of Parliament, my hon. Friend the Member for West Carmarthen and South Pembrokeshire (Mr. Ainger), to discuss precisely those issues. The hon. Gentleman is right to say that the price that farmers are receiving for their milk—it is often below the cost of production—is the key precipitator of the crisis in the sector.

The hon. Gentleman will know that, following the Prime Minister's summit on 30 March, every instrument that Government could use to help dairy farmers was proposed, including the lifting of the dairy hygiene charges, the drawdown of all agri-monetary compensation and the lifting of the weight limit on the over-30 months scheme. In addition—this gets to the heart of the hon. Gentleman's perfectly proper question—there is the issue of relations within the supply chain. I use my office as far as it is proper for me to do so to persuade others further down the supply chain that they have a vested interest in the security of the chain and in the profitability of the producer suppliers of the product—the more so as we are dealing with a fresh product, and substantial investment is necessary at each stage in the chain.

Several hon. Members

rose—

Mr. Brown

I will take some questions on that issue and then move on.

Mr. Alan W. Williams (East Carmarthen and Dinefwr)

On the dairy sector, my right hon. Friend mentioned the lifting of the cap on the over-30 months scheme. What is the latest position on that in negotiations with Brussels, and when will it be implemented?

Mr. Brown

As my hon. Friend knows, it is a European Union instrument, although it is the UK taxpayer who will pay the extra costs of the proposed change. We are in discussions with the Commission, and I hope to be able to make an announcement soon.

Mr. David Drew (Stroud)

Does my right hon. Friend agree that at least part of the problem is the intervention milk price equivalent. That is a floor price; it is not the price that the industry should be setting for the exchange of milk. If the whole industry realised that, including the supermarkets, it would make a significant difference to the price paid to individual farmers.

Mr. Brown

I understand what my hon. Friend is saying. As he knows, I have considerable sympathy with that view—but these are, after all, private sector arrangements, so there is a limit to what it is proper for me to do. I am doing everything that I can to help the dairy sector, and dairy farmers in particular.

Mr. Richard Livsey (Brecon and Radnorshire)

The Minister referred to the food chain. Has he noted remarks in the agricultural press by representatives of some stages within the food chain that the supermarkets are intent on buying at the lowest possible price from primary producers, regardless of any farm assurance schemes, whether they be for milk or other products? That is a major problem that he has to overcome.

Mr. Brown

In an industry such as the dairy industry, which is sophisticated and investment-intensive right the way through the supply chain, from producers to retailers, such a policy would be short term and foolish. Conditions for dairying in this country are ideal; I do not mean just climatic and agricultural conditions. The pattern of consumption in this country is different from that in the rest of the European Union. To allow the industry to be diminished for short-term considerations that will not endure would be very short-sighted.

That is a point that I make to all my Department's partners. With the Food Standards Agency being set up as a separate agency, the industry focus in my Department is thrown into sharp relief, so I make the point to every partner that we have, all through the chain. I get a good reception for what I am saying, but I think that it would be dangerous for me to do more than that.

I turn to the price-fixing proposals. The Agenda 2000 agreement set prices for a number of commodities on a multi-annual basis. For that reason, the Commission has made proposals this year for only modest changes in prices relating to cereals, silkworms, pigmeat and sheepmeat, rice and sugar.

To remove the need for annual fixing, the Commission proposes to transfer the legislative basis on which the changes are made to the basic Council regulation. The UK Government acknowledge the common sense of all that and give the Commission our support. However, I am disappointed that there is no provision for a cut in sugar prices. Support for sugar is increasingly out of line with what is available for other arable crops. The case for a price cut is strong.

On rural development, as well as the important move away from price support, Agenda 2000 introduced the rural development regulation which provides for the first time an integrated EU rural development policy. That is the way forward for the EU.

The regulation gives us a significant opportunity to move away from traditional commodity support in favour of schemes that boost the broader rural economy, encourage farming practices that benefit the environment and help to modernise and restructure the farming industry.

We have ambitious plans for implementing the regulation. Over the next seven years, the Government are proposing expenditure of more than £1.6 billion on the England rural development plan—an increase of 60 per cent. over the period. This will enable us to provide increasing support for agri-environment and farm woodland schemes, continued support for hill farming and support for energy crops, and to introduce a number of new schemes to help rural communities. Several of the new schemes will help the process of diversification and help increase competitiveness.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy)

The Minister was careful to refer to England. What is he proposing for Wales?

Mr. Brown

There is a separate plan for Wales, which is discussed by the Welsh Assembly and the Welsh Agriculture Minister. Responsibility for this matter is devolved, and the competent Minister is in the Welsh Assembly. I assure the hon. Gentleman that there is close co-operation between my Department and the agriculture departments in the devolved territories.

The hon. Gentleman has asked about the division of the moneys. It is complicated, but it was done proportionately. He is concerned mostly with hill farming, and the division of the money has been done in terms of the proportion of hill farms, rather than any other measurement. One might take the view that the settlement disproportionately favours Wales. I do not take that view; the settlement was fair, as the money was for hill farming.

Mr. Lembit Öpik (Montgomeryshire)

Given that farmers will be expected to pay an increasing proportion of the money spent on rural development plans, will the Minister assure me that they are being involved in the design of the plans?

Mr. Brown

Comprehensive discussions have taken place with farmers' leaders, and I did my best to consult individual farmers for a whole year as the plan was being devised. I accept that modulation—which I believe to be the best way forward—is controversial in some quarters. However, for every pound that is modulated in England, Scotland, Wales and Northern Ireland, there is an extra pound from the Treasury. No part of the UK can lose out overall, and UK agriculture as a whole gains. Within that, some individual businesses will be beneficiaries and others will be losers. There is a redistributive effect, and I have paid careful attention to that in devising the England scheme—for which I am responsible—to make sure that there is no disproportionate redistribution between the English regions. The allocation within England has taken careful account of that.

Several of the new schemes will help the process of diversification and increase competitiveness. We plan to reintroduce an expanded processing and marketing grants scheme. A new rural enterprise scheme will promote rural development on and off the farm. Government aid will support the development of energy crops. Vocational training for people in farming and forestry will broaden the skills base and support the delivery of the rural development plan's objectives.

On 30 March, the Prime Minister, ministerial colleagues and I met farming and food industry leaders from throughout the UK to agree a strategy for the future of agriculture. The aim was to chart the way forward in the context of the current difficulties in the sector. An enormous amount of work across Government and in the private sector went into preparing for that summit. I am grateful to colleagues in other Departments, to their officials and to those in the devolved Administrations.

The result is an action plan for farming, supported by more than £200 million in new Government expenditure. The action plan contains 62 measures to support the Government's long-term agriculture strategy. We are working hard to achieve the goals set out in the action plan, and we have already made good progress.

We have notified the Commission of a number of new state aids and the agri-monetary aid that we intend to pay to the beef, sheep and dairy sectors. By the end of this year, the Government will have paid more than half a billion pounds in agri-monetary compensation since coming to office.

Mr. Huw Edwards (Monmouth)

Will my right hon. Friend give way?

Mr. Brown

I hope that my hon. Friend is not going to ask for more.

Mr. Edwards

Will my right hon. Friend tell the House how much was delivered in agri-monetary compensation under the Conservative Government?

Mr. Brown

The facts speak for themselves: more than half a billion pounds under us; not a single penny under the previous Government.

Mr. Tony Baldry (Banbury)

Does not the intervention by the hon. Member for Monmouth (Mr. Edwards) show how little Labour Members understand? Did milk prices ever collapse under a Conservative Government, as they have recently? The Minister has given details of many interesting schemes, but will he tell us how much money the Government's actions will put into the pockets of dairy farmers—for whom milk prices are at their lowest level since the Domesday book was compiled?

Mr. Brown

Going back to Domesday is probably going a bit far. It is also claiming quite a lot for the previous Government to take credit for the shifting terms of trade. If the hon. Gentleman is making the point—it is a perfectly fair point to make—that when sterling is weak, the terms of trade are advantageous to agriculture as a sector, he is correct. However, I should also point out that when the international markets were selling sterling, interest rates were increasing to 15 per cent. It is fair to point out that at the heart of the current difficulties in the dairy industry are, at least in part, difficulties with the terms of trade—the strength of sterling and the weakness of the euro.

The Government, however, are doing absolutely everything that we can with the instruments directly under our control—including agri-money, dairy hygiene charges and the weight limit on the over-30 months scheme—to give what help we immediately can to hard-pressed dairy farmers. That is a fair response to what I acknowledge is a difficult position. I have also said that I am using my office, as much as it is proper for me to do, to try to facilitate a solution to the difficulties within the supply chain.

Mr. David Heath (Somerton and Frome)

The issue of agri-monetary compensation is important, and I am grateful to the Government for doing something about it, however belatedly and partially. What is the long-term solution on agri-monetary compensation? It is clear that the current arrangements will not last indefinitely, and that there will be pressure on other European Union member states, as members of the eurozone, to remove agrimonetary compensation. What is the British solution to that, and how can it be disentangled from the Fontainebleau arrangements, which are getting in the way of providing proper support for the British agriculture industry?

Mr. Brown

The Fontainebleau arrangements are a complicating factor in all this. As I have said repeatedly to the House, when agri-monetary compensation is discretionary rather than mandatory, I am competing with other demands for public expenditure, effectively from the domestic Treasury, in order to make those payments. Of course there is a debate within Government about priorities.

The future for the current agri-monetary regime is time-limited, as the hon. Member for Somerton and Frome (Mr. Heath) rightly said. The current scheme spans three years, with half the money being allocated for this year. That is the money that we are, in part, drawing down. I believe that next year, one third of the total sum will be allowed, with the final sixth coming in the following year. After that, the scheme comes to a conclusion. It is not a continuing arrangement, so the Government's policy of securing a stable exchange rate and bearing down on interest rates is important.

Mr. Owen Paterson (North Shropshire)

The Minister gets away with a lot in debates because he is so generous in taking interventions—

Mr. Brown

I agree with the hon. Gentleman. Thank you very much.

Mr. Paterson

But—there is a but—he has been disingenuous. He has failed dreadfully in his negotiations with the European Union and let down this country's dairy farmers. Why did Italy, Spain, Ireland and Greece get huge increases in milk quota last year, when our dairy farmers got nothing? In his negotiations on beef, why did he get nowhere on calf exports? A good bull calf in France makes £150, but a good bull calf in Shropshire either goes to the hunt kennels for nothing or at best makes £15. He has let down this country's dairy farmers, and he should not hide it with blather about a lot of little schemes. The real money is made from selling milk and calves to customers.

Mr. Brown

Although it is possible to get Conservative Members to make such charges, it is difficult to find dairy farmers who do so—or at least, they do not do so when I meet them. I am certain that the hon. Gentleman has his own friends who will support him. I agree that the extra dairy quota for Ireland is difficult to justify, but the Irish Government were able to plead an agreement made in the early 1980s—to which the Conservative Government were a party—as the basis for their extra quota. I could not say that what the British Government did in the early 1980s was wrong, even if I thought that it was. All that I could do was negotiate for our country and get an equivalent increase in quota for Northern Ireland, based on the southern Ireland claim. That seemed to be a reasonable response. The idea that we were somehow let down in the negotiations is fallacious.

In any event, the real issue is not extra dairy quota, but the future for dairy quotas. There are only two possible ways forward. One is to lock us into the regime, which would be wrong. The other is to argue for reform, even if we are currently arguing from a minority position. I stand by the proposition that we, together with the Governments of Italy, Sweden and Denmark, put forward for a permanent phasing out of dairy quota over six years. That would give the industry a period in which to depreciate its quota holdings and provide certainty about the longer-term outcome, resulting in a much more market-oriented industry, which is the only real way forward.

When the quotas were introduced in the early 1980s, they were supposed to be a temporary response to a particular market difficulty. The market difficulty has come back, but the response is not helping. We need to think strategically. There is not much difference between the Government and the Opposition on the strategic question.

Mr. James Paice (South-East Cambridgeshire)

rose—

Mr. Brown

I want to move on and deal with the pig industry scheme, but I shall give way first.

Mr. Paice

I am grateful to the Minister for giving way. I want to take him back to agri-monetary compensation, about which the hon. Member for Somerton and Frome (Mr. Heath) asked. The Minister talked about further tranches of existing money, but is he saying that the Government would not support any further agri- monetary compensation system to take over when the existing one runs out at the end of 2001?

Mr. Brown

I have not said that, but the hon. Gentleman must understand that the circumstances will be pretty difficult, with 11 of the 15 member states in a single currency and three others preparing to go into it. He should think about the circumstances in which such a scheme would be negotiated. It is better to pursue our current policies to stabilise exchange rates so that currency variations impact less on agriculture.

We are trying to support the pig industry and secure its long-term viability through the pig industry restructuring scheme. The issue is under discussion with the Commission, as well as with the industry and other interested parties. I know that the House will be interested in this, because right hon. and hon. Members have often raised the plight of the pig sector.

The scheme is worth £26 million in the first of three years. It will have two main parts: an outgoers element is aimed at those who wish to leave pig farming; an ongoers element is for those who wish to remain in the pig industry and restructure their businesses. We hope to introduce the outgoers element of the scheme in July this year. It is my intention—if I can—to backdate the scheme to June 1998 so that we can provide some help for those who have already left the industry.

We have also notified the Commission of our plans to provide funding for farmers to receive specialised business advice. I am pressing the commission for a rapid response to all the notifications that I have referred to so that we can act quickly to introduce the new measures.

Legislation to remove dairy hygiene inspection charges in England, which I referred to yesterday, was put in place yesterday. Parallel action is in hand to remove the dairy hygiene inspection charge in Wales shortly, but that is a matter for the Welsh Assembly. When that has happened, there will no longer be a charge for such inspections anywhere in the United Kingdom.

My Department is working with the Department of the Environment, Transport and the Regions to ensure that planning regulations, and their implementation, are flexible to local needs. It is essential that planning laws are compatible with opportunities for the farm business diversification that is already taking place, and that will be further facilitated under the new rural enterprise scheme. I accord great importance to that, because it would be discordant for me to favour diversification but for the planning rules to thwart it.

Mr. John Townend (East Yorkshire)

I hoped that the right hon. Gentleman would be saying rather more about the pig industry. Can he envisage a time in the foreseeable future when our pig industry will be able to compete on a level playing field with its competitors in Europe, with the same animal welfare and hygiene overheads as our competitors? There seems little likelihood, in the foreseeable future, of our competitors having the same costs imposed on them as we have imposed on our pig industry.

Mr. Brown

Both the animal welfare imposts on the industry—the stall and tether bans and the meat and bonemeal restrictions—are unique to the United Kingdom. The legislation to put those measures in place was introduced under the previous Government. I make no complaint about that—

Mr. Townend

I do.

Mr. Brown

The hon. Gentleman does, and no doubt he did at the time. However, these matters are not as party political and partisan as he might imply. Better news is that the price in the marketplace is crawling back to what the industry regards as a break-even point. That does not get the industry out of all its difficulties, of course, because there will be residual debts from the prolonged recession in the sector. However, it offers some hope, and the measures that the Government are taking now and have taken, particularly on the marketing side, to help the industry through, with the support and encouragement of Members of Parliament from all sides of the House, have undoubtedly helped.

Throughout the cycle, there have been points at which the domestic industry has been able to command a premium in the marketplace over the European Union price. I believe that we should focus our attention on that market-based solution and on what help we can legitimately give within the state aid rules. That is precisely what I am trying to do.

That is not all that I am trying to do, however. The Government will continue to explore other ways in which we can develop the action plan to help the industry in the short term. I can announce today that the Inland Revenue is offering to join with the National Farmers Union to increase awareness of the assistance available to farming families through the working families tax credit. Many farmers, like many other hard-working families, stand to gain from the working families tax credit. It is important that those who are eligible claim their entitlements in full.

Government action has been matched by initiatives from the farming and food industries. The Institute of Grocery Distribution is taking the lead on developing a code of practice for collaborative and constructive working in the food supply chain. That is having a tangible effect on my efforts to get the food chain joined up.

The NFU has developed a new British farm standard, the "tractor mark". The mark has the support of major retailers and they have agreed to use it, to identify clearly to customers produce that meets the high standards of British farm assurance schemes.

Mr. Hilton Dawson (Lancaster and Wyre)

Does my right hon. Friend accept that there is wide acknowledgement that the Government are doing everything that they can to promote high-quality British produce? Are we getting the same commitment from the food processing industry and supermarkets? My right hon. Friend seems to have had constructive discussions, but when will we see real action from those important sections of the industry?

Mr. Brown

My hon. Friend makes his point forcefully and well. The same point was made to me by farmers in his constituency when I met them recently. I try, as much as the boundaries of my office allow, to make these points to processors, retailers and distributors. The Ministry is the sponsoring Department for the entire supply chain, and I want the consequent responsibilities integrated within it, to the benefit of all.

I shall now say something about the red-tape review. Farmers say to me time after time that the burden of regulation is one of the most difficult things with which they have to cope. They go on to bet that others do not have to cope with that burden in the same way. Other Agriculture Ministers all make the same point on behalf of their farmers. It seems that it is right to bear down on regulations that are a burden to farming. The three regulatory reviews launched towards the end of last year made 107 recommendations, of which the Government accepted 98 straight away. I know that it will be of interest throughout the House that one of the most far-reaching recommendations relates to the computerised administration of CAP schemes. The Government have accepted the working group's finding that computerised administration could offer a radically improved service for farmers and significant savings to the taxpayer.

The Government are considering the issues and no final decisions have been made. I shall set out my four key objectives. First, I want to offer improved services to farmers, traders and other stakeholders. Secondly, I want to strengthen my Department's regional policy presence, which will mean building closer links with the Government regional offices. Thirdly, I want to ensure that the implementation of rural development policy has a strong regional focus. Fourthly, I want to make the best use of available technology in administering CAP schemes.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich)

Will my right hon. Friend give way?

Mr. Brown

Yes. I know that my hon. Friend has a constituency interest.

Mrs. Dunwoody

My right hon. Friend has been extremely understanding and sympathetic. I know that he understands the worry in my area about the problem of farmers and information technology, especially in relation to completing forms—forms on which a farmer's entire income can depend. Can he assure me that we shall try to resolve the difficulty when there is no civil servant to give direct advice to the farmer at the point of use?

Mr. Brown

Although we have accepted the principle, we have not yet agreed to a specific proposal. The matter is under active consideration. Before embarking on any change, I want to do two rather obvious things. First, I wish to ensure that the proposal has been as robustly tested as possible. Secondly, I want to ensure that we have given every consideration to my Department's regional interface with farmers, to which they attach so much importance and about which I continue to hear complimentary remarks from individual users of the regional service.

Mr. Tim Collins (Westmorland and Lonsdale)

May I take the right hon. Gentleman back to the second of his four points—greater co-operation with the Government regional offices? Is that a code that means shutting down the existing MAFF regional offices and merging them into the overall Government system? I can assure the right hon. Gentleman that my constituents find the service that they get from Carlisle extremely useful. The people at Carlisle understand Cumbria and can explain the problems to farmers in that area. If the service is transferred to Manchester, my constituents will not be remotely as happy, and they will be much worse served.

Mr. Brown

I am not certain that that would be a good idea. The direct answer to the hon. Gentleman's question is no. It is perfectly possible to integrate my Department's policy-making responsibilities more closely with the work of other Government offices, particularly those for the regions, without physically moving every MAFF employee to—to use the hon. Gentleman's example—Manchester. That would be an expensive and unnecessary solution to the problem. The reason why the regional services centres are not located alongside other Government services in the regions is perfectly rational. They have a different, rurally based client group. There is a strong case for paying particular attention to that factor as we consider these matters.

Dr. Godman

When my right hon. Friend discusses closer integration and regional offices, am I right to think that he is talking only about England? It is likely that the Northern Ireland Assembly and the Executive will be reinstituted on or about 22 May. If the Minister in Northern Ireland, who has a lot of catching up to do, seeks an early meeting with my right hon. Friend, will he accede to such a request? Does he intend to follow reinstitution of that Assembly by holding regular meetings with Ministers from Northern Ireland, Scotland and Wales?

Mr. Brown

I have regular formal meetings with Ministers from the devolved administrations, the last of which happened only a few days ago. A good working relationship exists among Ministers. When Brid Rodgers was Minister in the devolved administration in Northern Ireland, we developed a good working relationship, and relations between officials are excellent. I am involved in several issues of importance to Northern Ireland. Although the matters that we are discussing at the moment apply only to England, because they affect the regional offices, there is an Intervention Board dimension, which I discuss closely with devolved Ministers, who, like me, are stakeholders in that board.

Mr. Paice

As others have said, the Minister is being extremely courteous and generous in giving way. May I pursue him on the point about the regional offices? His rhetoric of the last few minutes appears to support the importance of contact between his officials and farmers, particularly when, as the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) said, they produce for checking forms that relate to large subsidies. There is widespread concern about the PricewaterhouseCoopers report on the future of the offices. It is widely believed in the farming industry that the Minister plans to close some offices. Can he tell us what his response will be to the report, and how he will maintain the interface that he rightly values?

Mr. Brown

I intend to maintain a regional interface with those who look to the Ministry, and to enhance our involvement in Government policy work at regional level. That is perfectly rational, not least because I set great store by the second pillar of the common agricultural policy. Rural development regulation schemes will clearly have a regional interface—it would be odd if they did not.

I will not set out my conclusions today, for the simple reason that I have not come to any yet. I am considering what has been said to me—not the principles, because they seem sound, but their practical application. If we are to have change, we must ensure that it is measured and rational, and delivers clear benefits to public administration and to our client groups. Those are my objectives.

I have received representations from the hon. Gentleman, but have also received representations from the right hon. Gentleman who has the Northallerton office in his constituency. Out of kindness to the hon. Gentleman, I should tell him that they were not the same representations, and he may wish to pause and have a word with the Leader of the Opposition.

Mr. Andrew George (St. Ives)

Does the Minister accept that there is widespread frustration and concern among farmers because when they return forms—particularly integrated administration and control system forms—under present MAFF regulations and systems they find it difficult to reach a satisfactory resolution when there is a dispute between them and the Ministry? Does he accept that the farming industry wants, needs and deserves an independent appeals system to deal with the continuing disputes between farmers and MAFF officials? Those disputes remain unresolved, and we need an independent system

Mr. Brown

That was one of the ideas that came out of the review group; I am giving it active consideration. However, the case against it is that the parameters for independent decision making are not as wide as is commonly believed—because the rules are EU-wide and thus fairly rigid, so as to avoid the exercise of national discretion that could lead to a distortion in the working of the schemes. However, there is a case to be considered, and I am considering it.

Agriculture is going through a deep recession. The Government acknowledge that. We have worked hard to help farmers through to better times. We have done much, but there is much more to do. Ultimately, profitability can be found only in the marketplace. Most farmers accept that—as do most hon. Members—although it sometimes seems that Opposition Front-Bench Members have not grasped the point. They tend to present every problem as though it came from Brussels—[Interruption.] I am sorry—every problem comes either from Brussels or from me—[Laughter.] From that response, I assume that Opposition Members take that as a fair summary.

The Opposition have not learned much from the Conservative Government's petulant and futile "war" on Europe. They accused the European Commission of forcing farmers to grub up hedgerows. They claimed that the use of rams' horns in walking sticks and shepherds' crooks was under threat from Brussels bureaucrats. They warned that lamb chops were going to be outlawed, and that the beef-on-the-bone ban was to be reimposed. The unfortunate fact for the anti-Europeans on the Opposition Benches and elsewhere is that none of that has happened—nor, given the Government's constructive engagement with Europe, was it ever likely to happen.

Conservative spokesmen have repeatedly tried to stir up scares about the safety of imported food. That comes from the party that presided over a succession of food scares, culminating in the national tragedy of BSE. Let me make it clear: the Labour Government will not hesitate to ban any food that is unsafe. The protection of the public comes first. However, we shall not start a Tory trade war with our European partners, thus jeopardising our £10 billion annual food exports and the jobs in the constituencies of almost every Member that depend upon them.

It is truly ironic that the party that claims to care about rural Britain has not made a single constructive contribution to help British farmers through difficult times. The hon. Member for South Suffolk (Mr. Yeo) suggested that we take unilateral action on food labelling. However, that would leave the UK open to legal challenge, with the taxpayer footing the bill for compensation.

The hon. Gentleman suggests banning foreign imports. That would be a breach of our legal obligation to ensure the functioning of the single European market. In case hon. Members think that is merely a theoretical point, I remind the House that a previous Conservative Agriculture Minister cost British taxpayers £1.5 million following an unlawful ban on French turkey meat in 1981. It is not even a new idea—it is certainly not a good one. Tory plans for state aids to cover the costs of BSE borne by the pig sector would be ruled unlawful, and any money paid—plus interest—would have to be recovered from farmers.

That is the case against the Conservative proposals. As for the agri-monetary aid promised by the Leader of the Opposition at the annual conference of the National Farmers Union on 2 February, that has been exceeded by the Government's most recent package of agri-monetary aid for dairy, beef and sheep farmers.

The Government understand the problems of British farming, and are doing a lot to help. Over the past few months, I have set out a policy to help agriculture meet the challenges it faces. I have also provided short-term help to the hardest hit: greater market-orientation; a more rational CAP; expanded rural development measures; a joined-up food chain; and regulation that is proportionate to risk. Those are the policies that British farmers are asking for. Those are the policies that will bring much needed profitability back to the industry. I commend them to the House.

2.5 pm

Mr. Tim Yeo (South Suffolk)

I beg to move, To leave out from "(2000–2001);" to the end of the Question, and to add instead thereof: deplores the failure of the Prime Minister and the Minister of Agriculture, Fisheries and Food either to secure meaningful CAP reform on behalf of consumers, taxpayers, farmers and the environment, or to defend Britain's interests in other EU negotiations; condemns the false claims made about the value to farmers of the Action Plan for Farmers; notes the dramatic and continuing fall in agricultural employment and farm incomes; and calls on the Government to address with urgency the crisis in Britain's countryside.

I welcome the debate and I welcomed—at least until the last two minutes—the Minister's characteristically courteous approach. It is possible to admire the style of his speech without agreeing with all its contents. I thought that he lapsed a bit towards the end; he should change the special adviser who inserted the uncharacteristic and entirely inaccurate jibes.

I wish to correct the Minister on a point of fact. When my right hon. Friend the Member for Richmond, Yorks (Mr. Hague), the Leader of the Opposition, spoke at the annual conference of the National Farmers Union, he suggested that all the agri-monetary compensation available for grazing livestock should be claimed. I do not believe that that has been done, so the Minister is wrong to say that he has done more than my right hon. Friend suggested at the conference. I shall return to the issue of agri-monetary compensation shortly.

We have had several debates on agriculture in Opposition time in the past two years, but it is a rare event to get a whole day on the subject in Government time. In fact, the last half-day debate, which was held in October, was not, as the Minister suggested, held on a Government motion; it was a Liberal Democrat motion. There was no annual debate on common agricultural policy price fixing last year, so this is a valuable, if unusual, occasion.

Mr. Paterson

Does my hon. Friend agree that the Minister's speech descended into the disgracefully churlish statement that no constructive ideas came from Conservative Members? Will my hon. Friend comment on the fact that I sent the Minister a letter on 15 December last year—I send him numerous letters—and sent a reminder on 18 February but his colleague, the Minister of State, replied on 26 April? The letter that I sent was from the managing director of Fullwood, the third largest manufacturer of milking equipment in the world, who deserved an early and reasoned reply to some sensible and practical suggestions on how to improve the supply industry to the dairy industry

Mr. Yeo

My hon. Friend has obviously been treated with disgraceful discourtesy by the Minister, and, more important, so has the senior industry figure whose suggestion he relayed. When he winds up the debate, my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice) will point out that several of the proposals about which the Government have boasted today and on recent occasions were contained in the policy document published by the Opposition in April 1999. Far from our not making constructive suggestions, some of those that we have made have happily been picked up. I hope that, by the end of the debate, more of them will be adopted by the Government.

The debate is urgently needed. A year ago the Heads of Government of European Union member states produced an utterly feeble package of CAP reforms. As a result of their failure, the process of European Union enlargement may now be impeded. Meanwhile, the crisis that is destroying Britain's farmers and damaging the British countryside worsens steadily month by month. Farm incomes have fallen by three quarters since the Labour Government came to power and thousands of jobs have been lost.

A year ago, the Agenda 2000 talks offered a chance of fundamental CAP reform—a chance that, regrettably, was thrown away. In its seventh report entitled "Outcome of the CAP Reform Negotiations", the Select Committee on Agriculture said that we can only regret the failure of the Council of Ministers to face up to the need for radical reform of the CAP. Judging by what the Minister said today, not a great deal is likely to change. The Select Committee added: We ourselves are deeply dismayed that even the modest hopes of the Commission could not be brought into fruition. This does not augur well for future discussions on CAP reform which are made all the more inevitable by the failure of certain member states to address the realities of the pressures for liberalisation. This is a had deal.

The consequences of that bad deal will be felt by existing EU members and more widely. Prospects for the six applicant countries—Hungary, Poland, the Czech Republic, Estonia, Slovenia and Cyprus—are threatened by European Union Ministers' failure to grasp the nettle. Admitting those countries would add substantially to the current cost of the CAP budget. Who will bear that burden? It is simply not acceptable that it should fall entirely on existing contributors to the EU budget.

Quite apart from the question of enlargement, CAP reform is needed for other reasons. The CAP is failing consumers, taxpayers and farmers. Despite the horrendous cost of its huge spending which, according to the documents that we are considering, is now about £25 billion a year, the income of British farmers is at its lowest in real terms since before the war.

Taxpayers, too, have grounds for complaint. Despite constant promises, the cost of the CAP never seems to fall. Too much money is wasted, and there is the scandal of subsidies for tobacco farmers, costing taxpayers hundreds of millions of pounds a year. Any policy that pays people to produce a product which is considered so dangerous to human health that it cannot be advertised legally and whose quality is so low that much of the output has to be dumped in the developing world, ought to be condemned as immoral, incompetent and ridiculous. However, such a policy has been part of the CAP for many years.

Consumers, too, have been let down by the CAP. Food sold in EU countries is artificially expensive. Indeed, the total cost to a typical British family of four of higher food prices and taxpayers' expenditure on the CAP is estimated to be £12 to £15 a week. That does not include an extra £1 a week, which is the cost of expenditure on national agricultural policies.

The environment suffers because of the CAP. Even after last year's reforms, English Nature, the Government's statutory adviser on nature conservation, concluded: The Agenda 2000 agreement on CAP reform was very disappointing for the environment. The Commission's original proposals did not go far enough for the environment and the final agreement retreated significantly. The overall effect will he that wildlife will continue to be seriously damaged by the intensive farming practices that the CAP supports.

Mr. Nick Brown

That quote is fair. However, along with other environmental groups, English Nature revised its views following our December announcement on how we intend to make use of the second pillar of the agricultural policy, which is an important component of our debate.

Mr. Yeo

I welcome the rural development regulation, and shall deal with it in a moment. However, it remains true that many practices that the CAP continues to encourage damage the environment.

My hon. Friend the Member for North Shropshire (Mr. Paterson) referred to the dairy sector, an examination of which illustrates just how bad a deal the Government got for Britain last year. At the Heads of Government summit in Berlin last March, the Prime Minister accepted a proposal to freeze mainland Britain's milk quota for six years, but agreed to allow Ireland, a country which is self-sufficient in dairy produce four times over, an immediate increase in its quota.

It is all very well for the Minister to say that he wants quotas to be phased out—indeed, there is nothing between the Government and the Opposition on that—but, given that that process will take many years, it is disgraceful that the Government agreed to a proposal that will give our nearest neighbour a chance to go on undercutting our farmers. That decision dealt a severe, disastrous blow to hard-pressed dairy farmers, who have been denied a chance to supply the demands of the home market, despite having some of the best dairy-producing land in the EU.

As the Minister acknowledged, dairy farmers are still struggling with a farmgate price for milk that leaves many of them trading at a loss. Those are precisely the circumstances in which any responsible Government would have resisted the Berlin proposal. While still on the subject of dairy farming, I reiterate Conservative Members' regret that the Government insisted last summer on breaking up Milk Marque, the largest dairy producers' co-operative in the country. That policy weakened the position of the primary producer and was followed for no reason but dogma.

Mr. Brown

Let us be clear about this. I have no direct ministerial responsibility for the matter, which is the responsibility of the Secretary of State for Trade and Industry. Is the hon. Gentleman saying that the Opposition believe that the Secretary of State for Trade and Industry should set aside the views of the competition authorities?

Mr. Yeo

The Minister should have insisted that the recommendation was made in the light of up-to-date information. The report on which the Secretary of State for Trade and Industry based his wrong decision was founded on hopelessly outdated information about the state of the market and Milk Marque's share in it. If the Minister had been doing his job, he would have made sure that proper representations were made to the Department of Trade and Industry, drawing attention to shortcomings in the report by the Monopolies and Mergers Commission.

Mr. Öpik

Does the hon. Gentleman agree that Milk Marque was a friend of small producers, who continue to be concerned about who will defend their interests in the supply market?

Mr. Yeo

I entirely agree, which brings me to my final point on the matter. The Minister suggested that dairy farmers were not concerned about such issues, so I would welcome the opportunity to introduce him to some small dairy farmers who are profoundly concerned about them. To be fair to the Minister, he has tried to get around the country and meet farmers. Having done so and listened to many of them, it is astonishing that he should now claim that dairy farmers are not anxious about the matter.

Mr. Nick Brown

I have not said that dairy farmers are not concerned. They tend to be not as abusive to me as members of the Conservative Front Bench.

Mr. Yeo

It is not abusive to point out that small dairy farmers have been directly disadvantaged by the decision of the Minister and his Cabinet colleagues. The Minister may not welcome that, although I am glad that he has backtracked on comments that he made about half an hour ago. Nevertheless, many small dairy farmers will read our exchanges with dismay.

Dr. Gavin Strang (Edinburgh, East and Musselburgh)

The hon. Gentleman said that Milk Marque was a friend of small producers. However, if it was, it was not nearly as good a friend to those people as the Milk Marketing Board. Does he not remember that a Labour Government negotiated arrangements to ensure that the board continued and that a Conservative Government abolished it in the face of Labour opposition?

Mr. Yeo

I am sorry that I gave way to the right hon. Gentleman. However, once again, we see the tendency of Labour Ministers and Back Benchers to fight again over matters that were concluded years ago. Conservative Members are anxious to do what they can to ensure that dairy farmers' prospects are improved in 2000, and put right some of the damage done in the past few months.

Mr. Paterson

Does my hon. Friend agree that it is tragic that the Minister does not understand that dairy processing in Europe is twice as efficient as it is here because companies such as MD, Parmalat and Arla are successful dairy co-operatives that have gone on to processing? Smashing up Milk Marque has set back the prospects of British co-operatives going into processing by about five years.

Mr. Yeo

My hon. Friend is quite right. Impeding the process of vertical integration in that industry is not in the interests of farmers, processors or, indeed, consumers.

It is common ground that fundamental and far-reaching reform of the CAP is necessary to prepare for EU enlargement. Even if it were not, World Trade Organisation negotiations will, no doubt, force further reforms.

Farming has to move closer to the marketplace, even though it cannot go all the way as long as the United States continues to bail out its farmers with huge amounts of taxpayers' dollars. Europe cannot sensibly operate on a completely free-market basis while the world's richest country declines to do so. It is also common ground that support in future will not be confined to production-related payments. In that respect, we endorse the principle of the rural development regulation.

CAP reform will also provide an opportunity to examine whether some decisions currently taken at EU level would be better taken by the Governments of individual member states. The sole purpose of any change must be to make the policy work better in the interests of consumers, taxpayers, farmers and the environment.

Changes are needed, not only in the practical policies of the CAP, but in the culture and philosophy within which those policies are implemented. Too often, whether it takes place in Brussels, Whitehall or even some regional office, the interpretation of the rules is hostile to farmers and others working in the countryside.

If British farmers deserve anything, it is a chance to show what they can do to compete on more equal terms with others, at home and abroad, both inside and outside the EU. Nobody denies the need for regulation, but farmers and other small businesses in rural areas should be able to expect the regulations to be applied in a common sense manner.

The Government's motion and our amendment to it are not limited to the CAP. The Minister spoke at some length about the action plan for farming—a plan which, it is claimed on its front page, will help chart a way out of the current crisis. After the Downing street summit of 30 March, the Government claimed that their package of measures was worth £200 million, but today is Parliament's first chance to examine that package; alas, the claims have been exposed as false. Far from representing £200 million of extra cash, the element of agri-monetary compensation shows a cut of £110 million compared with last year's figure.

Mr. Nick Brown

That is absurd. As I explained to the hon. Member for Somerton and Frome (Mr. Heath), the arrangements for agri-money are degressive. The fact that the Government do not take up the full sum does not mean that a cut has been made.

Mr. Yeo

In April the Minister gave me a written answer on the subject. He made it clear that in 1999, £264 million was available; and that in 2000, £154 million will be available. By my reckoning, those figures reveal a cut of £110 million.

Let me set out the record of the Conservative Government on agri-monetary compensation, because there have already in the debate been some astonishingly ignorant and misleading exchanges on that subject. Agri-monetary compensation in its current form was first available only four months before the 1997 general election, when farm incomes were four times higher than they are now and the pound was valued at 20 per cent. less than it is now. Yet the Minister's answer to the intervention of the hon. Member for Monmouth (Mr. Edwards) appeared to imply that the Conservative Government were at fault in not claiming agri-monetary compensation in those circumstances. Can farmers take that to mean that Labour will continue to seek sources of extra support for Britain's farmers even if farmers' incomes quadruple, to their pre-election levels, or if the euro rises to a value equivalent to that of the deutschmark in early 1997?

Mr. Brown

Will the hon. Gentleman remind the House whether the last Conservative Government supported or opposed the introduction of the agrimonetary regime? Did they commit themselves to making payments under that regime, or did they say that they would not make such payments.

Mr. Yeo

The last Conservative Government made their agriculture policy in the light of the needs at the time of farmers, consumers, taxpayers and the environment. I have absolutely no doubt that, had the Conservatives remained in office, farm incomes would not have collapsed as they have done; if they had, I am sure that we would have sought all available help for farmers under the agri-monetary scheme.

The agri-monetary element of the scheme accounts for more than one third of the package's total value; that element has declined. Let me give an example of one of the smaller elements. When, on 17 April, the Minister finally answered my written question about the details of the package—four days after a junior Minister had wrongly assured the House that the information that we sought on behalf of farmers had already been published—the answer revealed that, of the £200 million of cash help trumpeted by the Government, £4.5 million came in the form of a commitment not to raise meat hygiene inspection charges by more than the rate of inflation.

Even by the disgraceful standards of new Labour, which has debased the currency of political debate and enabled Ministers to assure the public that taxes are going down when they are actually rising, that is a pretty remarkable distortion of the facts. If a promise not to imposes increases in the burdens on agriculture by an amount greater than the rate of inflation constitutes cash help, who knows what further horrors the Government have in store?

Mr. Brown

That is a semantic point and this is not the first time that we have heard it; similar points were raised in response to the September package on the question of specified risk material costs, which the Government carried rather than passing them to the industry, and on the question of the cattle charges. The fact is that costs have to be covered, either by the industry or by the taxpayer. If the taxpayer is to cover the costs, that will cost money—new money that was not previously budgeted; money that I have to argue for alongside competing bids for public expenditure. Therefore, the money is new money because it is money spent to an agricultural purpose that was not going to be spent previously.

Mr. Yeo

The right hon. Gentleman appears to expect to be thanked if he walks down the street and does not rob the bank. From his remarks, we can take it that the Government were planning to raise those charges by a rate greater than inflation; but, having managed to take control of the management of those operations, the Minister was able to say that charges would increase only by the rate of inflation. Such Orwellian manipulation of language is a disgrace to the Government and gives rise to false hope in farmers' hearts.

As the Minister says, our charges have been laid previously. Last September, a package was announced and the Minister claimed that it was worth £500 million. Yet, only a few weeks later, critics were suggesting that it was worth not £500 million but £1 million. In its report, "The current crisis in the livestock industry", published in December, the Agriculture Committee stated: we also have sympathy with the farmers who were led by the headline figure to expect extra money in their pocket, rather than a notional decrease in the amount that would be taken from them. The Minister's comments this afternoon demonstrate that he learned nothing from that experience. In the same report, the Committee stated: the Minister should take care not to give false hope to farmers whose first news of help packages is a limited media story. False hope is exactly what the Minister gave rise to again in March this year.

Mr. Brown

The hon. Gentleman must not distort the Agriculture Committee's comments. It made those points in respect of the way in which the announcement was reported, but was careful not to do so in respect of the announcement itself. That announcement was made in September, when the House was not sitting, in response to what the Government believed, and I continue to believe, were urgent pressures. We set out specifically, category by category, each expenditure head. The Committee had sight of the statement made at that time, as did the hon. Gentleman. I defy anyone to describe the September statement as misleading: it was explicitly stated that £150 million of the package was new money, the rest being composed of two elements, agri-monetary payments previously announced—

Mr. Deputy Speaker (Mr. Michael Lord)

Order. The Minister is lengthening his interventions—

Mr. Brown

rose—

Mr. Deputy Speaker

Order. It is my responsibility to ensure that interventions are of a reasonable length. Many hon. Members want to contribute to the debate.

Mr. Yeo

Thank you, Mr. Deputy Speaker.

The fact is that I read out precisely what the Select Committee said in its report about the September package. The source of information on which press reports are based when these announcements are made is exclusively the Government. In the case of the announcement of 30 March, the reports could not be amplified for 17 days, because Ministers were unable or unwilling to answer detailed written questions tabled by Members of Parliament. If there is any mistaken interpretation, we know who is responsible for putting the spin on the original statement. In their increasingly desperate search for a good headline, there is no level to which new Labour will not stoop, no statistic that it will not distort, no fact that it will not manipulate.

Last year, £264 million of agri-monetary compensation was available. This year, it is down to £110 million, despite the continuing weakness of the euro and the fact that farm incomes are under intense pressure.

The Minister touched on the measures for the pig sector. Pig farmers deserve more details, and I hope that we will not have to wait very much longer for a clear statement of how much of the promised £26 million will be paid to outgoers and how much to ongoers. I hope that the conditions under which the ongoers will receive the money will also be made clear and that we will be told whether the support is likely to be continued in subsequent years.

After two years in which the British sow herd has declined substantially, do the Government think that they have done enough to ensure the survival of what remains of our pig farming industry? Does the Minister accept the view of the chairman of the National Pig Association, who wrote to me on 13 April: £26 million falls far short of what the industry needs even to recover its debt position far less compensate for the ongoing c. 8p/kg cost disadvantage from BSE-related costs that our producers currently face…?

Another major component in the action plan is the over-30-months scheme weight limit. There seemed to be some confusion in the Minister's mind when the matter was debated before. The action plan says on page 4 that the Government will seek from the Commission an increase in the maximum weight per animal on which compensation is payable but at Agriculture questions the Minister told the House: the Government's proposal is to lift the limit…—[Official Report, 13 April 2000; Vol. 348, c. 491.] I hope that he will soon be able to clarify which of those statements is correct.

Mr. Brown

The statement made at oral questions is correct: we propose to lift the limit—to abolish it.

Mr. Yeo

I am grateful for that clarification. That is an amendment to the written statement that accompanied the action plan, but it is none the less a change in the right direction.

I hope that the Minister will soon be able to tell the House and, more particularly, the industry, when he expects to receive approval for the proposal. He spoke about cutting red tape, and we welcome the efforts that have been made by the various review bodies, but we remain concerned about the tangible achievements that have been recorded so far.

The Minister was involved in some exchanges about the future of the Ministry's regional service centres. A big stretch of the imagination is required to describe the proposal to close them down as greater co-operation with the Government's regional offices. I want to place on record farmers' concern—well-founded, I believe—about the possible loss of the opportunity that they have to visit their regional service centre in person to discuss the details of the rather complicated IACS—integrated administration and control system—claims. Many farmers are not yet very experienced in the use of electronic communications, and to force them all at an early date to make claims via computer will, I believe, cause a great deal of additional stress in the industry.

We remain concerned about the damage that bureaucratic intervention can cause. The recent enforced closure of the Meade Webber slaughterhouse in Herefordshire is yet another example. My hon. Friend the Member for South-East Cambridgeshire will touch on that later.

Whatever the Government's rhetoric about cutting burdens on business, their actions too often belie their words. The imposition of the climate change levy, even in the amended form announced in the Budget, will hit the horticulture sector. The Countryside and Rights of Way Bill is still causing great anxiety and potential problems in the countryside. The threats are not confined to the United Kingdom. The European waste incineration directive is another substantial burden waiting to fall on the industry.

The acid test is whether the Labour Government are on the side of Britain's farmers and consumers and whether they believe in the future of agriculture and the countryside.

Mr. David Heath

I am a little surprised that neither the hon. Gentleman nor the Minister has mentioned the peculiarly precarious position of tenant farmers and the overwhelming need for a retirement package to enable people to leave the industry with dignity.

Mr. Yeo

I am aware of the fact that the Liberal Democrat amendment refers specifically to the retirement package. I have omitted to mention it only in the interests of time, and my hon. Friend the Member for South-East Cambridgeshire will deal with it in his winding-up speech.

Last year, Labour sold Britain's dairy farmers down the river on the issue of milk quotas. In the summer, the Minister let down pig farmers. He said: I have on my desk draft letters waiting to go out to the major public authorities…urging them to source products of the highest welfare and animal hygiene standards…—[Official Report,1 July 1999; Vol. 334, c. 422.] Four months later, at the end of the summer recess, under questioning from me on 20 October, it emerged that those letters had never been sent out. The Minister was happy to imply that he was trying to boost public sector support for British farmers, but in practice he did so only when persistently chivvied by the Opposition. It is no surprise that in Wales sheep farmers are now banning the Ministry of Defence from conducting exercises on their land.

In the autumn, Britain was again humiliated when France refused to allow British beef to be exported. As that crisis deepened, the Minister refused even to talk to his French counterpart, saying that there would be no point in doing so. At the Anglo-French summit at the end of November, the issue was not even raised. Even in the past few weeks, when the European Commission itself has, not for the first time, exposed dangerous flaws in French farming practices, and when the long-held suspicion that BSE is much more widespread in France than was previously admitted have been confirmed, he still refuses to consider any action.

Mr. Nick Brown

That is no longer my ministerial responsibility. With the setting up of the Food Standards Agency, responsibility passes to the Secretary of State for Health. Even if the hon. Gentleman was on to a good point—which he is not—he would be making it to the wrong Minister.

Mr. Yeo

I am sure that British farmers will have noted the Minister's response: that it is not a matter of concern to the British Agriculture Minister if the illegal practices of farmers in other countries, whose businesses compete directly with those of farmers in Britain, continue unchecked. His only answer is, "Oh, it's not my responsibility."

Had a British farmer been found feeding his or her livestock with illegal materials, as French ones were last autumn—when the Minister was responsible—does anyone believe that the Minister would have told Parliament that nothing could or should be done? Of course not. A French farmer behaving in that way can rely on good old Labour Ministers. Never mind the damage to Britain's farmers or the risks to British consumers, under this Labour Government there is not a word of criticism, a whisper of complaint or a moment of argument over any action or proposal, however damaging, from a foreign Government or a European institution.

Mr. Brown

Will the hon. Gentleman give way on that point?

Mr. Yeo

No, I have given way too often.

The Government's reluctance to act to reduce the flow of substandard food into Britain is now notorious. Only yesterday, the National Farmers Union revealed a 40 per cent. rise in poultry imports from Thailand, a country where practices are known, in some cases, to fall far below the standards that are required here for health reasons.

Agriculture and the countryside, and consumers, now need a Minister and a Government who are prepared to defend their cause: to defend it in Whitehall, when more taxes and red tape are being imposed on them; against the Treasury, when support levels are being cut; and in Europe, when they are under attack from other Governments who recognise the importance of rural communities.

In 50 minutes today, the Minister gave no clue about Labour's long—term view of agriculture. It is no wonder that the industry is suffering from a shortage of young people coming into it. The Liberal Democrat amendment refers to the retirement scheme, and we are sympathetic to those concerns, with which my hon. Friend the Member for South-East Cambridgeshire will deal. However, much more than a retirement scheme is needed to save British agriculture. It needs a Government committed to the industry's survival, who have a vision of the countryside as something more than a giant theme park—a rural version of the millennium dome.

The Conservative party believes in a living and working countryside, where a prosperous agricultural industry is the foundation of a thriving rural economy; where viable and enlightened farmers are in the front line of looking after the rural environment and have the task of producing high-quality food to meet a substantial proportion of the needs of British consumers; and where rural communities can feel hope, not despair. I commend our amendment to the House.

2.41 pm

Mr. Mark Todd (South Derbyshire)

I apologise for missing the almost certainly excellent speech of my right hon. Friend the Minister—I regret that deeply—and a significant part of the contribution of the Opposition spokesman on agriculture, the hon. Member for South Suffolk (Mr. Yeo), which I regret rather less.

The debate gives us a further opportunity to discuss the present and future of British agriculture. At one stage last year, we had more opportunities to discuss the topic than any other matter before Parliament, with debates almost weekly. As I participated in many of those, I regret that many hon. Members will have to put up with hearing similar views to those that I expressed then, with a small amount, regrettably, of "I told you so" and references to recommendations that I made previously.

I begin by outlining my credentials for speaking on the subject. Within South Derbyshire district, which includes three quarters of my constituency in population terms and far more than that in area, agriculture employs more than 5 per cent. of the work force, on the latest figures. It remains a major contributor to my local economy and to the shared environment of the citizens whom I am proud to serve.

The district contains most forms of agriculture. I have the pleasure of being able to touch on almost any aspect that anyone could raise on an agricultural topic—sheep, dairy, beef, horticulture, poultry, pigs and arable farming all exist, with varying degrees of health, in my area. The area's performance accurately mirrors what has happened in the broader agriculture sector in the past three years.

All sectors have struggled, particularly in the past two years. In the first year, there were some exceptions. The same situation has been reported elsewhere. Most of us will have received the statistics on farm incomes. I would not claim that my area is atypical; that has been broadly my experience as well.

I regularly visit farms and meet farmers. In some areas, perhaps one half of the farms have been sold to neighbours and transferred on to become larger units. It is an attractive area, near Derby, and the farm buildings are regularly redeveloped for housing purposes. There are examples of local enterprise in facing the current problems. A successful golf course has been established on farm land near Derby in my constituency. That activity earns a good deal more money than the farming activity that preceded it. There is an extremely successful cleansing and packaging operation focused on root crops—

Mr. John Hayes (South Holland and The Deepings)

I am grateful to the hon. Gentleman for giving way. I do not mean to interrupt the travelogue of Derbyshire, which is charming and entertaining, and I acknowledge, as ever, the hon. Gentleman's commitment to agriculture and his measured way of dealing with the topic. He speaks of having a variety of agriculture in his constituency. Are his arable farmers as disappointed as mine are in Lincolnshire that, in all the packages that the Minister mentioned today and introduced in the House previously, there has been almost no help for hard-pressed arable farmers, including tenant farmers, such as those who were mentioned earlier?

Mr. Todd

I thank the hon. Gentleman for his intervention. Because of the mixed nature of the farming that predominates in my area, there are few farms where arable fanning is the dominant type. Farmers will usually have a certain amount of barley, for example, as part of their farm's activity, but the arable sector would not be the major goal of their operation. I have therefore been less exposed to comments on that than the hon. Gentleman.

I shall continue. There is a highly successful washing and packaging operation in my area, based originally on a mushroom farm. That is still there, but the person involved has invested successfully in an operation that takes potatoes and other root crops from neighbouring farms and washes them, cuts them precisely and packs them neatly for the catering trade. He has established an extremely successful business around that. He is a successful entrepreneur from a farming family and is still a member of the National Farmers Union. My only regret is that he is about to move out of my constituency because of the need to expand his activities.

That example demonstrates some of the successes that there have been. Another is added-value investment in the poultry sector. There is one large poultry operator in my area, and a neighbouring plant produces added-value product for the supermarket trade. There are indications of diversification, development and added value in farming units in my area, but many farmers have simply struggled through. I would not pretend otherwise.

We have heard reference to tenant farmers, and I shall not hold back on that, as there are a number of tenant farmers in my area. Farmers have few options if they do not have a property asset, which, as I said, is worth a reasonable amount in South Derbyshire, because the area has good communication links and the planning authority has tended to be broadly supportive of changes in use—although there have been some exceptions, about which I would argue.

Farmers who do not have a property asset are left with their stock, which is worth painfully little. There are some encouraging signs. Others will have touched on the improvement in the price of pigs. There is only one pig operator in my area, and that improvement will allow him at least to break even. That is also true of the sheep sector, where there has recently been an improvement in prices and some prospect of recovery. However, many tenant farmers are forced to rely on their stock, which, in some cases, they bought for significantly more than they can raise from it now, and there is no exit strategy that they can use.

There is, none the less, much to commend in what the Government have attempted to do. The rural development plan offered the prospect of expansion of some successful schemes, such as the countryside stewardship scheme, and woodland and organics support. Welcome initiatives have been introduced for energy crops, and some much-missed supports, particularly for marketing, have been reintroduced. I stand to be corrected, but I believe that those were scrapped under the previous Government, not the present one. Since then, the farmers whom I represent have called for the reinstatement of such schemes. There are welcome new initiatives, existing initiatives have been extended, and initiatives that had gone have been reintroduced.

Genuinely new Government money is being offered to match cash modulated from support payments and existing European Union funds. The total value of the schemes is £1.6 billion over the next seven years, and the trend is rising. I shall say more about that later, but let me say now—this is merely a comment, not a criticism—that, although £1.6 billion is a substantial sum, it is a small amount in the context of all the support that will be given to agriculture over the period. The Minister seems to assent to what I have said, and I do not think he interpreted it as a criticism. It is, after all, merely a statement of fact.

We have made a good start if our aim is to develop a strategy focused on encouraging diversification, to improve the business skills of the farming community—which is clearly linked to the first objective—to enhance our environment, and to make the farm sector less dependent on subsidies for the driving of its main business activities. That last aim is as critical as any. As I have said, it is a good start, but it is only a start. Over a period, we must weight the balance of the budget much more in favour of measures such as those I have mentioned, and away from simple production support.

I have reservations about the package, some of which I have shared with Ministers and others. I shall now share them with you. [Interruption.] I mean that I shall share them both with you, Mr. Deputy Speaker, and with the rest of the House.[Laughter.] We should not discuss the subject so lightly. Perhaps it is familiarity with my speaking on such topics that produces this reaction.

The money available is heavily loaded towards the latter end of the seven-year period, which is regrettable. I have vigorously, even repetitively, asked for help for modernisation in earlier debates, and I am delighted that the Government now espouse my view; but that help is needed now, on a rather greater scale than will be possible in 2000–01 or, indeed, in the following two or three years.

We have already seen, in the organic sector, how the offer of existing small-scale reform money is rapidly oversubscribed. I willingly accept that there are strong arguments for balancing expenditure of this kind against market expectations, and that flooding the available marketplace for support for organic conversion with money is likely to lead to the potential impoverishment of organic farmers. Like, I am sure, many Members who represent farming communities, I already advise those considering organic conversion not to take that step on the basis of the premium prices currently available in the marketplace: they should not found their business plans on those expectations. A substantial additional production base is already emerging to supply the marketplace, which must logically affect the prices that can be commanded for organic produce, even in a rising market. That is simply prudent advice.

I well understand why funds of this kind need to be released progressively over a period, rather than in one mad rush at the start; but that, arguably, cannot be applied to some of the other key schemes in the package. I am thinking particularly of training, marketing, and investment in processing and co-operative activity for development of the new farm-based enterprises. I shall say more about that later, in a local context.

Mr. Öpik

Is the hon. Gentleman aware that farmers in Wales were keen to become involved in organic farming? Unfortunately, the project was massively oversubscribed, and there was not enough money to go round. As a result, farmers are being a bit more cautious.

Mr. Todd

I agree with the hon. Gentleman. Many farmers, including some in my area, have expressed interest in organics. The typical south Derbyshire farmer is canny and cautious and does not necessarily think that today's fashion is tomorrow's marketplace, so farmers in that area may not have leapt on the idea as keenly as some; but there are prospects. Those who are investing need sound business advice on the appropriateness of their decision.

My point is that a project involving the provision of money for the purpose of achieving a particular goal was immediately oversubscribed—and I should be very surprised if the same did not happen during the current financial year.

Mr. Paul Tyler (North Cornwall)

As the hon. Gentleman will know, I have sponsored a Bill setting targets for organic food production. He will also know that 70 per cent. of organic products in supermarkets are imported. I wonder if he also knows that the Prime Minister has committed himself to trebling the amount of agricultural land involved in organic production by 2006, and that there is no money to back up that commitment.

Mr. Todd

I accept all that the hon. Gentleman says, but freely admit that I subscribed neither to his Bill nor to the early-day motions that preceded it. Those who know me—members of the Select Committee, for instance—are aware that my view on such matters is firmly market-based. I regard approaches that set targets, at Government level, for the conversion of agricultural land to organic status as dangerously dirigiste—almost like the Soviet approach, suggesting that particular areas should be converted to organic status regardless of what the marketplace may want. I sense—as, regrettably, I often do—a degree of assent to some of my market-led views on the Opposition Benches. Nevertheless, I am keen to support the development of the organic sector along market-led lines.

Having been led along that track by others, let me return to my core point. The scheme to which I referred was oversubscribed last year. There are a number of examples of similar schemes, which I believe will be oversubscribed and in whose case the shortage of money is not related to a market problem. They include training schemes to encourage farmers to move into other sectors and improve their business skills, marketing assistance, and to some extent the development of support grant systems for farm-based enterprises.

It is feared that older farmers are less able to envisage change, will be locked into continuing to farm, and will present a potential barrier to reform. That has always been my strongest argument for an early-retirement scheme.

I know that many farmers would like an early-retirement package for their own reasons, wishing to extract themselves from an industry which, although they love it, no longer provides them with an income. That is a strong argument on a personal level, but there is also a micro-economic argument. The sector is ageing rapidly and, if we are seriously advocating reform, there is surely a need for fresh impetus, new faces and greater enthusiasm.

Without wishing to direct criticism at an older generation of farmers, who have served this country well, one could argue that they are the least equipped to manage change. There is therefore an argument for reviewing the basis for an early retirement package.

Nevertheless, I have listened carefully to the Minister's reasonable view that a large chunk of the cash would be wasted because a significant proportion of farmers who would be aided by an early retirement package would leave agriculture anyway. We would therefore simply be providing additional cash for pensions, which those farmers would claim in due course. I understand that rational argument, which is typical of the Treasury, and not necessarily shared by other Departments. We must consider it carefully, but, so far, the micro-economic argument for the change that I described has been badly expressed.

I am not clear about the mechanism for implementing some of the policies. The part of the speech by the hon. Member for South Suffolk that I heard referred to the role of regional service centres. I take a different view from the Opposition spokesman. There is plenty of room for reform in that service to farmers. However, greater co-ordination is required between support for farmers through regional service centres and support through the Small Business Service and various regional government offices. Provision of support and explanation of opportunity needs to be more finely tuned. So far, I am not persuaded that that has been thought through rigorously.

Mr. John Bercow (Buckingham)

Does the hon. Gentleman agree that one of the best forms of support for British agriculture is freedom from burdensome and unnecessary regulation? What is the hon. Gentleman's assessment of the draft Feedingstuffs Regulations 2000, which have come from the European Commission and to which the Minister has so far limply agreed? They will effectively prevent farmers from feeding their herds health-boosting minerals or vitamins, with the limited exception of compound feed. Does the hon. Gentleman know that the National Farmers Union regards them as unnecessary? What does he think?

Mr. Todd

I thank the hon. Gentleman for that intervention. Those who have heard me speak about the subject know that I do not support greater regulation in farming. I was about to deal with regulation. The hon. Gentleman has therefore anticipated me, although I did not intend to refer to the regulations that he mentioned. However, his point deserves consideration.

I should like first to make some positive comments. Various working parties were established to examine regulation in agriculture. I can claim a role in arguing strongly for the need for such working parties, and I am largely pleased with the results, especially the quality of the reports, which highlighted some problems, and the Government's positive response. I shall enter a caveat: I have never worked in the public sector and am therefore suspicious of British civil servants' ability to deregulate their activities, however instructed by politicians. When a decision is made to remove specific regulatory burdens, they often miraculously reappear by some other route.

I welcome the statements, and the intellectual progress that has undoubtedly been made in examining the regulatory burden. However, I shall judge success by outcome rather than words. Again, I do not criticise my Front-Bench colleagues.

Mr. Bercow

The hon. Gentleman is allowed to do that.

Mr. Todd

I prefer not to criticise them.

As I have said, I have contributed regularly to the debates on agriculture. In a debate on the dairy sector, I referred to dairy hygiene inspection charges, which have caused particular anxiety. I urged the Government to tackle the additional burdens that the English—not the Scottish—dairy sector bears. Perhaps the Government were persuaded by my argument, although others also commented on the matter, but I was delighted that the dairy sector featured specifically in the action plan and that the burden will be removed. That represents a genuine cash gain for dairy farmers. However, my previous cautionary remarks about the removal of regulations apply.

Another aspect of the action plan deals with aid for the pig sector. Like other Select Committee colleagues, I had the opportunity to question Commissioner Franz Fischler on potential aid packages for the pig sector before the Government devised their package. We had an entertaining Agriculture Question Time when another member of the Select Committee, who is sadly absent this afternoon, and I gave slightly different interpretations of the conversation.

The Commissioner made it clear to the Select Committee that there was absolutely no basis on which the Government could provide support mechanisms for the continuing activity of the pig sector. The regime is light and the sector does not currently receive subsidies. To take the example that the industry chose, the United Kingdom Government could not argue for compensating the sector for what is perceived as the BSE tax to cover the additional burdens of disposing of offal, which would otherwise find a market. Commissioner Fischler's judgment was clear and I reported it to the Minister. In my question, I suggested that the future lay in an aid package that was focused on restructuring and additional marketing support. I am pleased that that featured in the Government's action plan.

I alluded to the precise definition of restructuring in a more private meeting with representatives of the pig sector. It is rather vague. The Government's approach suggests that restructuring has an historical element. It is not entirely oriented towards the future; thus it is not designed to reduce the industry's capacity further. It is designed to look backwards at those who have already left the industry. That is an interesting definition of restructuring, but it is more helpful than an approach based only on the future.

Mr. Nick Brown

I should like to backdate the measure to help those who have already departed, but the assistance is conditional on the capacity not returning.

Mr. Todd

That was my understanding. Conditions are attached to the measure, but at least it attempts to compensate some people who have already left the pig sector, provided that the capital investment remains evident, that they have not demolished all the buildings and moved on to another industry. The measure is therefore another substantial gain.

I want to comment on other aspects of agricultural policy. Although it is unclear whether the current World Trade Organisation round is a continuation of the Uruguay round or part of the bigger negotiation, it represents an excellent opportunity for the United Kingdom. I have already expounded to my right hon. Friend the Minister of State the view that the stamp of the United Kingdom's agricultural policy—which has always been reliance on the marketplace, not on subsidies, controls and quotas—at least enables us to communicate with countries from the Cairns group and, to a lesser extent, with the United States, which rely far less on those instruments. We have strong historical links with many members of the Cairns group, especially its key players.

The Government's position is that we must respect the Commission's lead role and defer to its lead in the negotiations. Nevertheless, there is an opportunity to give a clearly identifiable UK lead on the philosophical approach to those negotiations. I await an intervention from the Opposition Benches.

Mr. William Cash (Stone)

The hon. Gentleman reads my mind. He is making an interesting speech, but does he agree that the Cairns group has been so critical of the CAP because of the damage that has been done, is being done and remains to be done by it to the developing world and the old Commonwealth, and that that is a serious problem not only for agriculture but for foreign policy?

Mr. Todd

Unusually, I entirely agree with the hon. Gentleman, although perhaps it is not so unusual for us to agree on these matters. I have long held the view that the CAP is a potential enemy of the improvement of successful developing countries' agriculture. We should take any possible steps to recognise the need for vibrant and successful agriculture in the third world. That is one of the intellectual bases on which I would urge the United Kingdom to take a leading and active role in the current round of negotiations. Obviously, we also have the opportunity to communicate more closely with the United States than with some other partners. I have argued that, instead of taking the more passive role of accepting the Commission's lead, perhaps we should give greater prominence to the United Kingdom agenda for agriculture.

Even Opposition Members would agree that welcome progress has been made on the goal of lifting the beef ban, although we might argue about how much. Obviously, we must now rely on the courts to achieve an outcome with France, but the Government's approach of engagement and constructive negotiation with our European partners has started to reopen doors for British beef. I urge a continuation of that process and the setting of more ambitious goals. Neither I nor the farmers whom I represent in the sector would be satisfied if we were to agree that we could export only butchered meat. As in the past, there is market for beef livestock from this country and we should explore as soon as possible the opportunities to reopen that market, with appropriate welfare support. I see no logical trading or health reason why a small beast could not be exported from this country now, but clearly we must take the negotiations step by step. I also recognise that some people take the principled stance that live exports of any kind should not be contemplated, although there is no representative of that view on the Benches behind me at present. I have never taken that view and believe that, in appropriate welfare conditions, we should re-engage in that reasonable export market.

I have already taken up a great deal of time, so I shall deal with a couple of local concerns that are relevant to the debate. The farmers in my constituency are canny and cautious in many respects, but they are keen to engage in new value-added activity and they are looking for direct assistance with that. Several want to form a co-operative, which would allow them to process various products. Almost anything that can be grown—either animal or vegetable—is grown in South Derbyshire. The farmers have a variety of goals, but they want assistance with the development of their new enterprise. The rural development plan package for processing and market development could provide a basis for that, but I would welcome the Minister's explanation of how that package might be applied and how farmers might apply for that assistance. They do not expect huge Government subsidies, but I agree with them that, as part of the refocusing and modernisation of agriculture, helping them to make that change represents an appropriate public sector investment. I would welcome details of how that might be done.

The second issue, which I have touched on not in the debate but in parliamentary questions, is further scrutiny of how the regulatory burden operates and the related issue of how that impacts on the market for key farming products. I refer to fertilisers, chemicals and drugs used to support the farm sector. [Interruption.] I hope that I can hold Ministers' attention for a moment. Local farmers regularly tell me that they pay significantly more for certain inputs than other farmers—for example, in France. The drugs, fertilisers and chemicals that they need to run their businesses are significantly more expensive in the United Kingdom than in our continental neighbours. That cannot be explained purely on the basis of the differences in currency; it seems to be linked to the slightly different regulatory requirements of member states. The farms are commercial enterprises and they are charged a premium for the products that make them more productive. I ask for that matter to be scrutinised further.

As I have explained to the farmers whom I represent, I have always thought that there is a dynamic and attractive future for agriculture in this country, but there will be differences: agriculture much more clearly focused on markets and business skills than on husbandry and crop development. Identifying relationships with other parts of the food chain is also more important than ever. However, that represents an attractive future and I can already see the signs of change in South Derbyshire.

The packages that the Government have produced recently will certainly assist that change. The critical issue will be engaging the individuals with reform in their minds in the farm sector with the officials and business people who can assist them with that process. I have to say—again, from my outsider's experience of never having worked within the sector—that it can sometimes be difficult to put together the private sector and the public sector enabler. Sometimes, the two hands miss each other somewhere in that process.

The critical issue will be how we implement the strategies that emerge and how we ensure that the policy tools that have been identified actually work. That will be the test of our achievement.

3.20 pm

Mr. David Curry (Skipton and Ripon)

It is always a pleasure to follow the hon. Member for South Derbyshire (Mr. Todd). I think that, on this occasion, my pleasure was achieved relatively early in his speech. I thought that his contribution earlier this week on the sale of National Air Traffic Services, an even more loyal speech than the one that he has just given, was perhaps more characteristic of his usual brevity.

I start with a quotation from the bible for the day: the action plan for farming, which states on page 6: Government has a duty to ensure that the essential safeguards for the consumer, the taxpayer and the environment are in place. But we must regulate only where it is really necessary and make full use of market and voluntary measures to assist these objective. It is mis-spelt; it should be "objectives". It continues: The Government's policy on implementing EU obligations in relation to farming will be to avoid all "gold plating" of the legislation, its implementation and enforcement; to regulate in the least bureaucratic and burdensome way and to avoid implementing legislation ahead of specified EU deadlines…We will also negotiate in Brussels to secure measures that minimise regulatory burdens. We all say amen to that, but what we really want to know is: is it Genesis or is it Exodus? Has a new culture suddenly gripped Government, or is it a palliative from which they will resile in due course? That is a key issue.

The question poses itself: do the Government see it as a prime purpose to give industry the means to compete fairly with European Union competitors in the single marketplace? One might say that the answer to that question is so axiomatic that it should not even be asked, but it must be asked because there is a history in the UK—a history under both the present Government and their predecessors—of imposing on industry burdens that competitors do not face, and of imposing them knowing that competitors do not face them.

Two issues flow from that fundamental question. The first relates to the weight and extent of regulation in relation to that imposed on producers in other countries. The second is the cost of that regulation to industry in relation to the cost placed on producers and industries elsewhere.

The Government have renounced gold plating, but Governments consistently do so. The Government speak of minimising regulation. Again, we all say amen to that, but do the Government accept that rules should be applied in what one might broadly term an equivalent way to the way in which rules are applied on the continent? Even more important, do the Government accept that the charges should be no more than those applying in the major competitor countries?

If the answer is yes, it is a fundamental and welcome change in culture. I salute it and am very glad about it. Quite honestly, if the answer is yes, it is a far more important element for farmers than the agri-money compensation that we have spent so much time on today. That compensation is only tiding people over but if there is a fundamental change in the way in which we look at an industry, and if the Government embrace the notion that they must help to maintain competitiveness and so take actions that they might not necessarily wish to take, and renounce policies that they might not necessarily wish to renounce because we must recognise the existence of competitors in a single marketplace of which we are members, that is of fundamental importance for the future of the industry.

Mr. Bercow

Will my right hon. Friend give way?

Mr. Curry

I shall. Hon. Members will not mind if I sort of half sit.

Mr. Bercow

Is my right hon. Friend aware that, more than 12 months ago, the then junior Cabinet Office Minister, the hon. Member for Liverpool, Walton (Mr. Kilfoyle), told me in a written answer that the Government had not published an annual estimate of the costs of regulation on business and, moreover, that Ministers did not intend to do so? Is that not a worrying sign of complacency?

Mr. Curry

It is a worrying sign of complacency, but it is reassuring that the hon. Member for Liverpool, Walton (Mr. Kilfoyle) is no longer in the Government. If one looks at local election results in Liverpool, one begins to wonder whether that particular appeal of old Labour is pulling many strings in what one might term the heartlands.

The action plan does not answer the questions that I have posed. It allows one to hint at the answer. It suggests that there may be an answer there, but I hope that, in her winding-up speech, the Minister can give a precise answer. I have a specific question for her: have the Government—by which we all mean the Treasury, of course—accepted that the doctrine of full economic cost recovery works massively to the disadvantage of British competitiveness and must be abandoned? I do not pretend that that is easy to do. I realise that there are legislative obligations and cost implications, so I do not pretend it is just a religious notion that can be cast aside. It is fundamental to the way in which we deal not merely with agriculture, but with industry more widely and the British question. It is relevant because on a wide range of issues the Government are—I recognise it—alleviating costs to farmers and related businesses, but is that a temporary relief, or a policy change? If things get better, will we come back to the non-relief, or have we changed our approach fundamentally?

Mr. Nick Brown

I agree with much of what the right hon. Gentleman is saying. He is right that the sector's current difficulties throw the regulatory burden into stark relief because that, in many cases, involves fixed costs that do not move with the agricultural cycle. I believe in deregulation and in keeping regulatory burdens to a necessary minimum. I firmly oppose gold-plating European Union regulations. If the single market is to work, it should work fairly and equally across the whole market. I would hold to that view in good times and bad, although, of course, it is bad times that throw all these things into sharper relief.

Mr. Curry

I am delighted that the Minister has made that intervention. He has given us a benchmark against which we will be able to judge many future actions, so I am grateful for that, but I want to take my argument a little further and to ask him a question that might be slightly more difficult: do the Government accept that they must create a level playing field for English farmers—because he is now responsible only for English farmers in many respects—within the UK?

An illustration is dairy inspection charges, which have never been applied in Scotland, and which the Welsh Assembly is poised to get rid of. I wonder whether that was the spur to removing them in England. We recognise that they are not a massive charge. None the less, they were a symptom of a differential treatment.

There are differentials in some of the allowances that are paid in the particularly disadvantaged areas. Specially high rates of premium are being paid, but it is important to ask that question. I will illustrate why by reference to another regulation: the integrated pollution prevention and control directive for intensive livestock farming. I welcome the action plan's deferral of implementation of the directive in the poultry and pig sectors from 2003–04 to 2007. That implements what the Minister has said—that we would not introduce the regulations in advance of other people. That reflects a recommendation from the Select Committee on Agriculture.

Equally, I welcome cuts in the projected initial permit charge of £12,000 to £18,000—for which the Environment Agency struggled to find any rationale when it appeared in front of the Committee—and in the £7,000 annual charge to less than half that, but the fact remains that the Scottish Environment Protection Agency's proposed charges for Scotland started at half the English charges. My suggestion was that we should ask the agency in Scotland to apply that in England as well, on a contractual basis.

Even if we are dealing with speculative figures in Scotland that come down, there will still be a disequilibrium in the United Kingdom, let alone within the wider European Union. We know that many EU countries will either not charge at all or will do so at a much lower rate. What is the policy implication in the light of the Minister's recent intervention about the level at which charges will finally be settled? Will he say that we should have a look at what is happening in Holland, Denmark, Germany or northern France, which are the competing countries in terms of pigmeat? Will we settle our charges in terms of what is being charged in those areas? They are not cheating. In deciding to impose lower charges, they are availing themselves of a facility that is in the directive.

The groundwater regulations concern my constituency because they apply to the way in which sheep dip is disposed of. The Government have said that they are abolishing the annual charge of £107 for the first four years in favour of a single £85 application charge. We welcome that, but is it a temporary relief? What charges are levied on competitors? Do the Government even know? I am often struck by the paucity of the Government's information about what other countries are doing.

Frankly, one does not have to be a magician to believe the continental agricultural press, or to have our posts overseas make the necessary contacts. There is nothing particularly secret about the information, although it takes some winkling out. There are plenty of English farmers who have established themselves in France who would be perfectly willing to constitute a fifth column in giving practical information to the Government, the posts in Paris or the consulates.

We have seen the deferral of the charges on abattoirs and increases in the meat inspection charges held to the rate of inflation. Where is the policy headed in that field? What is the EU practice? I am sorry to be repetitive, but I emphasise that we have no choice but to see the way in which we apply policy through the optic of the wider application in the EU. Otherwise, we prove our own worst enemy; it is not what our competitors do to us that is the problem, but what we do to ourselves. We must march in step.

There may be intrinsic merit in full economic cost recovery. In many regards, I would say that there is. The Minister is right that it is either a charge on the user or a charge on the taxpayer. However, we must judge that by its impact on the competitive marketplace.

I appeal to the Minister to recognise that it is difficult for a farmer who has just been told that he is to get the non-imposition of a higher charge to interpret that as an additional support for him. If it were an additional support, the Minister would have the most cost-free way of helping farmers imaginable: simply multiplying the charges that he says are necessary, and not applying them. That is monopoly money support.

Mr. Cash

Does my right hon. Friend recall that, some weeks ago, the Prime Minister told the House that there would be no further money available to farmers because, frankly, the money was not the there? Then, the Prime Minister went to Devon a few days later and said that the farming industry was not in crisis. Is it not the case that the Government do not know how to resolve the problem, that they cannot help the farmers and that they are not prepared to deal with the common agricultural policy properly?

Mr. Curry

I agree that the CAP reform agreed in Berlin was thin gruel in comparison even with how the Minister had left it. That is an extraordinary role reversal. Normally, Agriculture Ministers agree on reform and everyone else in government says that it is pathetic and that real Ministers, such as Treasury Ministers, could get a much more radical reform. This time, the Minister agreed a reform that the Prime Minister diluted. It is a remarkable achievement to dilute something agreed by Agriculture Ministers. It is rather like gaining a pass degree at one of the better universities; it is much harder to get than a first, if I may put it in those terms.

On the action plan, there are things there with which we have sympathy, but I am trying to find out the policy ideas that lie behind it. The Government talk about the review of food safety measures in relation to BSE and CJD, concerning the over-30 months scheme in cattle and the future of the meat and bonemeal ban and of the removal and disposal of specified risk materials. The Government repeat the word "proportionality", which we have all got used to.

The Government have asked for a review, and have made sure that it is packed with the world and his wife. There is pretty good cover in the review, and almost everyone will be implicated. Do the Government think that the review is necessary because proportionality has been disproportionate in some ways? Is the thought process behind the proposal that the system has not been working, or that circumstances have changed and that it can work differently? Are we looking for a different equilibrium?

The Government do not escape from their responsibility. I accept that with the Food Standards Agency, there has been a redistribution of ministerial responsibility, but there is a Government role and it is important to know the Government's thinking. When they talk about strengthening risk assessment procedures, what has prompted that thought process?

I welcome the review of the Meat Hygiene Service, and my hon. Friend the Member for North Shropshire (Mr. Paterson) may wish to raise the issue of a plant with high sheep throughput which has been threatened. [Interruption.] To do so, of course, he will have to be in the Chamber. The health rules have a direct impact on costs. The Minister said that he wishes to get EU clearance to use assistants, rather than full vets, in abattoirs. He is reviewing the legislation which relates to the skills of those who work in meat-processing operations. That has a strong cost implication. I hope that he will be successful, because no one has seriously felt that previous practices have led to a food risk in that area.

I agree substantially with what the hon. Member for South Derbyshire said in regard to rural development planning. There will be funding of £1.6 billion over seven years, which will be part-funded by a levy on support, or modulation; I recently had my knee modulated so I know that modulation can be quite painful. That will not get us very far, and the Minister is right that it has to be buttressed with a series of other measures.

It is important to recognise that helping the countryside will not automatically help agriculture. If we are setting out to help agriculture, there is not necessarily a wider spin-off to the countryside. Agriculture is now a small-scale industry, even in large parts of the countryside, and we must not confuse the two terms.

The Minister was right to emphasise the importance of planning rules, but he knows that that is not easy. Most people who come to my surgeries on planning matters do so to ask to get something stopped, not to get something done. It is easy to talk about the use of redundant farm buildings, but a village may not favour that because it is fearful of noise or more traffic. Almost invariably, the argument made against such use is based on the increased traffic flow that will come from it.

The Minister will therefore have to persuade Ministers in the Department of the Environment, Transport and the Regions on the matter. DETR Ministers will not only have to be committed to persuading local authorities to make something happen, but prepared for the subsequent letters to surgeries, as planning rules will not be regarded universally as a popular option.

The Minister was of course right to talk about more active business promotion. I should have thought that he might like to talk more about the active promotion of skills. In the uplands of Britain, half the farmers are over 50. Half of them have no recognised heir wanting to take over the operation, and half of them have no recognised skill of any sort. Very few sites are available for industrial development, as transport links have not been built, and there may well be environmental and planning reasons for not developing them. Additionally, with the best will in the world—simply because of the economics of providing private-sector transport—there is a limit on the extent to which sparse public transport can be improved in rural areas.

Concealed in the countryside, often living alongside prosperous areas, there is a significant amount of what we now call social exclusion. Although social exclusion is not easily seen up in the dales of my constituency, it contributes to a lowered quality of life for many of those who are working effectively for pocket money. So although it is important that we treat agriculture, it is equally important that other action should be considered in parallel, and that rural development should be seen in the round.

My final remarks are on the broader subject of common agricultural policy reform. We need to move closer to the marketplace. The problem is that farmers face continuing absolute uncertainty: they seem to live under the permanently provisional.

Various avalanches are sliding slowly down the mountain. We have the avalanche of the World Trade Organisation slipping slowly down the mountain, with various threats of doomsdays that I do not find entirely convincing. The enlargement negotiations are another avalanche that is quietly slipping down the mountain. We have the constant argument about European budgets, which is another landslip coming down the mountain. Farmers feel that they are in their path. Although the avalanches may not move particularly quickly, and some farmers may be able to get out of the way, there is a permanent sense of unease.

The Agenda 2000 package was inadequate not only because it did not meet the needs of the WTO or set the scene effectively for enlargement, but in its own right. Even without those external circumstances, the package was an inadequate response to the needs of the CAP. The CAP is increasingly anomalous as a command system in a world in which the liberal market economy is in the ascendant.

We all argue—the Government more than many—that we want adopted on the continent some of those more liberal economic measures, which are what we think generate employment, wealth and prosperity. I think that farmers are beginning to believe that, having tried some of the alternatives, they should opt for some of the potentially quite hard certainties that would be imposed on them by depending on the marketplace, rather than continue with the constant uncertainty engendered by not knowing what will happen to the support structure on which they depend.

Such a change would of course require vigour in policing the internal market and we would need to promote the schemes to which the Minister—like the rest of us—is committed to help farmers in their maintenance of the environment. Implementation of such a scheme would in itself be difficult. It is much easier to see how we might do that in the Yorkshire dales than in Chelmsford and East Anglia, simply because of the nature of the geography and the landscape.

One should be cautious, however, before assuming that we are present at the death of farming. As the hon. Member for South Derbyshire said, we are certainly present at the institution of quite radical change—which I do not think necessarily relates to size. The key now is whether one owns one's farm and owes no money on it, and whether one employs people. If one owns one's farm, employs no labour and is not in hock to the bank, one will probably be able to batten down the hatches. However, the formula for tenant farmers is even more complex, as they do not have a disposable asset. In my constituency, if tenant farmers want to leave their farms in the dales, there is no way that they can live in the very expensive properties in dales villages.

We shall see a move towards more capital-intensive, larger-scale and perhaps more corporate agriculture. The danger is that, because of amalgamation, we shall also see a move, perhaps necessarily, away from husbandry and towards ranching. Amalgamation will change the nature of agriculture fundamentally.

I hope that, when the Minister reflects on today's debate, he will be able to make it clear—as I think he intended to do in his speech—that he now clearly understands that he has a fundamental duty to ensure that we give our people the best opportunity to compete in the marketplace. Making that change will have financial and regulatory consequences for Government policy. However, if we do not make it, there is no earthly point in complaining about whatever nefarious practices there may be in France or about how continental Governments do things differently. If we do not make it, we shall be the creators of the initial hurdle facing farmers. If the change of culture is upon us, I shall certainly welcome it.

3.45 pm

Mr. Huw Edwards (Monmouth)

It is a pleasure to follow the right hon. Member for Skipton and Ripon (Mr. Curry), who—given his experience as an Agriculture Minister—brings to the debate a measured approach, and a more balanced perspective on Europe than many of his colleagues. He rightly mentioned social exclusion in the farming community. Would that the previous Government had recognised social exclusion anywhere, in the farming community or in the urban community, and that there had been greater concern about social exclusion and inequality in the past 20 years. We might have avoided some of the problems that we now face.

I listened with interest to my right hon. Friend the Minister of Agriculture, Fisheries and Food, and I was very pleased with some of his announcements. I was particularly pleased with his announcement that the Inland Revenue is considering the application of the working families tax credit to the farming community, although it is sad that it is being forced to do so. I wonder if Ministers will consider applying the national minimum wage to the farming community. Many farmers in my constituency would like to be earning the equivalent of £3.60 an hour, given the considerable number of hours that they work. Many of them have incomes far below the minimum wage.

Farming is the dominant industry in Monmouthshire. In recent meetings organised by the National Farmers Union and by the Farmers Union of Wales, which I have attended, the crisis in farming has been clearly demonstrated. I was pleased that Christine Gwyther, the Welsh Agriculture and Rural Development Secretary, was able to attend a recent meeting, and I was pleased with her responses to our representations. However, much more has to be done.

The crisis affecting farming reflects the strength of sterling, and part of sterling's strength reflects the success of the Government's economic policies. However, this is not the time to address that issue; we must address other issues, such as the costs of the BSE crisis. We inherited that crisis from the previous Government. I shall not put all the blame on them, but they might have handled it differently. I think that we all await the outcome of the BSE inquiry with some anticipation.

The lack of a long-term strategy for the farming industry is another issue, as are low world commodity prices.

CAP reform has been very slow. I pay tribute to my right hon. Friend for the enormous number of meetings that he must be attending in Brussels to try to secure a better deal for Britain's farming community. We need to reform the CAP, and to move away from some of the traditional price supports and towards more agri-environmental support. We have to decrease the number of burdensome regulations, which seem to be applied so unevenly in different parts of Europe.

Britain has generally high animal welfare standards. It is unfortunate that they are not applied and implemented in other European countries. There is inequity in the conditions facing Britain's farmers compared with those facing farmers in Europe. Although British farmers should not be paralysed by Europe's intransigence, I agree with some of the points made by the right hon. Member for Skipton and Ripon.

It is to the Government's credit that there was a Downing street summit, which was very welcome. It showed that they are listening to the farming community, and that the Prime Minister is intervening in the crisis. If there had been a Downing street summit on agriculture every three years for the past 50 years, we might not have some of our present problems.

It is good to see that the Government are trying to develop a long-term strategy. Some of the measures announced in the action plan for farming are particularly welcome—such as the £60 million support for hill farmers and £22 million agri-monetary compensation for dairy farmers, beef farmers and sheep farmers. That has generally been welcomed by the industry, but we all recognise that although much has been done, much more needs to be done.

In Monmouthshire, the farming community is made up mainly of lowland farmers, with some upland farmers. It concentrates mainly on beef and sheep. Monmouthshire is in a particularly beautiful part of the United Kingdom, and the beauty of the area owes a great deal to the hard work that farmers have put into maintaining the environment, with very little recompense. I invite any hon. Member to come to the Llanthony valley, which is one of the most beautiful parts of Wales. How sad it is to hear of small family farms in that beautiful area having to give up the business.

Mr. Livsey

Llanthony abbey and the valley are on the boundary of my constituency. The young people in that valley can no longer engage in farming because the money is not there. Does the hon. Gentleman agree that Ministers must urgently address the problem of youngsters going into farming, and give them maximum assistance, in conjunction with a retirement scheme?

Mr. Edwards

I welcome the hon. Gentleman's contribution. There are clearly many young people who would like to have a future in farming, but find that the prospects look bleak. In many cases, their parents would like to retire and allow the business to be carried on—but Europe has paralysed us. A woman farmer phoned me recently and said sadly that her son had refused to go into the farm business and wanted to go to university, but because of the crisis in their family income, they had great doubts about whether they could afford to send him there. That is a tragic catch 22.

I met a farmer recently who had been penalised to the tune of £7,000 for making one inadvertent mistake on an application form for sheep annual premium. That is not natural justice. The Inland Revenue does not treat people like that. I do not know why people in the agriculture industry should be penalised to that extent for simple, inadvertent mistakes.

This morning, I met a farmer who was pleased with some of the announcements from the Downing street summit and anticipated that he might gain about £600 in agri-monetary compensation, but he asked how that could compensate for the £10,000 that he had lost in the past couple of years as a result of the high value of sterling.

Monmouthshire is a beautiful part of Wales where farming is in crisis, but it does not have objective 1 or objective 2 status. Farmers who may wish to diversify—I am sure that many do not, and find diversification a bit of a dirty word—do not get the structural support that they might get if they lived 30 or 40 miles away. We need to allow greater investment in the industry.

There has been a campaign in my constituency for a new market in the middle of Monmouthshire, given the limitations of the present markets at Monmouth and Abergavenny. I have tried to impress on the local authority that it should have an economic development role in farming. Local authorities and other agencies in Wales have been successful in helping with economic development for manufacturing, but they have not engaged much with economic development for agriculture, which is one of the key industries in the area.

Mr. Baldry

I am listening carefully to the hon. Gentleman. When hon. Members make speeches in the House, they usually hope that the Minister will be able to reply to their points. As we have established that the Ministers on the Treasury Bench have no responsibility for agriculture in Wales, because it is a responsibility that has been devolved to the Welsh Assembly, to whom is the hon. Gentleman making his speech? Does not the fact that he feels the need to make a speech on agriculture in Wales show the craziness of having a Welsh Assembly and breaking up the United Kingdom, as his party has done?

Mr. Edwards

With all due respect, I do not accept most of what the hon. Gentleman has said.

Dr. Godman

Similar concerns were raised during the passage of the Scotland Act in 1998. Scottish Members said that they had the right to question MAFF Ministers on matters relating to farming in Scotland. Surely the same holds true for Wales.

Mr. Edwards

My hon. Friend makes a valid point. I only wish that the Welsh Assembly had the same powers as the Scottish Parliament. When I attended a recent meeting of farmers in my constituency, it was interesting that they felt that the problem was that the Welsh Assembly did not have enough teeth. It was refreshing to hear that, because—as I do not need to remind the House—I represent the area that recorded the highest no vote in the referendum for the Welsh Assembly. I hope that consideration will be given to ensuring that the Welsh Assembly has more powers.

Mr. Llwyd

Does the hon. Gentleman agree that as it is Ministers from this Parliament who negotiate with their colleagues on the European mainland, it is clearly right that Welsh matters should be debated?

Mr. Edwards

The hon. Gentleman makes a valid point. It is mainly Ministers from the Ministry of Agriculture, Fisheries and Food, representing England, who go to Brussels to work on the common agricultural policy. I am happy to address my comments to them.

The poultry sector does not get as much consideration in our debates as the more traditional beef and sheep sectors. My constituency has an important Sun Valley turkey processing plant. That sector has also had difficulties, suffering from the differential implementation of animal welfare standards. Poultry farmers have been disadvantaged by the fact that poultry can be fed on meat and bonemeal in Europe, but not in this country. Chicken comes to this country from Thailand and South America, where there are dubious animal welfare standards that would not and should not be tolerated in this country.

Farmers have raised a number of concerns at recent meetings in my constituency. The fall in milk prices is clearly a worry. I sincerely hope that Ministers continue their negotiations with the supermarkets, which now monopolise the market, to ensure a fair deal for dairy farmers. There is scope for movement. I am pleased that the Government have removed the dairy hygiene charges and are reviewing the meat hygiene charges. Those are welcome announcements and I sincerely hope that the relevant statutory instruments are passed in Wales as early as possible.

It is sad to hear young people wondering whether they will have a future in the industry. Usk agricultural college is in my constituency, and I sometimes wonder whether we have given agricultural education the same priority as other areas of education. We believe in the valid principle of lifelong learning.

Mr. Breed

Does the hon. Gentleman agree that it is a shame that agriculture GCSE is not to continue? Some 700 students a year took that examination to help them to go on to agricultural college, and they will no longer be able to do so.

Mr. Edwards

I am interested to hear that, because I was not aware of it. I am concerned that our agricultural colleges should be as vibrant as our business schools. I wonder whether they are getting the investment that they need to provide the lifelong learning, training and management experience that the existing farming community deserves.

Mr. Todd

From my already over-long speech, I struck out a planned reference to agricultural education. Does my hon. Friend agree that an opportunity has arisen for a wholesale review of the support that we give to training and education in agriculture? That would be consistent with the Government's strategy.

Mr. Edwards

My hon. Friend makes an excellent point.

Ever more farmers in my constituency want to go into agri-environmental schemes. In Wales, the Tyr Gofal scheme has increased in value from £4 million to £7.5 million this year, and in future years it will increase from £7 million to nearly £11 million. Those announcements are welcome, although scope remains for more resources to go into Tyr Gofal and other agri-environmental schemes.

The Government have increased the resources for organic conversion. There is considerable demand in my constituency, as there will be in many others, for support for farmers to undertake organic conversion, so I hope that the Government will continue to think seriously about the issue.

Let me turn to the subject of slaughterhouse charges. I have in my constituency, in the very heart of Monmouthshire, the Raglan slaughterhouse, owned by the lovely James family. They are struggling because of the veterinary fees that they have to pay. I go to the slaughterhouse to talk to them about their problems—and I am always mighty relieved to get away alive. They are concerned about the very high charges that the veterinary profession, with its monopoly, has imposed on the industry, much to the disadvantage of the small independent slaughterhouse, which provides such an important facility for our local farming communities.

In conclusion, I wish Ministers every success in their negotiations on common agricultural policy reform. Farmers work exceedingly hard providing high-quality food to feed our people, and maintaining the environment. They deserve a better deal than they have had in recent years, and I wish my right hon. and hon. Friends every success in working to achieve a better deal for farmers in the future.

4.1 pm

Mr. Colin Breed (South-East Cornwall)

I suspect that all right hon. and hon. Members agree about the need for reform of the common agricultural policy. Much of the frustration that has been caused has been to do with the speed of reform. It was surprising that the Minister of Agriculture, Fisheries and Food should remark how successful he thought that Agenda 2000 had been. Many people, not only in the House but those working in agriculture, were extremely disappointed at the relatively modest reforms that were ultimately achieved.

We have to ask ourselves whether there is another agenda in the process. Enlargement is on the agenda, and many countries have indicated that they are in favour of it. However, I sometimes wonder whether they do not want enlargement to take place particularly quickly, and look on reform of the CAP as a break in the enlargement process. The difficulty is to reach agreements that allow us to proceed and reform the CAP with any speed.

It is clear that European Union member states will have to move away—gradually, and whether they like it or not—from direct subsidy for production and towards a policy to support wider rural development, for which we and others are pressing. The CAP will be entirely different in a few years. I hesitate to suggest that it might become a common rural and agricultural policy, because that has an unfortunate acronym. However, that is the way in which the agricultural policy must go. It must be much more responsive to the marketplace and to rural concerns.

I, too, welcome the farming summit, although it took place a little late—we have been calling for one for quite some while. Although there has been little progress on CAP reform, many of us hoped that the summit would take place earlier. However, it has not really changed anything. Agriculture is still in crisis. Some prices have improved marginally—some farmers are approaching the glory days of breaking even, but that will not compensate them for the huge losses that they have incurred over recent years.

Last year was a poor year for farm incomes, and now we learn that they are likely to fall again this year. The misery will continue for many of our farmers and growers. We are concerned with the speed at which change should happen, and the way in which we see the future. For the rest of this year and probably for part of next year, a huge change in the weakness of the euro against the strength of the pound is very unlikely. Yet I cannot see what the Government's strategy is in dealing with that problem. We will have to live with it, and we need to know that there is at least a strategy for dealing with that uncompetitive currency situation.

Regulation continues to hamper the competitiveness of our farming businesses. I was extremely pleased to learn that 98 of the 107 recommendations have been accepted by the Government. However, I would like to see a timetable for the introduction of those measures. That will enable farmers to feel confident about the way in which they manage their business under the new deregulated, lightly regulated, or differently regulated scheme.

Concern has been expressed about the problem of the MAFF regional service centres. There is a growing disquiet that farmers will not be able to access the information that they require to fulfil their obligations on their integrated administration and control system forms or any other type of regulation. They have had the luxury of being able to speak directly to the officials dealing with their forms and their circumstances, and who would be understanding. The hon. Member for Monmouth (Mr. Edwards) gave the terrible example of someone who made an honest mistake and paid dearly for it.

My hon. Friend the Member for Somerton and Frome (Mr. Heath) mentioned appeals, and we need to consider that issue. Of course there have been deliberately fraudulent claims, but they are relatively few. The overwhelming number of mistakes on these highly complex forms have been made because farmers have been unable to complete them absolutely satisfactorily. They have paid significant sums in penalties for their mistakes.

The additional costs on the industry have not melted away significantly since the farming summit. Most of them still exist. Animal welfare costs, which are not borne by competitors abroad, will be with us for the foreseeable future. However, there are others hovering around, such as the new integrated pollution prevention and control regulations, the welfare regulations on egg production, the climate change levy and its effect on horticulture. Even the pesticide tax is still hovering in the background—it has not been dismissed as if it will never be introduced. Those additional burdens are on farmers every day. We must speed up the implementation of the objectives with which we all agree.

Uncertainty in the industry is the major obstacle to recovery. Farmers find it difficult to plan their business—farms are businesses, and they need business plans—bankers do not have much confidence in farming incomes in the future, and costs may be visited upon farming businesses at any time.

In addition, there are the potential problems of planning, which have been aired in the debate. Planning will play a critical part in the process of recovery and diversification. It will be possible to put some pieces of land to alternative uses, but not all.

Only this week I have been trying to assist a constituent who was a pig fanner and who is now hoping to be able to build an observatory. There is still some quite clear air in Cornwall and occasionally, when it is not raining, there is a clear sky. There are good opportunities for those people who want to spend a few days learning about the stars, for example.

There have been negotiations for seven, eight or nine months on the building of an observatory and the provision of some farming accommodation. It is difficult to imagine the problems that have ensued. I am certain that the planning officers are following planning guidance to the letter, but whether they are doing any great favours to the area in which they are operating needs to be questioned.

The farm summit was the Government's attempt to help the industry back on to its feet. It was welcome, but a few months on we are waiting for the money. Farmers are waiting to see how they can get their hands on it so that they can keep their business together and continue to face the bank manager and their suppliers. Gaps have appeared following the summit, and when the Minister of State replies she might address them.

For example, the aid announced for hill farmers is less than they were receiving in some instances. Some of the aid will have to be used for consultancy. It will not go direct to farmers, but it will enable them to obtain a consultant's report.

I have tried to quantify the money that will be made available for marketing. I agree with the Government that as farm subsidies are reduced, it is vital that we concentrate on the demand side and increase it. Marketing will play a significant part in that process. The marketing budget of a major plc is often up to six times as much as the money that agriculture will supposedly be able to use to market produce in the UK and abroad, a sum which is entirely inadequate. That is not to say that we do not welcome it or that we eschew it, but enormous sums are being spent on marketing and the industry should have proportionate funds.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Ms Joyce Quin)

The hon. Gentleman may be referring to the agricultural development scheme, for example, which is up and running. I remind him that marketing is part of the rural development regulations. The demand for marketing in the different regions can be reflected in some of the regional priorities under rural development plans.

Mr. Breed

I thank the right hon. Lady for that clarification but I do not think that it changes what I am saying. The annual report of a large public company will set out the moneys that are being spent in promoting its brand, product and everything else. The sums are extraordinary. We are deceiving ourselves if we say that we shall see a significant improvement in both domestic and foreign demand for farming produce, given the budgets that the Government are suggesting.

The industry does not have the money to market its produce. It is to be hoped that those that sell it—for example, supermarkets—will be prepared to put some money into marketing for their own reasons. The moneys that are now available are clearly not sufficient.

In December 1999, the Minister announced the introduction of a limited form of modulation at a flat rate of 2.5 per cent., rising to 4.5 per cent. in 2005–06. The process of going into modulation was controversial, but we on the Liberal Democrat Benches had supported it for quite some time. However, the flat-rate modulation has some drawbacks, which we need to identify. It hits hardest those farmers who can least afford the loss of subsidy. That is much to be regretted because the farmers concerned feel rather hurt.

The low level of 2.5 per cent., although I accept that it is a starting level, is too low to free up sufficient funds, even on a matched basis, to provide a significant boost for rural development schemes. I know that modulation will roll on, but when it came to an up-front boost it was not significant.

The way in which modulation will be introduced was not among the models that were agreed by the Commission. I assume that a flat-rate scheme would need the specific approval of the Commission. Perhaps the Minister will clarify whether that approval has been received or has been applied for.

We believe that the present modulation scheme, although welcome, is flawed. It is a new model scheme but there are other options available, which already have Commission approval. We would promote a tiered structure of modulation, which would ensure that those in greatest need of aid would continue to receive it, while freeing up more significant funds to deal with the important business of rural development and environmental protection. However, the Government seemed to allow that system to pass by. Perhaps they considered it and decided against it. Perhaps also they will tell us why they came to that view. Many smaller farmers would have felt that such a method of modulation would help them.

I do not know whether the representatives of small farmers were present at the summit or whether their views were represented. However, it seems that the system of modulation that is to be introduced does not suit their circumstances.

The pressures of World Trade Organisation and European Union enlargement mean that the supply subsidy is finite, but to what extent I do not know. We need to work on the product of which our farmers and we are rightly proud. We must add value to the product and then market it with force, both here and abroad. That initiative needs additional financial support, among other things, to get the demand side moving.

We have raised previously the early retirement scheme. The Minister was frank some months ago when he said that the Government had considered it closely and carefully. It had been costed and he said that it was deemed not to be value for money. We took that to mean that many farmers would be retiring anyway, and thus to provide them with an additional sum in those circumstances would not be a good use of taxpayers' money.

The truth is, however, that many farmers are not retiring. That is not because they do not want to but because they cannot. They are locked into a progressively more miserable situation. They cannot extricate themselves, and that applies particularly to tenant farmers. A growing number of farmers of increasing age want to retire but simply cannot.

Remarkably enough, many other people would like to go into farming, but are being locked out. They cannot find a way into the kind of unit—a small farm or a tenancy—that they could take on. I hope that the Government will reconsider an early retirement scheme. It need not be so broad as to include everyone who the Minister suggested would benefit unnecessarily. It could be targeted at those who are locked into circumstances from which they would wish to extricate themselves. It could also offer opportunities to new blood coming into the industry.

A retirement scheme that could tackle those twin objectives would not be enormously expensive. A targeted approach would provide an opportunity to revitalise farming, bringing in people likely to be able to diversify, use the land for different purposes, employ new techniques and go into organic production. Unless we change the personnel in our agricultural industry, we shall not see quick enough change. The industry will grind slowly on.

An early retirement scheme is an essential part of the Government's master plan. I agree with their medium and long-term strategies, but an early retirement scheme would allow their aims to come to pass much more quickly. It would also have the benefit of retaining more small farm units. Without that, holdings will simply become larger, preventing even more people from getting started in farming on their own account. Farmers and growers need sustained support at this critical time.

Mr. Tyler

My hon. Friend makes a persuasive case for a comprehensive interdepartmental approach to farming and rural concerns. Did he notice an answer that I received yesterday from the Minister for the Cabinet Office? She wrote: Primary responsibility for rural policy lies with my right hon. Friend the Deputy Prime Minister while the Cabinet Committee on Rural Affairs, which I chair, will play an important co-ordination role.—[Official Report, 10 May 2000; Vol. 349, c. 432W.] Does my hon. Friend find it significant that there is no mention of a role for the Ministry of Agriculture, Fisheries and Food in the development of rural policy? Does he believe that the time has come for a better interdepartmental vehicle that would achieve the comprehensive approach that he is advocating?

Mr. Breed

Yes, it is somewhat surprising that MAFF was not mentioned. I suspect that that was a slip, and hope that the Minister will tackle the point.

I agree with the Government's objectives, and we all want reform as well as protection of our environment, all of which must happen more quickly than at present predicted. I hope that the future will not charge us with delaying the improvements that we want in the CAP, in enlarging the EU, in protecting the countryside, in allowing diversification and in ensuring that agriculture remains an important part of our rural life. If we do not get the time frame right, people will drift out of the industry, our environment will not be protected and the CAP may become the means by which enlargement of the EU never takes place.

4.24 pm

Mr. William Thompson (West Tyrone)

I welcome the debate on agriculture and the common agricultural policy of the European Economic Community. I go back long enough to have heard the original debate on whether Britain should enter the Common Market. We were told in the referendum debate at that time that it was simply a common market that would allow us easier access if we wanted to sell to other parts of Europe. We were told that no great change could take place without unanimity and that if Britain wanted something not to happen, we could veto it easily. That was what the people of Britain voted for when we went into the Common Market.

Over the intervening years, matters have proved not quite so simple. Europe has intervened in every aspect of our lives. It becomes ever clearer that we are heading for some kind of united Europe. The common agricultural policy probably worked in its first years, but Britain is now disadvantaged by it. Our economy does not equate with those of many other European Union countries, and that puts us at a continual disadvantage. Furthermore, when we wish to advance policies that are to our advantage, we generally find that they are not advantageous to the other countries. When agreement is required among the countries, we tend to end up at a disadvantage.

The farming industry faces considerable difficulties—enlargement of the EEC, the lowering of world prices and the pressures of the World Trade Organisation for more even competition—all of which increase pressure on the CAP. We are finding it difficult to amend the policy. The Minister has told us that progress has been made on the Agenda 2000 settlement. That may be so, but there has not been enough to allow us to deal with the difficulties that farmers face.

Northern Ireland has a greater difficulty in that it has a land border with the Republic of Ireland. For some peculiar reason, the Republic always seems to do better than the United Kingdom in negotiations. Our farmers in Northern Ireland are sometimes at a considerable disadvantage to those in the Republic of Ireland. Those who want a united Ireland always say, "Look how much better it would be if we were united so that you in Northern Ireland could have all the advantages that we have in the European common market." That does not go down well with the Unionists.

I welcome the interest taken in Northern Ireland by the Minister of Agriculture, Fisheries and Food. He has visited us several times and shown great sympathy with the plight of farmers, especially pig farmers. Of course, even though there is no European regime for pig farmers, Europe still has to agree with everything that happens. Much negotiation and agreement still has to take place before the actual money comes to pig farmers.

I welcome the fact that there will be two forms of support for pig farmers—especially the outgoers scheme. The Minister said that there would need to be a stipulation that farmers must not go in again, but it seems unlikely that a pig farmer who had been put out of pig farming would want to go back. Those farmers have been destroyed—many of them face large debts from the banks and virtual bankruptcy. The prospect of their going back seems remote. However, I welcome the efforts being made to help them, and the fact that the scheme will go back to June 1998. Hopefully, some aid will be given. The farmers who have stayed in the industry also need help; it is necessary for reconstruction to take place. I welcome the Minister's comments on that point.

A prevalent issue in Northern Ireland is the move to designate it as an area of low incidence of BSE. I appreciate that the Minister has cottoned on to that idea and has given it as much support as he can. Originally, I thought that the matter was simple, but I have discovered its complexity. Although farmers are looking forward to that designation, in the hope that they will be able to sell their calves and get rid of their animals more quickly, there are several disadvantages. The General Consumer Council for Northern Ireland expressed grave concern that, if we become a low-BSE area, it might not be possible to import to Northern Ireland some of the products that are currently imported.

Some factories in Northern Ireland have also expressed concern. At present, they bring in meat from the mainland for processing; it is then sent back to the mainland. That may not be possible under low-incidence status. Those problems need to be researched to find a satisfactory solution.

The idea that everything in the garden will be rosy if we receive that status is open to question. At present, Northern Ireland can export cattle, but in fact there are no such exports. That is because so many rules and regulations have to be fulfilled—such as designated factories or parts of factories—that, unless there is a high output of cattle, export makes no economic sense. There is no supply of cattle for export.

Furthermore, some farmers unfortunately do not keep such accurate records as they should, so they cannot export their cattle. I support the view, expressed by the permanent secretary at the Department of Agriculture and Rural Development, that those farmers need to bring—and keep—their records up to date. If they fail to do so, they will be at a considerable disadvantage.

The over-30 months scheme has been mentioned. Will that scheme continue if Northern Ireland receives low incidence of BSE status? That proposal raises many questions. I realise that the Minister is doing his best. He has received representations from many companies and other sources. I hope that he will be able to produce a scheme that is accepted by Europe, that will disadvantage nobody and that will help farmers in Northern Ireland.

I welcome the relaxations in planning laws, so that, if diversification takes place, it will be easier to obtain planning permission.

Over the past few years, farmers have had a difficult time and they are greatly in debt. Recently, we have been encouraged in Northern Ireland by the good weather. There was a tremendous amount of rain and the ground was extremely wet. However, the fact that we have had several weeks of good weather has at last put a smile on farmers' faces. Perhaps things are changing and the outlook may be better than they anticipated some months ago.

4.36 pm

Mr. Christopher Gill (Ludlow)

It is a great pleasure to follow the hon. Member for West Tyrone (Mr. Thompson). I agree with much of what he said.

I make no apology for the fact that my remarks are not the received wisdom. I speak from the perspective of someone who has spent a lifetime in the meat and livestock industry, earning a living on both sides of the farm gate, both as a practical butcher and as a practical farmer. At the conclusion of my speech, I shall pose two straightforward and fundamental questions—one to the Government and one to my hon. Friends on the Opposition Front Bench.

Not surprisingly, the debate so far has concentrated on the detail and the mechanics of the CAP. I want to focus on the principles that are at stake. I trust that hon. Members on both Front Benches will do me the courtesy of responding to my questions to show that, at least, they recognise the importance of a comprehensive debate on such important matters, rather than simply going through the motions.

In a recent bulletin, Lloyds TSB Scotland stated: The current state of the agricultural industry is unsustainable in the longer term. I agree. However, what can we, as parliamentarians, do about that regrettable situation? The truthful answer is, "Not much".

Speaking at the annual general meeting of the Farmers Union of Wales, its president, Bob Parry set out an eight-point action plan, which included the demand for greater powers for the Welsh Assembly so it could find Welsh solutions to Welsh problems. What a wonderful aspiration—but what is the reality? It is that there can be no Welsh solutions to Welsh problems, any more than there can be English solutions to English problems.

Under the CAP, virtually the only solutions permitted are European ones, decided on by the EU, collectively, in Brussels. Let us consider, for example, the pig industry—of which I have some experience and in which I declare an interest. That industry would like a British solution to its uniquely British problems. It would like, for example, to spend the £26 million aid package announced in March primarily on restructuring among producers. However, EU regulations dictate that the funds available should first be spent on an outgoers scheme. Given the dramatic reduction that has already occurred in the national pig herd, that is the last thing the British pig industry needs, if, as a nation, we are to avoid becoming ever more reliant on imports.

Right hon. and hon. Members, who have campaigned on behalf of their pig farmer constituents for the past two years will have experienced the frustration of finding every avenue that they explored blocked by the decrees of the collective in Brussels. The plain fact of the matter is that neither the Government nor Parliament can make the decisions so desperately necessary to salvage what is left of the British fishing industry and the British agriculture industry. The authority to make those decisions is no longer ours. Under the terms of the European treaties, decisions have to be made by the collective in Brussels.

Let us take but one example. The Government recently set up the meat industry red tape working group—the Pooley committee—to investigate the problems of the abattoir sector, in particular, and to report back. The Pooley report followed and, generally speaking, the Government agreed with it and accepted most of its 35 recommendations. However, in the case of two of the most important recommendations—precisely those on vets that led to the peremptory closure of the Mead Webber sheep abattoir in Herefordshire two weeks ago—they could do nothing. That was not because the Government were unwilling or disagreed with the recommendations or because they would cost a lot of money, but simply because the Government would first need to obtain EU approval. Shakespeare had a line for it: The fault, dear Brutus, is not in our stars, But in ourselves, that we are underlings.

Members of the House—past and present—bear the guilt and the shame of having given away the powers by which we might otherwise have been able to help our fellow countrymen. In so doing, they gave away that which was not theirs to give away in the first place—the sovereign right of the British people to be governed by their own laws made in their own Parliament by their own people.

Instead, we are now run by a collective. How else can one describe a regime in which the centre tells the fishermen what they may catch, in what quantities, in which sea areas, where they may land their catches and, effectively, at what price? That is all done in the name of conservation, but not a single fisherman at sea today does not have to throw back dead into the sea more fish than he lands.

In the Russian republics, collectivisation of agriculture failed; in North Korea, to this day, people starve because of the failure of agricultural collectivisation that is distinguished from the EU model only in so much as, whereas the Korean model has brought about shortages, the European model has created surpluses. At what cost?

Mr. Baldry

Will my hon. Friend give way?

Mr. Gill

No, I will not give way.

The European model has been carried out at the cost of greater demands on the taxpayer, higher prices to the consumer and a burden of bureaucracy that is beyond belief to those who recall farming as it was before the common agricultural policy.

Mr. Baldry

Will my hon. Friend do me the courtesy of giving way?

Mr. Gill

No, I will not give way.

Last November, in early-day motion 62, I called on the Government to open urgent negotiations with other EU countries to bring about a change in the treaties so as to make country of origin labelling mandatory throughout the Community. I called for such labelling for meat—plain and simple. However, what we get is yet another bureaucratic nightmare.

According to a report in the Farmers Guardian on 21 April all beef sold in member states will have to be labelled by country of origin from September 1. So far, so good. However, the report adds: The new measures will also mean all beef sold will have to be labelled with the abattoir number and country of slaughter. The label will also have to record the date of slaughter, the reference identification number of the animal and the category of animal—heifer, steer or bull. Ministers also agreed from January 2002…the beef label will have to include details of the place of birth and fattening of the animal along with its slaughter details.

What do Governments—and individual politicians who should know better—say about all those unsatisfactory matters?

Mr. Baldry

If my hon. Friend will give way, I shall tell him.

Mr. Gill

I shall give way to a former Agriculture Minister.

Mr. Baldry

I am very grateful to my hon. Friend for doing me the courtesy of giving way. Is his powerful argument advocating that we should leave the common agricultural policy or that we should leave the European Union altogether? The measures that he is proposing are clearly contrary to Community law, so the logic of his argument must be either that we leave the common agricultural policy or the European Union altogether. Which is it?

Mr. Gill

The short answer is that I advocate repatriation of control over agricultural policy to this country and to this Parliament, so that the people who understand British agriculture, are responsible for British agriculture and have to face their constituents who are involved in British agriculture can give satisfaction in a way that we simply cannot do under the present regime.

I am sure that my hon. Friend will forgive me for being so blunt, but people like him say that we must reform the common agricultural policy. The question for them is how they would do that. Do they not recall how Agenda 2000 was emasculated by the vote of the French; do they not understand that, unless there is unanimity, the fundamentals of the CAP cannot be changed; and do they not understand that, if reform is achieved by qualified majority voting, it is as likely as not that the matter will be challenged in the European Court by countries alleging discrimination and will be struck down?

Being nice to the Germans, the French, the Italians or the Spaniards is not the answer. The point is that what we can do and how we can do it are all prescribed in the treaties. There is no latitude or tolerance; there is only the law.

My question to the Government is this: by what means or methods will they bring about any fundamental or meaningful reform? Let me remind the House that a collective can, by definition, only act in the interests of the collective. It self-evidently cannot act in the separate interests of its component parts. The notion that the agricultural collective can deliver what is best for Britain is a delusion. Equally, it is absurd to believe that it can deliver what is best for the agriculture industry of any other individual member state. If I am wrong, those on one or other Front Bench will have an opportunity at the end of the debate to tell me why.

My second question is addressed to those on the Conservative Front Bench. They will know that my credentials as a Conservative are impeccable. I have been a Conservative all my life; I was born into a Conservative family and I am a Conservative by conviction and consistently so. I am opposed to big government and state interference; I believe in individual freedom, low taxes and free markets. I am not a collectivist; I reject the whole concept of collectivism.

The question for my hon. Friends on the Front Bench is why our party, the British Conservative party, continues to support a policy, reformed or unreformed—it makes no difference—that owes more to communism than to conservatism. Members of the shadow Cabinet should not be surprised at this question; they have heard it before and they will not be surprised to hear me say that they will hear it again unless they recognise that collectivism and conservatism are mutually exclusive. One is the antithesis of the other. My party will not, and cannot, prosper until it comes to terms with that ineluctable truth.

Only politicians, by dint of that collectivist policy, could have brought about a situation in which every sector of British agriculture is depressed. It does not matter how the British farmer or fisherman votes, as he gets the same whether he votes Labour, Liberal Democrat, Plaid Cymru, Conservative or Scottish National party. He gets the common agricultural policy, which is effectively decided by people whom he does not elect and cannot hold to account. However he votes, he gets what is decided for him by the collective.

That cannot be right. As a Conservative, I say categorically that it is not right. Conservatives believe in choice, diversity and—not least—democracy. At the next general election, I trust that we as a party will put that before the British people, especially those working in our once-great farming and fishing industries, for whom there is currently no light at the end of a very long and very dark tunnel.

The motion that we are considering speaks of negotiating an outcome which takes account of the interest of UK producers, consumers and tax-payers alike. That is platitudinous nonsense. The CAP has failed on every count and has done so comprehensively. It has failed producers, consumers, taxpayers and the nation. The crisis in agriculture is not new: it has not just appeared from nowhere. The current state of affairs has been building for the past 28 years, ever since we joined the benighted CAP. For half that time, and throughout my membership of the House, I have consistently warned that it would all end in tears, and so it has.

I shall end with a quotation from Pericles for my colleagues: Remember that Prosperity can only be for the free, and that freedom is the sure possession of those alone who have the courage to defend it.

4.51 pm

Mr. Bill Rammell (Harlow)

It is a pleasure to follow the hon. Member for Ludlow (Mr. Gill). Given the enormous damage that divisions on Europe did to the Conservative party at the election, I am pleased to hear that such divisions are clearly still very much alive. Long may that continue.

I shall make a brief contribution to our debate, prefacing my remarks with a criticism of all parties involved in it. Regrettably, our debates on fundamental issues affecting the governing of our country through the European Union are ill attended by all political parties. Everyone should take that criticism on board.

Anyone interested in the issues that we are discussing knows that farmers throughout the country face real problems. For three years, there have been substantial falls in farming income. Despite farming's image as a prosperous industry providing for prosperous communities, such a reduction in income is bound to have a lasting and disastrous impact on farming communities. I have talked to local farmers, and those in their 30s and 40s say that they regret going into the industry, and would not choose it if they were starting out today. That is a serious cause for concern.

The problems that we are experiencing are by no means unique to this country; in many ways, they are a worldwide phenomenon. Low world commodity prices are the result of over-supply, following the collapse of import markets in Russia and the far east. There is nothing that this Government—or, indeed, any other—can do directly to manage that position more effectively.

However, farming problems are worse in Britain than elsewhere for two principal reasons. First, the BSE crisis is having a continuing impact on the livestock sector. Whether that crisis was the result of accident or error—the inquiry will throw light on that question—it is indisputably having the single most serious impact on any part of British industry, probably since the second world war. We are still suffering the consequences.

The second factor peculiar to Britain is the sterling-euro exchange rate, which has resulted in cheaper imports, especially food, being sucked in and our own food exports becoming more expensive and less competitive. CAP payment rates are calculated in euros, so there is a further impact on farm incomes.

We are experiencing both a worldwide phenomenon and particular problems in Britain, and the Government have responded exactly as we would expect a responsible and sensitive Government to respond. From the Downing street summit emerged the action plan providing more than £200 million in additional support for the pig industry and dairy farmers. That package includes all the agri-monetary aid permissible under EU rules, and it is worth contrasting it with what happened under the Conservative Government. The Conservatives criticise us, but since entering office the Labour Government have, under those rules, granted £551 million of aid through that mechanism, That aid was not provided under the Conservatives. Additional support is being given to hill farming, where some of the worst problems are experienced. Rural development plans, with matched funding of £472 million, have been drawn up. All that adds up to short-term assistance that provides a breathing space and sensitive support for longer-term restructuring and diversification in farming.

During debates such as this, the Government say that they are responding to the problems, and the Opposition say that the situation is dreadful and the Government are doing nothing. It is therefore instructive to listen to those who are directly affected—those working in farming. After the Downing street summit, Ben Gill, president of the National Farmers Union, gave due recognition to the import of the decisions that had been made. Even the Country Landowners Association—not one of the Government's natural supporters—said that the summit and the resulting aid package provided the short-term help for which it and the industry had been asking.

Mr. Hayes

To cut across the partisan interpretation of the aid packages, will the hon. Gentleman tell us precisely what the Government have done to support arable farmers such as those in my constituency, especially tenant arable farmers? He talks about hill farmers being helped, but tenant arable farmers are in at least as bad a position as they are.

Mr. Rammell

I throw back the question: what did the previous Government do? To pretend that farming does not face major long-term problems does a disservice to farmers, and to pretend that any Government, past or present, have to hand all the solutions to those problems and the money to implement them is false and does a disservice to those whom we represent. When I talk to farmers in my constituency, I find that although they have been traumatised by the changes that have occurred and are concerned about the future, they are realistic: they know that there is no quick fix to the problems and they respect and support the Government's course of action.

It is instructive to contrast the Labour Government's actions in respect of the problems facing farming with the Conservatives' actions in similar circumstances. Processes of economic restructuring and change are always going on in all parts of our society, and the role of Government in those circumstances is to help and support people through that process of change. Under the previous Government, we experienced restructuring of the mining industry, in which a process of economic change and industrial transformation was taking place. To say that that Government stood on the sidelines gives them too much credit; they exacerbated the process and made it more damaging to and difficult for the communities it affected. Contrast that with the Labour Government's actions and we see a very different, far more sensitive, approach to change.

The crisis in farming causes us to reflect on the purposes of agricultural support, specifically in the context of the CAP. The CAP was created in the post-war years, when a wholly different set of circumstances prevailed. The system of production subsidies was established to insure against food shortages. That was a legitimate reaction following the war, but we have different problems now.

The modern justification for agricultural support is founded less on the need for food security and more on the environmental, social and economic role of agriculture in rural areas. The Government are right to focus on that and to support the process of change and diversification.

Some progress was made at the Berlin summit, where we secured a package of reform worth about £65 a household to Britain—about £500 million. That was a new achievement, but it is clearly nothing like enough. There would be cross-party consensus on the fact that we need to go much further, especially in the context of the challenge of European Union enlargement. All parties are signed up to that and, on the face of it, support it, but the major problem is that the common agricultural policy was certainly not designed for 27 different countries—indeed, there is a question mark over whether it was designed for 15.

Under the current rules, if Poland joined tomorrow, according to the most recent figures that I have seen, it would soak up 60 per cent. of CAP funds. That statistic clearly underlines the absolute necessity, if we are serious about enlargement—which we should be, for a whole series of reasons—to reform the CAP further.

We must ask ourselves seriously and honestly how we are to achieve that reform. About a year ago, I went on a European Scrutiny Committee visit to Germany and talked to the German ambassador and German politicians. I was struck by the significant consensus between British and German politicians on the reforms that are needed. As Conservative Members have said, the French Government appear to be especially conservative in their attitude and actions on such issues.

From those discussions, I got a real sense that we had missed an opportunity over the years because we were not fully engaged in the European Union and were not the active partners that we are now. We missed the chance to build bridges, especially with the Germans, and to move away from a Franco-German axis directing the Union's affairs towards the more broadly based leadership in which Britain plays a part and can secure the significant changes that we need.

I agree wholeheartedly with my hon. Friend the Member for Monmouth (Mr. Edwards) about the problems with the byzantine complexity of the current common agricultural policy rules, the forms that farmers have to fill in and the processes through which they have to go. That criticism could be made of many European Union funding programmes. One almost needs a degree in form filling to get through the process.

I do not for a minute minimise the problems of fraud in the European Union, but a careful reading of the report of the Court of Auditors shows that often we are talking not about fraud but about genuine mistakes, because people do not understand the system and have an honest problem with the forms. Liberal Democrat Members seem to agree with that. We constantly debate the issues and highlight the fact that the processes are far too complex and difficult and cause honest people to make honest mistakes, yet we never seem to be able to resolve the problem. The Government are arguing for the changes that will help us to achieve that.

We need also to focus on the changes that are needed in farming generally, and on organic farming in particular. My hon. Friend the Member for Monmouth commented on that subject. Consumers want more organic farming. I do not pretend that that is a majority view, but increasingly consumers want wider choices in the food that they eat. The Government have made some progress. In the last year of the Conservative Government, only £600,000 was spent on supporting conversion to organic production. We are spending £11 million a year, and there are indications that that will double in the next four years.

Mr. Andrew Rowe (Faversham and Mid-Kent)

I thank the hon. Gentleman for giving way. Does he agree that if the organic farming movement is to have any chance of success, a great deal will depend on the labelling of those products? Does he consider it unfortunate that attempts to reform the general labelling of agricultural products have been blocked by the Government?

Mr. Rammell

I do not believe that such attempts have been blocked by the Government. The labelling of agricultural produce is within the competence of the European Union, and we must get support to achieve those changes. That is what the Government are arguing for, and what we should all try to achieve.

There has been increased support for organic farming, and still more is needed. I hope that as a result of the comprehensive spending review, there will be further movement in that direction.

I shall comment on some of the alternative strategies and tactics proposed by the Conservative party to support the farming industry. We heard the hon. Member for Ludlow (Mr. Gill) advocating what might be described as the unilateralist option—for example, that we should go for a ban on imports because we are worried about what the EU is doing through the CAP, that we should adopt unilateral action on food labelling, and that we should introduce state aids that are illegal under EU law.

Whether that is right or wrong in principle, it does not work. We need only think back to the beef ban that the previous Conservative Government initiated at the height of the BSE crisis to see that such measures do not work. The beef war was initiated in a fervour of enthusiasm, and lasted for 31 days. Even the previous Conservative Government, divided to the core as they were on the subject of Europe, realised that that is not how results are achieved in the EU or anywhere else.

The further problem with arguing for unilateralist solutions is that we have more to lose than other countries, with £10 billion-worth of British food and drink exports supporting British jobs and British communities. All that would be put at risk.

I turn to the relationship between Britain's attitude to the single currency and to the CAP. I support the Government's position. They are in favour of British membership of the single currency in principle, and have set out five realistic and sensible economic criteria to be met. Once those have been met, the Government will recommend to the British people in a referendum that we should join. However, I know in my bones that some of the problems that fanning is facing, and that British manufacturing is also facing, are caused by an overvalued pound. Farmers and manufacturers recognise that.

Were we to adopt the Opposition's head-in-the-sand approach and argue that we should stay out of the single currency indefinitely, regardless of the economic circumstances or the possible economic benefits, we would be promising British farming and manufacturing industry a permanent overvaluation of our currency, causing us major problems in competitiveness, which would have a direct impact on jobs and communities.

When I discuss these issues with farmers in my constituency, they understand that. Farmers' views on the single currency are far more positive than those in the country as a whole. Because of farmers' experience of the consequences of the argument that we should stay permanently out of the single currency, I believe that the National Farmers Union has a role in arguing the opposite case, and turning the tables on the Conservative party when it advocates saving the pound. The consequence of saving the pound would be the loss of jobs, as people will increasingly recognise if we put off indefinitely dealing with the question of British membership of the single currency.

Let me comment on a couple of points raised by Opposition Members. The hon. Member for West Tyrone (Mr. Thompson) presented the familiar argument—I have heard it here before—that there is a determination to head towards the establishment of a united Europe, in which we will lose all sovereignty. The hon. Gentleman nods, confirming what I have said.

Having talked to politicians and civil servants throughout the European Union, and having read every available document on the subject, I see nothing like majority support for such a future for the European Union. I see nothing like majority support for total qualified majority voting, tax harmonisation or any of the other evil spectres raised by Opposition Members.

The hon. Gentleman contrasted the support provided for farmers in the Republic of Ireland with that provided for those in the north of Ireland. Clearly, that will result partly from the response to different levels of economic growth. However, I also think that other countries have been more successful than Britain in securing what they need for their people through the European Union, partly because they have been more actively engaged in the process over the past 20 to 25 years. They have participated more fully, and have argued more effectively in fighting their corner.

I respect the passion and conviction shown by the hon. Member for Ludlow. I disagree entirely with his analysis, but I genuinely believe that someone who did what he did during the last years of the Conservative Government must sincerely believe what he is saying. As I have said, however, I disagree with his analysis. He suggested that the problem of farming in Britain and the problem of the common agricultural policy were really problems of sovereignty. According to him, if we were not in the European Union and were not partners in the common agricultural policy, we would not have these difficulties.

I reject that completely. If we were outside Europe—if we were outside the common agricultural policy and the European Union—we would still face the problem of world over-supply. We would still face the problem of an overvaluation of the British pound. We would still be dealing with the legacies of BSE. The suggestion that if we depart from the CAP and leave the European Union all the problems of agriculture will suddenly be resolved is at best fool's gold, and at worst gives farming communities hope that is not justified.

When the hon. Member for Ludlow was talking about reform of the CAP, I was astonished by a comment made, from a sedentary position, by the hon. Member for South Holland and The Deepings (Mr. Hayes). I am sorry to mention this now, because—although I did not realise it until just now—the hon. Member for South Holland and The Deepings is no longer present. I thought that I heard the hon. Gentleman, who is a vice-chair of the Conservative party, say, "That is the Vichy argument". The ill judged use of that language of war shows me more than anything how far the Conservative party has moved from the mainstream on these issues, and it will have to face up to that one day.

I support the Government's aims, which the National Farmers Union recognise as being in the best interests of diversifying our farming communities and providing the realistic and longer-term support that farmers need.

5.14 pm

Mr. Tony Baldry (Banbury)

I agree with the hon. Member for Harlow (Mr. Rammell) that it is disappointing that more Members have not taken part in the debate. I see that my hon. Friend the Member for Ludlow (Mr. Gill) is disappearing; I am going to mention him, and I do not wish to do him the discourtesy of mentioning him when he has no opportunity to respond. As he is keen to leave, I shall make my point to him now and comment on the speech of the hon. Member for Harlow later.

I was grateful to my hon. Friend for giving way during his powerful speech, in which he argued for the repatriation of agriculture and fisheries policy from the EU to the United Kingdom. As he knows, we could do that only if we left the EU. He hopes that that will be Conservative party policy by the next general election. What will he and those of my hon. Friends who support his view do if, as I suspect, that does not become party policy? Will they support our manifesto, notwithstanding the fact that repatriation is not part of our policy, or will they walk away from our party? It would be interesting to hear the views of those of my right hon. and hon. Friends who agree with my hon. Friend, otherwise the electorate are likely to be confused about the Conservative party's stance on that crucial issue.

Mr. Desmond Swayne (New Forest, West)

My hon. Friend takes the argument a little too far. The Government have tried for many months to achieve substantial reform of the CAP. They have failed to do so, but that does not mean that that policy was wrong. Equally, those of us who advocate that British farming interests would be best served by a withdrawal from the CAP would naturally pursue that as a policy objective. The fact that that objective might not be achieved does not undermine its validity.

Mr. Baldry

My hon. Friend must not delude himself. My hon. Friend the Member for Ludlow used the word "repatriation." One cannot have it all ways. It is intellectually honest to argue for repatriation—there is no reason why one should not do so—but one must recognise the consequences. One cannot argue for repatriating agriculture and fisheries policy without recognising that that would effectively mean withdrawal from the CAP and the common fisheries policy, and that is achievable only by withdrawal from the EU. Everyone understands what the argument is code for—we are not children. My hon. Friends have urged that that policy should be part of the manifesto at the next general election. Will they follow our manifesto regardless of whether that policy is part of it or will they walk away from the party? That is a simple question.

Mr. Swayne

Shall I answer it?

Mr. Baldry

I should be interested to hear my hon. Friend's answer.

Mr. Swayne

Undoubtedly, I would continue to support the party and the manifesto, but I do not go so far as my hon. Friend. It is appropriate to pursue a policy of repatriation that falls short of withdrawal from the EU. They are not necessarily one and the same.

Mr. Baldry

I am grateful to my hon. Friend for that observation, but if he thinks about it he will realise that it is intellectually impossible to pursue a policy of repatriation without advocating withdrawal from the EU. I am pleased that he and his colleagues will support the manifesto, which, I suspect, will state that we should continue to be part of the EU and argue our case from within. Indeed, I had hoped that the Government had proposed the debate because they wanted to provide the House with a genuine opportunity to discuss agricultural matters.

Mr. Gill

If I understand my hon. Friend correctly, he is arguing that no matter how bad it gets—no matter how serious the position for British fishermen or farmers—we will hang on to the CAP, come hell or high water. That is totally bizarre. Such a policy would not have great appeal to the British electorate. By using such extreme terms, he is being somewhat disingenuous. He knows that the inevitable consequence of repatriation is not withdrawal from the EU.

Mr. Deputy Speaker (Mr. Michael J. Martin)

Order. The hon. Member for Banbury has been helpful in allowing interventions, but time is getting on and a number of hon. Members wish to speak. Interventions will squeeze out opportunities for those hon. Members.

Mr. Baldry

I have not been speaking for long, Mr. Deputy Speaker, and I do not intend to do so. Some Labour Members spoke for as long as 40 minutes, and these are important issues. The House must judge whether my comments have been extreme; I thought that they were perfectly moderate.

In response to my hon. Friend the Member for Ludlow, we are members of the EU. That decision was taken by this House, and by the country in a referendum. Part of our membership of the EU is membership of the CAP. It behoves Ministers and Opposition Members to argue and campaign for the sort of CAP we wish to see. That, quite rightly, is what Ministers should do. We will criticise Ministers when we feel that they fall short of what we wish to achieve in the CAP.

However, I hope that my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice) will assure us when he winds up that it is not and will not be the policy of the Conservative party to withdraw from the CAP or, by implication, from the EU. That would send a destructive message to the people of this country and to our colleagues throughout Europe.

I was a Minister when we had a policy of non-co-operation with Europe over beef. That was brought about by considerable frustration at the fact that Heads of Government from other member states refused to give my right hon. Friend the Member for Huntingdon (Mr. Major) an honest and straightforward answer. Some would say that it was a matter for the Agriculture Minister; others that it was for the Health Minister; others that it was for Parliament. We were making little progress.

As a consequence of that frustration—and to ensure that the EU understood how deeply these matters were felt here—we had, for a while, a policy of non- co-operation with the EU as a whole. At the end of the day, it did not necessarily advance our case very much. It made the point, but thereafter it caused a number of colleagues within the EU who might otherwise have been sympathetic to us to feel that we were not approaching the EU in the way and by the rules that we would have expected from others. However, that is history. We are members of the EU, and it behoves us to collaborate.

Earlier today, we had Trade and Industry questions, at which great concern was raised, rightly, about the future of Dagenham and the potential loss of 2,000 jobs there. Also, we have had debates on Rover recently, when the House has been full. The National Farmers Union estimates that, this year, we are likely to lose 15,000 jobs in agriculture and industries allied to it. That is an enormous number to go from one industry in one year.

The Minister chided me when I said that the crisis in the dairy industry was probably the worst in recorded history. I do not think that there has been a time in the history of UK agriculture—certainly not since the depression of the 1930s—when the prospects for all sectors of agriculture have been as grim as they are at present.

Part of the reason for that is the strength of sterling, the weakness of the euro and the relationship of the two. In dairy prices, for every 1 per cent. rise in the value of the pound in relation to the euro, 0.6p comes off the price of a pint of milk. I think that, of the 9p decrease in the milk price in the past year, 5p can be attributed to the relationship between sterling and the euro.

Interestingly, today, the Secretary of State for Trade and Industry used a form of words that was rather different from that used recently by the Prime Minister and the Chancellor, and it may well herald a different approach by the Government. Until recently, the Government's approach to the sterling-euro relationship has been to say, "There is absolutely nothing we can do about it. One just has to accept it. Manufacturing industry and the dairy industry will have to accept it." Today, the Secretary of State changed that line by saying that sterling's strength in relation to the euro was unsustainable, and that, sooner or later, the international financial communities will see that sterling's value is unsustainable.

Although that may herald a change of tack by the Government, we have to recognise that not only United Kingdom manufacturing industry and my constituents who work at Cowley, but dairy farmers and others have been suffering from the strength of the pound—or the weakness of the euro, or the relationship between the two—and the difficulty of exporting. We should never forget that other sectors are suffering too.

We should also recognise that particularly the dairy industry has been facing other difficulties, not least the break-up of Milk Marque and the creation of three new organisations, which will find it increasingly difficult to compete. However, not all is lost. I simply draw the dairy industry's attention to the fact that, as one can see in supermarkets, there is a huge market yet to be won in products such as yoghurt and other value-added dairy products, the value of which is about £1 billion. Almost all those products are imported from firms such as Miillers in Germany and elsewhere. It is a huge market.

Mr. Paterson

May I correct my hon. Friend? Mullers has invested £65 million in Market Drayton, in my constituency, and makes 800 million pots of yoghurt from milk produced at farms in the surrounding 40 miles. It is a marvellous lesson in how we should be adding value to the basic dairy product of milk—which is the point that I think my hon. Friend is trying to make.

Mr. Baldry

It is indeed. I am very glad of my hon. Friend's correction, as I was relying for my information on the report by the Select Committee on Agriculture on milk pricing. As MÜllers' investment shows, we shall be able to guarantee jobs and ensure that we maximise the liquid milk price by concentrating on value-added products. That would surely benefit UK farmers, and I hope that other similar firms will invest here.

The Government can do more than we have heard described today to help UK farmers. Although the Minister said some pleasant words about deregulation, just recently, an enormous number of environmental regulations have been imposed on the farming industry, including the groundwater regulations and the integrated pollution prevention and control regulations. Farmers have also been threatened with nitrate regulations, and a pesticides tax that would be £55 per tonne, which is simply not sustainable. The Government have temporarily withdrawn the pesticides tax proposal, but they have not said that they will permanently withdraw it. I simply hope that the Ministry and the Government will make every effort to ensure that farmers are not overburdened with regulations, and that regulations are introduced sympathetically. When farming is in difficulty, those burdens have a disproportionate cost.

Similarly, the Minister made much of diversification in the countryside. However, that possibility will be dependent largely on the way in which planners and the planning authorities approach it. Farming enterprises have a new difficulty when they seek to diversify farm barns or other buildings. They are now told by local planners that their proposals are not sustainable, because, as farm buildings tend to be in the countryside, some way from centres of population, people may have to drive to them. A farmer in my constituency wished to convert some buildings that were going to be used by a local physiotherapist to provide a service for a large number of people in the area, but planning permission was denied.

Mr. Geoffrey Clifton-Brown (Cotswold)

rose—

Mr. Baldry

I am not going to give way. I have been waiting since 1.30 pm and I have been speaking for only 15 minutes.

The Government's policies on diversification will come to nought if they cannot encourage planners to be more sympathetic.

I am conscious that a number of my hon. Friends have also been waiting for a long time and wish to speak, so I shall come to my final point. Several farmers in my constituency are concerned about the IACS cheques. Debates on agriculture are always partly in code, and I apologise for that, but the Minister will understand what I am talking about. The issue is incredibly important for the cash flow of cereal farmers. They usually receive their IACS cheque at the end of November, but there are concerns that they will not receive it until March of the following year. That will disrupt their cash flow considerably. I hope that the Minister will assure that House that the situation will not change.

While it is clearly good to make form-filling easier by taking advantage of computerisation and the internet, a large number of farmers do not have computers. It would be greatly resented if an increase in computerisation was simply code for cutting the number of regional offices and the opportunities for farmers to have face-to-face contact with MAFF officials to help them with form-filling. We have heard repeatedly that if farmers get their IACS form wrong, the financial penalties are draconian. There is no appeal or remedy, only a total financial loss. The network of MAFF regional offices has been greatly respected and appreciated over the years.

These are grim times for UK agriculture. The Government have not made the progress that they should have done. We are not alone in saying that. A House of Commons Library research paper on the Agenda 2000 reforms says that the result was a disappointment to the British Government and the dairy industry. There is no sign that the EU is willing to abolish dairy quotas. Even the existing commitments are worth little, since there is ample scope for change of mind before 2005.

The Minister is always courteous and always comes with soft words, but farmers are interested in what his actions mean. They want money in the bank and financial support for the farming community during the greatest crisis for agriculture in living memory. The farming industry is looking to the Government to give a positive lead and real assistance. If they cannot do that, the 15,000 jobs that may be lost in agriculture this year will be nothing compared with the likely job losses in years to come.

5.34 pm

Mr. Gareth Thomas (Clwyd, West)

This debate has been interesting for a variety of reasons, not least because of the bout of in-fighting that broke out on the Opposition Benches following the speech of the hon. Member for Ludlow (Mr. Gill).

I might not be quite as much of an Euro-enthusiast as my hon. Friend the Member for Harlow (Mr. Rammell), but I think it fair to say that most farmers in the United Kingdom are realistic, and they know that their future, and the future of the UK, depends on our continuing to be a member of the European Union. However, there is a great deal of frustration that institutions in Europe, with which this Government and others have to deal positively and robustly, are not always seen to be open and accountable regarding the needs of British agriculture. Surely there is a need for a lighter touch as far as European regulations are concerned. I say that not from a Euro-sceptic but from a realistic point of view.

A number of right hon. and hon. Members have sought to catch your eye, Mr. Deputy Speaker, so my contribution will be short. I welcome the outcome of the recent agricultural summit. The package has been welcomed by, among others, the president of the National Farmers Union, who described it as going a long way and giving a clear signal that the Government believe that British agriculture has a crucial role. The package has also received a welcome among my constituents, many of whom are involved in farming. Although times continue to be extremely difficult for fanners, things are improving somewhat.

This is a Government who have listened to farmers. The aid packages alone that have been available during the Government's time in office, which amount to £1 billion in extra spending, are testimony to the fact that Labour's claim to be the genuine party of farmers is correct. I am particularly pleased that, so far during this Parliament, the Government have put into hill farming subsidies to the value of £700 million.

The action plan is to be welcomed. The removal of so many of the regulations that have been an irritation to farmers, and a disproportionate cost, is to be welcomed. I am particularly glad that the Government have committed themselves to retaining hill farming subsidies at the increased level for the next year.

I wish to concentrate on three issues—the milk sector, modulation, and the need for a long-term strategy, including the role of the Treasury and other Departments in delivering that strategy. Although livestock farming predominates in my constituency—the vast majority of my constituency is within the less-favoured area—dairy farming in the Vale of Clwyd has none the less been an important industry. Clearly, dairy farmers are in an almost unsustainable position. The figures demonstrate beyond peradventure that the costs of production are becoming higher than the price realised on the market. I agree with my hon. Friend the Member for Stroud (Mr. Drew) that many producers are using the intervention milk price equivalent, which is no more than a floor, as approximating to the price that farmers should expect at farm gates.

It is a vicious circle, and it is difficult to see a way out. More liquid milk is going on the market because more imported processed products are coming in owing to the uncompetitive position of the pound in relation to the euro. It is a vicious circle, because it means that farmers are getting less for the liquid milk. As one farmer told me recently, "You can't stop milking. You can't put the milk back in the cow." It is, of course, a perishable product, and it is true that many processors are taking advantage of the situation. Does my right hon. Friend the Minister of State accept that there continues to be enormous frustration and indignation that processors are exploiting a bad situation? I ask her to take up that matter when she replies. The report of the Office of Fair Trading will soon be forthcoming, and I hope that we shall see some Government action to deal with what are perceived to be the unfair practices of supermarkets and larger processing conglomerates. Producers must get a fair price for their product.

Farmers in my constituency and in other parts of Wales are getting out of dairy because they cannot make a living. They are going into sheep. However, that in turn is depressing the market for lamb. Perhaps that demonstrates how interrelated these problems are and how essential it is to develop a strategy.

The strong pound is undoubtedly having a deleterious effect on farming, as on manufacturing industry. There is the welcome news today that the pound has dropped substantially against the euro. It is to be hoped that that trend will continue.

I accept that there is little that the Government can do in terms of the macro-economic position, but surely we must have a strategy that enables producers to form co-operatives and to add value to their products so as to compete and make their product viable. That is a role for the common agricultural policy and for the Government and devolved bodies.

Milk and milk products need to be promoted more vigorously. I am not quite up to date with the Government's position on free school milk, but I understand that the Americans have done much work on promoting milk in their schools. They take the view that, for every dollar spent on promotion, they get back $4 in extra sales. Will my right hon. Friend the Minister of State deal with the issue? It seems that there would be a healthy demand for milk if the product were served and marketed in an attractive manner. I do not mean supplying it in lukewarm, tatty plastic bottles on school playgrounds.

In principle, modulation is to be welcomed, but many farmers in my constituency—I am sure that this applies to small farmers especially—are perturbed that it has been applied across the board and that everyone is affected by it. However, the recycling effect—the money that comes back—will apply to only a few, under the so-called "horizontal measures" under the CAP. It is not possible for everyone to go organic or to diversify, especially for those who are at a pretty high altitude in the Welsh hills. Will the Government reconsider the position?

Surely the Treasury has a responsibility. I do not believe that it is solely a European responsibility to provide extra funding to enable the industry to restructure. I am particularly interested to know the Government's view on this issue. The French use a sophisticated support method, which involves their social security system and other organs of Government, to prevent rural depopulation. The Treasury has a role in helping to cover the additional costs of administering the date-based export scheme and tagging. The Treasury should not absolve itself of responsibility simply because we are dealing with agriculture and the CAP is predominant when it comes to making policy.

The Ministry of Defence also has a responsibility when it comes to sourcing British lamb products. Some 90 per cent. of lamb consumed by our military forces comes from outside the UK, which causes great alarm and anger among hill farmers, particularly in Wales. The Ministry should redress that problem.

A long-term strategy for farmers is essential. They need to know not just how they will survive until next year, but how they and the whole industry will develop over the next 20 years. I am confident that the Government are adopting the right policies and can claim to be the genuine party of farming.

5.46 pm

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy)

The outcome of the negotiations held during the Berlin summit was not as radical as the original proposals. A 20 per cent. cut in support prices for cereals had been suggested, but the agreed cut was 15 per cent. in two steps. For beef, it was proposed that there should be a 30 per cent. reduction, and the final reduction was 20 per cent. Although a reduction of 15 per cent. was accepted for cereals, it will take place five years later than planned.

As a result, the European Union will appear more protectionist at the start of trade talks, which will raise doubts about its ability to meet its commitments on market access and subsidised exports. The reforms will not placate critics of the common agricultural policy inside or outside the EU. Franz Fischler, the European Commissioner, has emphasised the importance of what the Commission calls the European model of agriculture. He describes a model based on competitive, multifunctional and sustainable agriculture throughout the EU. It is, he says, highly diversified…and supports and safeguards our unique countryside and a stable environment. The model is supposed to produce renewables, provide environmental services, protect the countryside, maintain the vitality of rural areas and respond to social expectations concerning the origin and traceability of food, ecology and ethical issues such as animal welfare. That is the strategy that is supposed to protect, or even enlarge, the so-called "green box" in the face of continuing attacks on CAP market prices.

By increasing the proportion of the agricultural fund allocated to co-financed measures, the EU is limiting its potential future liabilities from enlargement. However, because of a lack of clear opinion on what further reforms will occur—particularly as a result of enlargement—there is great uncertainty and worry among farmers in Britain. I agree entirely with the interesting and well-researched speech made by the hon. Member for South-East Cornwall (Mr. Breed). I had intended to speak on retirement and new entrants, but need not do so as I cannot add to what he said.

By and large, the farming industry is, as the hon. Member for Clwyd, West (Mr. Thomas) said, opposed to modulation—at least as it is currently framed. In principle, no one argues against modulation, but, according to the discussions that I have had with unions and individuals, it is being canvassed in a way that is totally unacceptable. It is suggested that there will be a 2.5 per cent. cut in grant in the first year, rising to 4.5 per cent. in 2006–07. The Minister of Agriculture, Fisheries and Food said that the Treasury is then supposed to contribute £1 for every £1 modulated, so long as the Treasury agrees. We in Wales well know about pound-for-pound match funding—the Chancellor is pretty reticent about committing himself to it. After about six years, an extra £78 million for rural development will be available for Wales alone—if the match funding is provided.

I am sure that modulation is being introduced for the best possible reasons, but the formula that has been chosen is disappointing. It appears to hit those most in need. It clearly needs to be better thought out. The industry would benefit from a tapered formula, whereby larger farms are top-sliced most and smaller family farms and those with high labour units receive more subsidy. That would help to level out the industry. A formula similar to that operates in France, where the size of the farm and—importantly—the number of workers are taken into account. The money is then focused on the poorer areas that are most in need. If such thinking were employed, it would be extremely helpful to many farmers in Wales.

However, the caveat about the money from the Treasury remains. For example, objective 1 areas in Wales are entitled to 75 per cent. assistance, but we understand that the Chancellor is willing to give only 50 per cent. If we do not receive sufficient backing from the Treasury, there will be a problem.

There is general consensus that the agriculture industry is in crisis—as is the rural economy. To be fair, fanning unions, politicians on all sides and—more important—farmers themselves welcomed the Government's aid package, announced after the farming summit at the end of March. However, that provided only a breathing space for farmers; it does not tackle the crux of the problem. The Government have tackled the symptoms and not the disease. One part of the disease is the strength of the pound.

The current CAP arrangements are scheduled to run until 2006. They do not satisfy farmers, land managers, consumers, environmentalists or any other rural interests. The Berlin Agenda 2000 agreement does not adequately provide for enlargement of the EU or for the EU' s current and prospective World Trade Organisation commitments on agriculture. The CAP must evolve from a commodity-based production subsidy to a more integrated rural policy. Such a policy is needed to promote viable, stable and competitive agriculture. The industry needs a period of stability—that has been missing for many years.

I am glad that the Government were recently willing to concede the allocation of funds for agri-monetary compensation, because there are, of course, serious economic imbalances caused by the high value of the pound against the euro and so on. However, the £66 million set aside for that compensation—as an attempt to level the differences between the pound and the euro—is not enough. Farmers unions were calling for £215 million.

However, throwing money at the problem is not good enough, as I shall explain. The amount set aside is tiny compared with the estimated £3 billion—according to The Times—that the industry has lost because of the strength of the pound. That £66 million offers a breathing space—a slight relief, but nothing more.

During the farming summit, the Prime Minister admitted that a start had been made. He said that what we are doing here today is a start. It will not end the painful restructuring of the industry that has seen so much real hardship. But it will offer solutions to problems; it will set out a vision; and it will answer some of the key concerns.

I regret that that vision has yet to become apparent. We need an integrated rural strategy, with a healthy agriculture industry at its core. Yes, we need the creation of work, diversification, the relaxation of planning regulations, sustainable transport and so on. We need a vision that comes in an all-embracing package, but it must have a strong agriculture industry at its heart.

Something will have to be done about the artificially high level of sterling. The hon. Member for Clwyd, West referred to a change of attitude. That blip might be of some assistance, but a more determined effort must be made.

The discussions on the Berlin Agenda 2000 did not give enough consideration to enlargement. There is much uncertainty about enlargement, the role of the WTO, the future of the CAP and whether the industry is sustainable. Of course, the future of our rural communities is also uncertain. We need to consider a truly integrated rural policy. The Government must press the European Union to redirect the direct crop and livestock payments towards rural development regulation.

Further CAP reform will expose agriculture to the volatility of international markets. Every farmer to whom I speak says, "I want to go out into the marketplace; I don't want to be paid for staying at home doing nothing; I want to be back in the market so that I can sell my produce for what it's really worth." Farmers in Britain are not afraid of competition, but, because of the way in which the CAP has been structured, it will not come overnight. It certainly will not come in isolation from the other necessary reforms for rural areas. Ultimately, however, there must be a safety net to even out the extremities of farming incomes. We have heard much about incomes today, so I will not pursue that point. However, it is clear that there is a crisis.

One part of the disease is the strength of the pound, but we must remove the impediments to rural development that are embedded in the current planning and tax systems. Those problems must be high on the Government's agenda. I was pleased to hear the Minister for the Environment say that they will be highlighted in the forthcoming White Paper—let us hope so and that the White Paper appears soon. I suggested to the right hon. Gentleman on Tuesday that planning legislation should be relaxed to enable small and medium-sized enterprises to develop sustainably in rural areas and to assist in the overall pattern of rural regeneration. I was pleased with his reply and I hope that it is a precursor to a positive White Paper on which we can all build. The small and medium-sized enterprise sector needs assistance. There is no reason on earth why it cannot flower in rural areas and become part of the rural regeneration scene.

Yesterday, the Prime Minister acknowledged that the strength of sterling was detrimental to manufacturing industry. Obviously, it has just as bad—and probably worse—effects on the farming industry. There is a consensus that farming must become more viable and, in some areas, diversification is the answer. However, in other areas, the answer is farms coming together and working as co-operatives.

I ask the Government to do something urgently about the value of the pound, and to draw down some pro tem relief from the substantial agri-monetary compensation scheme. Above all, will they please consider a better, strategic and overall view of rural regeneration? At the heart of all that is a healthy agricultural industry.

5.58 pm

Mr. John Hayes (South Holland and The Deepings)

The debate has been characterised by an acknowledgment on both sides of the Chamber of the nature and the severity of the crisis facing agriculture. To give the Government credit—it pains me to do so—the Cabinet Office report on rural Britain, which was published in February this year, acknowledges that agriculture, the countryside's most visible and most typical activity, is facing major problems and that many sectors and people within it are facing real crisis. There is no doubt about the severity of the crisis.

I am surprised, however, that the report does not address the issue of sparsity in the countryside and specifically does not accept the need—the Government show no sign of recognising this—to allow sparsity to be given greater significance when it comes to the allocation of Government grants and the provision of public services.

Not all the problems are of the Government's making. There is no question but that there are long-term structural problems in agriculture across Europe. Some sectors have over-supply—supply exceeds demand—and the beef sector springs to mind. There is unfair competition across Europe and most European countries are unwilling seriously to reform the CAP. Whenever CAP reform is mentioned, we seem to end up with the lowest common denominator or the option to which people are least hostile, rather than the most favoured or acceptable one.

There is no better example of that than Agenda 2000, which was heralded as a great change and significant improvement to the CAP structure, but ended as a fudge and muddle in which the Government are complicit. Agenda 2000 was supposed to bring about a shift from production-led subsidies in agriculture to environment-led payments, but did no such thing, so all the good intentions and exaggeration came to nothing. Amazingly, however, the Berlin summit watered down an already diluted package.

The decision to delay dairy reforms for two years has already been mentioned and was condemned by the Select Committee on Agriculture. Whatever the Minister says, the Select Committee described the decision as disappointing and a bad deal: one does not use such terms except in condemnation. Condemned by the Select Committee, the Berlin summit was an indictment of the Government's ability to argue Britain's case fairly, squarely and successfully in Europe.

The Minister made great play of the CAP's second pillar of rural development. However, there is no clarity about the shift from production-led subsidies to good environmental schemes and measures. Farmers have not been made aware of any comprehensible and enforceable schemes which they can embrace and which can make a seismic change for them.

Many Labour Members—not all—do not understand that farming is more than a business. It is a business, of course, subject to all the normal pressures, challenges and constraints on profitability and cost-effectiveness, but it is also something more, comprising the fabric of our nation and our national identity. Farmers have husbanded and conserved our landscape. Their asset or capital resource is our rural idyll. We must face up to and accept that, and all policy must be founded on that acceptance.

The Government are culpable of certain things, to which they must own up and for which they must take responsibility. One such matter was raised earlier, but I make no apology for amplifying points made about the hyping of aid packages offered to farmers. The first package last September gave nothing to poultry or pig farmers or the arable sector—that is relevant to my constituency, which is principally an arable farming area. The package promised not to impose more charges, but financial aid does not mean saying to someone, "Part of that aid is a charge that I am not going to make, as opposed to what I shall give you." Frankly, presenting an aid package in that way is disingenuous.

Promises were made and expectations raised. The substance, however, was less impressive than all the usual spin that preceded it. This March's package, once again, contained precious little for arable farmers. I do not begrudge hill farmers the support that they have had, as they deserve it. However, little was offered to the arable sector and nothing to cereal farmers facing cereal prices equivalent to those 25 years ago.

Imagine the plight of a tenant farmer. "Diversify," is the Prime Minister's response. Does he not understand that diversification is predicated on location—the type of soil or land that one is farming? One cannot grow any crop on any soil. I would have expected the Prime Minister to consider that before speaking in grand terms about diversification, and to ponder the insensitivity of his remark to tenant farmers who have very few options. I accept, however, that that was acknowledged by the hon. Member for South Derbyshire (Mr. Todd) in his most enlightened contribution to our debate.

The Government can also be indicted for their failure to address the retail problem, by which I mean the supermarkets. Farmers and farmers' leaders cannot say so because the supermarkets are their customers. However, it is an open secret that, time after time, supermarkets are unfair and unreasonable with producers. They frequently cheat consumers as well, and have created undiscerning consumers who—with the greatest apologies to Oscar Wilde do not know the price or value of anything and do not even know where it comes from. I shall give a single example: potatoes. When Cornish potatoes and Lincolnshire new potatoes are available, the supermarket buyer's response is to stay out of the domestic market and buy Majorcan potatoes until such time as the British price falls to the point where it is uneconomic for British farmers to produce and sell their product. I could cite scores of similar cases.

Ministers have held long discussions with the British Retail Consortium and Lord Sainsbury is a member of the Government, but they have delivered precious little in terms of obliging supermarkets to treat producers fairly. I refer to the Adjournment debate of 11 March last year, introduced by my hon. Friend the Member for North Norfolk (Mr. Prior)—who I know came to the Chamber when he heard that I was speaking. He described how supermarkets frequently broke the links between local producer, local retailer and local consumer. He described the work of Lady Caroline Cranbrook, whose study found that local shops in Suffolk often bought from local producers, but that large supermarkets frequently did not. The Government must address that problem.

There is no long-term plan for agriculture: we do not know how many producers the Government want there to be in five or 10 years' time; how much production they want; or what relationship they envisage existing between those two elements. The Government have produced no credible business plan for agriculture, and because what plans have been drawn up are not communicated clearly and fairly to farmers, they are left guessing, not knowing what the Government are going to say or do next. The Government give the impression of merely reacting to every new imperative, usually emanating from Europe.

My hon. Friend the Member for Eddisbury (Mr. O'Brien) levelled the next indictment against the Government when he introduced a private Member's Bill that would have enforced proper labelling and obliged retailers to show both country of origin and method of production. It does the Minister of State no credit that she talked out that Bill, which would have provided encouragement to our producers and farmers, clarity to our retailers and satisfaction to our consumers.

The Government are also guilty of frightening rural Britain. The people of rural Britain perceive in the Government a lack of empathy and sympathy with their needs, their aspirations, their customs and their way of life. That might just be a case of had public relations management—the Government are not particularly good at PR and they have been getting worse lately—but it is what the people of rural Britain believe, what they feel in their heart.

That brings me naturally to my conclusion. There has always been a romantic thread running through rural life, inspiring a wealth of literature by writers such as Wordsworth, Coleridge, Hardy and Surtees. However, rural life is also hard, and making a living in the British countryside is tough. People in rural Britain, especially farmers, are dependent on variables that are outside their control, especially the weather. They can live with all that chance and all that risk, but they cannot live with an unsympathetic Government and a meddling bureaucracy in Europe.

The Government's lack of sympathy might result from the fact that their perceptions and character are essentially metropolitan. Perhaps they do not support rural Britain because rural Britain cares about the collective wisdom of ages and about time-honoured habit and custom. However, in the rich earth of my constituency, my fens, my England, there is indeed a richer dust concealed: the dust of generations of farmers, who have built communities, provided gainful employment and, as custodians of our countryside, husbanded our landscape. We owe them a debt, and when that debt is called in, we must not be found wanting.

6.9 pm

Dr. Gavin Strang (Edinburgh, East and Musselburgh)

I am happy to follow the hon. Member for South Holland and The Deepings (Mr. Hayes), even though time does not allow me to respond as fully as I should have liked to some of the points he made, a few of which were over the top. However, I agree with him that farming is more than a business. It is vital to rural communities throughout our country; more than that, it is vital to British society, to the British economy and to the quality of our lives and our countryside. It is no accident that, even before we were in the common agricultural policy—of course, all the major decisions are now made at European level—successive Governments of both parties recognised the need to intervene and support British agriculture.

To his credit, my right hon. Friend the Minister of Agriculture, Fisheries and Food acknowledged the depth of the crisis, which is now in its third year. He was right in his analysis of the reasons, as the whole House will acknowledge. First, there is the background of low prices for agricultural commodities worldwide. Secondly, there is the severe disparity between the strength of sterling and the weakness of the euro, which is a double whammy for British agriculture. The Prime Minister rightly acknowledged this week that the situation damages manufacturing industry. It damages agriculture, too, because it makes imports cheap and our exports expensive, but there is an additional factor in that it reduces the amount that farmers get in subsidies.

Thirdly, we have the aftermath of the BSE crisis, which we will be able to discuss when the report comes out. When I had the privilege, as a junior Agriculture Minister, of representing the United Kingdom during the British presidency in the late 1970s, I successfully argued for a derogation on an animal health matter on the grounds that we had higher animal health standards than the rest of the European Union. We were able to exploit the fact that we were separate from the continent and had a reputation for having the best livestock in Europe. I hope that our objective will be to re-establish that. It will take time, as our reputation has been severely damaged by BSE, but we should aim to be able to exploit once again the fact that we are an island people.

My right hon. Friend rightly emphasised what is called the rural pillar. There is probably consensus across the House on the general shift of money into supporting the development of the rural economy in its broadest sense. One of the key objectives is to have thriving rural communities. We must not lose sight of the crucial importance of agricultural production. The vast bulk of that production is food but, as we all know, the land can also contribute to our energy needs, and that relatively small sector is likely to grow.

Production is vital. The hon. Member for South Holland and The Deepings can visit a coleslaw manufacturer in his constituency providing 100 or 200 jobs, all of which depend on the raw material that comes from the land in Lincolnshire. Agriculture's importance to the economy, because of the importance of food, should never be undervalued.

We now include organic farming in the rural pillar budget. I congratulate the Government on the additional support that they have given to organic farming, which I am sure hon. Members on both sides of the House will welcome. I address a word of caution to the strong advocates of green policies. Organic farmers have to get the bulk of their income from the market, and the premium that their produce commands over conventionally produced food is vital. It is much more important than the subsidy, which after all is only temporary.

If organic production is expanded too fast, especially through artificial means, the danger is that the premium will be eroded, leading to a regression in organic production. It is true that we import a lot of organic products at present, so there is scope for increasing UK production, but some of the figures that are bandied about—including in an early-day motion that I saw a few months ago—make me think that those with ecological concerns should bear that danger in mind.

I want to pick up a point raised by my hon. Friend the Member for Clwyd, West (Mr. Thomas) and the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd). I refer to the word "modulation". I do not know whether we have Mr. Fischler to blame, but it depresses me that the word has been used to apply to the environmental objectives. I support those objectives, but "modulation" is a technical word. In the development of the common agricultural policy, all the arguments—not just during the early years of the present Commissioner, but under previous Commissioners—were about whether we should limit the amount of subsidy going into large agribusinesses—very large farms.

The proposals for modulation that were put forward in those years were never acceptable to the UK, because a small farm in the UK would be a relatively large farm in some continental countries. However, in my view, that was not an argument for abandoning the policy of modulation. We should consider whether it has a part to play, and recognise that it has been our policy in the Labour party for some years to support as many people on the land as practicable—farmers, tenant farmers, owner-occupier farmers and farm workers.

We are making a value judgment. We are saying on social grounds that we want to encourage local farming. We prefer the workers and the farmers to live in the local communities, rather than our land to be farmed by some huge landholding company based in London, with the contractors coming in from 50 miles away and disappearing after a couple of days on the land. I hope that we will not lose the argument.

Large sums of money are going into British agriculture, and there is a case for saying that the issue of modulation, as it was, should not be removed from the agenda. I put it no more strongly than that. A change in the use of the word has no doubt occurred, but the policy and the question whether we should continue to treat large farmers in the same way as small farmers for the purpose of subsidies should be brought back on to the agenda.

With regard to farm workers, reviews are being carried out by the agricultural wages boards. The review by the Scottish Agricultural Wages Board is the responsibility of the Scottish Executive and the Scottish Parliament. Its consultation period has ended before that for England and Wales, but I presume that there is some co-operation, as I understand that both administrations—the Ministry of Agriculture, Fisheries and Food and the Scottish Executive—are using sets of consultants to examine the matter further.

I strongly urge that we should not miss the opportunity provided by the review. We must keep the Agricultural Wages Board. It is vital in terms of skills, and there is no case for arguing that since the introduction of the minimum wage, the board is no longer needed. That was never our policy in opposition. Indeed, I remember campaigning with the Liberal party against a proposal by the Conservative Government to abandon the agricultural wages boards.

I trust that we will maintain the boards, and give careful consideration to suggestions that will be made by the Transport and General Workers Union on behalf of the agricultural workers about the possible scope for extending the Agricultural Wages Board coverage to other groups of workers in the countryside.

Finally—I know that several hon. Members still hope to speak in the debate—with regard to the development of the CAP, we must all recognise that although some useful changes have been made, the challenge remains as to how we reform the CAP to accommodate enlargement. I remember the challenge being posed by Baroness Thatcher when she was Prime Minister, and it has not yet been met.

There is one option that we should not pursue, and from which it seems the EU is now moving away. I hope that it is. It had been suggested that producers in the old European Union, in countries such as Britain, France and Germany, should be eligible for subsidies and investments in their enterprise that would not be available to the new entrants. I do not believe that that is sustainable. It should not be possible in the EU for a large farmer in France, for example, to get a grant for investment while a smaller farmer in Poland was denied such a grant. I hope that that will not be part of the package.

In meeting the challenge, we must recognise the fundamental importance of sustaining our own industry. It is vital to this country. We need a level playing field as regards competition. We know that in some European countries, charges are paid that were paid in the past by producers in this country. The Government have gone some way towards correcting that, against the background of the present crisis.

In the last century, British agriculture was a huge success story. It is still a huge success story, although it is going through a terrible period of recession, and I am sure no one would underestimate the hardship and suffering experienced by some families. We must maintain our vision: we must continue to see British agriculture as a key industry throughout the century. We, as a Parliament and as a country, must maintain that vision throughout this century.

6.20 pm

Mr. Owen Paterson (North Shropshire)

The common agricultural policy is an extraordinary invention. It costs European citizens £30 billion a year. The idea was to keep the rural population on the land, but the CAP has failed to do that. It has also failed to deliver cheap food: it costs each family in this country £20 a week, or £1,000 a year. In many ways, it is a parody of central planning in the Soviet Union. It failed there, and it is failing in the European Union today. Its time has passed. Stifling bureaucracies did not work in the Soviet Union, and Britain's farms and food industries must be released from their stranglehold.

What is bizarre is the fact that there is much common ground. In our European Standing Committee debates, the Government often agree with us. Recently, we had a particularly bizarre debate about flax. The subsidies had rocketed from £45 million to £96 million between 1995 and 1999. It is a huge scandal: 80 per cent. of Spanish flax was burnt in strange barn fires. The Minister agreed, but she could not do anything about it. We are always in the minority in negotiations.

The feeling in my part of the country is that the CAP is now skewed against Britain's farmers. My milk producers lost out badly in the milk negotiations last year: Ireland was given an extra 150,000 tonnes, although it is more than self-sufficient in milk production. My farmers lost out when the calf scheme ended. Why are they not allowed to export their calves to Europe? Because the Government flunked negotiations on the reopening of beef exports. French farmers get £150 for a good bull calf. Most of the calves in my constituency go to the kennels for nothing; the best go for £10 or £15.

There is inequity in regulation. The pig industry, for instance, is disappearing from this country. According to a report in the Farmers Guardian last year, 80 per cent. of Dutch pig farmers did not respect Dutch welfare regulations, and 20 per cent. did not know of their existence. That is not being addressed, and we are about to make exactly the same mistake in regard to the eggs directive. This week I spoke to the deputy president of the National Farmers Union, Tim Bennett. He said: If we do not get the directive changed, it will be disastrous for the poultry industry.

In this country, we are establishing standards that are way above those in any neighbouring countries, and way above those of countries outside the European Union or in America. There are farmers in my constituency with a million hens, and possibly 120 employees, trying to compete with plants in the United States that have 13 million hens and nine employees.

Let me say something about enlargement. I feel that we have a moral obligation to bring the eastern countries fully into the western trading system, but it is unthinkable that they should be brought into the CAP. I should be interested if the Minister could give us a clue about what is going on in the negotiations. I recently talked to ambassadors from some of those countries, who said that they were looking for derogations banning non-citizens from buying agricultural land for 20 years. That is a non-starter. We need to get rid of the CAP: those countries do not want it, because export-subsidised agricultural products are destroying their rural industries.

Not long ago, the Select Committee on Agriculture went to Washington. The line in America was "If you export-subsidise your products, you create a problem in a third market, and that gives us a big problem in America. If you want to protect your small family farms, we respect the environmental output of agriculture in Europe, and we realise that tourism represents a major output." I understood that payments for that purpose would be acceptable, and I found that very encouraging; but we must eradicate the CAP to get there. We must look to the green box, as it is called, and consider payments for the environment and tourism.

If we had been more radical, we could have included animal welfare in the negotiations. Animal welfare features prominently in public opinion, especially in this country and increasingly in Europe. We have to respect that. However, it is a non-starter in the United States. To use a popular expression, it is not on the screen. The Government must acknowledge that by unilaterally pushing up animal welfare standards—I have already cited the examples of pigs and poultry—we massively reduce the competitiveness of United Kingdom producers. If we do that, we must unilaterally take measures to counter the lack of competitiveness.

Why did the Minister of State talk out the labelling measure that my hon. Friend the Member for Eddisbury (Mr. O'Brien) promoted? It was a sensible measure, which provided for unilateral action in this country to counter the unilateral action that put our producers in an uncompetitive position.

I am seriously worried that the Government have not taken into account the impact of proposals to establish a European food authority, which was debated in European Standing Committee C. Document No. (1999 719 final) proposes setting up a new food authority. The 84 action points would overrule much current UK legislation on agriculture, food production and local government. Yet when my right hon. Friend the Member for Fylde (Mr. Jack) asked the Under-Secretary of State for Health about the treaty basis for the proposals and when I asked her some basic questions, she could not answer.

It is clear that health is of greater public concern in Europe. The Food and Drug Administration in America is respected, partly because it is so transparent. Any incident in the United States is on the internet. In this country, there was BSE; in France, there was the blood scandal, and its Prime Minister, Laurent Fabius, nearly went to jail; in Belgium, there was dioxin. Clearly, there is public anxiety about food safety. However, the answer is not to set up huge new quangos.

The Food and Veterinary Office in Dublin has increased its numbers from 150 to 600. It can use the new fast-track method, by which the UK was fined £200 million for breaching the fine habitats directive. Direction, interference and regulation of the food industry will not be run from here by the new Food Standards Agency, but by DGXXIV in Brussels.

I wish to consider the problem of unregulated, unaccountable quangos. I am especially worried that, within a month of the establishment of the Food Standards Agency, when all-party colleagues on the Select Committee and I proposed that it should not be the executive agency running the Meat Hygiene Service and the policing agency, a scandal has occurred in Eardisley in the constituency of the hon. Member for Leominster (Mr. Temple-Morris). I have given him notice of the problem.

It is inconceivable that one of our few profitable abattoirs, which produced premium products, has been shut down. It took 350,000 lambs a year from all around the Welsh borders and received high health and safety scores for the past five years. Sixteen different vets inspected it. One new vet joined the Meat Hygiene Service and it closed down. That is a major public scandal. I have written to the Minister, his colleague the Secretary of State for Health and Professor Sir John Krebs, who is head of the Food Standards Agency. I should like an assurance that there will be a full, independent, public tribunal and that all evidence and conclusions will be published on the internet.

Mr. Livsey

I fully support the hon. Gentleman's comments. The abattoir is on the boundary of my constituency. Its closure has hit my livestock farmers badly. An investigation must take place, and its findings must be published soon.

Mr. Paterson

I endorse those comments and thank the hon. Gentleman for his support.

Central planning for food production has failed. We must not allow further regulation from distant quangos in Brussels to interfere and overregulate our food processing industries. The food processors must set their quality standards. They should be judged on their results. There should not be dirigiste interference by officials to impose new levels of European regulation.

6.30 pm

Mr. James Paice (South-East Cambridgeshire)

As is usual in such debates, I must remind the House of my interest, as declared in the Register of Members' Interests.

The hon. Member for Harlow (Mr. Rammell), who is not present, was sad that few Members have attended the debate, and I share that view. I am especially concerned that the Labour party, which claims to represent rural areas and has two and a half times as many Members as my party, managed to find only five speakers.

Mr. Dawson

Will the hon. Gentleman give way? Mr. Paice: No, but I may do so in a moment.

Nevertheless, those who spoke made good points; we were not saddled with time-filling speeches made by Members brought to the Chamber by Government Whips. I make it absolutely clear that we welcome the action plan that was produced at the summit and the principle of the rural development initiative. The Government have done much to help the industry, and we support that, but we are concerned that they have added more problems to those that are not their responsibility, and introduced delays. When the Minister came to office almost two years ago, he set out to endear himself to farmers. He put a metaphorical arm round their shoulders and expressed his sympathy. He has done that well, but his tenure has been marked by dither and delay: the four-month delay in writing to public purchasers, to which my hon. Friend the Member for South Suffolk (Mr. Yeo) referred, and the several weeks' delay in banning the import of Belgian products during the dioxin scare—long after other countries had banned it—with the result that the United Kingdom market was flooded with Belgian chicken meat and the price collapsed.

The action plan for farming contains many sensible measures, but they are all long overdue, despite having been demanded by the industry for some time. However, the Minister had the gall to accuse us of not making proposals. We and many others had been calling for the pig industry restructuring proposals for months. After two years of loss making, the Minister waited until the market improved before taking action. He will remove the over-30-months limit; we called for that a year ago. He will change groundwater charges and the charges imposed under the integrated pollution prevention and control directive; we called for that a year ago. The BSE measures are to be reviewed, but everyone called for the review of meat inspection charges. Even the Minister said: In dealing with those charges, we do not intend to put smaller operations—particularly those that specialise in high-quality product—out of business. My aim is that the study should be completed quickly, and I intend to take a close interest in its conclusions.—[Official Report, 21 April 1999; Vol. 329, c. 993.] Nothing happened until 30 March 2000.

We called for rate relief on horse establishments two years ago, and we also called for a risk-based approach to meat hygiene. We have been calling for many other changes for some time.

Mr. Dawson

Will the hon. Gentleman give way?

Mr. Paice

Not for a moment.

Mr. Dawson

Will the hon. Gentleman give way?

Mr. Paice

I have just said that I will not.

We welcome what has been done, but regret that it has taken so long for the Minister to act. We also welcome the comments on deregulation that he made in response to my right hon. Friend the Member for Skipton and Ripon (Mr. Curry), but they do not sit well with what has been taking place. On deregulation, the Minister once said: I intend to have the whole issue re-examined by specialist advisers.—[Official Report, 4 November 1998; Vol. 318, c. 952.] However, he did not even announce the membership of the working groups until 11 October 1999–11 months later. That is a catalogue of complacency. Out there in the real world, farmers are losing money and going out of business. Farm workers are losing their jobs, many of which might have been saved if the right hon. Gentleman had acted more quickly.

Every time the hon. Member for South Derbyshire (Mr. Todd) speaks, I become even more concerned that he thinks of himself as a Labour Member. He always speaks on such matters with common sense and made several sensible points. [Interruption.] I do not want to destroy his career, but I think that he is doing it himself anyway.

My right hon. Friend the Member for Skipton and Ripon referred to the importance of ensuring that our regulations, our charging systems and all the burdens that we put on our farmers are no greater than those for the farmers with whom they must compete. That is critical.

My hon. Friend the Member for Ludlow (Mr. Gill), in what I suppose I could call a robust oration, referred to two things. I shall respond briefly to the question that he asked. I am sure that my answer will not satisfy him, but I shall try. First, he raised the issue of beef labelling. I agree with him. I hope that the Minister will comment on the business of having to state on the label whether the beef has come from a steer, a bull or a heifer. That is irrelevant.

As for whether the Conservative Front-Bench team supports collectivism—as my hon. Friend, I think, knows, we do not. The CAP has many faults, but to describe it as collectivism is an exaggeration. It has provided opportunity for entrepreneurship and innovation. Many farms are a testament to that. I do not think that either of those are features of collectivism.

My hon. Friend the Member for South Holland and The Deepings (Mr. Hayes) wanted a longer-term strategy. My hon. Friend the Member for North Shropshire (Mr. Paterson) highlighted the fact that the CAP is increasing in cost to the taxpayer and to the consumer, with a decrease in income to the farmer.

Many Members have commented, properly, that unarguably the biggest problem is the strength of sterling versus the euro. The Government cannot wring their hands and pass the buck. The scale of the gap between the pound and the euro is a feature not only of the problems of the euro—although I readily accept that that is a significant factor—but of Government economic policy.

When the Chancellor of the Exchequer gave the Monetary Policy Committee control over interest rates to control inflation, he thought that he had shuffled off responsibility for inflation, but he had not, because increasing public expenditure, increasing fuel taxes and halving the savings ratio are all inflationary. The committee has had to counter that with higher interest rates than would otherwise be necessary.

As for the MAFF regional centres, I welcome again the Minister's recognition of the need for an interface with farmers, but the PricewaterhouseCoopers report is causing widespread concern not only among his own employees in those centres, but among farmers. Last week, I sat in the Cambridge waiting room for an hour or so and spoke to many farmers. Even I was surprised how far some of them had come for advice and help and to have their forms checked. Some had driven for more than two hours to get there. That interface is critical.

The Minister will say, no doubt, that in time it can all be done through electronic communication. No doubt it will be, but the pilot schemes so far have not exactly been a raging success. I understand that although farmers send the forms in by e-mail, they have to follow them on foot or in a car to sign them.

My hon. Friend the Member for South Suffolk (Mr. Yeo) referred to arable farming. The arable sector is disappointed that there is nothing for arable farmers in the latest package. Wheat and barley prices for the coming harvest are likely to be of the order of £60 a tonne—close to half the price only seven or eight years ago. On top of that, English arable farmers face a reduction in their payments.

Whereas the Agenda 2000 reform, about which we have heard so much, increased the payment per hectare by 25 euros for the coming year, our farmers will see a reduction of some £8 per hectare at today's exchange rates. That is without taking into account the 2.5 per cent. cut to fund the rural development programme.

Will the Minister confirm that there will be a further payment of £11.12 per hectare of cereals this autumn on the back of the 1999 claim? Will she confirm whether there will be any compensation for the reduction in this year's payments? Will she respond to the point that was made by my hon. Friend the Member for Banbury (Mr. Baldry) about cash flow?

The Minister of Agriculture, Fisheries and Food referred to sugar. I was going to quote something that he has said on previous occasions, but I need not bother because he reiterated his policy today, which is that he thinks that the sugar price should be cut. I am glad that he has acknowledged that, and that I got his words right. However, I do not see his logic, which seemed to be that because all other arable prices have fallen, so should that of sugar. It seems odd that the one lifeline that exists for countless arable farmers should be taken from them.

Reference was made to the pesticide tax. I am glad that the Prime Minister made his statement at the annual general meeting of the NFU, but we wait to see whether the Department of the Environment, Transport and the Regions will accept the voluntary scheme put forward by the industry. I hope and trust—given his previous pronouncements—that the Minister is supporting the industry.

Mr. Nick Brown

indicated assent.

Mr. Paice

I am glad that the right hon. Gentleman acknowledges that.

Mention has been made of an early retirement scheme. The Government said no to that because of the "dead weight" issue. However, I believe—as do others on both sides of the House—that there is a case for such a scheme. The past two or three years have deprived farmers, particularly tenant farmers, of their capital. Milk quota is now 17p to 19p a litre to buy or sell. It was almost double that a year ago. The capital value of their stock has gone, so many small tenant dairy farmers have had their pension fund halved. Ireland has developed an innovative scheme, and I commend it—or something similar—to the Minister.

Long-term reform of the CAP is critical. There is no doubt about that, and there is not a great deal of difference across the House on the need for it. Last year's reform was weak. I believe that the biggest and most significant reform was the 1992 MacSharry reform, which shifted the concept from market support to direct aid. More reform is essential for enlargement, and I am concerned by stories that the enlargement talks are beginning to founder on that point.

As my hon. Friend the Member for South Suffolk said, even the United States—which presents itself as a Messiah of the free market—has had to put billions of dollars into agriculture. The Organisation for Economic Co-operation and Development has figures on the producer support estimate—the means of measuring public support. In Europe, it is considered to be about £18 a week for a family of four. In the United States, it is considered to be £16 or £17. That must be borne in mind in negotiations, and it does not even take into account the burden of the environmental and welfare controls that we place on our farms.

Without support for farming in the UK, there would still be farming; land would be farmed, but not in a way that the public would support. Good land would be farmed even more intensively, and poorer land would be farmed so extensively—the word "ranching" was used in the debate—that dereliction would develop, and the public would be very upset.

What matters is the form of support. We need to move from market support and abandon production controls that prevent farmers from expanding to compensate for falling prices. We need to make support transparent—not just the sums, but their purpose.

The previous Government developed the concept of environmentally sensitive areas—the first, and, I believe, still the largest step towards payment for environmental measures. We introduced the countryside stewardship scheme, and this Government implemented our arable stewardship scheme. There is no single form of support that is right for everyone. There must be a range of options, and the only common factor must be that they are clear in their intention, and designed for a purpose that the public will support.

Farmers do not want more subsidy. They do not like being dependent on the taxpayer, and they like being dependent on politicians even less. However, they expect a fair deal and an opportunity to compete on a level playing field, with the same regulations and obligations as others. If we in this House—for very good reasons, sometimes—place upon them regulations which are not being placed on their competitors, we have a moral duty to help to compensate for those extra costs.

This debate is about the future of British agriculture, as well as the future of the British landscape and countryside. We expect ever more environmental care from our farmers, and we impose more and more regulation on them.

In my travels, farmers across the country have asked me, "Do the Government really want us any more?" I do not try to answer that question, but say, "I don't know whether they do—you'll have to ask the Minister." Farmers believe that under this Government, they are dispensable. Despite the Minister's warm words, his actions have so far proved insufficient to provide real help. It is a matter not of applying a few sticking plasters, but of addressing long-term issues.

Three years ago, Labour told the electorate that things could only get better. Since then, as European Union figures show, farm incomes in the rest of Europe have decreased by less than 10 per cent., whereas in the United Kingdom they have decreased by 37 per cent. If that is what happens when things get better, goodness knows what would happen if Labour were trying to make them worse.

I do not pretend that any Government have a magic wand, and I realise that many of the issues facing agriculture are outside the Government's control, but many more issues than the Minister seems willing to admit are within the Government's control.

Farming is a part of the rural community—a critical part, not just an add-on. The places where people live and work are there because farmers created them and maintain them. They cannot be immune to changing markets or to moves to freer trade, but they can be helped in that change. That is a challenge that we believe we are best placed to meet. This debate has shown that the Government's response is entirely inadequate.

6.46 pm

The Minister of State, Ministry of Agriculture, Fisheries and Food (Ms Joyce Quin)

This has been a very worthwhile debate. It has certainly confirmed the opinion and recommendation of the European Scrutiny Committee that we should have a full-scale debate on the issue, despite the fact that, given the agreements that were made under Agenda 2000, European Union annual price-fixing no longer has the same impact. The Committee quite rightly pointed out that this debate would give us a chance to review changes in the common agricultural policy as a whole, and to review events and developments in our own farming industry and the follow-up to the Prime Minister's summit on 30 March, to which various hon. Members have referred.

The debate has been very thoughtful and has shown a depth of knowledge of agriculture and agriculture-related issues. It has also demonstrated considerable concern for the difficulties of constituents across the country.

For a while, I even thought that the hon. Member for South Suffolk (Mr. Yeo) was going to give us a calm, reasoned speech. Eventually, however, his over-the-top instincts overwhelmed him and proved impossible for him to resist. I should like to correct him on two of his comments. First, he certainly seemed to have forgotten that the previous agriculture debate—an all-day debate—was in Government time, and that, in the previous week, an agriculture debate was introduced by the Liberal Democrats. I remember that debate vividly, as it was my first outing at the Dispatch Box as an Agriculture Minister.

Secondly, the hon. Member for South Suffolk gave the impression that, at the National Farmers Union conference, the Leader of the Opposition was giving a more generous commitment on agri-monetary commitment than we were. However, the Leader of the Opposition was talking about using the savings from the sheep annual premium scheme resulting from currency changes, which amounted to £30 million. The agri-monetary payments that we announced at the summit amounted to £66 million.

Additionally, as my right hon. Friend the Minister of Agriculture, Fisheries and Food properly pointed out, since coming to office, we have paid about half a billion pounds in agri-monetary payments, despite the constraints to which hon. Members have referred arising from the priorities of public expenditure and the difficulties resulting from the Fontainebleau abatement mechanism.

At one point, the hon. Member for South Holland and The Deepings (Mr. Hayes) seemed to suggest that we have not supported arable farmers. I should point out to him that arable farmers receive £1 billion annually in direct area aid payments. They have had agri-monetary compensation of £170 million, and another £57 million is due this autumn. That amounts to very substantial support. We are aware of the difficulties that arable farmers are facing, and I am not trying to disguise them. None the less, we need to correct any misapprehension that that particular sector has not received support, because it certainly has done.

A number of hon. Members referred to devolution. One Conservative Member seemed to suggest that the existence of devolved responsibilities made it pointless for my hon. Friends from Scotland and Wales to participate in the debate. I was glad that my hon. Friends and the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) contradicted that by pointing out that because we are part of a common agricultural policy—that is largely the subject of this debate—the United Kingdom member state has to negotiate. My right hon. Friend the Minister does that in close co-operation with the Ministers in the devolved administrations. It is important to highlight that success story for the Government. The debate has been equally valid for all Members of Parliament.

It is impossible to address all the issues that have been raised in the time available. On a rough calculation, there are three times as many questions and issues as I have minutes available, never mind the points that I wish to make myself. I am glad that there was a general welcome for the package of measures announced by my right hon. Friend the Prime Minister on 30 March. My right hon. Friend the Minister referred to the 62 points of the action plan and set out how we propose to take forward many of them.

However, I should pick up on some of the points made about the action plan, particularly those that were most frequently the subject of Members' concerns. I fully understand the continuing difficulties in the dairy sector. I am glad that the package included not only devising a programme for agri-monetary payments—the first such payments to the dairy sector—but the removal of hygiene charges, moves to scrap the limits on the over-30-months scheme and important moves on the code of practice, which we hope will help the dairy industry and others. Many hon. Members, including my hon. Friend the Member for Clwyd, West (Mr. Thomas), referred to relationships in the food industry.

It has not been pointed out during the debate that we are committed to a campaign for the generic promotion of milk and have passed an order through the House to facilitate that. I hope that the campaign will appear shortly and will be as effective as many well known milk-drinking campaigns of the past. My hon. Friend the Member for Clwyd, West mentioned school milk schemes. We have been active in support of the European Union school milk scheme and have attracted a lot of support from other member states.

Mr. Paterson

If the Minister was in Shropshire tonight and saw a male black-and-white calf born, what would she advise the farmer to do with it?

Ms Quin

The market for calves is strengthening. There are also initiatives on finding future opportunities for the calf market. The Ministry and the National Farmers Union have taken forward some interesting and worthwhile initiatives on issues such as ethical veal. I recommend that the hon. Gentleman looks at some of them. We cannot answer all the problems of finding markets in the industry, but we are actively seeking to do what we can.

I very much welcome the decision of my right hon. Friend the Secretary of State for Trade and Industry that the successors to Milk Marque can get involved in processing. That important point has not been mentioned in the debate.

Many right hon. and hon. Members were concerned about the pig industry. I am glad that some, including the hon. Member for West Tyrone (Mr. Thompson), welcomed what we had done at the summit and the scheme that we devised to avoid falling foul of European Union state aid rules. Again, that is not all that we have done for the pig sector. As well as the appointment of the verification officer in the Ministry of Agriculture, Fisheries and Food, who has already had some success in curbing misleading labelling and has persuaded certain supermarkets to change their labelling as a result—

Mr. Stephen O'Brien (Eddisbury)

Will the Minister give way?

Ms Quin

I have only five minutes left to deal with some of the points that have been raised, so if the hon. Gentleman will forgive me, I will not give way.

We have given guidance to trading standards officers and offered support for the promotion campaign on animal welfare standards. Yesterday I was at the National Agricultural Centre in Stoneleigh, launching the promotion campaign to highlight the animal welfare standards that we have met in the pig industry. The campaign message is simple—to support farmers who look after their animals properly. Right hon. and hon. Members may have already seen advertisements in today's national press. We believe that that will be important in drawing our consumers' attention to the high standards in our industry, and the importance of helping our producers at a difficult time.

The right hon. Member for Skipton and Ripon (Mr. Curry), who chairs the Select Committee on Agriculture, made a number of interesting points about the importance of tackling red tape. I believe that he has welcomed some of the initiatives that we have taken, particularly in the review of red tape and the fact that MAFF has been so willing to accept the conclusions of the three working groups. I assure the right hon. Gentleman that the concept of not gold-plating, and of having a commitment to look at the competitiveness of our industry in relation to other European countries, is at the heart of our approach. He called it a change of policy, but I believe that it is a policy that we have always had. However, I assure him that ours is a deep-seated, determined and purposeful approach.

The hon. Member for West Tyrone welcomed the progress that we have made in Northern Ireland by being granted low BSE incidence status. He is right that there are a number of complexities in that situation. None the less, we believe that Commissioner Byrne, along with Ministers here and in Northern Ireland, are working hard for a successful outcome that gives Northern Ireland that status but does not provoke some of the problems about which certain producers have worried.

The Government have a long-term, as well as a short-term, approach to agriculture. That was evident in the farming summit, but it has also been evident in earlier pronouncements by MAFF, particularly when my right hon. Friend launched the new direction for agriculture last December.

We are in the vanguard of change in Europe. Many right hon. and hon. Members referred to common agricultural policy reform. The way in which we have chosen to implement the possibilities under the second pillar of the CAP has shown how we can move away from the traditional CAP production support towards a policy of rural development, which helps diversification in agriculture. Indeed, we have been far more active than the hon. Member for South-East Cornwall (Mr. Breed) seemed to give us credit for. The money that has been allocated for marketing under the rural development regulation is dramatically more than that under the agricultural development scheme, which was a beginning.

In terms of reforming the common agricultural policy and moving forward to a new long-term sustainable direction for agriculture, the Government have done more in three years than the previous Government did in 18. We have a long-term strategy, and I believe that the British people will prefer Labour achievement to Tory opportunism on agriculture and the countryside. Therefore, I invite the House to support our motion.

Question put, That the amendment be made:—

The House divided: Ayes 123, Noes 257.

Division No. 194]	[7 pm
AYES
Ainsworth, Peter (E Surrey)	Gibb, Nick
Amess, David	Gill, Christopher
Arbuthnot, Rt Hon James	Gillan, Mrs Cheryl
Atkinson, David (Bour'mth E)	Gorman, Mrs Teresa
Baldry, Tony	Green, Damian
Bercow, John	Greenway, John
Beresford, Sir Paul	Gummer, Rt Hon John
Blunt, Crispin	Hague, Rt Hon William
Boswell, Tim	Hamilton, Rt Hon Sir Archie
Bottomley, Peter (Worthing W)	Hammond, Philip
Brady, Graham	Hawkins, Nick
Brazier, Julian	Hayes, John
Bruce, Ian (S Dorset)	Heald, Oliver
Burns, Simon	Heathcoat-Amory, Rt Hon David
Butterfill, John	Hogg, Rt Hon Douglas
Cash, William	Howarth, Gerald (Aldershot)
Chope, Christopher	Hunter, Andrew
Clappison, James	Jack, Rt Hon Michael
Clark, Dr Michael (Rayleigh)	Jackson, Robert (Wantage)
Clarke, Rt Hon Kenneth (Rushcliffe)	Jenkin, Bernard
	Johnson Smith,
Collins, Tim	Rt Hon Sir Geoffrey
Cormack, Sir Patrick	Key, Robert
Cran, James	Kirkbride, Miss Julie
Curry, Rt Hon David	Laing, Mrs Eleanor
Day, Stephen	Lait, Mrs Jacqui
Dorrell, Rt Hon Stephen	Lansley, Andrew
Duncan Smith, Iain	Letwin, Oliver
Emery, Rt Hon Sir Peter	Lewis, Dr Julian (New Forest E)
Evans, Nigel	Lilley, Rt Hon Peter
Faber, David	Lloyd, Rt Hon Sir Peter (Fareham)
Fabricant, Michael	Luff, Peter
Fallon, Michael	MacGregor, Rt Hon John
Flight, Howard	McIntosh, Miss Anne
Forth, Rt Hon Eric	MacKay, Rt Hon Andrew
Fox, Dr Liam	Maclean, Rt Hon David
Fraser, Christopher	Madel, Sir David

Major, Rt Hon John	Streeter, Gary
Malins, Humfrey	Swayne, Desmond
Maples, John	Syms, Robert
Mawhinney, Rt Hon Sir Brian	Tapsell, Sir Peter
Nicholls, Patrick	Taylor, Ian (Esher & Walton)
O'Brien, Stephen (Eddisbury)	Taylor, John M (Solihull)
Ottaway, Richard	Taylor, Sir Teddy
Page, Richard	Thompson, William
Paice, James	Townend, John
Paterson, Owen	Tredinnick, David
Portillo, Rt Hon Michael	Trend, Michael
Prior, David	Tyrie, Andrew
Robathan, Andrew	Viggers, Peter
Robertson, Laurence	Walter, Robert
Roe, Mrs Marion (Broxbourne)	Waterson, Nigel
Rowe, Andrew (Faversham)	Wells, Bowen
Ruffley, David	Whitney, Sir Raymond
Russell, Bob (Colchester)	Wilkinson, John
St Aubyn, Nick	Willetts, David
Shephard, Rt Hon Mrs Gillian	Winterton, Mrs Ann (Congleton)
Shepherd, Richard	Winterton, Nicholas (Macclesfield)
Simpson, Keith (Mid-Norfolk)	Yeo, Tim
Soames, Nicholas	Young, Rt Hon Sir George
Spelman, Mrs Caroline
Spicer, Sir Michael	Tellers for the Ayes:
Spring, Richard	Mr. Geoffrey Clifton-Brown
Stanley, Rt Hon Sir John	and
Steen, Anthony	Mr. John Randall

NOES
Abbott, Ms Diane	Connarty, Michael
Adams, Mrs Irene (Paisley N)	Cook, Frank (Stockton N)
Ainsworth, Robert (Cov'try NE)	Cooper, Yvette
Alexander, Douglas	Corbett, Robin
Allen, Graham	Corbyn, Jeremy
Anderson, Donald (Swansea E)	Corston, Jean
Anderson, Janet (Rossendale)	Cousins, Jim
Armstrong, Rt Hon Ms Hilary	Cox, Tom
Ashton, Joe	Cranston, Ross
Atkins, Charlotte	Crausby, David
Austin, John	Cryer, John (Hornchurch)
Barnes, Harry	Dalyell, Tam
Beard, Nigel	Darling, Rt Hon Alistair
Beckett, Rt Hon Mrs Margaret	Darvill, Keith
Benn, Rt Hon Tony (Chesterfield)	Davey, Valerie (Bristol W)
Benton, Joe	Davidson, Ian
Bermingham, Gerald	Davies, Rt Hon Denzil (Llanelli)
Berry, Roger	Davies, Geraint (Croydon C)
Betts, Clive	Davis, Rt Hon Terry (B'ham Hodge H)
Blizzard, Bob
Bradley, Keith (Withington)	Dawson, Hilton
Bradshaw, Ben	Dismore, Andrew
Brown, Rt Hon Nick (Newcastle E)	Donohoe, Brian H
Brown, Russell (Dumfries)	Dowd, Jim
Browne, Desmond	Drown, Ms Julia
Buck, Ms Karen	Dunwoody, Mrs Gwyneth
Burden, Richard	Eagle, Maria (L'pool Garston)
Burgon, Colin	Edwards, Huw
Campbell, Mrs Anne (C'bridge)	Efford, Clive
Campbell, Ronnie (Blyth V)	Ennis, Jeff
Caplin, Ivor	Field, Rt Hon Frank
Casale, Roger	Fisher, Mark
Caton, Martin	Fitzpatrick, Jim
Cawsey, Ian	Flint, Caroline
Chapman, Ben (Wirral S)	Follett, Barbara
Chaytor, David	Foster, Rt Hon Derek
Clapham, Michael	Foster, Michael Jabez (Hastings)
Clark, Rt Hon Dr David (S Shields)	Foster, Michael J (Worcester)
Clark, Paul (Gillingham)	Fyfe, Maria
Clarke, Eric (Midlothian)	Gapes, Mike
Clarke, Rt Hon Tom (Coatbridge)	Gardiner, Barry
Clelland, David	Godman, Dr Norman A
Coffey, Ms Ann	Godsiff, Roger
Cohen, Harry	Goggins, Paul
Coleman, Iain	Golding, Mrs Llin
Colman, Tony	Gordon, Mrs Eileen

Griffiths, Jane (Reading E)	Michie, Bill (Shef'ld Heeley)
Grogan, John	Miller, Andrew
Hall, Mike (Weaver Vale)	Moffatt, Laura
Hall, Patrick (Bedford)	Morgan, Ms Julie (Cardiff N)
Heal, Mrs Sylvia	Morley, Elliot
Healey, John	Morris, Rt Hon Ms Estelle (B'ham Yardley)
Henderson, Doug (Newcastle N)
Hepburn, Stephen	Mountford, Kali
Heppell, John	Mudie, George
Hesford, Stephen	Murphy, Jim (Eastwood)
Hill, Keith	Naysmith, Dr Doug
Hinchliffe, David	O'Brien, Bill (Normanton)
Hodge, Ms Margaret
Hoey, Kate	O'Brien, Mike (N Warks)
Hope, Phil	O'Hara, Eddie
Hopkins, Kelvin	O'Neill, Martin
Howells, Dr Kim	Osborne, Ms Sandra
Hughes, Ms Beverley (Stretford)	Palmer, Dr Nick
Hughes, Kevin (Doncaster N)	Pearson, Ian
Hurst, Alan	Pendry, Tom
Hutton, John	Perham, Ms Linda
Iddon, Dr Brian	Pike, Peter L
Illsley, Eric	Plaskitt, James
Jackson, Ms Glenda (Hampstead)	Pollard, Kerry
Jenkins, Brian	Pond, Chris
Johnson, Miss Melanie (Welwyn Hatfield)	Pound, Stephen
	Prentice, Ms Bridget (Lewisham E)
Jones, Mrs Fiona (Newark)	Prentice, Gordon (Pendle)
Jones, Ms Jenny (Wolverh'ton SW)	Primarolo, Dawn
	Prosser, Gwyn
Jones, Dr Lynne (Selly Oak)	Purchase, Ken
Jones, Martyn (Clwyd S)	Quin, Rt Hon Ms Joyce
Jowell, Rt Hon Ms Tessa	Quinn, Lawrie
Kaufman, Rt Hon Gerald	Rammell, Bill
Keeble, Ms Sally	Rapson, Syd
Keen, Alan (Feltham & Heston)	Raynsford, Nick
Kemp, Fraser	Robinson, Geoffrey (Cov'try NW)
Kennedy, Jane (Wavertree)	Roche, Mrs Barbara
Khabra, Piara S	Rooker, Rt Hon Jeff
Kilfoyle, Peter
King, Andy (Rugby & Kenilworth)	Ross, Ernie (Dundee W)
King, Ms Oona (Bethnal Green)	Roy, Frank
Kumar, Dr Ashok	Russell, Bob (Colchester)
Ladyman, Dr Stephen	Salter, Martin
Lawrence, Mrs Jackie	Sarwar, Mohammad
Laxton, Bob	Sawford, Phil
Lepper, David	Sedgemore, Brian
Leslie, Christopher	Sheldon, Rt Hon Robert
Levitt, Tom	Shipley, Ms Debra
Lewis, Terry (Worsley)	Simpson, Alan (Nottingham S)
Linton, Martin	Skinner, Dennis
Lloyd, Tony (Manchester C)	Smith, Angela (Basildon)
Lock, David	Smith, Rt Hon Chris (Islington S)
Love, Andrew	Smith, Jacqui (Redditch)
McAvoy, Thomas	Smith, Llew (Blaenau Gwent)
McCabe, Steve	Spellar, John
McCafferty, Ms Chris	Squire, Ms Rachel
McDonagh, Siobhain	Starkey, Dr Phyllis
Macdonald, Calum	Steinberg, Gerry
McDonnell, John	Stevenson, George
McGuire, Mrs Anne	Stewart, Ian (Eccles)
McIsaac, Shona	Stinchcombe, Paul
McKenna, Mrs Rosemary	Stoate, Dr Howard
Mackinlay, Andrew	Strang, Rt Hon Dr Gavin
MacShane, Denis
Mactaggart, Fiona	Stringer, Graham
McWalter, Tony	Stuart, Ms Gisela
Mahon, Mrs Alice	Sutcliffe, Gerry
Mallaber, Judy	Taylor, Rt Hon Mrs Ann (Dewsbury)
Marsden, Gordon (Blackpool S)
Marsden, Paul (Shrewsbury)	Taylor, Ms Dari (Stockton S)
Marshall, David (Shettleston)	Temple-Morris, Peter
Marshall, Jim (Leicester S)	Thomas, Gareth (Clwyd W)
Marshall-Andrews, Robert	Timms, Stephen
Maxton, John	Tipping, Paddy
Meacher, Rt Hon Michael	Todd, Mark

Truswell, Paul	Williams, Rt Hon Alan (Swansea W)
Turner, Dennis (Wolverh'ton SE)
Turner, Dr Desmond (Kemptown)	Williams, Alan W (E Carmarthen)
Turner, Neil (Wigan)	Winnick, David
Twigg, Derek (Halton)	Wood, Mike
Twigg, Stephen (Enfield)	Woolas, Phil
Tynan, Bill	Worthington, Tony
Vis, Dr Rudi	Wright, Dr Tony (Cannock)
Wareing, Robert N	Wyatt, Derek
Watts, David
White, Brian	Tellers for the Noes:
Whitehead, Dr Alan	Mr. Greg Pope and
Wicks, Malcolm	Mr. Tony McNulty.

Question accordingly negatived.

Main Question put and agreed to.

Resolved,

That this House takes note of European Union Document No. 6629/00, a Commission proposal on the prices for agricultural products (2000–01); supports the Government's intention to negotiate an outcome which takes account of the interest of UK producers, consumers and tax-payers alike; and also takes note and approves of the action which the Government has taken in partnership with the industry to launch the new Action Plan for Farming to ensure that British agriculture is more sustainable, dynamic and diverse, and more consumer and market-orientated.