HL Deb 23 June 1981 vol 421 cc1035-57

7.56 p.m.

Lord Cledwyn of Penrhos rose to move, That this House takes note of the Report of the European Communities Committee on EEC fruit and vegetables policy (22nd Report, 147). The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. This debate deals with the Report of Sub-Committee D on Fruit and Vegetables and, at the outset, I should like to thank all those who have helped in one way or another to produce it. The witnesses who are listed in the report were uniformly helpful, and their expertise was of great value to the committee. The House will have noted the minutes of their evidence. I think that one point should be made in this context; namely, that while it is not thought necessary at all times to hear all potential witnesses orally, we do appreciate written evidence, and we pay the most careful regard to it throughout our deliberations. The fact that witnesses are not called before the committee does not mean that their evidence is regarded as second-rate. It is of the first importance, and we appreciate it. We were also helped and guided by our specialist adviser, and finally I should like to thank all my noble friends on the committee who worked their way with great determination through what is a complicated maze.

The subject may not sound a highly exciting one, but I can assure the House that it is important and that its study brought to light some vital issues of principle.

Let me refer to the range of our inquiry, which covered the whole of the EEC's fruit and vegetables policy—and this deals with all fruits, vegetables and nuts grown in the Community, with the exception of potatoes, grapes and olives for pressing, and peas and field beans for animal feed. The objective of the policy is worth quoting because our aim was to see whether it is working successfully. The objective is: to achieve a balance between supply and demand at fair prices to the producer, account being taken of trade with third countries, while encouraging specialisation within the Community".

I would also draw attention to paragraph 2 of the report which points out that: in recent years fresh fruit and vegetable production has accounted for between 11 and 12 per cent. of total agricultural production in the Community". We are therefore talking about a very substantial level of production and expenditure. As your Lordships will see on page 2 of the report, the expenditure in this field in 1980 was £443 million.

The House will note that the support system, which is dealt with in paragraphs 5 to 12, is complex in the extreme, and as we proceeded in our studies we were dismayed by our failure to obtain full information on a number of occasions. For example, it was alleged that many growers were growing for intervention prices, or for withdrawal—a very serious charge to make. The Ministry official's reply to Question 10 was that: it is very difficult to substantiate these statements absolutely". Again, we were unable to find conclusive evidence to support the suggestion that national enforcement agencies were not effectively administering the control over the grading of fruit. Furthermore, the National Farmers' Union expressed concern about the failure to obtain information about certain imports. The committee are properly concerned about the harmful effect of these allegations, which cannot be substantiated.

Again, the committee are concerned about the subject of national aids. We discuss this in our recommendation in paragraph 64. It is impossible for this or any other committee of this House to decide whether competition is fair, whether prices are reasonable and whether the producer in this country is being fairly treated unless full information about the financial and other help which Governments give to the industry is freely available to the committee. I was under the impression that within the Common Market producers and consumers would receive fair and equal treatment. I was a strong supporter of entry into the Common Market on the basis that that would be the case. Furthermore, the EEC treaty itself, in Article 92, prohibits state aids, which would (and I quote) distort the competitive nature of the Community market".

Three members of the committee paid a visit to the Commission and had a discussion with Mr. Driesprong and other senior officials. We were received with great courtesy and kindness, and we were impressed with their great knowledge of the subject. On this question of state aid they could not assist us. Article 93 of the treaty instructs the Commission to compile a register of national aids in all sectors of the economy. The House will observe what the senior Ministry witness said in reply to Question 9 and Questions 261 and 262 in the report. Some details are given on pages 104 and 105, but they are very far short of the information contained in the 6,000 pages in the possession of Community officials, which we were told about and to which we had no access. Nor has anyone else access to them, for that matter. I leave the House to draw its own conclusions, but the committee view the position as being totally unsatisfactory.

Many witnesses, including the noble Earl, Lord Selborne, whose evidence greatly impressed the committee, said they believed that state aids to French apple growers might be important. Here, again, the lack of firm information made it impossible for them to substantiate their view. This will be of interest to the House, because noble Lords will recall the great public concern a few months ago about the imports of French Golden Delicious and their effect upon local produce, like Cox's Orange Pippins.

Paragraph 23 of our report will give some idea of the complexity of this area, but the Top Fruit Working Group and the Apple Industry Committee of the European Democratic Group came to the conclusion that the present support system is biased against the interests of British apple producers. The committee, after due consideration, decided to press the Commission to reduce the level of withdrawal prices for Golden Delicious so as to eliminate the unfair treatment of growers of other varieties of apples. The House will be interested to hear the Minister's view of this recommendation and any action the Government propose to take to help the local produce.

My Lords, I must make one further point; namely, that we were told that the marketing of British-grown produce—that is, apples, particularly—with respect to quality, grading and presentation leaves much to be desired, and that other EEC countries do these things much better than we do them here. We were further informed by the noble Earl, Lord Selborne, among others, that steps are being taken to rectify the position, especially by apple growers, in the face of aggressive marketing by French producers. The committee believe this to be of the first importance. We are dealing with tough competition in this as in other markets, and we must make sure that our marketing and presentation are as good as theirs at every point and at every level. Again, I hope that the Minister, when he comes to reply, will comment on that. Is his right honourable friend satisfied with the progress that is being made to improve quality, grading and presentation?

On the question of the quality of produce, we were very concerned that national enforcement agencies have not got sufficient powers, and that a good deal of ungraded fruit finds its way on to the market, especially in France and in Italy. If noble Lords will look at page 103 of the report, they will see the numbers of inspectors in all the member states; but we were unable to find evidence of the effectiveness with which the controls are in fact administered. The House will note that we make a number of important recommendations, and I hope that the Minister will be abe to comment on them. I do not propose to weary the House by going into detail at this time of night, but I will mention some of them very briefly.

First, we believe that the withdrawal system should be kept under constant review and that the withdrawal price should be a safety net, and not offer a guaranteed market return. We were further impressed with the weight of evidence which suggests that the Community's import arrangements are unduly restrictive, and that it is unnecessary to tax out-of-season produce so heavily. We believe the consumer could be helped if that was looked at carefully.

The committee are also concerned that National Health regulations affected the ability of some United Kingdom food processors to compete effectively on our own home market. The answer to Question 275 gives some important information, and tells us that the matter is under review. We hope this will be carried out with dispatch, and perhaps, again, the Minister will tell us what progress has been made.

Our final recommendation deals with the system as a whole; that is, the complicated system which has grown up over the years on an ad hoc basis, with different policies emerging at different times until we have something approximating the Hampton Court Maze. When we try to envisage the further complications which will arise with a Community of 12, the mind boggles. Now is the time to revise the system with a view to simplification. As the committee say at the end of paragraph 74—and I think this is worth quoting: A revised system should give greater benefit to consumers, while preserving security for producers. In particular, it should seek to ensure access for out-of-season produce, and equality of treatment for Community processors.".

Before I conclude I must draw attention to paragraph 65 and the committee's conclusion that the Commission's policy has been of no significant benefit to the United Kingdom. The lack of full and precise information makes it impossible to go further than the words of this paragraph, but we cannot say that British producers have benefited in any substantial way. This is why a review of the kind the committee recommend is so important at this time.

My Lords, this report provides in microcosm a good example of the pitfalls into which the Commission tend to fall and out of which they always seem so reluctant to climb. But climb they must if the Community is to work efficiently in the interests of all its people—consumer, producer and processor alike. The Community's survival depends upon its capacity to adjust and upon its ability to change as circumstances demand. If it does not change and adjust, the Community will not survive at the end of the day—and so far it has not been notably successful in doing this. I hope the Government will press the officials in Brussels, and the Council of Ministers, to adopt the small but significant changes recommended in this report, which I now commend to the House. I beg to move.

Moved, That this House takes note of the Report of the European Communities Committee on EEC fruit and vegetables policy (22nd Report, H.L. 147). —(Lord Cledwyn of Penrhos.)

8.9 p.m.

Lord Mackie of Benshie

My Lords, first, I should like to say as a member of the committee that I have greatly enjoyed the work on it, particularly in sitting under the chairmanship of the admirable and noble Lord, Lord Cledwyn of Penrhos. I think he has given your Lordships a very fair summing up of the views of the committee, and I think he has put to the House a very necessary matter—that is, the basic objectives of the CAP. Of course, the basic objectives are that producers should get a fair living, that consumers should get food at a reasonable price and that the food supply for the Community should be assured. I think that these are very fair objectives; and the Community has chosen to implement them, really, by a protective system of the control of imports and of help to the producers to produce food at a reasonable price.

My area of disagreement with the committee—I have the chairman's permission to express my views on this—is that it does not take fully into account the essential objectives of the common agricultural policy. I disagree with the committee when it says that imports are unreasonably restrictive. Bacfid, Frucom, the Food Manufacturers' Federation, the National Federation of Fruit and Potato Trades and others all gave similar evidence; that they thought imports were restricted too much, particularly some varieties which they felt could be freely let in without any tariff or reference price because the other members of the Community did not grow this particular produce at that time.

In a way this is a fair point, but it is a fallacy because if the Community's policy is going to protect the grower it must also protect against massive imports of low-priced substitutes for fruits which are grown in the Community. I think it is perfectly fair for the Community to impose levies and tariffs on other fruits not grown in the Community if there is a flood of them, which could wholly divert the public to cheaper imported fruits and thereby affect very seriously produce from Community growers.

I must declare an interest, because I grow soft fruit in Scotland, but the Scottish NFU put forward what I thought was very conclusive evidence to the Committee and to the Government concerning the import through Dutch sources of pulp from eastern Europe at prices which were way below the cost of production. As we know, this is a regular device used by eastern European countries to obtain foreign currency. When we are looking at these matters we must take account of the general policy, which is to hold up returns to consumers, to keep up their standards of living, by reference to the market. We have to accept that this is what is done on the Continent and what has been done on the Continent for years. We are only a fraction of the EEC and therefore we have to think in terms of the Community as a whole. This is the essence of the CAP as it develops; that we are being far too nationalistic in our approach, but we are by no means the worse culprits. I believe it is well recognised that the French producers look to their own interests in an extremely clever and admirable manner, but they do not do very much good to the whole feeling of Community spirit. What the chairman of the Committee said was absolutely true; the Commission told us that they have a large amount of information on national aids but it was confidential and the only way that they could get it from certain countries was by promising to keep it confidential. That is no way to run the Community. Unless we start rationalising the national aids we are going to get nowhere. We have a great deal of evidence to suggest that our suspicions might have been well-founded; that national aids were being given which were not in the spirit of the Community and which where cutting across the Community's purposes.

I believe we have to improve our aim towards the market. We had a lovely illustration of this when the noble and learned Lord, Lord Elwyn-Jones, came to the Box in an earlier debate about soft fruit and waxed lyrical about the crunchiness of Cox's Orange Pippins. That was probably the best piece of advertising one could have, and we should have broadcast that particular speech by the noble Lord to promote the sale of Cox's Orange Pippins on their merits. As the noble Lord, Lord Cledwyn of Penrhos, said we have fallen behind in the marketing of our excellent produce. We should always be able to sell quality and any aids that we are suggesting the EEC should give should take the line of helping the marketing of our fruits.

With regard to the withdrawal system, I believe it is full of pitfalls. The withdrawal system—in other words, the selling to the board of potatoes at a guaranteed price—could lead to people in this country quite happily growing for the board to take over. In the days before the board took over people were growing for the Government to take over and this was absolute nonsense. As the noble Lord, Lord Cledwyn of Penrhos, said, we must set any withdrawal price at a level which simply encourages it off the market and is of some small help to the producer. In vegetable growing we all know that for centuries people have realised that in times of blight one often has to plough down a field of cauliflowers, for example, and I believe that in the main aid should go into marketing, processing, and other methods of helping the producer.

With the expansion of the Community into Mediterranean countries, we have to watch in particular that the withdrawal system does not become a source of income and, indeed, abuse. We have already a complicated case in Italy concerning tomato concentrate, and I do feel that we ought to watch these affairs, particularly in some of the Mediterranean countries where the Civil Service is not as strong as the one that we have in our country and where the administration of such schemes can lead to abuse. I commend the report to your Lordships with slight qualifications. It highlights a situation which is highly dangerous and gives a warning of simplification and it is one that the Council of Ministers, who really have the power rather than the Commission, would do well to heed.

8.18 p.m.

The Earl of Selborne

I should first like to congratulate the noble Lord, Lord Cledwyn of Penrhos, and his committee for this excellent report. It has drawn attention to an area of the common agricultural policy which is well overdue to receive further illumination. This report is fully of extremely valuable information, be it statistical or otherwise, and full of information which is in some senses sometimes even surprising. I was grateful to the committee for giving me the opportunity, as an apple-grower, to give evidence as a witness. I was most grateful for the courteous way in which my evidence was heard. Having read this report with, as your Lordships might imagine, great care, there are two points which I found to be spelt out with great clarity and which must be quite self-evident. First, the EEC's present support system for fruit and vegetables is strangely complicated.

The noble Lord, Lord Cledwyn of Penrhos, referred to the Hampton Court Maze and I think that describes the system very aptly, because the procedures are almost inpenetrable to anyone who might try to take an informed view of them. I do not believe that I need say any more about that because the report itself emphasises that any support system which is so complicated is by its nature likely to be poorly communicated and will probably give rise to many of the fears which exist among various sectors of horticulture and marketing to the effect that our competitors are pulling a fast one. If one does not understand the system, one is inevitably going to feel that more than might otherwise be the case.

Secondly—and this is perhaps the most important point to make tonight—this support system is not suitable for the United Kingdom. It is not designed for our requirements, neither for our consumers, nor for our producers and certainly not for the taxpayer. The figures in the report (which I have not seen before) certainly deserve to be repeated. The cost (calculated in the report) to the United Kingdom of this particular branch of the CAP is £79 million. The report refers to the year 1980. The sums received back from this particular support system are £1 million and the net budgetary deficit is £78 million—which is a fairly startling figure bearing in mind that horticulture (and apples and fruit and vegetables are what we are talking about tonight) is a not inconsiderable part of our own production and represents about 10 per cent., so far as I can ascertain, of the production of fruit and vegetables in the EEC. So we receive one quarter of 1 per cent. of the expenditure in this sector in return for producing 10 per cent. If that does not, on the face of it, appear to be an imbalance, then, surely, that would be a strange case to argue.

You may say that that is probably because we do not need support in this country but, again, the noble Lord, Lord Mackie, and the noble Lord, Lord Cledwyn, have referred already to the extremely difficult situation in which various branches of horticulture find themselves. I refer to apply growers but also to the vegetable growers who argue, equally strongly, that if support is to be given within the EEC then, surely, a more equitable system could be devised which would give us more than a quarter of 1 per cent. if we are to produce 10 per cent. of the product. This is something which I am sure that my noble friend the Minister would wish to refer to.

The strange thing is, as the report points out, that since our entry into the EEC, a totally distorted support system has got rather worse. There was the Mediterranean package of 1978 which produced production aid which, by its very name, obviously was not serving the interests of our producers. The Ministry witnesses, I see, suggest that it might have helped the consumer in some sense but I am certainly not persuaded of that. The argument was that the consumer could already buy, for instance, canned peaches at a certain price. If that consumer wanted to buy Italian peaches, then a subsidy would be given to the Italian processor and this would bring down the price of Italian peaches so that she could buy Italian peaches as well as peaches from another country. Quite frankly, the consumer was not greatly benefited except that there was a choice of two different sources of canned peach. When you bear in mind that these processing premiums absorb two-thirds of the expenditure that we are looking at today, then one suspects that really this is a system of support very largely designed for southern Europe that is, Italy and Southern France. Again, statistics would show that where it goes to supports this very strongly. Obviously, this Mediterranean package has no relevance whatsoever to us. Also, the export refunds which are available both for production and for processing are again, as the report demonstrates, of little relevance.

It is true that export refunds were at one time of a certain significance for processed products. That was when (as the report points out very clearly) the price of sugar on the world market was rather lower. Now that it is higher, there is no need to give an export refund on processed fruits which have a high sugar content; so that export refunds are really of no significance to the United Kingdom any more. But again there is a great relevance to those sectors of horticulture in the Common Market which are export-orientated and, of course, again we look to the exports of the Golden Delicious or the Italian tomatoes which have traditionally been exported, not just round Europe where export refunds would not be appropriate within the Common Market, but into third countries around the world.

Fair enough. They are doing an extremely efficient job in marketing their horticultural produce into these markets, but, let us make no mistake about it, when you come to assess the benefits which can be derived from export refunds and add it to the total package, at least to underpin the amount of income you would be guaranteed to get from EEC funds, it is a significant factor. The reason in top fruit, for example, why we are not exporters is because we have traditionally always been importing fruit from round the world; we are growing a rather specialised variety, low yield, high quality, and again this is certainly a difficult product to sell; although by no means impossible, as apple growers, by their expert marketing in many fields, have demonstrated. But I do not think it is realistic to expect export refunds from this sector to be very relevant to our requirements either for the processed products in future or in the fresh sector.

That, lastly, leaves the sectors we are looking at. If the Mediterranean package and the export refunds are of little relevance, that leaves the withdrawal payments which are paid to the producer. Again, I repeat the figures which I mentioned before: 10 per cent. production or thereabouts of fruit and vegetables. But in practice, while Italy takes 60 per cent. of these withdrawal payments, Holland 15 per cent., France 13 per cent., Belgium 6 per cent, Germany 3 per cent., we take 1 per cent. Again, page 102 of the report demonstrates that that goes half to cauliflowers and half to apples. So it is clearly the case: either English growers are not availing themselves very largely of these withdrawal payments or they are inappropriate, they are not designed to the needs of the producers. I cannot speak for cauliflowers. I think that probably we do reasonably well out of those. We seem to get a large share, anyway, of that expenditure; but for the top fruit we do not.

The committee spent some time exploring the reason why it was that these systems of support appeared to favour Golden Delicious and the South of France more than production in Northern Europe. The basic fault, from our point of view, is that the system of intervention supports a high-yielding variety because it is paid by kilo and not by hectare. Also, to add insult to injury, because you may say that there is no harm in supporting people with high yields, it rewards those who grow the larger fruit. That, if you think about it, is totally illogical. If there was some merit in growing a large apple or a large tomato or whatever, then by all means reward it; but, on the other hand, the discriminating consumer will tell you that if you want shelf life, if you want flavour, you do not go for the balloon which will break down, you go for the smaller apple. We happen to grow a smaller apple, we happen to grow apples which are lower yielding, we happen to grow apples which command a considerable premium in the market and, incidentally, I am able to assure the noble Lord, Lord Mackie, that the premium has increased over the last year, thanks to the success of marketing initiatives.

When you look at the level of support per hectare, because this leads back to the farm in Southern France, add to that the assurance which is available from export refunds bearing in mind that horticultural production by its nature is a chancy business if you can underwrite a large proportion of your direct costs, then it is of enormous advantage. The more risk you have, the less sure you are of your income year to year, so the greater has to be your margin for contingency. It is a case that, while I would not necessarily claim that people in the South of France are growing year by year for profit as fruit producers, they are, nevertheless, assured from all sources—I am talking specifically at the moment of sources from the EEC—of a very reasonable return on their direct costs. I repeat that they may not be getting a profit, but, equally, they are very little at risk.

This is the basic reason why production of top fruit, particularly in Europe, is moving inextricably Southwards. It is not just the British producers who are complaining. It is also the Dutch, the Belgians, the Germans and even the Northern French who are all complaining that they are finding it impossible to stave off the floods of imports from the Mediterranean countries who, in turn, are apparently able to assure themselves of a much larger return from the various support systems. This makes me quite certain in my own mind that the package which the CAP have put forward over many years through many modifications is totally inappropriate for the consumer in Europe. It may be all right for the consumer in the South of Europe. It is certainly not appropriate for our consumer and certainly not appropriate for our producer. I think it is reasonable to ask of the Community from time to time if the long-term interests of the consumer were any way being advanced by their policies. Obviously, what is happening at the moment is that the choice which the consumer is afforded in the shops is being reduced. It is exactly the same as happened in North America ten years ago. As production moved to Washington state—which was the higher yielding, blander (if you like; that is the kindest description I can give to a Golden Delicious)—so the quality varieties in North America from New England, Virginia, disappeared from the supermarkets. This is happening in Europe, in Northern France; it is happening in England and it is happening in the Low Countries.

In England we complain about the loss of the share of the market for Cox and Bramley. In Holland you will hear the same story of Belle de Boskoop and in Denmark Ingrid Marie, and so on. What system of support would we, both as a United Kingdom consumer and producer, find more to our requirements? The intervention system should, I suggest, be phased out—and quickly—for all it has done is to keep in production varieties which are apparently in surplus year after year. Restructuring grants, the committee have pointed out, are overdue. They are certainly overdue in this country in the sense that restructuring is required. The age profile of the orchard is dangerously high. This is a point made by the Ministry, and I would entirely agree. I should declare here my interest as a fruit nurseryman.

Nevertheless, it is true that if we are to keep in plant some of the varieties which I suspect we can quite easily demonstrate are greatly desired in our markets, then we will need help in making sure that these varieties are put back into plant. I suggest that this would be a much more appropriate use for funds than the present system of intervention which seems to keep in plant unwanted varieties.

It will obviously be very difficult for a decision to be made as to which varieties should qualify for restructuring and which should not. It certainly would not be a job for a producer, let alone a nurseryman, to say which those varieties should be. I would ask the consumer. The consumer is vociferous in respect of his or her interests in top fruit. One saw this last season when there was so much interest in the so-called "apple war". I would think that it would be just as easy to discriminate in favour of one variety as it is, for instance, in hops, where there is income support on an acreage basis and by variety. There is a precedent and the problem is not insuperable.

Lastly, on national aid—and I must not speak any longer—I heartily agree with the committee when it says that the distrust and suspicion engendered by unsubstantiated allegations is not conducive to the harmonious development of the European Community. I made allegations as a witness which I was unable to substantiate. Of course, when one hears from the noble Lord, Lord Cledwyn of Penrhos, that the Commission may have this information but it is confidential and they will not allow the committee to see it, let alone a grower such as myself, it is not surprising that I find it somewhat difficult to substantiate. This is surely a situation which is totally unacceptable to all those in this House and in this country.

The people who are most in support of the Common Market should be the most vociferous in demanding that we are told specifically what national aid is available. We shall be told no doubt that it is complicated; that we have much assistance; that we are de-rated as farmers; we get free advice from ADAS and we get capital grants. All that is quite true. It may even be—if we move away from horticulture for a moment—that in some commodities it might be embarrassing to find the assistance that we get is perhaps in some respects equal or better than that available to our competitors.

That matters not a bit to me. I am sure that we should know and if we find that we are getting more assistance than we have given ourselves credit for, then we as producers should stop bleating. Where we are able to quantify, it will have to be an accurate assessment going back over a number of years in a perennial crop or a crop with a high capital input such as glasshouses. Where one can quantify if there has been a distortion over a number of years, as there will be when one starts with subsidised capital, then we should know and the Commission should accept that they have a responsibility to redress the distortion which they have caused.

I end by saying how much I welcome this report. It has shown that in this sector we are getting a particularly poor deal in a funding of a budget which we all recognise is seriously distorted. This may be only 6 per cent. of CAP but perhaps it is a microcosm of something which is basically unsatisfactory in so many other spheres. Let us hope that when the Minister speaks he will be able to tell us clearly what it is in the long run that we should like to see in the form of an income support system for fruit and vegetables.

8.35 p.m.

Viscount Sidmouth

My Lords, the report being debated today sets out details of the European Community régime for fruit and vegetables which appear somewhat complex. I believe that this applies mainly to details such as the method of calculating withdrawal price set out in Table 1 which I for one would certainly not pretend to understand at all. In essence, however, I believe that the régime merits the description of being "light" which was applied to it by the Ministry of Agriculture in giving their evidence, at least as compared with the Common Agricultural Policy as a whole. The reason is that from the very first the Community has been in effect self-sufficient in these commodities, with the exception of tropical fruits and some temperate produce out of season. Extension to the south, now in progress, will enhance this situation. There has been no need therefore for target prices calculated to stimulate production, and although there have been surpluses, the perishable nature of the produce has ensured that there have been no tomato or cauliflower mountains.

Thus late in the day, I would draw attention to three aspects of the subject. First, "state aids" dealt with in paragraph 57 of the report. As I understand it, these are not in themselves excluded by Article 92 of the treaty, and are certainly tolerated—indeed encouraged—by the Community itself in certain directions. I refer to such matters as research, help for hill farmers, measures for energy saving and the like. Article 93 of the treaty requires that all such aids should be monitored by the Commission, and no doubt there will be room in the future for their "harmonisation "—that great Brussels word. It must be recognised however that most industrialised states, such as ours, have vast urban populations who must be fed but who do not themselves produce food. In an emergency, all Governments would prefer that these people should be dependent for their food upon home producers, who are politically more controllable than foreigners, and can be counted upon to co-operate.

It is a different matter when state aids directly favour exports to another member of the Community, and when this occurs, such exports should be regarded as being more in the nature of dumping, which has always been condemned in international trade. The report makes reference to two such cases in paragraphs 57 and 58. In the second case quoted, that of the Dutch gas price, the Minister of Agriculture has acted since the report was printed to give temporary help to British glasshouse producers—for which the industry is most grateful—but of course the problem still remains.

Secondly, there is the question of consumer prices. Mindful of its remit, the committee endeavoured to establish how the CAP had affected these so far as fruit and vegetables are concerned. The Ministry of Agriculture was unable to help in this matter, for the very good reason that after eight years in the Community, no one could now tell what the level of prices in the United Kingdom would have been had we not been in the Community. It is thus a hypothetical question to ask how they would compare with the level of prices actually prevailing. This does not prevent critics of the Community hazarding a guess, and in the debate in your Lordships' House last week one speaker is on record as attributing to the CAP a 10.2 per cent. increase in our cost of living. However that figure was arrived at, I have no doubt that it cannot be applied to fruit and vegetables. Paragraph 61 of the report quotes British growers (of whom I am one) as maintaining: that prices are under pressure, sometimes severe pressure, from imports and that the régime has worked to the advantage of the consumer. They may well be right". Certainly the annual cost to the EEC of the fruit and vegetable régime in the United Kingdom (paragraph 54) at £1 million is truly negligible when compared, say, to the proceeds of the tariff which, as the noble Earl, Lord Selbourne, has remarked, is estimated at £79 million. But in the meantime the area in this country devoted to horticulture has been, and is, declining and so is the net annual income of the growers. If I may quote the Motion for a resolution on the common agricultural policy which was recently submitted to the European Parliament by their Agricultural Committee, chaired by Sir Henry Plumb, it is accepted as a matter of principle that— The aim of insuring adequate supplies of foodstuffs to consumers at reasonable prices has been attained in recent years to a greater extent that the other aim of the common agricultural policy, which is to enable farmers to participate in the general growth of earnings". Finally, there is the question of overseas aid. Many of the ACP countries affected by the Lomé concessions, especially in Africa, are very interested in the supply of tropical fruits and the out-of-season temperate fruits and vegetables to which I referred earlier, and have the capacity to supply them. While I agree entirely with the point made by the noble Lord, Lord Mackie, about competition within the horticultural market itself between one type of produce and another, I also feel that so far as imports are concerned this should apply mainly to imports from other developed countries. After many years of direct involvement in this particular matter, I have seen for myself how much better trade is than aid for the developing countries, and I would commend the Lomé initiative and what it has already achieved.

8.42 p.m.

Lord Sainsbury

My Lords, the EEC fruit and vegetable policy has never been the subject of inquiry by the Select Committee as a separate issue. This fact alone makes the report of some significance. However, the budgetary cost of this policy is not small. In terms of expenditure by the European Agricultural Guidance and Guaranteed Fund, fruit and vegetable is the fifth largest category receiving support. This puts the policy into perspective rather more clearly than saying that fruit and vegetables take roughly 5 per cent. of the total EEC price support.

The policy itself, as the noble Lord, Lord Cledwyn, has already stated, covering both fresh and processed produce, is aimed at achieving a balance between supply and demand at fair prices to the producer, account being taken of trade with third countries, while encouraging specialisation within the Community". In other words, the price support system is designed to give varying degrees of protection to Community producers. The question is: How far is the policy suited to the Community's production of fresh fruit and vegetables and to the needs of the consumer?

As your Lordships will appreciate, Community production, because of the climate and the changes in the seasons, cannot meet consumer demand all the year round; yet third countries are subject to import tariffs under the EEC fruit and vegetable policy. In 1978–79, the Community imported from third countries and associated states 12 per cent. of its vegetable consumption, 66 per cent. of its citrus fruit consumption and one-third of its consumption of other fruits, according to the submission from the consumers in the European Community Group.

As far as the United Kingdom is concerned, we rely more heavily than the EEC as a whole on third country imports. In view of this reliance on imports these tariffs are difficult to justify, particularly where there are levies on products which are not grown in the Community or whose season is over. For example, a 20 per cent. tariff is imposed on imports of bananas: yet none are grown in the EEC. Peaches are produced only during July and August but imports are taxed, when there is no EEC production. In the report the committee conclude that there is no need to tax out-of-season produce so heavily. Such import arrangements are unduly restrictive. The import tariff should be reduced, if not removed, when Community production cannot meet off-season demand or where there is a low self-sufficiency ratio.

The other main plank of the policy for fruit and vegetables has already been referred to; namely, the withdrawal system—the equivalent of intervention for other commodities. It removes surplus produce from the market to maintain a pre-determined price for the produce in times of glut. This policy has been the subject of much criticism. Many assertions have been made of producers deliberately growing for withdrawal, but the Ministry of Agriculture in their evidence said that this was very difficult to prove or disprove. It is a fact, though, that the greater proportion of this withdrawn produce is destroyed and is unavailable for human consumption, even though it is of marketable quality. In 1978–79, the cost of withdrawal for the nine products amounted to nearly £42 million. It is hard to believe that more of this produce is not suitable for processing by freezing or canning.

The committee heard evidence that led them to conclude that the withdrawal system should be kept under review, offering only a safety net. The National Federation of Fruit and Potato Trades in their evidence called for a freeze on withdrawal prices. Others advocated that the system be phased out over a period of five years. In the case of apples, the National Farmers' Union believed that withdrawal should be abolished as it is the only fruit that is in structural surplus. One witness asked in evidence: Could not the expenditure involved in the withdrawal system be directed towards marketing and the consumption of produce in abundance? It is not better use of resources to encourage consumers to eat more fruit and vegetables?

May I turn to what, in my view, is the most important aspect of fruit and vegetable policy; that is, quality standards? The evidence we heard in committee led to the conclusion that Community policy has not been of significant benefit to the United Kingdom. However, improvements in marketing and the maintenance of consistent standards and presentation are the means of improving Britain's competitiveness. Early this year, after visiting Nine Elms fruit and vegetable market, one of the Minister of Agriculture's marketing advisers stated at the Oxford farming conference that the tattered lettuce was British, all the dirty celery was British and even the English Cox's apples seemed very second-rate against the Dutch imports. The lady in question may have been unlucky in her experience. However, it is generally recognised that it is easier to control quality and freshness when produce is for export.

We have to realise that the marketing efforts of our European competitors are of a very high standard. Besides this, there has been the revolution in long-distance haulage of fresh produce, with containerisation, refrigeration and the development of the roll-on/ roll-off ferry links, which enables continental produce not only to arrive in good condition, but to reach the market nearly as quickly as United Kingdom produce. The intensity of competition from imports has grown since our entry into the Community. Our United Kingdom marketing system needs to respond both to competition and to the needs of the consumer. There is now a trend among consumers away from value for money measured in terms of greatest volume for the lowest price, towards value for money in quality-for-price terms. We need to meet this in the home market by raising standards.

I appreciate that I have not covered all the points raised in the report; for example, the lack of sufficient data and information on national aids, which has already been referred to by several speakers, as well as the inequality of treatment between individual growers and producer groups and the important subject of enforcement. They have been covered by other speakers and I have already spoken for too long. I realise that I have made a dull speech, but it is difficult to go into flights of oratory on what is a complex subject; namely, the study and understanding of the Community's régime for fruit and vegetables. I hope that I have at least shed a little light rather than darkness, and that the report will serve a useful purpose.

8.55 p.m.

Baroness Elliot of Harwood

My Lords, I shall be very brief, indeed, because so much has already been said with which I entirely agree. But I should like very much to pay my tribute to the noble Lord, Lord Cledwyn, for the way in which he conducted his committee. I know of no other chairman who gets so much information out of people who come and give evidence as he does, and all the evidence which is printed in this report is fascinating and very useful for the Minister and for our Department of Agriculture. I should also like to say that the evidence given by my noble friend Lord Selborne, which is printed on page 21, was one of the most important moments in our committee, because he speaks with such authority. Not only he, but his father and, I think, his grandfather, too, have been responsible for growing apples in this country.

I should like to underline one or two points very quickly indeed. The question of withdrawal prices, which we stressed, should be watched very carefully. French Golden Delicious can be withdrawn which, in consequence, means that far more are grown than are needed. I agree with the National Farmers' Union that continuing to encourage the growing of apples in France, when they are not wanted, simply adds to the complications of the trade. In paragraph 54, we point out that the common agricultural policy spends £443 million on fruit and vegetables and that the United Kingdom gets slightly less than one-quarter of 1 per cent. of that, which amounts to £1 million. On the other hand, the customs duties that we pay amount to £79 million. So that the United Kingdom pays out £78 million net, which seems a very large sum.

We questioned what state aids were being provided in other EEC countries and, as noble Lords have said tonight, we were met with very unsatisfactory answers and far too much secrecy. We all know that very strong aids are being given in France, in Belgium, in Germany and in the Netherlands, which falsifies to some extent the cost of production vis-à-vis the British who do not give these great aids. I am very strongly in favour of getting more information from countries—and I think that the EEC has every right to ask for it—rather than that all this should be kept secret.

We in this country know what a devastating blow the rise in fuel prices has been to our glasshouse industry. In the Clyde Valley in Scotland, which I know quite well, there are big centres which used to grow tomatoes and fruit in glasshouses. Today, those glasshouses are used only in the spring and summer, when they are unheated, and not at all in the winter. On page 35, there is quite interesting and important evidence, which I commend to the Minister, from the National Farmers' Union of Scotland on the devastating effect of the high rise of production costs in the glasshouse industry. If we cannot get the other EEC countries to declare what they are spending on these subsidies, I think that we could ask the Government to look at the situation in this country, because we have unfair competition from Europe.

In paragraph 65, we point out that the United Kingdom has not benefited very much from the policy of the EEC on fruit and vegetables. This is before the advent of the new countries—Spain and Greece, in particular—which produce fruit and vegetables. We should take this very seriously. If we are going to take some action—and I hope that we are—we should take it as quickly as possible, because we are going to be caught up in a network of complications the moment these other countries come in. This is something which the people in Brussels ought to look at immediately. I hope that our Government are well aware of the problems. Our Secretary of State, Mr. Walker, and our Minister of State, my noble friend Lord Ferrers, are both practical people who really know about the importance of these matters. I urge upon them very much that the time to take action is now, before the position gets any worse. If we can do that, we shall be doing something which is of value for this important part of the agricultural industry.

9 p.m.

Lord Peart

My Lords, before speaking to my notes, may I pay a tribute to my noble friend Lord Cledwyn of Penrhos. I knew him when he was Minister of Agriculture. He did so much for the farming industry in the Community at that time. His introduction of the Committee's report was admirable. I pay a real tribute to him in the best sense. I am very proud of him. I want to thank my noble friend and his Committee for all the work that they have done. It is not an easy subject. It is different from the larger aspects of the common agricultural policy. Like any other policy, it has its deficiencies. Nevertheless, when you wade through the statistics you see how difficult a subject it is.

I should like to stress the importance of the Committee's recommendations in paragraphs 63 and 64. The Committee have expressed their opinions on, first, allegations of unfair competition, causing distrust in the Community; secondly, the problems of intervention and withdrawal; thirdly, the need to enforce quality standards and to monitor imports; and, fourth, the need for better marketing.

This is one of the problems which we have to face. It is no good always blaming the foreigner or the Community. We must look at ourselves. I am not now one of those who always blame the Community and wishes to destroy it. As an agriculture Minister, I changed my mind a long time ago. As we are in the Community, I believe that we must make it work. It would be very wrong of us to think otherwise.

I would refer to the importance of the views of the National Farmers' Union. Most noble Lords will have seen their views in the report which has been put before them. It is an important document. The union are concerned not only about producers. They are concerned also about those who are employed in agriculture and horticulture. More Government aid is needed for research for good varieties and good produce. There is also a need for good presentation and marketing.

As this is such an important question, may I ask the noble Earl, Lord Ferrers, what the Government are doing about both. We have got to put our own house in order. If we are to compete successfully in the Community we must be efficient. I should be grateful if the noble Earl, Lord Ferrers, could endorse this. If he cannot do so tonight in detail, no doubt he will be able to write to me.

Both noble Viscounts mentioned the produce of Spain, Portugal and Greece now that they are members of the Community. We accept that this will create difficulties, but now that they are in the Community I hope that they will be partners who will make a contribution to the Community. There is, therefore, a need to ensure effective enforcement of fair competition in the Community, especially now that these new countries have joined it. May I therefore ask the Government what they are doing about the report, and how soon? I do not want to go on arguing about the matter. This is a very fine document. It has been well produced, and I should like to pay a tribute to MAFF for it.

I had been hoping for a wider discussion of this subject. Why is it not possible for horticulturalists to make use of some of the surplus power which comes from our power stations for heating purposes? I know that they are worried about the high cost of oil. This is something which the Apple and Pear Council, which I had the privilege to set up, thinks should be done. It is important to site glasshouses near to power stations in order to make use of the waste which now trickles away in other directions. I should like to know whether we are going to do something like that. Perhaps a study group could be set up to go into the question. I hope that the noble Earl will be able to give me a sympathetic answer. We must appreciate that there are difficulties about it. Nevertheless, there is something in this suggestion which I hope will be considered. May I thank my noble colleague and all noble Lords who have spoken in this debate. It is a fine report which contains a tremendous amount of detail. It needs to be studied carefully. It is a report which is worth reading and studying.

9.7 p.m.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers)

My Lords, it is a remarkable example of your Lordships' House that a report like this can be produced on one of the most complicated, complex and detailed subjects and yet can be discussed in the way in which it has been discussed this evening. Our debate has been condensed into something like an hour-and-a-half and a great deal of information and knowledge has been expressed. The noble Lord, Lord Peart, congratulated his noble friend Lord Cledwyn of Penrhos. I should also like to do so, with the greatest of humility. I think he said that this report was a microcosm of what happens in the whole fruit and vegetable régime in Europe. If I may say so, his speech was a microcosm of his report in 10 minutes; I thought that was a quite astonishing speech and I admired it enormously. I should like to think that I could at least try to emulate it but I know that I shall not succeed.

I know that your Lordships will be particularly grateful to the committee of the noble Lord, Lord Cledwyn, for having gone into this subject in such detail because it really is almost a biblos, not only for the United Kingdom but for Europe and even for third countries as to how the fruit and vegetable régime works. It is very important and I believe it will become a text book. We are of course dealing with highly complicated subjects. We are not dealing with large commodities such as we normally deal with, like beef or grain, where we can be fairly broad in our considera tion. We are dealing with a number of relatively small crops produced, relatively speaking, on a number of small places with a variety of climatic and husbandry conditions, and very often with a totally different marketing position where they end up. Yet the individual item, be it an apple or a mandarin or a pear, is what the housewife is concerned with, as opposed to grain, where she may be concerned with a loaf of bread but she is not concerned with the individual grain. That is where I believe this is a subject of great importance and complexity.

Of course, the horticultural industry always has been one of entrepreneurial activity, and remarkably it has succeeded in this country with very little price support from the state. Its success or its failure has depended upon the talents and the competitiveness, the vision and the dedication, of those who are engaged in the industry, and that will still continue to be so. They have the ability to face up to the vagaries of the climate and the uncertainties which it creates, both on supply and on demand. No Government have, or can be expected to have, simple solutions to these many great difficulties.

In addition, many of these products are highly perishable and one cannot expect simple solutions to them all. But I should like to come to the item which I think has been stressed by very nearly every noble Lord who has spoken, and certainly the committee referred to it in great detail. I am referring to the allegations that there is unfairness within the European Community and that some countries are not doing what they should do. The committee expressed strong concern about the suspicions that arise from these allegations and the harm which is done to the development of the Community. Clearly any partnership cannot prosper in an air of mistrust and doubt, and I am convinced that at the moment a great deal of energy is wasted by the industry—not just the horticultural industry but even the agricultural industry—in worrying unnecessarily about what others might be doing. It is important that every country should—to use the colloquial English expression—play the game, but I believe that we are in danger of expending a vast quantity of energy, almost carrying out a witch hunt, to try to see what the others are doing and to see whether what they are doing is wrong, as if, even if that were substantiated, that in itself would solve the problems. I do not believe that it would.

I think it is certainly correct that we should try to ensure that wherever possible there is fair and reasonable and proper competition and that there should not be unfair subsidies. I think we all know of doubts about this, but I really do think that the industry as a whole should not direct all its energies into trying to find out what the others are doing and telling them not to, because all you do is to expend your energies in that direction instead of expending them in trying to compete.

Here I agree so much with the noble Lord, Lord Peart, that what we in this business have to try to do is to see that our product competes. It has to compete with other people, some of whom have advantages of climate, some of whom have advantages of soil; but in the end we have to compete, and in order to do that we have to market. The noble Lord, Lord Peart, is absolutely right, and that is why I have found that one of the most stimulating things about my short tenure of office in this Administration and in this particular Ministry is that so much effort is expended on trying to encourage marketing.

Before we always felt that the producer has to produce the food and there is the nation ready to eat it. That is not so. Communications of every kind—I think the noble Lord, Lord Peart, referred to roll-on roll-off ferries—have become far easier. It is easier to move stuff from one country to another, and little is gained by complaining that our competitors have advantages over us if we are not making the best use of our opportunities. Having said that, I can assure your Lordships that my right honourable friend is taking every possible step to ensure that where there are substantiated evidences of unfair competition he will report those to the Commission.

The noble Lord, Lord Cledwyn, and I think my noble friend Lord Selbourne and the noble Lord, Lord Mackie, also said, "Why cannot we have a list of all the aids produced by other countries?" Well, I think there is a list at the moment, in a number of different languages, which extends to 6,000 pages. I think there are seven different languages in use in the Community, and if they are all going to be translated into each language we shall end up with a volume of about 42,000 pages. Then you are going to have a host of people reading through all these pages to see what the others are doing which is so wrong, and that is going to involve a vast quantity of people. In the end what we are doing is really doing the job of the Commission, because it is their duty to ensure that State aids are fair and just.

Lord Mackie of Benshie

My Lords, as a matter of fact on our visit to Brussels we were told not that the list was available but that the list was confidential. Surely the noble Earl would agree that information, in peace as in war, is very vital.

Earl Ferrers

My Lords, I agree of course that information is always vital, but it is the Commission's responsibility to be told what aid is being given and having been told to decide whether it is fair or not. It is their duty then to inform member states where such aids are not fair and not just. All I would say to the noble Lord, Lord Mackie—I absolutely take his point—is that we want to be careful that each member state does not find it its duty to look at each aid which is offered by each other member state, because otherwise we shall be going round in concentric circles. It is the duty of the Commission. I do not wish, in saying that, to devalue the point made so forcefully by your Lordships: that the whole essence of the system is that there must be fair and reasonable competition.

When the noble Lord, Lord Cledwyn, says there has been very little benefit to the United Kingdom from the Community's policy on fruit and vegetables, I am bound to say I would share that view. It seems probable that the more tangible benefits have gone to importers and consumers rather than to producers, since the régime is largely geared to assisting the Mediterranean production. My noble friend Lord Selborne referred also to the cost of this régime, as did my noble friend Lady Elliot. It is perfectly true the régime has been very expensive to the United Kingdom, but I think it is a dangerous thing to look at one tiny sector of the whole CAP and say because that has been expensive to us therefore it ought to be changed. Of course the fruit and vegetable régime was designed when there was a Community of six, and it was recognised that there were those countries further south who did not have the advantage of the more temperate climates of the North, and that is possibly one of the reasons why the régime was so adjusted. What we have to do now is try to readjust where possible. Having to get the consent of so many other partners is not an easy task, but I can assure your Lordships it is one which my right honourable friend intends to pursue.

The noble Lord, Lord Cledwyn, asked very succinctly, as is his characteristic, are we satisfied with grading, marketing and the quality of produce? I am bound to say my answer to that would be, No. I believe this is an area to which we ought to pay far greater attention, because in the end it is in the way the produce is marketed and presented which is what attracts it to the buyer. Far too often, as the noble Lord, Lord Sainsbury, pointed out, we find the produce is not of good enough quality when it reaches the consumer. The noble Lord, Lord Sainsbury, also referred to an example of British produce which was very bad indeed. I saw some British produce—namely lettuces. I would only draw the noble Lord's attention to what happened to what one might describe as the "lettuce industry" about six years ago. It went through a complete revolution: it marketed itself and produced its crops far better and it now competes with the Dutch in presentation and, indeed, in many instances, in marketing requirements. I think that that is a good example of what happens when people address their minds to the situation.

Of course there ought to be a reasonable level of enforcement throughout the Community as regards inspection. The Commission reports irregularities which are recorded in trade between the member states. In addition, member states are required to report on home-grown produce which fails to meet the required standards on the domestic market. Records are kept of all inspections which are carried out. One might say that ideally a large proportion of home-grown and imported produce should be inspected, and at every stage in the distribution chain. That would, frankly, be impossible because it would need a great army of inspectors and the Government would be assuming the responsibilities which are really, in the last instance, best undertaken by the trade itself.

Our own inspectorate has recently been subject to the searchlight of a Rayner-type review and my right honourable friend will shortly be announcing—and the noble Lord, Lord Peart, asked me about this—his decision on the recommendations in the report of the review. I could not anticipate what is likely to be said then.

Many noble Lords referred to the difficulties of the withdrawal of produce. I think that one must face the fact that in the triumphs and disasters of the climate we must accept that, in some years, there will be abundant crops and in other years shortages. That is particularly true in the horticultural sector, where, because of the highly perishable nature of most fresh produce, storage is not practical. It follows that one consequence of the concern of the industry to meet the demands for fresh produce at all times is that there will be periods of glut and some of this produce will inevitably be wasted. I think that it offends against the conscience of everyone when, in a world in which two-thirds of the population are short of food, we see good food wasted, but I am afraid that far too often that is one of the laws of supply and demand in perishable produce.

I do not believe that there are many people who grow simply in order to have their produce made the subject of withdrawal. I know that one or two of your Lordships have suggested that this evening. The withdrawal price is, in fact, well below a normal market price. At best, it is no more than a minimum safety net for a very efficient producer. I think that it is unlikely that many people would grow simply in order to see their produce being withdrawn.

My noble friend Lord Selborne has played, if I may say so, a quite remarkable part in the apple industry. He it was who was Chairman of the Top Fruit Working Group which produced the remarkable document which has, in fact, guided the whole of the apply industry over the last 18 months. I should like to pay a tribute to him and to his colleagues for what they have done. Many of the recommendations have been acted upon, and the Apple and Pear Development Council took up the challenge in a most dramatic way. Its "Kingdom" scheme, with the assistance of a grant of £300,000 from the Government, fired the imagination of the industry and it greatly helped to increase its returns. I believe that what happened in the apply industry is an example that many others, both within and without the agricultural industry, could well follow.

Having been assaulted by the import of Golden Delicious apples, growers were prepared to say, "It is our job to fight back, and we will"; and they did. It is a great tribute to what they have done and shows how an industry, when it is being persecuted, can have the guts to pick itself up and fight back. My noble friend said that the Community preference is for large apples and I agree with him—I do not like having to eat something the size of a football. That is a perfectly good advertising point which could be made over the Cox; it is not as big as some others, and that is a very good thing too. It also has the benefit of flavour because it is grown in a country which is subjected to cold winters, and it is the quality of the cold winters that gives the apple its flavour. That is not so with Golden Delicious.

My noble friend Lord Selborne said that our orchards were old and that there ought to be restructuring grants for orchards. He knows that restructuring grants for all orchards would be a very expensive business. At the moment Ministers are examining with the industry how such restructuring could be tackled, but I can give him no promise of how this will be done or whether any public funds will be available for it.

The Earl of Selborne

My Lords, the point I was trying to make was that this should be funded from EEC funds and not necessarily from national funds.

Earl Ferrers

My Lords, I am very glad that my noble friend has made that point clear. I was not fully seized of it and I shall certainly look into it. The noble Lord, Lord Sainsbury, referred to the question of import tariffs. Of course, questions relating to tariffs and third country import arrangements are generally for the Community as a whole to decide, taking into account all the interests and all the circumstances which are involved. Where there is a strong case—and, as usual, the noble Lord pointed to a very good case—we ask the Commission to investigate the possibility of negotiating tariff reductions. But I could not hold out great hopes of immediate results because as he will realise, international negotiations between the Community and third countries are a matter for the Community and it is, of course, all part of the GATT system and, therefore, those discussions tend to be of rather longer nature than one might wish. But I certainly take the noble Lord's point.

My noble friend Lady Elliot, and I think the noble Viscount, Lord Sidmouth, referred to glasshouses and to the difficulties which they have experienced. I share the concern expressed by the noble Viscount and by my noble friend that the glasshouse industry has gone through a very difficult and testing time. It is perfectly true that the Dutch glasshouse growers have had the advantage of what is described as unfair competition. The Commission was asked to investigate it; it did, and it considered that the competition was unfair. As the noble Viscount will know, we have been able to give an adaptation aid of £5½ million this year, which is the extent and the limitation under the EEC rules, as aid to the industry.

I recognise that it does not solve the problems, but the Dutch have recently announced increases this year in the price of gas to growers, with further increases to follow. This package of increases will not fully remedy the situation. My right honourable friend has assured both the president of the National Farmers' Union as well as Members of Parliament that he will continue to press for the preferential tariff to be ended before April 1984, which is the date currently planned.

The noble Lord, Lord Peart, asked: why do we not do something about using waste heat from power stations? I can tell him that this is being done. I have seen myself the result of some of this work at the Drax power station where the heat from the power station is used to heat greenhouses. It is an impressive system; it is a new system. I have no doubt that it will have its own teething problems, but I can assure the noble Lord that that method of saving heat and using it for agriculture is being used. I would also let him know in that context that I believe there is quite a possibility of using energy by methods of anaerobic digestion, which is another means whereby agriculture can use, or can provide, its own energy, but again that is very much long term.

I would conclude by saying that I appreciate greatly the fact that the noble Lord, Lord Cledwyn, introduced this debate. I appreciate enormously, as indeed the whole House does, the work which his committee has done because it has been a mammoth work and it will be of great benefit. I would, if I may, thank as well those who have been good enough to give evidence, because when you go to give evidence to a committee such as your Lordships' committees, you do not just roll up and speak, you have to do a lot of homework to make quite certain that the evidence upon which your Lordships' decisions are going to be taken is correct. I should like to thank the noble Lord for having introduced this debate, and your Lordships for having made it so interesting.

9.33 p.m.

Lord Cledwyn of Penrhos

My Lords, I shall not detain the House for more than a moment or two, but I should like to say that, although this has been a short debate, it has been an extremely valuable one. On behalf of the members of the committee, I should like to say how much we appreciated the generous remarks which have been made about the committee's work, and about this report in particular, by the noble Earl the Minister and by my noble friend Lord Peart.

It is quite remarkable when we regard the debate in general how fortunate we are as a committee structure and as a House that we have so many specialists in this field who can speak in a debate of this kind. It is a tribute to our committee system and to this House as a second Chamber that we have noble Lords who speak with such authority that the industry and the country must listen to them.

The noble Lord, Lord Mackie of Benshie, in fact referred to tomato concentrate. I think I should in fairness mention that the Food Manufacturers' Federation, which provided us with valuable written and oral evidence, are a little concerned that the report, as they think, did not spell out with sufficient clarity why Italian producers of tomato ketchup have been enabled to undercut the price of ketchup produced in this country by 4p to 6p a 12 oz. bottle.

The report goes into this matter in some detail in paragraphs 45 and 46, but the federation have submitted a note since the publication of the report, and I should, as a matter of equity, place this on the record before we come to the conclusion of this debate. This is what the FMF said: The solution to this problem advocated by the FMF, with the support of MAFF, is that the table of coefficients used for calculating production aid for tomato concentrate should be amended so that the coefficients are directly proportional to the dry extract content of the fresh fruit equivalent. This would put production aid payments on a more equitable basis, and enable Italian and British ketchup manufacturers to compete more fairly". I think that in fairness to the FMF I should say that at the conclusion of the debate. I am extremely grateful to the Minister for the constructive way in which he wound up. He walked delicately through the minefield of state aids. I could say a great deal to him about that, but I will forbear at this moment and tell him privately what I think about it.

On Question, Motion agreed to.