HC Deb 20 April 2004 vol 420 cc268-76

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jim Murphy.]

8 pm

Mr. David Heath (Somerton and Frome) (LD)

Debate in the House is often about great matters of national or international policy. Occasionally, it is right that we debate perhaps smaller matters that affect fewer people, but about which certain people feel passionately. That is why I am so pleased to have this opportunity to represent my constituents in the Adjournment debate.

Many people in Somerset feel deeply about the traditional cider apple orchards, which are such an important part of our landscape, environment, history and culture. The people who know them best are the growers and producers. I am indebted to constituents whom I saw at my surgery in Langport on Saturday. They include Mr. Fry of Long Sutton, and Messrs. Meaker, both senior and junior, of Pitney, as well as those to whom I spoke in Kingsbury Episcopi on Monday morning, including Mr. Male, Mr. Hebditch and Mr. Temperley. Many others have written either to me or to my hon. Friend the Member for Yeovil (Mr. Laws). Those people told me how worried they were that this year would see the loss of so many acres of precious orchards. Whether that fear is justified—I think that it is—it is genuinely held and needs a serious response.

I suspect that the problem is well known to the Minister. This year sees the introduction of the new single farm payment scheme, and land must be registered by the end of 2004. Land given over to permanent crops—and apple orchards are specifically included in that definition—is not eligible for registration. Landowners are therefore in the unenviable position of having to decide within the calendar year whether to clear orchards and grub out their trees in order to register, or to forgo those payments in perpetuity.

In the case of modern, commercial planting, grubbing up is unlikely to be the best option, but for those orchards that are marginal or past their peak of production, no responsible landowner could possibly ignore either the loss of income that in the current state of agriculture—particularly, I have to say, in parts of my constituency—might be critical to any profitability, or the loss of capital value that they would incur.

Mr. Paul Keetch (Hereford) (LD)

I congratulate my hon. Friend on securing the debate. Does he agree that, given that the Government are committed to a mixed landscape and biodiversity in agriculture, any measures that have the effect of reducing biodiversity are, on the surface at least, contrary to Government policy? Does he hope that in his response the Minister will explain that apparent ambiguity in the system?

Mr. Heath

My hon. Friend, who is the chairman and founder member of the parliamentary cider group, is absolutely right on that matter, to which I shall return.

Mr. Bill Wiggin (Leominster) (Con)

I may have to register an interest, as in the next few weeks I hope to buy a field containing apple trees. I hope that in his reply, the Minister will also say whether other European countries such as France are taking the same line as our Government—or will the French be subsidising their apple production while we do not do the same for our apple producers?

Mr. Heath

I hope that the Minister will respond to the hon. Gentleman's question.

Matters are made considerably worse by the uncertain state of the commercial-scale cider industry. Both Matthew Clark Cider and Bulmer are reducing the acreage under contract and many marginal orchards are unlikely to find ready markets. Nor will a reduction in total apple production restore apple prices and encourage replanting; history suggests that production shortfalls will be met by the importation of concentrate rather than enhanced domestic production.

Why does that matter? I could wax lyrical about the beauties of Somerset orchards and I would be justified in doing so. They are a special part of our landscape and it is hard to imagine Somerset, or other parts of the west country, without orchards. That point has been made forcefully by the Countryside Agency, among many others.

I could mention the environmental importance. The ecology of orchards is unique—a point made by my hon. Friend the Member for Hereford (Mr. Keetch)—and enormously valuable. English Nature has intervened in the debate and initiated studies to underline what it considers a hugely important managed natural resource. It has even mentioned the invertebrate, Gnorimus nobilis—the noble chafer. I have to confess that I do not know much about the noble chafer, but the environmental benefits of orchards are apparent even to those of us who are not entomologists. It is hard to think of another form of agricultural production that is so benign in environmental terms.

Then there is the diversity of apple varieties. If we lose the older, more traditional orchards, we shall inevitably lose yet more of the myriad apple varieties unique to Britain. More than 156 apple varieties are recorded as having connections with Somerset alone, and their names are every bit as redolent and evocative of the county as any cultural artefact. They include varieties such as Yarlington Mill, Black Dabinett, Glory of the West, Slack-me-Girdle, Hoary Morning and Bastard Foxwhelp—I had better stop there, but I hope that I have made my point.

The Minister for Rural Affairs and Local Environmental Quality (Alun Michael)

The hon. Gentleman has mentioned many of his distinguished constituents and many species of apple, and it strikes me that he is making his case primarily in relation to traditional orchards. I should like us to be clear about that, as some of the public discussion seems to have confused traditional orchards with the more modern commercial growers. I should like my response to be accurate, so am I right in my interpretation of his remarks? Is he primarily concerned with traditional orchards?

Mr. Heath

I am grateful to the right hon. Gentleman. Yes, I am concerned about the traditional orchards that are so much part of our landscape, but there are also questions about the commercial orchards and I do not want to lose sight of them in this debate.

Brian Cotter (Weston-super-Mare) (LD)

My hon. Friend will know that there is a well known cider maker in my constituency, Thatchers Cider. Businesses have been encouraged to invest in this country because the Government have told them that there is stability, so it is very discouraging for Thatchers Cider to have invested in planting up a lot of orchards recently only to find that—as it were—the ground has been swept away.

Mr. Heath

I am grateful to my hon. Friend for that comment. Over recent years, we have seen a welcome revival in the planting of orchards, which has been encouraged by the Government through agri-environmental schemes and also locally. Somerset county council has been active in promoting the replanting of traditional apple varieties. It is thus perverse that we are switching to reverse gear.

Once those ancient varieties are lost, they are gone for ever; they will not be recovered. Genetic diversity is as important in arboriculture as in animal breeding, in which I declare some interest as, at one stage, I was a member of the Rare Breeds Association and bred a rare breed of pig.

Is the loss inevitable? I think not. I know that the Department for Environment, Food and Rural Affairs has held discussions with representatives of the industry and others, and I hope that the Minister may be able to expand on the results.

Let us deal with some of the possible avenues for escape. First, there is the definition of "permanent crop". There is some flexibility in the definitions. I understand—perhaps the Minister will confirm this—that the Department has already exempted some permanent crops, such as withies, hops and asparagus beds. If the definition is amendable in that form, why not do so with apple trees?

One of the growers—a gentleman who was a commercial-scale grower—told me how absurd he thought it was that the raspberry canes that he had on part of his land were eligible for single farm payment grants, but the top fruit that he had on other parts of his land was not. Where is the logic in that? Another gentleman pointed out to me that, under the new scheme, someone who grows a field of potatoes—a very valuable crop, but not one with a great landscape value—will receive a benefit, but those who have beautiful orchards, whether of apple or cherry or whatever, will not. That seems perverse.

Secondly, there is dual use. Orchards were never included, per se, in the integrated administration and control scheme, but traditional orchards are grown over a sward that is very often used for grazing. Under the old scheme, traditional cider orchards used for grazing for more than six months of the year qualified as forage acreage. Although those orchards did not qualify, per se, for subsidy, they were nevertheless included in the bundle. I understand that the Department is reconsidering the position on that—I hope that it is— because the arguments about dual use are just as pertinent now. I also hope that the Minister can give us some further thoughts on his conclusions.

Thirdly, although I have seen nothing in writing, there is talk of an upper limit on density as a working definition for what is a traditional, as opposed to a modern, commercial orchard. I have heard the figure of 50 trees a hectare mentioned. That is a step in the right direction, but most traditional orchards that I have seen come closer to about 50 trees an acre, rather than 50 trees a hectare. Clearly, if we can refine that definition, there is scope for finding a workable yardstick for exemption.

Fourthly—this applies in the fully commercial world—will the Minister say whether it would be possible to register land for eligibility for payments as and when it reverts to other crops within the normal 30year rotation? There is a perverse situation at the moment in that land would normally be used for other crops after 30 years, but unless people do that before the end of this year, that land will not qualify for single farm payments. That seems not to be the intention. If the Minister could help us with that, he would at a stroke dispel many concerns that might cause the premature destruction of orchards.

One of the Department's counter-arguments is that orchards will continue to qualify for the countryside stewardship scheme. That would be fine but for the fact that, as the Minister knows, the countryside stewardship scheme is closed to new entrants at the moment. No application can even be considered until 2005. By then, the growers whom I represent will have had to take commercial decisions about what to do with their land. I fear that it will be too late by then, even if the countryside stewardship scheme provides all the support that we hope it would. We need absolutely clarity now, not a wish list for the future.

Alun Michael

The hon. Gentleman is making an important point. The countryside stewardship scheme is open each year for a window. Although the scheme may change next year, because we are moving into the new arrangements post-CAP reform, there will be a similar window next year. Contrary to the impression that he seems to be giving, if this year's window in the countryside stewardship scheme is missed, it is not over for ever and a day. I can certainly assure him on that point.

Mr. Heath

I am grateful to the right hon. Gentleman, but that is not what I meant. The point that I am trying to communicate is that there is no capacity to apply for inclusion in the countryside stewardship scheme now, before 1 January 2005. Before that date, a person must have either removed the trees from their land in order to qualify for the single farm payment scheme, or not done so. People are having to take that decision without knowing with certainty whether they will be included in a countryside stewardship scheme. They need clarity.

The other point raised in correspondence by the Department is that the sums do not add up. The Department says that the cost of grubbing up is £1,000 per hectare, and when that is taken into account, no one will grub up. No one in my part of the world recognises that as a reasonable figure for the cost of grubbing up. The cost would be far less—the Department's figure is hugely inflated. I do not know where the Department found it, but I hope that it is not basing its policy on that figure, because it is unhelpful and reduces the Department's credibility in the eyes of those with whom it is dealing.

I do not think that the destruction of orchards is the Government's intention. It is an unanticipated consequence of the policy and it can be avoided. The acreage involved is not huge—it is estimated that there are 16,000 acres of orchard, of which perhaps 5,000 acres are in danger of being lost by the end of the year. Saving our orchards is entirely in line with stated Government policy: supposedly the whole point of the reform is to benefit benign forms of cropping and agriculture, which orchards exemplify in the clearest possible way.

Can anyone imagine this debate happening in any other country? Can anyone imagine traditional and ancient Burgundy vineyards being destroyed and even whole grape varieties lost because no one foresaw the consequences of a policy? Such a thing is unthinkable— yet we in Britain seem to be prepared to lose those things that are most precious and best define our landscape and our culture. I hope that the Minister will find a way to stop that happening.

8.17 pm
The Minister for Rural Affairs and Local Environmental Quality (Alun Michael)

I congratulate the hon. Member for Somerton and Frome (Mr. Heath) on obtaining this debate and on the way in which he introduced it. His speech contained a subtle mixture of bad and good information, although I entirely accept the lists of names of his constituents and of the distinguished varieties of apple that grow in his constituency. I am happy to confirm that we are anxious to protect biodiversity, which is helped by the existence of traditional orchards. However, in much of the coverage given to the matter, environmental issues have become muddled with questions of subsidy in relation to modern commercial orchards. That is why I am pleased to have had the hon. Gentleman's main concerns confirmed this evening. I understand the reasons for those concerns. A sensible debate is needed, but the public debate has been confused and clarification is needed.

Some of those who intervened in the debate seemed to suggest that there might be an advantage to growers in other countries—France was specifically mentioned. There will be no benefit in any other member state. Apple trees and others will be treated as permanent crops. In countries that are taking the historic payment route, there will not even be the possibility of acreage that has been used for apple trees qualifying for a flat rate, because there is no flat rate; it is only the flat rate element of the single farm payment that comes into play. In that respect, the concern that has been expressed is quite out of proportion.

As the hon. Gentleman is aware, the subject falls under the portfolio of my noble Friend Lord Whitty, and I have brought a fresh mind to the issue in my preparations for today's debate. My incredulity has mounted because yet another issue has been reported in various inaccurate ways, as Lord Whitty said this morning. I concur with him, and advise anybody who owns a traditional orchard or is contemplating the purchase of one not to read the headlines about getting an entitlement of £340 a hectare if the rules are changed. That is nonsense—it would take eight years to get more than £200 a hectare, and in the meantime there are better returns on the land and the orchard. Grubbing up to qualify for the area payment would make sense only for commercial or intensive growers—ltheir position is quite different from people with traditional orchards—whose trees have reached the end of their useful life. They would take a commercial decision to grub up anyway, and any gain from area payments would be small compared with the income from a successful apple plantation.

The hon. Gentleman rightly referred to rotation. A grubbed up commercial orchard would usually be left fallow or put to another use for 15 or 20 years, or perhaps longer, as he suggested, and the grower would plant other land in the meantime. I am happy to assure the hon. Gentleman that we are looking at that issue and are seeking a solution, including the possible use of the national reserve and other options, but that is not the substance of our debate. English Nature has expressed concerns about biodiversity, and we are exploring definitions of, for example, grazing land, which may help to protect it. However, that is different from opening up subsidies for commercial orchards—the issues have become confused.

Mr. Keetch

Importantly, the Minister distinguished between small growers and commercial growers. As time is short tonight, will he give a commitment that he or his noble Friend Lord Whitty will meet a delegation of small growers from my constituency and from the constituencies of my hon. Friend the Member for Somerton and Frome (Mr. Heath) and other Members in the Chamber tonight, as they would like to present their case directly to Ministers?

Alun Michael

There has been confusion and misunderstanding, so I am happy to try to clarify the issue with the hon. Gentleman and his hon. Friends, and we can ask others who have more expertise than me to go into the fine detail.

The underlying themes of our debate were twofold. First, there was a request for subsidies and, secondly, there was concern that perverse incentives could damage biodiversity. I hope that I have shown that the perceived perverse incentive is much less serious than has been suggested. The key feature of the CAP reform settlement is the decoupling of support from production. Existing support for farmers is redirected to encourage them to make the best use of market opportunities. Fruit growing has not benefited from the CAP subsidies that are to be replaced by the single payment. Fruit trees have been planted because there was a market demand for the fruit, not because of subsidies. It is entirely consistent with that philosophy that trees that are no longer needed for commercial production should be grubbed up if there is a more commercial use for the land. In the end, the area used for cider production must reflect the market demand for cider apples and the most commercially appropriate methods of growing them.

On biodiversity, we must reinforce the point about the lack of incentive to grub up and must counter what has been said. If a grower has been cultivating apples and not claiming on a piece of land, grubbing up will entitle him only to the flat rate element of the single payment, often called the single farm payment. That rate is just over £20 a hectare in the first year, 2005, which is far below both the £340 quoted in the press and media and the £230 area payment, which takes eight years to reach, as the flat rate element in the new payment system builds up through the traditional route. That is without taking into account the cost of grubbing up, and I acknowledge the expenditure mentioned by the hon. Member for Somerton and Frome. The National Farmers Union has put it at about £300 a hectare, although it could be much higher in different circumstances.

Mr. Heath

I do not want the right hon. Gentleman to mislead himself, as it were, about the perverse incentive. No one in my part of the world believed the incorrect figure that he cited, and they understand perfectly well the rates, the gradual increase and the effective ceiling. What worries them is that that is an important factor in the profitability of their land, and that the capital value of their land is massively reduced if it is not included in the eligibility criteria.

Alun Michael

A number of complex issues are tied together. One is the possibility of entering into the IACS arrangement—the integrated administration and control scheme—which obtains up to this year. That was inflexible, so there is a change in the arrangements. As I have indicated. there are various other ways in which eligibility can be considered—for example, the issue of trading. There are several complex issues that open a number of doors that are not as closed as has been implied.

On the key point that the hon. Gentleman made at the start of his contribution, it is important to understand that some orchards—long-established traditional orchards in particular— provide considerable environmental benefits. That is why there is a real incentive to retain them. Those benefits are recognised in the countryside stewardship scheme, which provides payments of about £250 per hectare for maintenance of traditional orchards. That is much higher than the full rate that would be applicable under the new system, and more than the full rate of single payment. Two thirds of the total area of traditional orchards is already protected in this way, through 1,500 agreements, at an annual cost of £600,000. Payment rates for one-off activities such as pruning have been increased by 55 per cent.

It is open to other growers to come into the stewardship scheme during the annual window. Although the hon. Gentleman is right to say that the window has closed for this year, the window will be there next year, although there will be changes in the scheme, so the opportunity to go into stewardship, which offers much greater rewards than the single payment option, will be available in relation to places where the biodiversity value, which he put at the heart of his comments, is the real issue.

Andrew George (St. Ives) (LD)

Does the Minister accept that where the Department is seeking to intervene to put right possible unintended consequences in severely disadvantaged areas—I understand the Department is prepared to do that—notwithstanding country stewardship, there is still the potential for unintended consequences at the end of the transitional period in 2012? Surely the Minister must recognise that he should investigate the possible impact of that and consider revisions to take into account the needs of traditional orchards.

Alun Michael

I am trying to explain that there can be a perverse incentive—and therefore the grubbing up of orchards—only if those taking such a decision have totally misunderstood the options available to them. I understand the importance of certainty, which the hon. Gentleman is referring to and which the hon. Member for Somerton and Frome mentioned in his speech. It is true that there are CAP reform decisions that are still to be made.

We cannot realistically expect to reopen the question of permanent crops in the near future. We can, however, take account of the need to protect orchards in planning to implement the single payment scheme. We have been speaking to the National Farmers Union about that. We recognise the need for growers to know what the rules will be, and we will take this into account in the planning announcements—for instance, on the 10-month rule, which determines when land used to support a claim must be at the farmer's disposal. We are also considering the NFU's suggestions about the possible use of the national reserve in certain situations.

Finally, we recognise that some old orchards are used for grazing and that this has been taken into account in the existing IACS rules. It would be perverse to create a discrepancy between the current arrangements and the new ones. We are seeking to ensure that the treatment of land under the single payment rules reflects the same considerations.

We believe that the fears of wholesale orchard grubbing have been exaggerated and would come about only if there was misunderstanding about the options available. We recognise the need for clarity about new rules and are working to resolve the outstanding issues. Countryside stewardship provides an important and successful means of protecting traditional orchards, and we need to consider that as the solution to some of the problems that the hon. Member for Somerton and Frome placed at the heart of his contribution. We should not forget the outstanding achievement that CAP reform represents, moving away from production-related subsidy to production for the market and payment for public good, including biodiversity, the very issue that the hon. Gentleman rightly said was at the heart of the Government's policies, as it was at the heart of his plea in relation to traditional orchards. We recognise, as he does, the contribution that they make to biodiversity.

Question put and agreed to.

Adjourned accordingly at half-past Eight o'clock.