HL Deb 22 July 1982 vol 433 cc1020-8

6.31 p.m.

The Earl of Gowrie rose to move, That the draft order laid before the House on 17th June be approved.

The noble Earl said: My Lords, I beg to move that the order be approved. The purpose of the order is to replace the existing Agricultural Marketing Act (Northern Ireland) 1964 with legislation which will provide for the future, but differing, needs of the three Northern Ireland Marketing Boards; namely, the Milk Marketing Board for Northern Ireland, the Pigs Marketing Board (Northern Ireland), and the Seed Potato Marketing Board for Northern Ireland.

In introducing the order I should like to say that 10 years ago, when I first became involved in political life, the Whips in my party told me that the subjects on which they would never let me loose would be agriculture and defence. Agriculture has now fallen; I wonder what barrier will be next. The order enables the Pigs Marketing Board to be brought into a form which is acceptable under EC law. It puts the Milk Marketing Board on a basis similar to the other four Milk Marketing Boards in the United Kingdom. In the case of the Seed Potato Marketing Board, it makes provision for the disposal of any surplus assets remaining after winding up.

I should perhaps explain that currently the Agricultural Marketing Act (Northern Ireland) 1964, provides legislative cover for the existing three Northern Ireland boards. The 1964 Act is a consolidation of earlier Northern Ireland marketing legislation, the first piece of which was the Agricultural Marketing Act 1933. In Great Britain the equivalent current legislation is the Agricultural Marketing Act 1958, under which the Potato Marketing Board and the various Milk Marketing Boards in Great Britain are constituted. The British Wool Marketing Board, which operates throughout the whole of the United Kingdom also operates under the 1958 Act. The House might also recall that the Hops Marketing Bill was debated in this place towards the end of last year. That legislation was required to enable the Hops Marketing Board, which also operated under the 1958 Act, to transfer its operations and assets to a co-operative, in compliance with Community law.

That is the issue which brings me to the initial need for the order before us today. There is a requirement to put the Pigs Marketing Board in Northern Ireland on a basis which is acceptable under the law of the EC. The operations of the board were the subject of legal action in the European Courts of Justice during 1978. In its judgment the court ruled that it is not permissible for a member state to retain legislation compelling producers to sell their produce through a marketing board. Following that ruling, discussions with the European Commission indicated that the Pigs Marketing Board could continue to operate if its compulsory purchase powers were removed and the relationship between producers selling pigs and the board buying them was based on general contract law, and not on statutory compulsion. Both producers and buyers of pigs in Northern Ireland are agreed that the orderly marketing facilitated by the board should go on. At present the Pigs Marketing Board is constituted under the Agricultural Marketing Act (Northern Ireland) 1964. The necessary transformation required by the EC will be achieved in Part III of this order.

However, it was possible to have the United Kingdom Milk Marketing Boards accommodated within the framework of EC law. Unlike the cases of the Pigs Marketing Board, and indeed the Hops Marketing Board (which I mentioned earlier), it proved possible to establish that the United Kingdom milk market had certain characteristics which distinguished it from other member states in the European Community. Based on that, an amendment to the Community milk régime was obtained to permit the continued operations of the Milk Marketing Boards along the lines of a classical producer monopoly. Accordingly, provision is made for the Northern Ireland Milk Marketing Board, as presently constituted under the Agricultural Marketing Act (Northern Ireland) 1964, to be reconstituted under Part II of this order with provisions more akin to the Agricultural Marketing Act 1958.

Part II of the order closely follows the provisions and procedures of the 1958 Act. While the Northern Ireland Milk Board could have continued under the provisions of the 1964 Act, the effect of Part II of the order will bring the board into line with the other four United Kingdom Milk Marketing Boards. That will mean, among other things, that the responsibilities of the Department of Agriculture for Northern Ireland will be reduced in such areas as the approval of staffing levels of the board and staff and members' remunerations. On the other hand, producer involvement with, and control over, the board is increased, and this should further protect the Northern Ireland Milk Marketing Board against European Community criticism in the future. This change of emphasis is desirable, and I am glad to be able to tell the House that it is generally supported by the industry.

I now come to the case of the Seed Potato Marketing Board for Northern Ireland. It had been hoped that this board, which had moved on to a voluntary system following the European Court ruling on the Pigs Marketing Board, could have been accommodated in the order in a manner similar to the one that I outlined for the Pigs Marketing Board. However, since the board was set up in 1961, it found it impossible to enforce an absolute monopoly. The hoard was not empowered to control producers exporting on their own account. Even before the end of the United Kingdom transitional period of entry into the European Community, producers who exported their own potatoes, especially merchants who produced considerable quantities of seed, accounted for an increasing proportion of the crop. By 1981 the board's share represented only 13 per cent. of the total crop. With that level of support its continuation under the agricultural marketing legislation was difficult to sustain and, with its long-term viability being in jeopardy, the board decided to wind up after its commitment to the 1981 crop had been fulfilled.

Legal opinion indicates that in the execution of the winding up procedure under the existing provisions of the 1964 Act, a liquidator would have difficulty in making satisfactory arrangements for disposing of any surplus assets of the board. As there is a possibility that the board could have surplus assets after it has met all its liabilities and the cost of winding up, Article 43 and Schedule 7 make amendments to the Agricultural Marketing Act (Northern Ireland) 1964 in relation to the winding up of the Seed Potato Marketing Board. These amendments will enable any surplus assets of the board to be transferred to the Department of Agriculture, for distribution for the general benefit of the seed potato industry.

I have been outlining the background to the order and its effects on the existing Northern Ireland marketing boards. In essence Part II of the order is based on the Agricultural Marketing Act 1958, applying in Great Britain, and contains provisions to place the operations of the Milk Marketing Board for Northern Ireland on a basis similar to the other four Milk Marketing Boards in the United Kingdom. Part III of the order is an adaptation specifically designed to facilitate the acceptability and continuation of the Pigs Marketing Board (Northern Ireland) under Community law. Your Lordships will be relieved to hear that rather than go through the order article by article, I should like to bring to your attention a number of more significant points.

First, while Part II has been drafted primarily to secure the continuation of the Milk Marketing Board on classical statutory marketing board lines, it will still facilitate the establishment of new marketing boards. Because of the application of EC law the opportunity for that will be limited, and none is envisaged. However, the retention of the possibility keeps the Northern Ireland legislation on a basis similar to that applying in Great Britain.

Secondly, unlike the 1958 Agricultural Marketing Act, on which Part II of the order is based, Part II makes no provision for the formation and role of a consumer committee to report on the effects of any scheme of consumer interests. It is intended that this role will be undertaken by an amalgamated consumer protection body looking after all consumer interests in Northern Ireland. That will help to avoid the proliferation of such bodies, and appropriate legislation to provide for it is presently in the course of preparation by the Department of Commerce for Northern Ireland.

While Part III has been drafted primarily to accommodate the Pigs Marketing Board, it will be possible, should it become necessary, for the Milk Marketing Board, or any other boards constituted under Part II, to be reconstituted under Part III. In this respect I would draw the attention of the House to Article 32. However, the order does not provide for the establishment of marketing boards de nouveau (so to speak) under Part III. If producers wish to set up other voluntary marketing organisations, sufficient opportunities already exist under both the companies and industrial and provident societies legislation. Unlike the Agricultural Marketing Act 1958, Schedule 2, paragraph 7, and Schedule 6, paragraph 6, of the order make provisions for boards, whether constituted under Part II or Part III, to consult producers with a view to winding up and the transfer or distribution of assets. Such transfer could, among other possibilities, include a transfer to some other producer organisation, such as an agricultural co-operative.

Lastly, I should make reference to Schedule 3, which applies to all boards constituted under the provisions of Parts II and III, and also requires the boards to show an annual statement as to the emoluments of members and employees of boards. The purpose of this statement is to give producers insight into the costs of staff and members, which are, of course, significant factors in the administrative expenses of any board. These requirements are, I feel, in keeping with the objective of making agricultural marketing boards more acceptable to producers and ensuring that producers are given sufficient information with which to exercise meaningful control.

Over many years the Northern Ireland Marketing Boards have been a stabilising and beneficial influence in the marketing of agricultural produce. I am sure your Lordships will agree that the changes envisaged by the proposed order are in some respects essential and in others highly desirable to enable both the Milk Marketing Board and the Pigs Marketing Board to continue this role with the minimum of disruption. The changes will also leave the boards better equipped to meet changing circumstances in the years to come. I commend the order to your Lordships.

Moved, That the draft order laid before the House on 17th June be approved.—(The Earl of Gowrie.)

6.41 p.m.

Lord Bishopston

My Lords, I am sure we are all very grateful to the noble Earl for introducing the order in the way he has, and for explaining it to your Lordships. I certainly do not intend to go into some of the details which he has given to clearly so your Lordships. I think we would welcome his initiation to the agricultural sector, and I am sure that, despite his short acquaintance with the industry, no one will doubt from the previous debates the fact that he is very much in touch with the grassroots, if I may put it that way. The noble Earl has no relief tonight, because this is his third order and he still has one more to go; but my noble friend Lord Blease, who is also so well identified with Northern Ireland affairs, has one more to go, and I am very pleased to be able to give him some relief, at any rate. I am sure that some of the points I shall make, which I shall do as briefly as possible, are points that he would have made.

As the Minister of State for the Ministry of Agriculture, Fisheries and Food for five years myself in another place, I had the pleasure of liaising with Northern Ireland agriculture, fisheries and food industries, helped by visits which strengthened my contacts there, including visiting the Royal Ulster Show and also some of the fishing areas. The reshaping of the marketing boards, with other changes as outlined by the noble Earl, will have effect upon a wide range of people involved in production, marketing and distribution, and, of course, in consumer aspects in Northern Ireland, where 9 per cent. of the working population is engaged in farming—which, of course, is about three times the average percentage of those engaged in the United Kingdom—and the processing and preparation of material of course adds to this impressive percentage.

The order introduces greater compatibility, as the Minister has said, with the EEC, with the organisation of Northern Ireland commodities matching to some extent the legislation which is already in use in Great Britain. I think we must ensure, nevertheless, that such changes are not less advantageous when applied to the Province. Part II of the order, as the Minister has said, concerns co-operation, education and research. These are very important aspects in agriculture. They are essential to the viability of small farmers in particular, and co-operative ventures need more encouragement and resources, accepted as they are by more small farmers and in a wider range of commodities.

The Agricultural Marketing Boards in Brtitain and, indeed, in Northern Ireland have made a substantial contribution to the high productivity of agriculture and food production in the United Kingdom, where the output per employee is indeed higher than in almost any other industry. There is, as we know, considerable criticism of the CAP, and we would not wish our agricultural industry to be influenced unduly by those member states which are nowhere near as productive as our own. Although few doubts have been expressed about the possible effects of the order, Northern Ireland will want the Minister to resist any trends which may hinder Northern Ireland producers in their commendable production records.

The Milk Marketing Boards, which, of course, are regarded by everyone with great admiration in the United Kingdom, exist because, in particular, of the considerable confidence expressed by the dairy industry, including farmers, distributors and most of all, of course, the consumers. The doorstep delivery is so well an accepted part of our lives, and one hopes that this will continue despite any other changes which may emanate from the CAP.

But it seems incredible that the United Kingdom, including the Northern Ireland dairy industry, which is far more efficient and productive than that in many other EEC states, should have been threatened by the Brussels Commission. I think that indicates the need for vigilance. But, of course, efficiency in marketing depends on having produce to market, so other trends need attention. Two of them have been mentioned tonight by noble Lords. Reference has been made to the problem of manioc by the noble Viscount, Lord Brookeborough, and the noble Duke, the Duke of Abercorn, mentioned the problem of the less favoured areas—two matters of real concern to Northern Ireland agriculture at the moment. The less favoured areas (or the LFAs, as they are called) are important because Northern Ireland has something like 45,000 agricultural holdings which are, on an average, about 21 hectares (which, as your Lordships will know, is about 50 acres) as compared with an average of 50 hectares (or 125 acres) in the United Kingdom as a whole. So these are important factors with the LFAs. The marketing boards must of course heed these facts, and indeed the Government do.

Holdings of the size of those in Northern Ireland can survive only by efficiency and hard work, and they need all the support they can get. The review of the LFAs, to which the noble Duke, the Duke of Abercorn, made reference, brings also eligibility for aid, but this is not helpful if the overall cash available brings no greater help to individual areas and producers. It seems to me that, taking the present sum of money from the Community and from Her Majesty's Government which is applicable to the less favoured areas, if those areas are extended then, unless the amount of money allocated is increased, this can have its effect upon those already receiving some benefit. Farmers in Northern Ireland must get more encouragement to utilise the more difficult areas—improving the quality of soil and making it worthwhile to produce in very difficult circumstances where normally crops and other means of production would not be viable.

My noble friend Lord Blease and I have been very much aware of the concern of farmers as expressed by the Ulster Farmers' Union general secretary, Mr. Gilliland, who expressed what he called "urgent concern" at the delay in the submission to Brussels of the United Kingdom application for an extension of the LFAs. I think I gathered from the Minister's reply in the last debate that the application has not yet been made. He may clarify this if I am wrong. But I understood that the Minister of Agriculture said in March that the application would be made within weeks, and in reply to a Private Notice Question in another place on 13th May, he said he expected to make the submission very shortly. It seems that the submission still has to be made. I think the importance of this point is that it is essential to make the submission in time to ensure the extension is designated before the 1983 LFA payments are made. If the application goes in too late, then, of course, the farmers concerned may suffer.

The other concern of the Ulster Farmers' Union is about the supply of cereal substitutes, especially manioc, as we have been told today. The Minister may recall that your Lordships' House had a debate on this matter following a report of the Select Committee on the European Communities as far back as last year. This is a matter which is still worrying farmers in various parts of the Community. In the debate, in which I took part, I believe the noble Viscount, Lord Brookeborough, also took part and expressed his concern about manioc. We know that Northern Ireland producers are worried about the high cost of imported feed. Manioc, as the noble Earl will know, is a very high energy product from tropical countries—Thailand, Indonesia and China—and I believe that, coming into the Community, it is subject to a levy. The Community has a dilemma here because of the need to put the interests of those who use the cereal substitutes such as manioc which are less costly and the interests of the livestock users, who benefit from it, against the interests of the producers of cereals.

In the report to your Lordships' House from the Select Committee on the European Communities, the committee said that they believe that the Commission's proposals and the support given thus far by the Council for negotiating restrictions on imports of manioc to be wrong. This is a factor which still has to be resolved. There is hope by the Ulster Farmers' Union that its members will be benefiting from any regulation of the quota when, of course, there should be an assurance that Northern Ireland will get its fair share. Small farms, small fields and heavy rainfall make it essential that there is a competitive livestock industry as there are very few alternative arable ventures. It should be possible to resolve the apparent conflict between the cereal producers and the livestock industry and the cereal substitutes such as manioc and gluten help us and the LDCs.

May I put to the Minister, finally, three questions of which I have given notice to his officials, so that I hope he will be able to reply. First, will he ensure that in reshaping the marketing boards and in the re-organising of their functions, the changes do not add to the problems of the agricultural and horticultural industry, ensuring that these changes are based on the methods of the most efficient areas of the Community? We all know that the United Kingdom—including Northern Ireland—is among the most efficient producers in the EEC; and we want to level up the standards and not to level down.

Secondly, can the Minister report on the state of play with regard to the extension of the application of the LFA? He has already made some comment on this and I should like to know what the prospects are of making the application and of the certainty that benefit will be available in the 1983 period; and also, of course, whether the Government will be making more money available for the LFAs because, as I say to extend the areas with the same amount of money will not benefit those who are already receiving help. Finally, with regard to cereal substitute, manioc, will the Government ensure that if there is an EEC quota system to operate with manioc et cetera that Northern Ireland gets its fair share of the benefit having regard to its dependence on livestock.

With 80 per cent. of the land area of the Province being in agricultural use and a good percentage of its working population employed in it, the agricultural industry needs all the support which the EEC and Her Majesty's Government can give to ensure its prosperity. Finally, if the noble Earl can deal with defence with the same skill with which he has dealt with the agricultural aspect this afternoon, then I am sure we have nothing to fear.

The Earl of Gowrie

My Lords, I thank the noble Lord, Lord Bishopston, for his kind remarks and assure him that I am sure that my honourable friend the Minister of Agriculture there will welcome the noble Lord back to any agricultural shows that are going in the Province. We hope to see him at them once more.

He asked me whether the Government would ensure that in reshaping the marketing boards, the changes do not add to the problems of Northern Ireland agriculture. I think these proposals were designed to ensure as little disruption as possible between the old and new arrangements. That, certainly, is the overriding desire of the Ulster Farmers' Union and the various marketing boards. The Part II changes are not all directly as a result of European Community requirements. I agree that we must be vigilant about bringing everything in line with the Community; but they do exist to put the Northern Ireland Milk Board on the same footing as milk boards over here, which is a rather different point. There will be continued consultations on all matters concerning implementation of the legislation and Ulster farmers are not notoriously reticent when they think the Government are not serving their interests well. The framing of schemes will be largely for the producers themselves.

I am in a slight quandary in that the other questions that the noble Lord asked me are appropriate to the previous order, as they are not dealing with marketing board issues. I gave part of the answer on manioc to my noble friend Lord Brookeborough. I skipped the rest of it because he was not here. As a matter of courtesy to the noble Lord who has been so kind, I will give the rest of the answer but, in fact, it is not pertinent to this order. I should be grateful if he would correlate what I have to say with my answer to my noble friend on the previous debate.

Government expenditure on compensatory allowances—we are now on the less favoured area points—and certain capital grants would qualify for a contribution from the Community. It is our judgment that it would be inappropriate to consider an application for Northern Ireland by itself before the Northern Ireland less favoured area issue was correlated with the issue in the context of the United Kingdom as a whole. My right honourable friend the Minister for Agriculture is engaged in that work at the moment. I do not think, therefore, that we can take Northern Ireland out of the United Kingdom in this issue, any more than in any other at present. I hope, therefore, that he will appreciate that I cannot give him as full an answer as I should like.

Lord Bishopston

My Lords, before the noble Earl sits down, may I mention the relevance of the two matters of manioc and the less favoured areas which I raised. Unless one has the basis for prosperous agriculture one has very little to market. The two points I raised are ones of current concern in Northern Ireland. With regard to the less favoured areas, I appreciate that Northern Ireland's application or the application to Northern Ireland will be part of the application of the United Kingdom generally. But there is a special need for Northern Ireland because of the very much smaller areas concerned and the areas which would benefit from that charge. With regard to manioc, I appreciate that the Minister will write to me and I shall be in touch with those who have been in correspondence with me on the matter. With those comments, I thank the noble Earl for his reply.

On Question, Motion agreed to.