§ Motion made, and Question proposed, That this House do now adjourn—[Mr. McNulty.]
9.42 pm§ Mr. Oliver Letwin (West Dorset)I am grateful to the Minister for Rural Affairs for spending time late in the evening listening, yet again—as has been the custom once a year—to the condition of agriculture in West Dorset. I wish that I could say that there would be a shorter list of problems than in previous years and that I could signal an end to this series of debates, but that is not so.
I am sure that these facts will be entirely familiar to the Minister. Farm profitability in West Dorset remains—without hyperbole—abysmal. Smaller farmers continue to leave in droves. As the older farmers leave their family farms their children do not take over. More worryingly, even in our mid-sized farms—of between 200 and 500 acres—where considerable value-added is going on, trading is at close to break even.
Production looks set to reduce further. As the Minister knows well, beef self-sufficiency in the United Kingdom has fallen generally by about 25 percentage points. That is reflected in what is going on in West Dorset beef farming. My pig farmers remain hugely concerned that they are at the tail end of an international price war and that Danish and Dutch pigs will see them out.
Underneath all that lies a severe set of price pressures—again, the Minister is well aware of them. The price of milk heading downwards—from about 19.5p a litre to about 18p—puts most of my dairy producers at severe risk of unprofitability next year. Pigs are now at 89p a kilo and the price may be headed down. Cereal prices are tumbling out of bed.
Some of that is entirely beyond the Minister's control: the temporary high level of the pound versus the euro—a frequent lament during recent years. Some of it is also certainly due to the demoralisation that attended foot and mouth disease. My farmers join the rest of the farmers in the UK in hoping that there will be—as there certainly should have been—a public inquiry.
A great part of the problem remains structural. It is structurally impossible for my livestock producers to manage to be profitable in circumstances in which there is a huge differential in animal welfare standards and in the costs imposed by those standards between them and their competitors on the mainland. There is also a huge and similar difference in environmental regulations that affect cereal production.
That is the lament. Although I suppose that I would have sought this debate to make that lament alone, I could have spared the Minister a few more minutes and ended there, were there only that bad news. So far, the picture has been similar to last year, and the year before that and the year before that. However, there is a further reason for requesting this debate tonight.
As any Member representing a rural area will have done in the past months, I have met a range of farmers, including, most recently, the National Farmers Union representatives in my area.
§ Mr. Eric Martlew (Carlisle)That is no surprise.
§ Mr. LetwinIndeed, it is no surprise.
535 The good news is that the prominent farmers in my area see a ray of hope and believe that the Curry commission report points the way to a future for them. I want to draw out the critical elements of a way forward in the light of Curry, which might prevent me, many other Members and the Minister from having to have such debates on many occasions in the coming years. More importantly, the recipe, if adopted, might prevent the destruction of farming as we know it in West Dorset and similar areas.
The first point that I want to draw out from Curry is an observation that almost merits the term "profound". He has given us a different picture of the way in which we ought to regard agriculture in the UK. Until now, romantics have seen UK agriculture as a nostalgic and delightful business, and have argued the case for subsidising it without regard to profitability, whereas those who have thought of themselves as realists have seen agriculture as much the same as any other competitive industry. By and large, as an economic realist about a wide range of industries, I would say, as the agricultural realists have been prone to say, that it does not matter too much whether Britain produces one kind of widget or not, or whether some widgets are imported and others produced locally.
What we want, by and large, across industries, is an efficient, well-functioning economy that is open and competitive—one in which competitive advantage dictates whether we produce a given good or service or somebody else does. The realists have argued that the same applies to British agriculture. If British pig farmers, dairy farmers or other kinds of British farmer cannot compete with an outsider on the same rules of open markets obtaining in the UK, so be it—let our agriculture disappear. That struggle between the romantics and realists has pervaded the scene over many years.
Curry offers us a way out of the morass of unproductive debate between an unsustainable nostalgia and a cryptoeconomic realism that is also unsustainable because there is no prospect of continued farming in the UK on the basis of sheer open markets with no subsidies and no national defence mechanisms. Curry offers us the possibility that we might regard farming in the UK, particularly in a place such as West Dorset, as a national environmental asset that can be sustained only if we treat it in a certain way and make it profitable on a long-term basis. Curry makes us consider the sustainability of farming in a place such as West Dorset as part of a UK-wide approach to a regulated industry, parallel in many respects to the utility industries.
The best way to conceptualise that is to imagine the dreadful moment when the whole nation is turned into a park that is cared for by paid park keepers who are the minions of the Minister. In that scenario, Sir Humphrey presents the Minister with the wonderful prospect of diminishing the costs of keeping the park by allowing the keepers to keep animals and grow things. If we see farming on a regulated basis, as a United Kingdom-protected industry that is sustained as a single national enterprise over and against competitors on the continent and elsewhere, there is a hope of putting the fragmented pieces together into a coherent strategy that makes sense only because farming is the cheapest and most sensible way to preserve the rural character and the environmental advantages of our countryside.
What elements does Curry identify that need to be put in place and that my farmers have alighted on to construct such a coherent national strategy? First, there needs to be 536 a serious approach to research and development and to model farms—the New Zealand approach. New Zealand understands that it is a small country battling against the odds of the deficiencies of being far removed from most of its markets. The economy is in every other respect open.
In the case of agriculture, New Zealand has expended huge efforts on enabling its farmers to learn from models and research and development, and to benefit from national direction and strategy, so that ordinary farmers can see how to go about their business in a way that is coherent with what is going on elsewhere in the country.
The second element, which is allied to the first, is the need to develop the home market for home produce by producing high-value-added local niche products—to put it parochially, Dorset cheeses and Dorset hams in Dorset. Other counties would have their own products.
The third element, which is perhaps more important than the other two, is a changed attitude to regulation. The comparison and contrast with the utility industries is constructive in this regard. Almost every utility regulation Bill has imposed a duty on the regulator to consider the interests of consumers and producers. He has to balance one against the other and to consider the return on assets that is achieved by the regulated entity. If a new regulation—be it environmental, health and safety or whatever—s imposed on the regulated utility, it becomes the duty of the economic regulator to assess the cost of that extraneous regulation on the industry that he is regulating and to allow it to recoup the cost as a return in its charging structure.
No such system is in effect for British farming. I am not making a partisan attack; that has been true under Labour and Conservative Administrations alike for many years. If well intentioned Members introduce Bills and persuade Governments to impose a new regulation on my farmers in West Dorset, there is no corresponding allowance for that in any feature of the subsidy regime, the crypto-price control regimes or the tax regime. The farmers bear the double cost—the direct cost and the competitive cost.
Economic impact assessments are febrile documents, as the Minister and I know. My farmers estimate that the figures in the impact assessment for the recent imposition of nitrate vulnerable zones are wrong by a factor of broadly four. That is typical. It has been the case over the years in many domains outside agriculture that the economic impact assessments presented to the House are the ludicrous fictions of optimistic officials who are guided by intense Ministers. Again, that is not a partisan remark. I regret to say that it has been true under regime after regime.
If our regulatory arrangements for farming were so designed that the Treasury had to buy increases in exogenous regulation of our farmers by paying specific subsidies to the value of that regulation, the battle royal between the Treasury and DEFRA or other Ministers taking up an environmentalist or animal welfare standard on behalf of members of the ruling party's parliamentary party would be huge. The Treasury would then demand to understand whether the regulation in question was worth buying and the farmer would be recompensed. The likelihood is that, on both competitive and direct-subsidy grounds, a plethora of animal welfare and environmental 537 regulation that is not matched by parallel regulation in our competing markets and unmatched by subsidy would no longer be imposed on our farmers.
Fourthly, there must be a serious attitude on the part of the nation as a whole to animal health. At the moment, we have no serious, single national body responsible for policing animal health standards at our ports. The evidence from everyone who has ever visited a UK port or airport in pursuit of the agency or agencies that are controlling the import of dangerous substances is that there is no such single agency and that there are indeed no such agencies effectively policing those frontiers. I have wandered fruitlessly around both ports and airports attempting to find the agencies seriously involved.
I do not say that efforts are not being made—they are—but by comparison with the scale of the problem, as recent reports have made clear, they are pathetically inadequate. The problem will not be solved until there is a single agency of government, rather than one of the seven or eight currently partially responsible, that becomes alone responsible for policing the frontiers.
While we are at it, we need an agency specifically charged with the remit of producing contingency plans for disasters that occur as a result, as there always will be, of imperfections in border controls, even where those have been improved. The fact of the matter, as the Minister will very well be aware, is that whereas the Ministry of Defence has typically had contingency plans for hundreds of kinds of events that are unlikely ever to occur, MAFF and its successor DEFRA have traditionally—I fear that it is still so—had no contingency plans for many events that are almost certain to occur. We saw that most recently with foot and mouth, and we shall see it again in other spheres. Indeed, we shall see it until we have a single agency, whether the Food Standards Agency or another, charged with the business of contingency planning.
Finally, if we are to see a changed attitude and to offer a prospect of sustainability, we must, as the Curry report clearly indicates, have a serious attitude to replacement of old farmers by young. There must be a serious effort to replace manpower. At the moment, there is no strategy for that, but until there is, we cannot expect a sustainable industry.
Those five themes are small but crucial. My farmers see this as a decisive moment—not in the sense that it is noticeably worse than in years past. They have been so bad that this year is no worse. Rather, my farmers see this as a decisive moment in the sense that there is now a ray of hope in the shape of the Curry report. There is a way forward for the industry which has not previously been part of the political currency. It is up to the Government whether they will grasp that challenge or evade it.
§ It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. McNulty.]
§ Mr. LetwinOnly a minute more, Mr. Speaker.
If the response of the Minister's Department at this juncture is to evade the challenge by doing what the rumour mill has it the Secretary of State has in mind and inaugurating that wonderful Sir Humphreyesque device of 538 a report on the report, my farmers will go into a state of despondency akin to despair. This is the moment at which the new Department needs to show that it is a new Department—that it has a new attitude, that it is willing to take the challenge of the Curry report and willing to offer my farmers, for the first time in many years, a realistic prospect of a sustainable future which will be to the huge advantage of our environment and our society.
§ 10.1 pm
§ The Minister for Rural Affairs (Alun Michael)I thank the hon. Member for West Dorset (Mr. Letwin) for managing to surprise us. He said that this was his annual debate, so that was not the surprise. He said that he had not come simply to lament, and that was true, given the nature of his contribution. He did not just repeat himself; in general, he gave what I can only describe as an endorsement of the Government's approach.
In his initial remarks, the hon. Gentleman was right to say that we could hardly be totally positive about farming, given the horrendous time that farmers and the non-farming members of rural communities have experienced over the past 12 months. I am glad that he acknowledged that not all is within the power of the Government to change, and certainly not an individual Minister. He then gave a dutiful nod in the direction of a public inquiry. Without the Government's decision to have three specific inquiries—one dealing with the lessons to be learned, one dealing with the science in a searching way, using some of our most senior scientists, and one that establishes the commission on farming and food to look at the way forward for the industry—the hon. Gentleman could not have been as positive as he was in responding to the outcomes of the Curry commission's report.
The hon. Gentleman spoke of meeting farmers who are still positive, despite their horrendous experience and the reasons they have to feel damaged and depressed—the months of foot and mouth disease and the difficulties faced by the industry. I have had the same experience in recent weeks. When I met farmers at a conference organised by the Bishop of Hereford, I expected a negative response. Instead, they were exchanging views on how to make themselves more competitive and how to bring more of the end-shelf price back to the farm and into the local community. In many ways their arguments were the same as those of us who argued for fair trade on the international scene. They want the opportunity to get a fair return; they are not looking for feather bedding.
I agree with the hon. Gentleman that there are some rays of hope. That is not to be over-optimistic, because we face a challenging period over the coming months and years in moving to a sustainable farming and food industry for the long term. The hon. Gentleman is right that the Curry commission report points to the way forward. I assure him that the Government's response to the report will be thoughtful, as it should be. It will engage the stakeholders—the farmers and others—in designing the response, as it should do. It will also be practical and positive about the future.
I liked the hon. Gentleman's description of romantics and realists, although I think that it should be romantics and pessimists, because the realists are now winning. Those who want a bright future for the farming and food industries, enormously important though they are 539 recognise that it must be achieved in the context of the world as it is, rather than as it was or as we wish it to be. That involves the ability to be competitive and imaginative, to provide quality and to market goods produced through a quality process.
There are good examples of such initiatives in the hon. Gentleman's area. The local action group and partnership for rural economic development, "Dorset chalk and cheese", is aiming to add value to local products and to develop local employment opportunities. It is bringing together diverse stakeholders such as the Prince's Trust, the National Farmers Union and Weymouth college. In many ways, the west country as a whole has shown the way by branding the region through the "taste of the west" initiative, while retaining the personalities of individual local products, be they from Dorset, Cornwall or Devon. I am impressed by that approach.
The hon. Gentleman considered different ways in which we might deal with the countryside, but let us be absolutely clear: we do not want to turn the countryside into a museum. The whole point of the Department for Environment, Food and Rural Affairs is sustainable development. Sustainability means getting matters right environmentally, economically, and socially in the local communities. In our view, those three objectives—environmental, economic and social—are not alternatives. They are not options to be chosen from, but targets to be pursued in harmony with each other.
That process needs the engagement of the whole community—the farming community and, indeed, the urban community. We should aspire to a better understanding between the urban and rural communities, and the hon. Gentleman certainly did not speak as if there are worlds between them. I hope that he agrees that we should remind both that they need each other, or that we need each other, depending on how one wants to put it. We should therefore see the positives in the countryside.
The hon. Gentleman may be aware of our response to the recommendation of the rural taskforce, which was established at the height of the foot and mouth disease, and which I have had the honour to chair since the general election. The taskforce recommended taking action to attract people back to the countryside, but we recognised fairly quickly that people were indeed returning. In many cases, the tourism industry—which includes many farmers who have diversified—is experiencing stronger advance bookings than for a number of years.
However, it was necessary to remind people of the benefits that the countryside provides. I am proud of the way in which the "Your Countryside, You're Welcome" campaign has developed. It is not a top-down Government publicity campaign but a Government-backed initiative—involving some 50 organisations such as the NFU and the Country Landowners Association—to remind people of the countryside's attractions. In doing so, it offers a positive image for farming and countryside communities, rather than simply being critical or looking on the downside. In many ways, that reflects the ray of realism but optimism that the hon. Gentleman has brought to the debate.
The hon. Gentleman is right to point to the example of New Zealand and a move away from dependence on subsidy. It is a different country with different pressures, but our need to move from production-related subsidy to an effective and competitive farming industry is at the 540 heart of the Curry commission's recommendations. The report conveys realism and the fact that there are many environmental benefits, which are not financially productive as they do not pay the farmer for his work. It is right that those public benefits should be paid for by the public purse. There are increasing moves towards reform, both in the common agricultural policy and the England rural development programme. The Curry commission's proposals mapped out the more distant future, and we should respond to that.
The hon. Gentleman referred to the problem of imports, which of course is divided into two; large imports—lwe need to make sure that regulations on them are properly observed—and small quantities that are brought into the country for personal consumption. Both kinds of import involve problems. We recognise the strength of concern about illegal imports and action is being taken. A high-level imports forum has been convened for next month to discuss what action, in addition to that which has already been taken, can be taken to detect and prevent illegal imports. However, the United Kingdom can never reduce the risk of importing disease to zero, so we must be prepared to deal with any outbreaks.
The hon. Gentleman was a little unfair to suggest that there were no contingency plans, because there were. The lessons learned from the foot and mouth outbreak of the 1960s led to plans being drawn up and visited from time to time. However, no one anticipated the speed and virulence of the foot and mouth outbreak that we experienced last year. One positive was that it led many people and organisations to look afresh at the way we do things. Supermarkets, for instance, have looked at the way in which they procure their foodstuffs, which is extremely positive.
The hon. Gentleman rightly referred to the problem of low farm incomes and pointed to the way forward. We need to help farmers, as the Department for Environment, Food and Rural Affairs is doing, to reach a position in which their farm business is viable. For some people, that means organic conversion and being able to compete in a market with a large of proportion of imports; there is a market to be won back for British producers.
Some people may have to get involved in a niche market, producing and marketing things so that more comes back to the primary producer; other people may have to look at the expansion of farmers markets, which we are strongly encouraging. Farmers markets come in many shapes and sizes, and I have seen a number of them around the country in recent months. There is a good example in Bristol; in the heart of the city, foodstuffs from the surrounding area are being marketed to people, who benefit from high-quality foodstuffs being brought into the city in an attractive way. There is also a benefit for the hinterland of the city. Sometimes an individual opens a shop, developing something on behalf of the wider community of farmers and their families.
There are therefore a number of approaches to the problem; it is not just a question of farmers diversifying and everybody having one or two bed and breakfast rooms. Each business must find the right solution and choose the right options, given the support available through the England rural development programme, the rural enterprise scheme and other available options. We must encourage and help farmers to take those options. Recently, we have had a positive announcement from my noble Friend Lord Whitty, who has ministerial 541 responsibility for farming, about increased optimism among farmers, who are restocking and going back to business now that they can see an end to foot and mouth.
I have responded mainly to the tenor of the hon. Gentleman's speech, which was about looking forward, not backwards. It would be wrong not to acknowledge the fact that farmers have experienced a devastating period.
There was the impact of foot and mouth disease, even in areas such as the one that the hon. Gentleman represents where there were few immediate cases, although the disease was not too far away. The farming community as a whole has been enormously damaged. In many instances, as we have seen through the excellent work of the rural stress network, individuals were traumatised by their experience. It is greatly to the credit of farming communities that they are responding positively to the recommendations that we have seen in the Curry commission's report. They are responding often not with over-optimism, but with a gritty determination to succeed in the business that they have chosen, and to meet the challenges of the future.
I congratulate the hon. Gentleman on making his points in a positive way. I am certain that that is the best way to represent the interests of the farming community. We should take forward the ideas that have been outlined in the policy commission's report. We should consider issues of efficiency and recommendations such as the establishment of a food chain centre to improve efficiency. For instance, we should consider ways of developing the red meat sector. We should examine demonstration farms so that lessons can be learned and carried forward in a more positive way.
The hon. Gentleman referred to adding value, and I agree with him. It is not a matter of competing only for the market that is there, but developing markets for local 542 and regional foods and engaging, for example, the regional development agencies, which have responded extremely positively to the challenge of helping rural communities and the rural economy cope with the results of foot and mouth disease. It is difficult to believe that we would have been able to respond so quickly and effectively without the work of the RDAs.
We must examine diversification. That includes non-food crops, an integrated approach to businesses and the support of farmers through business advice that is effective and co-ordinated. We are considering how the inward rural development programme can be simplified and made easier to access. That is not without its problems, but we intend to do all that we can in that direction.
Finally, there is the road, which the commission stressed, of supporting reform of the common agricultural policy. I know that the hon. Gentleman has taken an interest in the shifting of priorities away from the first pillar subsidy to the second pillar, and that is something that we shall pursue actively through the CAP's mid-term review.
I congratulate the hon. Gentleman on initiating the debate and on discussing some of the issues that are for the future and how we implement the Curry commission's findings. These are issues on which the Government will report before long. We shall respond positively. I hope that from both sides of the Chamber we shall receive encouragement to help the farming community to develop, stand on its own feet and be successful for the future. That is the best way to have a thriving and living countryside that all can enjoy, and a successful farming industry. That is in the interests of everyone in this country, whether they live in rural or urban communities.
§ Question put and agreed to.
§ Adjourned accordingly at eighteen minutes past Ten o'clock.