HL Deb 06 May 1986 vol 474 cc620-84

4.50 p.m.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead)

My Lords, I beg to move that this Bill be now read a second time.

These are significant times for the agriculture industry—times of change for which the industry needs to plan. This change can be divided into two aspects which dominate this Bill. Firstly, there is the shape of the industry itself. New technologies and the new pressures of over-production and reduced margins make some reassessment necessary. Secondly, there is the ever-increasing awareness of the needs of the environment. The aim of this Bill is to develop a partnership between the Government and the agriculture industry so that together we can not only respond to these changes but also bring some of them about.

The first aspect, then, of this need for change relates to the shape of the agricultural industry itself. With each passing month, it seems, we face new demands and new pressures, which seem greater than those that went before. We are often told how the industry needs to turn more to the market and must change with the times.

This leads to difficult questions for the Government's advisory services. How best can advice be adapted to the new pressures facing the industry? How can the partnership between ADAS and the industry which has been so successful to date be maintained and strengthened in future years? On which subjects should advisory effort be concentrated, and how can advisory services improve the speed and flexibility of response to changing needs? There are no instant answers to all these questions, but one thing is clear. The best way of finding out what the industry wants and values is to enable it to choose the services it will pay for.

Clause 1 accordingly enables the Government to make available a considerably wider range of advice on agricultural and rural matters than has previously been the case, and puts on a common footing the various existing provisions relating to advisory services. Because the scope of the clause has to be drafted in wide terms to enable ADAS to respond to requirements that cannot be foreseen at present, it would not be appropriate to make these requirements mandatory, as in the legislation it replaces. ADAS needs to be able to move resources quickly into newly-developing areas of interest to the industry and out of areas in which the industry is no longer interested.

The clause will also make it possible to charge for advisory services. This will enable farmers to have the clearest possible say in the kinds of services they receive. That is crucial, at a time when the agricultural industry is facing a period of unprecedented change. There is no point in providing services that farmers do not value or which are no longer relevant to their needs. However, I should like to repeat here the firm commitment which was given when the clause was discussed in another place. There are no plans to charge for the kind of advice now given to farmers on conservation, rural diversification or animal welfare matters.

Clauses 2 and 3 of the Bill are based on the same principle; namely, that the beneficiaries of a service should be aware of, and contribute towards, the cost of its provision. Clause 2 will enable the cost of enforcing seeds regulations to be taken into account when fees are set to recover the cost of official seed certification services. All the costs incurred in actually certifying seed are already fully recovered at the present time, but this clause will allow expenditure on the important task of policing certification also to be recouped.

Clause 3 deals with the powers that are being sought to charge for certain plant health work. Producers already make a contribution to the cost of plant health work, which benefits the environment as well as the farming industry, by taking preventative measures and by bearing the costs when a pest or a disease is found and a crop has to be destroyed. There are, however, two areas of plant health work where we are providing services which are of clear benefit to growers and others. Accordingly, Clause 3 seeks to amend the Plant Health Act 1967 by inserting a new clause which gives the power to set fees and charges to pay for work done in connection with the issue of export certificates and import licences.

Exactly the same principles apply to our agricultural research and development effort. It must have a clear direction and purpose, so that it meets the needs of the industry as effectively as possible and allows Government to discharge their own responsibilities in areas which only Government can fund. Here again, the industry is now being asked to take decisions which will help determine the future shape of the R & D effort in agriculture. Each sector is considering what research and development it wishes to see undertaken on its own account and so to contribute to the total effort. The Government will still be contributing nearly £200 million on United Kingdom agricultural and food research and development in 1987–88, but new contributions from industry would mean that the industry itself would have a much greater say in the overall programme. This Bill provides mechanisms to help the relevant sectors participate in this process.

Therefore Clauses 4 to 6, through some limited changes to the Cereals Marketing Act 1965, provide the widest possible scope for the cereals sector as a whole—and other arable sectors, if that is the industry's wish—to play a larger role in the areas of research and development and marketing, through the Home-Grown Cereals Authority. It remains for the industry itself to decide whether to raise additional funds for this purpose and on what specific projects such money should be spent. I am heartened by the progress which I understand has been made in devising a programme for the authority to pursue, and I am convinced that it is strongly in the interests of all sectors of the industry for this to be endorsed.

Similarly, Clause 7 introduces important additional flexibility into the membership arrangements and levy powers of the Meat and Livestock Commission.

The Government have always recognised that marketing is vital to the modern agricultural industry, which is why we set up Food from Britain. However, we must get the emphasis right. We do not want good marketing to be, as it were, imposed upon the industry, but to become a characteristic of it. That is why we hope that the industry will choose to use the fund-raising mechanisms in the clauses I have described to fund Food from Britain as well as other forms of marketing.

We have made it clear that for the Government's part we are ready to continue funding Food from Britain for a further three years when the initial pump priming funds of £14 million run out next year. Those additional funds will be on a £1 for £2 basis with the industry up to a maximum Government contribution of £2½ million a year provided the industry comes up with £3 million a year for its part. The Food and Drink Federation and the meat industry have so far agreed to make contributions to Food from Britain, but more money is needed and I hope the industry generally will not lose this opportunity to secure the long-term future of our national marketing organisation. Given the prospect of an increasing industry commitment to Food from Britain, it is right that we should make changes to its constitutional and financial framework to reflect a different pattern of funding. Clause 8 introduces these changes and will extend the size of the council to allow Ministers to appoint members from a wider cross-section of interests.

In one case where a sectoral body does not have the support of the industry, the Government, in keeping with their desire to work in partnership with the industry, have decided to remove the body concerned. Clause 9 will therefore provide for abolition of the Eggs Authority. The authority has, for many years, been a source of division within the industry. My right honourable friend therefore invited the noble Lord, Lord Peyton, to chair a small committee to review the authority. That committee concluded that the authority should be wound up, and Clause 9 will carry that recommendation into effect. I should like to take this opportunity to pay tribute to my noble friend Lord Peyton for the thoroughness, speed and brevity with which he tackled his review.

One important addition to the Bill in another place emphasises how important it is to allow the industry to react and respond to change. Clause 11 and Schedule 1 are intended to deal with one of the consequences of the introduction of milk quotas. In the last two years quotas have acquired a value; tenants can see this value reflected in the sale prices and rental values of land with quota attached, as opposed to land without quota. However, because quotas are linked with the land a tenant who retires or moves to another farm cannot sell the quota or take it with him. Hitherto, he has not been able to obtain any recognition of the efforts he has made to building up the level of milk production on which the quota is based. Being unable to realise any part of the quota value for themselves has led to a very real sense of injustice among tenants.

It was because of this that my right honourable friend held intensive discussions with the National Farmers' Union and the Country Landowners' Association to try to devise a system of compensation for tenants which would be reasonable and fair to all concerned. However, it did not prove possible to reach agreement. The Government decided that in this situation it was our responsibility to design a system which would strike a fair balance between landlords and tenants, and to introduce legislation accordingly.

In Schedule 1 we have set out a framework within which landlords and tenants will, we hope, in the great majority of cases be able to agree on the amount of compensation due. In the absence of agreement, arbitration will take place. In designing this system it was necessary to strike a balance between, on the one hand, providing very detailed guidance which would leave the arbitrators with little discretion, and, on the other hand, providing only very vague guidance which could lead to unpredictable results with similar cases being given different treatment. We believe that we have struck the right balance. On the one hand we have not, as was suggested in some quarters, specified that tenants should normally receive a particular share of the quota. It seemed to us that the starting off point should be the specific circumstances of each holding, rather than an arbitrary figure plucked from the air. On the other hand, we have provided a basic structure which we believe will ensure that similar cases receive similar treatment.

The fundamental philosophy behind the provisions in Schedule I is that tenants who have put in a great deal of effort should do well in this compensation matter, whereas those who have let their farms run down should not.

Part I of the schedule establishes which tenants will have a right to compensation at the end of their tenancies. Normally it is those who were on the holdings on 2nd April 1984 and to whom quota was allocated by the Minister. Special provision is made for statutory successions, where the compensation would not be payable at the end of the original tenancy, but instead the right passes to the statutory successor.

Part II of the schedule sets out how the payment is to be calculated. The assessment will be based on the concept of a "standard quota". This will normally be calculated by multiplying the number of hectares used for dairying on the holding by a standard yield of milk per hectare. If the tenant has more than this standard quota, he will receive the full value of the excess. This is intended as recognition of the results of his managerial enterprise and skill. He will also receive a share—which in the schedule is called the tenant's fraction—of the standard quota determined by the relative values of his inputs into the enterprise, compared with those of the landlord. Where a tenant has less than the standard quota he will receive a share of his actual quota determined in the same way in relation to his and his landlord's inputs, but the compensation will be reduced proportionately to the amount by which he has fallen short of the standard quota. This abatement will recognise the fact that this tenant is leaving on the holding a lower quota than the landlord might have expected.

In recognition of a number of concerns expressed in another place I am pleased to say that at the next stage of the Bill in your Lordships' House we will be tabling an amendment which will remove the 20 per cent. restriction on variations in standard quota and will make other related adjustments. Although the details have yet to be worked out, we believe that the amendment we propose to make will meet the main concerns which have been expressed and will allow greater flexibility for individual circumstances to be taken into account.

The other main subject of the Bill is care for the environment. Increasingly, all sectors of the community have come to realise how vital it is to protect our natural heritage. This cannot be dismissed as a mere fashion. Nor is the desire to protect the environment really a new one. In recent years government policies on agriculture have been developed to reflect this wider concern. Many of the activities in which agricultural departments are involved now reflect our wider concerns for conservation and the social and economic interest of rural areas. The success of such policies depends on the development of a partnership between government, the industry, and other interests in the countryside. The Bill is seeking to develop this process.

Clause 12 of the Bill recognises this vital shift of emphasis in the development and implementation of agricultural policies. It imposes on agriculture Ministers a duty to seek to achieve a reasonable balance between the interests of agriculture, conservation, recreation and the social and economic needs of rural areas. This new duty would establish in law a policy which recognises the vital role that farmers play in preserving the social fabric and natural beauty of our countryside. The Government realise that finding the right balance between the many and varied countryside interests is by no means an easy task. However, our record in recent years I think demonstrates our determination to try to find that balance. Clause 12 will establish more clearly than ever before this aim, which underlies all of the ministry's functions in the countryside.

The commitment enshrined in Clause 12 is not an idle one. It will result in practical measures, such as those contained in Clause 13. This clause implements arrangements for which my right honourable friend the Minister fought very hard in the Community negotiations and which will have a significant beneficial effect on our countryside. It will enable us to set up environmentally sensitive areas in which farmers will be offered payments for maintaining or adopting farming practices which help to conserve the special landscape and habitat features of those areas.

Equally, we have taken steps to do away with an anomaly from the past. Clause 14—and I am glad at this stage to be able to acknowledge the part which the noble Baroness, Lady Nicol, played last year in pressing the case for this amendment—ensures that all capital grant applications in respect of national parks, the Broads Authority and sites of special scientific interest are now to be fully covered by consultation arrangements with the Nature Conservancy Council and national park authorities.

This Bill is about choice, about allowing those responsible to pursue what is best. On the one hand it gives the farming industry the opportunity to influence its future direction and gives it the flexibility to adapt that direction with changing times. On the other hand, it emphatically states that there must be a balance between all the interests of the countryside. The Bill reflects the Government's determination to allow neither the industry nor their own services to drift and to ensure the best future that we can plan for the agriculture industry and for the nation. I commend the Bill to your Lordships' House and I beg to move.

Moved, That the Bill be now read a second time.—(Lord Belstead.)

5.10 p.m.

Lord John-Mackie

My Lords, the noble Lord, Lord Belstead, is very good at putting across a Bill like this. He does it so extraordinarily well that one is almost forced to agree with him sometimes. I must congratulate him on the way he managed, in a few sentences almost, to put across the ten pages of Schedule 1. I am obliged to him because it does help me a little to understand what on earth the Government are trying to do in this case.

I should like to be as short as possible: there are 20 odd speakers, and time is getting on. This Bill started over six months ago with 11 clauses and a couple of schedules taking up 14 pages. It now appears in front of us six months later with 16 clauses and three schedules taking up 28 pages. I suppose one could say that the Government have not been idle in that time. That may be, but to take nearly three months from the end of the Committee stage in another place to bring this Bill here is, I think, a bit much. Quite frankly, many of us had almost forgotten it was in existence; but here it is at last.

The acceptance of this Bill publicly on the part of the various facets of agriculture has been quite qualified. Few, if any, like the first three clauses, where the emphasis, although the noble Lord would probably say otherwise, is on the charging for advice by ADAS. Of course we are pleased at the extension of the services and goods mentioned by the Minister, and I will say a word or two more about Clauses 1, 2 and 3 later. Clauses 4 to 8 are amendments to various Acts from 1964 to 1968, with which I had a lot to do when I was in the Ministry. In changing times, no doubt some of these are, as the Minister said, necessary, but they will need to be looked at fairly closely in Committee. Clauses 9 and 10 abolish the Eggs Authority, as the noble Lord said, on the advice of the noble Lord, Lord Peyton, and his two committee colleagues. Clause 11—a mere seven lines—carries a schedule (Schedule 1) of ten closely-written pages.

The noble Lord, Lord Belstead, explained it, as I said, in a few sentences and he did it well, but I think it will need a lot more explaining than that. The main thing it does is to explain how the compensation is to be arrived at between landlord and tenant if the CLA and the NFU cannot agree on the value of a milk quota at the end of a tenancy. I shall also be saying something about that matter later.

Clauses 12, 13 and 14 deal with conservation. In many quarters these three clauses make up for their grave doubts about the rest of the Bill. The CLA and NFU give these three clauses their blessing, with minor reservations, and of course the conservation and environmental societies are looking forward to the various provisions being carried out. I am just as keen a conservationist as most people. I have done a lot of conservation work, and I should like to point out to the conservationists that the land of our country is the basic raw material for the production of food and wood. From that production farmers and foresters have to make a living, maintain and pay a labour force on the land and, which is equally important, purchase and maintain equipment and goods from ancillary industries which also have to make a living and to pay and maintain a labour force. I cannot emphasise that point too strongly. Into that picture of what we do on the land, conservation and the environment can be fitted—but it has to be that way round and not vice versa. I would emphasise that very strongly indeed.

Quite frankly, I have difficulty in visualising how ESAs are going to be managed, and so have many other people, I believe. If, for example, we had in an ESA an outbreak of aphids (we had such an outbreak not many years ago in my own area) which could completely destroy a whole crop of wheat, and a pesticide spray was forbidden because of the risk of killing ladybirds, how would the farmer be compensated there? The same could apply to forestry in the case of spraying for moths and so on which destroys trees. There could be a restriction on the use of nitrogen.

I could give other examples. I sat at a dinner the other day beside a lady who had a tremendous antipathy to the growing of oilseed rape. I have come across it in other places as well. So there will have to be a better understanding of farmers' problems before their co-operation will be complete on this issue. There are many questions to ask about ESAs before this Bill reaches the statute book.

If I may turn now to Clause 1, this Government have been in power for seven years with adequate and, indeed, excessive majorities. For the first four years or so farmers were encouraged to go on producing more. "Go ahead: it saves import costs", one Minister told us. During that time, rumour, backed up by some statistics, had it, that farmers were making plenty of money. Yet during that time they got all their advice free. There was never, or very little, word that they should pay for it. Over the last two or so years the scene has changed very much indeed, as the noble Lord, Lord Belstead, said. Prices have come down, and the noble Earl, Lord Ferrers, treated us to a speech a few weeks ago in which he very ably pointed out what had happened in cereal-growing areas. He pointed out that costs have gone up although of course there has been a welcome reduction in oil prices recently. However, that is not going to do everything.

This year's Price Review from the European Community puts on levies, quality restrictions and an intervention timetable, all of which lower our returns even further. Add to that last year's disastrous harvest—and quite frankly in some ways I think another bad one is looming: I did a trip through East Anglia this weekend, all the way up to Norfolk one way and back home again down the other, and I was amazed at the amount of bare land that still remains unbroken or where the crops have gone in just this last week.

We must alter our thinking and our attitude to conservation and the environment. We have to reduce our production, maybe take land out of cropping altogether and find other ways of making a living from our land and buildings. All that will need a lot of advice and guidance, but what do the Government do in these circumstances to help in this dramatically altered situation? Again, I emphasise that it is a dramatically altered situation. Apart from closing down a lot of research stations, increasing charges for a lot of statutory work and a so-called efficiency drive which will probably mean a loss of up to 400 jobs in ADAS, plus probably closing five veterinary investigation centres—after all that they are now to make us pay for advice.

Even if they had sat down to think of the most irrational thing they could do, I doubt whether they could have bettered this proposal. We are told that it is going to collect £5 million—probably between £20 and £25 per farmer countrywide. We hear a report that dog licences bring in something like £750,000 but that it costs £3 million to collect the money. Before the whole apparatus for collecting this £5 million is set up, we should consider that we might have the same picture. If the Government are hell-bent on being stupid, surely they should look for a simple way to do it. A small levy collected by the MMB, the HGCA, the MLC, the PMB—and of course, if they had left the Eggs Authority alone, it could have collected some as well—and so on, would raise the money. Farmers would then feel free to ask advice where they needed it. This particularly applies to small farmers in remote areas, and I cannot emphasise that too much. A lot of people think of farming as being done by East Anglian barley barons, and so on. I should like to point out that the average size farm in this country is 160 to 180 acres. There are 250,000 farms altogether, and a lot of these will not be able to afford the advice which they so rightly need under the changed conditions.

The very comprehensive advice provided by ADAS has been of inestimable value to these people and to farmers in general, and its impartiality and independence has added to that value. This cannot be obtained from commercial advice. I am not against commercial advice. I have a lot of friends in the commercial world who have advisers, but they all have a bias in favour of what they are selling, and the impartial advice of ADAS has been of invaluable help to farming.

Leaving aside the principle of the charges, there appear to be enormous difficulties in deciding how much to charge and when to charge. There will be no charge for conservation, but there could be a combined visit—and what does the adviser do then? Also, there are all the expenses of setting up an accountancy system. There will be bad debts. I can see first-class advisers having to waste their valuable time on the trivia of commercialism.

Having dealt with the physical side, I should now like to come to the emotional side. We have dedicated people at ADAS, and it is almost impossible to state how much harm will be done through the demoralising effect of what is going on there and at the research institutes. I plead with the Government to abandon this whole idea, which is just for the sake of being able to charge £5 million for advice.

Taking a look at the clauses in the middle of the Bill, Clauses 2 and 3 have to do with recouping costs and increasing fees, all adding to the costs of the industry. I hope we can have some estimate of what these might be. Clauses 4, 5 and 6 deal with some changes in the Home-Grown Cereals Authority which have our approval. The two clauses dealing with the MLC alter the numbers on the commission and give it power to levy to raise cash for other uses. I hope that my suggestion of a small levy to help pay for ADAS will be included in this.

As I said earlier, Clauses 9 and 10 abolish the Eggs Authority. This is being done on the advice of a committee chaired by the noble Lord, Lord Peyton. I have read the conclusions in the report. As the noble Lord, Lord Belstead, said, it is a very concise and short report, but I have had time to read only the conclusions, and I am not fully convinced about this move. But I know the noble Lord, Lord Peyton, well. He is a reasonably sensible man, so I hope that no harm is being done here.

I now come to the clause on compensation for milk quotas. This has caused a fair amount of heart-burning, as we all know, the reason being that quotas were given a value. There is no doubt that when quotas came in two years ago the whole situation had not been thought through before launching them on the milk industry. I made that point in a speech in July 1984, but I readily admit that I did not anticipate the trouble that this would ultimately cause.

In the proposed outgoers' scheme, a figure of 27p a litre, or thereby, was mentioned. This has now been reduced, as we heard in the debate a couple of weeks ago, to 18p, but even this figure gives a total value in the region of £3,400 million for all the milk that is produced under quota in this country, and it is half as much again if we take the first figure. A 60-cow dairy farm with a quota of 300,000 litres is, in theory, worth an extra £54,000. I wonder how a banker would react. All this has created a situation between landlord and tenant that the Government are attempting to solve with Clause 11 and Schedule 1. As a well-known Doric poet put it, I am going to leave it, to fouk wi' better thoombs than me to red this ravelled snorl. I hope that the noble Lord, Lord Middleton, will be able to help when he speaks.

There is a lot more that one could say about this Bill. There is a lot of information missing, particularly from Clause 1 and Clauses 12, 13 and 14. I know the argument that you cannot put detail into a Bill, but these four clauses—and the Minister emphasised this today—bring a completely new picture to the agricultural scene. We have been told very little about how the charges for advice will be operated. We have no idea what is the final objective in repect of ESAs. There are arguments that the whole country is environmentally sensitive, but not everybody has the same idea of an environmentally sensitive area. The advice will come from the Nature Conservancy Council and the Countryside Commission, but they are controlled by the environment Minister. I hope that he is on better terms with the Minister of Agriculture than he was a few months ago at Oxford. Then the Treasury come into the picture. Who advises them on environmental matters? It will be an intensely interesting Committee stage on this Bill.

Before I sit down, I should like to make a final point. The charity aid bodies that are interested in aid to developing countries—Oxfam, Christian Aid and so on—have written to me, and no doubt to many other noble Lords, because they would like some commitment that the surpluses that are produced in this country and in the EC will not be used to distort the agricultural economies of the countries that are receiving aid. In the other place, it was asked that a clause or a subsection be added to cover this point. I have studied their brief and I do not think that this Bill is the place for it, although I have every sympathy with their ideas. I just thought I should mention that before I sat down.

5.17 p.m.

Lord Walston

My Lords, the noble Lord, Lord Belstead, may be surprised to hear me say that I greet this Bill with praise, albeit with faint praise. He told us that its object is to develop a partnership between government and farmers—a very desirable objective. I cannot honestly see it developing any greater or better partnership than there is at the present time. I shall not go into details, but while I agree with Clauses 4 to 6 on the Home-Grown Cereals Authority, I cannot see that altering the membership from a minimum of 21 and a maximum of 23 to a minimum of 12 and a maximum of 21 will do a great deal to develop a partnership between government and farmers. Also, I cannot see that altering the number of people on the Meat and Livestock Commission from a maximum of 15 to a maximum of 10 will do that; nor will altering the number of people looking after Food from Britain achieve that purpose.

While I hold no particular brief for the Eggs Authority and am prepared to go along with the recommendations of the Peyton Committee, I do not see that this—I am referring to Clauses 4 to 9—will have any effect whatsoever, other than a rather minor one of tidying up a slightly untidy situation. So I certainly do not complain, but I cannot greet the clauses with anything other than the faintest of faint praise.

I move on to Clause 11 and the schedules. I should like to make one minor point here. I suspect that there is an almost insignificant misprint on page 17, but as Bills before this House should be read with the greatest of care I mention it as much as anything to show hat I have read it with care. Page 17, line 19, states, the milk quota was transferred as the former tenant bore (or its treated as having borne)". I suspect that it means, is treated as having borne". Possibly my copy of the Bill is unusual, but in future copies perhaps that could be put right.

Having said that, I shall say little more than that the proposals are enormously complicated. Even reading the schedule with the greatest of care I find it very hard, as did the noble Lord, Lord John-Mackie, to understand how this is all going to be worked out. In my view it is impossible to legislate for this very complicated matter. There are very many variations both in locality and in personal conditions, and inevitably it is far better to leave it to an arbitrator to decide. We have a very well worked out arbitration system in this country to deal with disputes or disagreements between landlords and tenants. I think that, as this Bill provides, it is reasonable and right that it should be left to the arbitrator, but I should be happier if the arbitrator's hands were not tied to some extent in the way (as I understand it) the Bill is attempting to tie them under the guise of giving guidance. I think it is also a matter for argument as to how the standard quota is calculated. That can give rise to a great deal of argument. I am not happy about the schedule in particular, and I look forward with hope to the amendments which the noble Lord has told us will be presented at Committee stage.

I turn now to Clause 12. I, too, have received the document to which the noble Lord, Lord John-Mackie, referred. While I do not go along with it to the extent of thinking that a clause could well be inserted into the Bill to deal with the matter of the third world, it is important in the present atmosphere that when one is talking about the job of the Minister of Agriculture it should not be simply under the heading of conservation, as it is in Clause 12.

While obviously the first job of the Minister of Agriculture—historically, if for no other reason—is, the promotion and maintenance of a stable and efficient agricultural industry", I should like to see more emphasis given to the other three considerations: (b) the economic and social interests of rural areas; (c) the conservation and enhancement of the natural beauty and amenity of the countryside … and (d) the promotion of the enjoyment of the countryside by the public". I should like to see those considerations promoted to the extent of making it quite clear that they are all responsibilities of the Minister of Agriculture which are growing rapidly and that they are not just, as in the past, to be relegated to some poor relation status. While I would not go so far as to say that they are completely equal in standing to the job of food production, they are of very rapidly growing significance.

I also suggest that another point of significance in any policy put forward by the Minister of Agriculture for the agricultural industry is his duty to take account of world trade. We are hearing a great deal of this now. At Tokyo a great deal of time was spent discussing this matter of world trade—the effect of production within the United Kingdom on the patterns of world trade, the disposal of surpluses and so on. At the same time I should like to see some mention made of the needs of the third world both as consumers of food and as exporters of food and agricultural products.

I move on to Clause 13 and to the environmentally sensitive areas. One is struck by various questions as one reads the clause. It is an important clause, and on the whole a good and useful one. I should like to ask the Minister whether production grants, which exist already in the instance of land drainage, will remain in these areas. There could be a certain amount of conflict if a farmer can apply and receive from the Ministry of Agriculture a grant for drainage in an area which it has been decided should be conserved largely because of the high water table. It would be interesting to know whether the compensation presently payable under the loss of profits arrangements will still remain in these areas.

The department says that in the first instance five or six areas will be designated. I hope that the Minister will be able to assure us that this is only a first slice. I agree that it is wise to go slowly and that the department should not designate more than it can properly look after, and should not bite off more slices than it can properly chew. But I hope that as its digestion improves and its knowledge of how to organise and manage these areas increases, further areas will be so designated.

Mention has been made by the noble Lord, Lord John-Mackie, of the role of the Treasury. We have to accept that the Treasury has the final say, not in the areas to be designated—not even in the number of areas—but in the amount of money that is available to deal adequately with these areas. I should be very unhappy if the Treasury felt that it could put a limit on the number of areas designated, although obviously it could put a limit on the amount of money spent on those designated areas. How will these management regimes be set up? They have a vital part to play in the environmentally sensitive areas. I hope very much that the Nature Conservancy Council and the Countryside Commission will not only be consulted if the Minister so wishes but that they will have a statutory right to be consulted in the form of management that should be undertaken in the environmentally sensitive areas.

On that subject, I hope noble Lords will bear with me if I read an extract from the view of the noble Lord, Lord Montagu of Beaulieu, the chairman of English Heritage, the Historic Buildings and Monuments Commission for England, who unfortunately is abroad at the present time and therefore cannot take part in this debate, as I am sure he otherwise would have done. I shall not read all of the noble Lord's observations to your Lordships, but he writes: In general, English Heritage very much welcomes the step forward in the interests of conservation which these provisions represent. We also, with the conservation bodies, welcome the specific duty which the Bill in Clause 12 places on the Minister to have regard to conservation interests in exercising agricultural functions, although we would wish for a specific reference to archaeological interests in this clause, to balance the reference in Clause 13. The Bill inevitably leaves unanswered a good many questions about precisely how the new system will work, and in particular how it will relate to policies already developed by the other agencies, including English Heritage, for conservation of the countryside and features within it. The English Heritage will be pressing for ministerial assurances that there will be adequate consultation over the practical implementation of the scheme. The Bill represents very much a first step in the right direction. Like all foundations, it will need careful building up to achieve the right effect". Those are the views of the noble Lord, Lord Montagu of Beaulieu, and I certainly go along with them.

Finally, I come to what I believe we all agree is the most important part of this Bill; that is, Clause 1, dealing with ADAS. Here, I find myself in disagreement with the noble Lord, Lord John-Mackie, which I must say is a rather unusual situation. I believe that it is perfectly right in principle for farmers to pay for advice that increases their efficiency and their profits, and so I cannot disagree with the principle of Clause 1. I add in parenthesis that I do not think that farmers should be expected to pay for visits from officials and inspectors under statutory requirements, any more than visits from health inspectors or from whoever it may be to food shops and factories are the subject of a payment. If the Government wish, as is their privilege, to have inspections carried out, then I do not think that farmers should be expected to pay for them.

Having said that I think it is right in principle that farmers should pay for advice, I go along with the noble Lord, Lord John-Mackie—and I emphasise this as strongly as I can to the Minister—that it is impossible to distinguish between the efficiency advice and the environmental advice. For it to be done properly, the same person must give it, and he must be giving it, especially in respect of environmental advice, all the time.

A farmer does not say to himself, "I will call out ADAS and ask the inspector to look at my barley, because it is going yellow, and see what advice he can give", and then, a few weeks later, or a few days later, say to himself, "I must call out ADAS and ask them to come and give me some advice on the environment". What the farmer does is to say to the ADAS officer, "Can you tell me what is happening about my barley?". If he is a good ADAS man—and they almost all are—then the adviser will tell the farmer that he must do this and that, and will add, "Why not plant a few trees at the bottom there, where you will never get a very good crop? Why not put in some hedgerow timber? Why not clean out your ditch?", or whatever it may be. The officer will give such advice at the same time.

If those functions are now to be completely separated, then one will not have the environmental advice being given. All one will have is a farmer calling out ADAS to say that he wants some advice on the environment and then adding, "By the way, can you tell me what I ought to do about my barley?"—hoping that the officer's call will go down on the time sheet or the log sheet as an environmental call and not as a technical advisory visit.

For those reasons, if for no others, I do not believe that the proposed scheme will work. I suggest also that if it were to work then there is a very great danger that farmers will give up calling upon ADAS, in spite of its disinterested advice, but will obtain advice instead from their suppliers of chemicals, fertilisers, feeding stuffs and so on. That is good advice always, but one cannot forget that such advisers are paid out of the profits of the companies that are employing them. It is very difficult to give completely objective advice in those circumstances.

That in itself is bad enough, but the effect on ADAS of that sort of change is already being felt. I do not imagine that many people who know of the situation would disagree with me when I say that morale in ADAS is low—lower than it has been for a very long time. Many centres, many stations, have been closed. There has been the loss of 800 ADAS officials since 1981, and 20 per cent. of jobs will have gone by 1987. That is another factor to be taken into account and to be given a great deal of thought.

Finally, what is a "reasonable charge", as mentioned in the Bill? I do not know how one calculates what is a reasonable charge. Is it based on time, or on the cost of the office and the overheads? Does one have a little timeclock going, or a stopwatch, and check it all out in one's day book? Is a reasonable charge based on that for competing advice; the same price that others would charge for commercial advice? How does one arrive at that figure? Is it based on what the farmer would pay?—and I suggest that the farmer will pay little if anything for it. It is all very well to talk vaguely in a political speech or in a conversation around the dinner table about reasonable charges, but when one is to put them into operation and into an Act of Parliament, one must be far more specific if "reasonable charge" is to have any meaning at all.

The same applies to the £5 million that has been mentioned as coming from that operation, without any regard or any figures being given as to how that money is to be produced or how much the charge of collection would be. So I believe that Clause 1 on ADAS is a very serious mistake in the Bill. As to the rest of the Bill, some of it is definitely good, and some of it is certainly not bad but without any great relevance. However, I believe that most of us who have any knowledge of farming must agree that Clause 1 itself makes the Bill a far less valuable Bill than it otherwise might have been.

5.48 p.m.

Earl Ferrers

My Lords, it is always a pleasure to follow the noble Lord, Lord Walston, especially when he says, as he did at the outset, that he is going to praise the Government. That is an occurrence of such rarity that I almost felt compelled to ask for a hearing aid. I congratulate my noble friend Lord Belstead for having introduced this Bill. I cannot help but feel a tinge of sorrow that ADAS is to be made to charge for its services, other than those that are socially or environmentally important. But at a time when increased production from agriculture is not now required, it is difficult to justify the expenditure of public funds on showing farmers, free of charge, how to increase the efficiency of their businesses. However, I have a great deal of sympathy for the noble Lord, Lord John-Mackie, when he says that there will be plenty of people who will want to go to ADAS for advice such as, "Where do we go from here?".

We should remember this. One of the least-noticed aspects of ADAS is the link that it created and administered, by which the results of new research was transmitted and relayed into practical application—not just to farmers but to other professional advisers as well. I pay tribute to the members of ADAS, not only for their knowledge but also for their professionalism, as well as their friendship. They never tell farmers what to do from a dictatorial height; they would not get very far if they tried. But they do get alongside farmers as friends and advise them. Because that advice was free, farmers were happy to accept it. Now that it has to be paid for, I fear that that advice will not be so readily sought. I fear that the relationship between ADAS and the farmer may be distanced. I fear that ADAS may be wondering what it is supposed to do. I question what will happen to the transmission of scientific and other new knowledge.

Of course, the whole trouble is that agriculture is going through such an unprecedentedly difficult time. All previously accepted conventions and objectives have been stood on their heads. On the one hand, we see outputs, surpluses and the cost of the common agricultural policy rising, and clearly these have to be curtailed. On the other hand, the farmer sees costs rising but prices and returns lowering, and the Government insisting that they must get lower still. The farmer sees this as the way to ruin—which it is. He is alarmed. Meanwhile, the conservationists have appeared, as it were, like an army of hobgoblins in the middle of the night to tell him that he has all his priorities wrong, anyhow, and that it is not food that is wanted now but that conservation and environment are the in things. The farmer is left bemused; yet all he has done is to respond to the call of successive governments over the past 40 years to produce food and become efficient—which he has and the nation has benefited.

The noble Lord, Lord Wilson of Rievaulx, when he was Prime Minister said that if output per man in British industry had increased as much as it had in British agriculture the nation would not be facing as many problems as it then was. He was right. But things have changed radically and in a few years. The requirements of agriculture are different now to what they were even five years ago. The industry must be prepared to change and it must be given time to change.

It was Dean Acheson who said after the war that Britain had lost an empire and had not yet found a role. In some ways British agriculture is like that now. It has lost its objective of producing food and has not yet found its new role. It must be given time to adapt to its new role, whatever that may be. If one wants to stop a battleship it goes on for a mile after one has put the engines into reverse. Agriculture is like that. That colourful character, the late Mr. Nubar Gulbenkian, who was not known for being impecunious, had as his motorcar a London taxi. When asked whether he liked it he replied, "It is wonderful. It can turn round on a sixpence—whatever that may be." Agriculture is not like that. It cannot be spun round. It must be given time to readjust.

Conservation is important. I only hope that we shall be careful not to fall into the trap of segregating, on the one hand, farmers and, on the other, conservationists. On the whole, most farmers are interested in conservation and are frequently the ones who do it. Agriculture and conservation need not be incompatible. They usually do, and certainly should, go together. What has been achieved over the past five years is evidence of that. There has been a sea change in attitude over conservation, not just by the public and by the enthusiasts but by the farming community as well. Long may that continue. I hope that the environmentally sensitive areas which are in the Bill will be seen as yet another step and yet another obligation on agriculture to look after the countryside in a way which recognises the interests of others. I hope that those who are interested in conservation, from whatever aspect that may be, will see this as yet another recognition of their concern and will find satisfaction in that.

As this is an agriculture Bill I hope I shall be permitted to say this. As the Government grapple to keep the cost of the common agricultural policy in bounds they should not be content just to lower prices. This will leave, as I suggested two weeks ago, a devastated countryside and a ruined industry. I believe that this would be economically, socially and strategically unacceptable. The Government should consider set-aside land. It is just as justifiable to pay farmers not to cultivate their land as it is to pay them, as provided for in the Bill, to look after environmentally sensitive areas in a particular way.

Agriculture is not just farmers. A whole host of other industries depend for their existence on agriculture. The agricultural engineering industry is an important one. It consists of very small units. That industry is also going through a difficult time. It is not often realised that more than 90 per cent. of agricultural machinery enterprises employ fewer than 50 people. There are only 20 machinery companies which employ more than 100 people. Half of what is produced by the agricultural machinery business is exported. The other half is sold to British farmers.

If 500 acres is considered to be the minimum viable acreage where investment in machinery will bring a worthwhile return, then the United Kingdom agricultural engineering business can be said to rely on 14,000 farmers. I merely say to your Lordships, "Let agriculture run down then see what happens to that industry and to the small companies and their exports." These companies depend on a sound home market for their existence. It is not insignificant that even the Tokyo summit agreement, announced today, referred particularly to the importance of small businesses.

We ought to export; and not only the industries peripheral to agriculture but agriculture as well. That is what Food from Britain was set up to do—to aid the promotion at home and abroad of British food. Its constitution and funding is adjusted in Clause 8 of the Bill. I should declare an interest as being a member of the council of Food from Britain. Somehow our competitors seem to be so much better than are we at exporting. If one goes into a restaurant and asks for mineral water like a Pavlov reaction every time the waiter says "Perrier?" The word "Perrier" has become almost synonymous with mineral water in the same way as one refers to a Hoover instead of an electric suction sweeper or a Thermos instead of a vacuum flask. As a result, French Perrier water has 62 per cent. of the British mineral water market. What is wrong with Ashbourne water? I happen to like it. I always ask for it but it is frequently unavailable. In the part of the country from where I come deliveries are infrequent—about once every three weeks. Perrier water of course is always there.

It is marketing which is so often where we fail and not the product. In a major promotion in north-west Germany, Food from Britain sold three container-loads of Highland Spring water, worth £10,000; so the Germans wanted it. That was merely one of 50 products involved in that promotion which turned over £2 million in two weeks. Food from Britain has been very successful in a very short time, in my view, starting from nothing despite constant criticism. We in Britain have an unrivalled ability to knock every new venture whenever one starts without giving it a chance.

In the two years from 1983 to 1985 exports of British food and drink worldwide increased by 3 per cent. But in the areas where Food from Britain concentrated its efforts, the results have been spectacular. In France over the same period British exports of food and drink went up not by 3 per cent. but by 9 per cent. In America, exports went up by 10 per cent. Food alone exported to America went up by 19 per cent. Exports of food and drink to Germany went up by 23 per cent. In September of last year Monoprix of France held a Scottish fortnight in 45 hypermarkets and supermarkets throughout France. Among other products, they sold 5,500 lamb carcasses, 11 tonnes of cheese, 230,000 bottles of beer and, believe it or not, 42,750 bottles of whisky. That was £1.3 million of extra export business which was generated in that fortnight last September in France.

In March of this year a British promotion was held on German railways which went on for a month. It took place in 135 inter-city restaurant cars and 15 inter-city hotels. It is the first time that British bacon has been available throughout Germany. That work with a Scottish producer has seen his sales of smoked salmon in France increase from £20,000 in 1983 to an anticipated £1 million in 1986.

I venture to suggest that these are real successes, though I hasten to add that they have nothing whatsoever to do with me. This is what is wanted. I have no hesitation in saying that to set up Food from Britain was a right and brave thing to do, but equally I have no hesitation in saying that I am appalled at the dalliance of the industry in funding it. Since its inception three years ago everyone has known that as from 5th April this year the industry will have to be responsible for partially funding Food from Britain. Instead of producing nearly £5 million, as they did last year, the Government will produce only £3 million this year and £2 million next year. They were to produce nothing in the following year, but they have now agreed to make more funds available.

The method of funding by the industry was being considered at the end of 1985, but each time, because of indecision or lack of will, the deadline has had to be extended. Now Food from Britain is already a month into the new financial year and no one knows how or whether, and, if so, in what amounts, the funding from industry will appear. I think that it would be a disaster for it to fail. Every time the subject is mentioned an astonishing ritual dance is performed by the potential contributors, with each one saying that they are sure that their sector in the end will provide money; but when the question is put, "Are you prepared to contribute to Food from Britain this year and how much?", like fish they all slide away. I remember when I was a child we used to play a game called pass the parcel, and the whole idea was to make sure that you did not land up holding it when the music stopped.

Everyone looks to the other, but no organisation can go on like this. Patience is fine; so is tolerance and so is understanding, of which there has been plenty, but this is a business which has to be funded, and funded for the benefit of British agriculture and British business as a whole. For one reason and another, some understandable and some not, the funders have so far failed to commit themselves. No budget can be made and, still less, adhered to; the milk, meat, cereals, and food and drink industry are the potential funders, and any one of those sectors by not contributing can finish Food from Britain for everyone else.

I fear that there are too many vested interests at stake. There are too many people who fear that Food from Britain might do something that they are doing or do somebody else out of a job. Some parts of the industry say, "We will pay for our share of the deficit". That is not the way to fund an organisation. Some say, "We will pay Food from Britain to do work for us on a contract basis". That is not the way to fund an organisation. The cereals people say, "We must have a poll"—to raise 5p per tonne on cereals. Frankly, the document which the Home Grown Cereals Authority has put out to accompany the voting paper needs to be seen to be believed. It is lengthy, awash with figures that go to three places of decimals, and unintelligible. It promises more staff, more committees, more advisers and more expenditure. The document could not really have been better designed to secure a "No" vote if it had tried. All this is to raise a levy of 5p per tonne, when the Ministers' negotiations in Brussels have imposed a levy of £3 per tonne at a stroke. All this is to raise a levy of 5p per tonne, when in Germany they raised a levy of 60p and in France a levy of £5 per tonne. If the British agriculture industry does not back up Food from Britain, frankly it does not deserve to have it and what is more, it will not have it.

What a bizarre comment it would be on the situation facing agriculture today if Food from Britain were to be wound up and the £5 million offered by the Government for the next two years were to be returned to them. What a message for agriculture to give to the Government at this of all times: "We do not want Food from Britain and you can keep your money". If that happens, the responsibility can lie only with the leaders of the industry and the agricultural bureaucracy with which they are inevitably involved, but it will be British agriculture which will suffer. The Milk Marketing Board will still be there; the Meat and Livestock Commission will still be there; the Home Grown Cereals Authority will still be there; so will the Perrier water and so will the French, German and Danish food and all the rest. It will be the British who, as usual, will suffer.

I recognise that the concept of Food from Britain is revolutionary in Britain. We are moving from an independent activity by various boards and organisations, which have been created since 1947, to a co-ordinated activity. That is a very large step. But let us remember that, while in this country we fund our organisation to the tune of about £5 million, Sopexa in France funds theirs to the tune of about £30 million and CMA in Germany funds theirs to the tune of about £35 million. Those two organisations—CMA in Germany and Sopexa in France—were set up later than our boards and did not have the problems of persuading strong, independent bodies to work together and give up some of their independence. I recognise the difficulty that this creates for us in Britain.

It is really a curious reflection that for the last 20 years the leaders of the agricultural industry have been trying to persuade farmers to give up some of their independence and to co-operate together—and how the farmers have squealed! Now, it is the leaders themselves who are having to be persuaded to do the same thing—and they are not half making a meal of it! There has been a substantial change in the attitudes of the major interests in the last few months and I only hope that this will continue and that a method of correctly and adequately funding this organisation will be found, and in time, because I believe it is badly needed.

6.8 p.m.

Lord Stanley of Alderley

My Lords, I hope that my noble friend Lord Ferrers will forgive me if I do not follow him down the Food from Britain path, for the reasons which I gave in the House when he promoted that Bill. Though there is quite a lot of good in this Bill, I fear that there is really a lot of tidying up work to do. I address this remark to my noble kinsman the Chief Whip to try—probably pointlessly—to curb his impatience when we go into Committee. My remark is certainly not addressed to my noble friend Lord Belstead who, as your Lordships know, will always do his utmost to accommodate sensible suggestions.

My shopping list for this Bill will include the following. First, like the noble Lord, Lord John-Mackie, I should like more details regarding the future of ADAS; in particular, a long-term commitment to continue the service and no charging for statutory duties or new duties such as conservation or diversification. I am somewhat at variance with the noble Lord and with the noble Lord, Lord Walston, in that my impression, certainly from the younger members of ADAS, is that they are responding exceptionally well to the challenge that is put before them but they badly and urgently need advice as to where they have to go.

Secondly, there must be a recognition that by commercialising ADAS there is bound to be a conflict of interest similar to that experienced between Plessey and BT when that organisation was privatised. For instance, ministry vets will be put in a difficult position trying not to breach professional etiquette, yet wanting ADAS to provide the most efficient service. The problem will be particularly difficult in the sheep and beef sectors where 99 per cent. of the work of general practitioners consists of acting as middlemen in supplying prescription-only drugs.

As a sheep farmer my first reaction is to say, "Let ADAS and its veterinary service have complete control without resorting to the private practitioner, thus providing the sort of service that my noble friend Lord Belstead said we should expect". But as a countryman I do not want to see the country vet practice die, and it is certainly under pressure today.

Thirdly, I come to milk quotas. I hope that your Lordships will allow me to make that most irritating of remarks, "If I was you, governor, I wouldn't have started from here anyhow", in the hope of warning all those, including my noble friend Lord Ferrers, who continue to advocate quotas and suchlike for other commodities. The milk quotas are causing much friction between landlord and tenant, which is a situation that I dislike intensely, as I am sure does my noble friend Lord Middleton. All I say at this stage is that the Government admendment is ghastly. It is a lawyer's paradise. It is my intention, with your Lordships' permission, in Committee to try to simplify it by allowing valuers much more freedom of action. I hope that your Lordships and my noble friend Lord Belstead will not think that that is a conceited remark. But, as other noble Lords have said, I think that we should try to do that.

The Government amendment, for instance, does not take into account the position of the tenant who perhaps came into a derelict holding and milked in a bail; or indeed the tenant who is most likely to be in a less favoured area and who practises a low input-low output system, which I thought we were all trying to encourage today due to the surplus situation. As I understand it, in both those situations 99 per cent. of the value of the quota should go to the tenant, but it will not. In case my noble friend Lord Middleton turns round to scowl at me for forgetting the landlord, I assure him that I do not. On many occasions the landlord should be entitled to 99 per cent. of that quota, even though under the Government's amendment the tenant would probably be entitled to his bit of super-quota. I hope therefore that with your Lordships' normal good sense, calm and fairness we can improve the Government's amendment. I know that we can count on the help of my noble friend Lord Belstead.

Fourthly, there are the environmentally sensitive areas. I am not against them, but being somewhat of a cynic I can hear the taxpayer saying, "For years we paid those farmers to produce what we did not want, and now the devious lot have managed to get us to pay them for doing nothing". Apart from that long-term fear, I congratulate those who promoted the idea. I am most anxious to see it work, but in order for that to happen it is essential to get the nitty-gritty correct. In this context that means adequate payments to farmers and adequate supervision of those payments, which was a matter raised by the noble Lord, Lord John-Mackie. I should like an assurance from my noble friend Lord Belstead that the Government will generously fund the supervisory staff and the conservation objectives in those areas.

I am worried about that aspect. Although the Halvergate experiment was successful, it was far simpler than that proposed in future ESAs. In Halvergate the objective was to keep pasture from becoming weak. In the new ESAs the objectives will be far more complicated, varying from region to region and indeed from farm to farm. To be successful ESAs will require a lot of funding and supervision. I liked the comment of the noble Lord, Lord John-Mackie, about whether the Treasury was involved. But if there is one thing that is more expensive than wine, women and song, it is conservation, and I hope that the Treasury realises that.

6.14 p.m.

Lord Stodart of Leaston

My Lords, I shall try to be brief and essentially agricultural because many other noble Lords will speak on the conservation and sensitive area aspects of the Bill. We heard a most excellent tribute to Food from Britain and the clause that involves that from my noble friend Lord Ferrers. Anyone who had been to food fairs abroad will have noticed enviously the stalls, stands and even pavilions of the Italians, the French and the Germans. At least that was my experience some years ago. One felt that the British effort was not as good as one wished.

I can say this in less than a moment, but it may be of interest to noble Lords to know that without a body called the Highlands and Islands Development Board there may have been no British representation. It had almost unlimited power to spend public money promoting the sale of Scottish goods. A memory that I retain to this day is of when I was at the Ministry of Agriculture and paid a visit to a food fair in Paris, I think. A scowl of fury was vented on me by the noble Lord, Lord Mackie of Benshie, for my daring to go to one stall that was selling cheese while he was trying to compete at the other stall that was selling cheese.

I wish to dwell only on Clauses 1 and 11. Unlike the noble Lord, Lord John-Mackie, I am bound to say that I have no great objection in principle to paying for advice, and I am not a barley baron. If one has to pay for something, one tends to value it a bit more. But much will depend on how reasonable the charges are, which is a point that has already been made. I do not know what has happened in England, but since charges were introduced for soil analysis, the number of analyses, certainly in Scotland, has dropped substantially. That is not a good thing, unless of course it is a way to run down agricultural production. The last time that I had my farm analysed was about two years ago and the cost was between £100 and £150, whereas prior to that it had cost nothing. I do not know what it will be today if it was £150 three years ago. But again we come back to the reasonableness of the charges.

The other matter that causes me concern is whether staff will be available to give the advice. Both the Scottish National Farmers' Union and the East of Scotland College of Agriculture have put out documents that say that the budget of the Scottish advisory services is to be cut by 41 per cent., compared with a 20 per cent. cut for England and Wales. I am bound plaintively to ask why. Have we been cosseted in Scotland, or has the system been extravagantly run? There has been continuous dialogue as to the relative merits of the advisory system in England and Wales compared to that based on the various colleges in Scotland. A great many people south of the Border have paid high tribute to the Scottish system. It surprises me that the cut in the budget for Scotland is to be double that for England and Wales. I know that that is a question outside the immediate field of my noble friend's responsibilities, but I should very much like an answer to it.

Lord Walston

My Lords, as someone from the deep south, may I suggest to the noble Lord that the reason could be that Scottish farmers are so much better at taking advice and following it that they need it much less now than we do in our part of the country?

Lord Stodart of Leaston

My Lords, that is perhaps an answer that I shall be receiving from the Front Bench. It is one that my noble friend may be inspired to give. So far as provision for research and development goes, there is a great deal of apprehension, certainly in Scotland, and I daresay also in England and Wales. Rumours fly about as to who is to be cut, when they are going to be cut and where they are going to be cut. One finds agricultural correspondents of reputable newspapers constructing hit lists and broadcasting them on early morning farming programmes. The last that I heard was that the Animal Breeding Research Organisation and the Hill Farming Research Organisation were to go. We know that the latter is being amalgamated with the Macaulay Institute. But there is great controversy as to where it is to be settled. I hope that a decision can be made soon.

Of course, Ministers cannot win. If there is no consultation, they are called autocratic. If they do consult, then, almost inevitably, uncertainty takes over during the consultation period. To come back to the advisory services, I have a definite preference, in company with the noble Lords, Lord John-Mackie and Lord Walston, for the independent college services in Scotland as against the commercials. Again, with the budget cuts that have been announced, uncertainty about the future may be causing staff to leave. Now is a most unfortunate time for this to happen. Never has there been a time, going back over many years, when advice is so badly needed in respect of the numbers who should continue farming.

I should like to give your Lordships a personal experience. It is exactly 20 years since a Mr. Brian Pearl, whose name will be familiar to the noble Lord, Lord John-Mackie, and who was at the time on the staff of the East of Scotland College, came to Leaston to tell me how to stop losing money. It is perhaps ironical, looking back, that his advice, backed up by costings, was basically to concentrate on cereals rather than on beef and sheep. Ever since then an upland farm at anything from between 700 feet to 1,000 feet that had consisted of 600 acres of grass and 150 acres of grain has grown 300 acres of wheat, oats and barley on a five-course rotation of three years of grain and two years of grass. In that way, as Mr. Pearl forecast, it made a bit more, or, perhaps, I should say, for propaganda purposes, lost a bit less money.

But now let us watch what happens. I agree with the noble Lord, Lord John-Mackie, that we have to try to make a living. If a college adviser comes out to see me at reasonable expense, the very first question that I know I shall ask him—it comes naturally—is, "Can I force my yields up?" The first thought is whether I can grow a bit more. A large crop at a smaller price is always very much better than a small crop at a high price. I remember saying exactly that to a fellow Member of another place about 20 years ago as we were walking across the Park. His business was making shirts in Birmingham. On hearing what I have just said, his response was, "You must be mad. If keeping lambs does not pay you, do as I do. If we cannot make money out of shirts, we stop making them."

Alas, farming does not work like that. Two tonnes an acre off my farm will be no good. Beef is in surplus and lamb will be in surplus before long. Consumption figures of red meat are down. Beef has dropped from 521bs. a head in 1975 to 401bs. a head today. Mutton and lamb are down from 181bs. to 151bs. Therefore, the traditional options are no longer available. The second question to my adviser will be to ask whether I can reduce my inputs, chiefly fertiliser and sprays, and be content with lower yields. I have read the comments made by my noble friend Lord Radnor a fortnight ago. He described himself as a low-input producer. The trouble is that I cannot make the figures meet. Therefore, self-interest makes me a quota man until my noble friend can reveal what he has in mind as an alternative use for my kind of land.

Forestry is obvious. I heard the noble Lord, Lord Walston, make some comments about the Treasury. My heart bleeds in respect of what the Treasury will say when my noble friend goes along and puts to it what, in my view, is a thoroughly sensible proposition. At the level of imports of timber products that now exists the Treasury should perhaps pay so much a year for cash flow purposes to sustain income over the first 20 or 30 years in respect of large areas of upland land. That is obvious. There was, I believe, reference the other day to fallow land—not exactly needed on a farm with grass rotation, but possible. And what is precisely meant—because I really do not know—by taking land out of production? I visualise my farm growing bracken thistles and day nettles—a great weed. It is time that we had a lead, even in broad terms, as to where we are expected to go.

In the excellent debate that took place a fortnight ago the use of the price mechanism was the popular choice. But, with great respect to your Lordships, the devastating results of this approach, if carried out too quickly, were faced squarely only by my noble friend Lord Ferrers and by the noble Lord, Lord Walston. I thought that my noble friend was going to quote Winston Churchill this afternoon when he appealed for time in any change that takes place. It was, I believe, Winston Churchill who said, somewhat trenchantly, that before you could put a railway engine into reverse, you had first, if it was going forward, to bring it to a stop.

Clause 11 deals with the division of milk quotas. I believe, frankly, that the schedule is so complex that one can, in any observation that one makes, only go by what was stated in another place. What makes it even more difficult is that my noble friend has already announced that amendments are to be made to it in the course of the Committee stage. Like my noble friend Lord Stanley of Alderley, I am immensely sad at what seemed to be the apparently entrenched positions adopted by landlords and tenants. I am neither. Therefore an owner-occupier may qualify as being objective, or it may damn one for knowing absolutely nothing about the problems.

In my own mind I am quite certain that, in view of the huge variety of tenancies, the most enormous flexibility is needed. I think that there must be some guidelines. I do not think that we can leave it totally to the arbitrator. However, it is total and absolute nonsense to suggest that either side should receive zero. Therefore, clearly there must be guidelines.

In another place I thought that Mr. Charles Morrison gave an interesting example. He said, "Suppose someone went and put what was called a Hosier milk bail up on the Wiltshire Downs". I do not agree with Mr. Morrison here, but he thought that the owner of that bail, the tenant, should receive 100 per cent. because the landlord had provided absolutely nothing. I think that the landlord has provided something; he has provided the land on which the bail would stand.

Again, one can only go from what one has read of the debate in another place, but if it is the case that the parameters seem to be that a tenant can receive between zero and 66 per cent., whereas a landlord can receive between 33 per cent. and 100 per cent., I am afraid that they lean far too heavily against the tenant who, on many occasions will, I believe, be entitled to a good deal more than 66 per cent.

6.33 p.m.

Baroness White

My Lords, in this expert company I would not regard myself as competent to comment upon Clauses 4 to 11 of the Bill, and still less upon Schedule 1, though I had a good deal of sympathy for the comments on Clause 8 made by the noble Earl, Lord Ferrers, about Food from Britain. I wish the noble Earl further success. I do not recognise myself as one of the hobgoblins of the noble Earl, Lord Ferrers, but I shall comment briefly on some of the clauses which one might regard as being of particular concern to conservationists, environmentalists, or to whatever derogatory terms we are entitled.

I think that I should start by welcoming Clause 12, and particularly the comprehensive scope envisaged for its implementation. Your Lordships will have noticed that it reads: In discharging any functions connected with agriculture in relation to any land the Minister shall … have regard to and endeavour to achieve a reasonable balance between the following considerations", and the four considerations are set out in the clause and I think cover all our main concerns. I would simply say that while we welcome this clause, declarations of intent can mean little or much, and we shall watch with close attention how this will work out in practice. Possibly the Minister can let us know what steps have been taken to ensure that the balance described in the clause will be adequately observed not only by his own department but also by the various committees, quangos, and so on which serve or advise his ministry. However, we welcome the clause. It is a declaration for which we have waited for some time. It was not included in Private Members' Bills which were brought forward from another place, so we are particularly happy that it is now included officially, with Government support, in the Bill before us.

Having extended that welcome to Clause 12, I must say that one is correspondingly disappointed at what seems to many of us to be the very narrow, parsimonious attitude of the Government which is suggested in Clause 1. The provisions of this clause replace the existing obligations of the Minister to provide free advice not only under various agricultural statutes but also under Section 41 of the Wildlife and Countryside Act 1981. I think that one can fully understand that for certain functions which could bring to a farmer some direct commercial advantage it may be proper to charge a reasonable fee. Although it is not specifically confirmed in this clause, provision is made for enabling free advice still to be given by ADAS on environmental or conservation matters. This should be brought out much more clearly on the face of the Bill.

However, then one asks oneself, as I thought the noble Lord, Lord Walston, did very clearly: where does the distinction begin and end? In the light of Clause 12, to which I have just referred when I mentioned maintaining the balance, what one really needs is that considerations of landscape value, protection of flora and fauna and so on should permeate agricultural advice and should not necessarily be segregated in the way suggested by this distinction. Unless the required advice is very site-specific or directly functionable—such as how best to build a traditional stone wall—it could be a tiresome and time-wasting argument as to whether or not the advice requested comes into the free-of-charge provisions.

Furthermore, particularly if ADAS is to charge the going rate, some farmers may well be persuaded to turn to private commercial operators or salesmen who will be under no obligation to observe this balance between environmental or social considerations and the direct agricultural ones.

I am sorry that I arrived a few minutes late and possibly the noble Lord the Minister may have touched on this matter, though judging by the subsequent speeches, I doubt it. How is this attitude to be secured if the advice is to be given primarily commercially? As we have already been reminded, commercial firms may offer free advice in order to further their sales of agro-chemicals, farm machinery, road-building services, pond-digging expertise, or what have you. However, the really serious aspect of this is surely that, once the relationship with ADAS is damaged or diminished, what could be a most encouraging partnership in the new situation in agriculture may not develop. It has worked in the past for food production; it is doubtful whether it will work anything like as effectively in the future for either conservation or the equally, if not more, important subsection of Clause 1 dealing with any, enterprise of benefit to the rural economy", whether or not agricultural.

I am sure that many of us will entirely sympathise with the notes of the National Farmers' Union which we have received, and particularly with the sentiments expressed there that, at a time of intense change the need is for more research and more advice to farmers, not less". I shall not touch on the cuts in agricultural or related research, as that is the subject of a debate to be initiated by my noble friend Lady Nicol next week. However, I would reiterate that these quite savage cuts in ADAS manpower—with further cuts announced only recently—are disheartening in the extreme. I am perhaps even more concerned with the health of the rural economy than with conservation, not least in the uplands and less-favoured areas, of which we have so high a proportion in Wales. But the two elements are interdependent in important respects. Neither a coniferous blanket nor an untended wilderness will bring beauty or happiness to our Welsh hills and rural areas. The staff of ADAS are familiar with the groundwork conditions from which other activities must in the future develop, and to go on cutting down their numbers is criminally irresponsible.

I now wish to turn briefly to one item not in the Bill and to another which is, namely, landscape conservation orders and environmentally sensitive areas. Needless to say, most people with the interests that I share welcome the concept of environmentally sensitive areas and would join in the congratulations to the Minister for having succeeded in persuading his European partners that such measures would be desirable and acceptable, although one recognises some of the problems which are bound to arise and also some of the possible conflicts to which the noble Lord, Lord Walston, in particular, has drawn our attention. Nevertheless, the concept is in itself a good one and an important and interesting one.

We are disappointed to learn in Wales in particular that we may have only one of these environmentally sensitive areas designated in the Principality. That may or may not be true. Perhaps the Minister can tell us. I think they started with a long list of 56, which was then reduced to about a dozen, and it now seems to be shrinking even more and more. Rumour also tells us that it will probably be the Lleyn peninsula, but there are other areas in Wales possibly even more deserving; the Cambrian mountains, for example, where I should have thought that the agricultural equation might be even more deserving of the kind of treatment proposed under these suggestions.

However admirable environmentally sensitive area designations may be, they are clearly not going to comprise all the landscape areas which deserve some protection even on a much more restricted scale. Therefore, some of us are particularly concerned that reference should be made in the Bill to the need for the lesser but important provision of landscape conservation orders made by local authorities.

These were discussed by the House of Commons Select Committee under the chairmanship of Sir Hugh Rossi. In their response to that committee's report, the Government agreed to consider the matter further. But surely there is a real urgency about this because unless a place can be found in this Bill for such an improvement, who knows when the next legislative opportunity will occur?

This brings me to a final comment which is the sense of unease that we feel at the picking out of various types of designated area (increasing the number and complexity of designation) for particular attention, to the exclusion of other areas which are not designated. The selectivity can be wide, as in a national park, or much narrower, but it seems to be becoming of increasing importance whether the area is formally designated or not.

For example, in the Housing and Planning Bill, which has just reached us from another place, there is a reference in Part II to simplified planning zones. I do not wish to discuss the merits or demerits of this concept except that it adds "SPZ" to the series of initials we have to try to memorise. But these will not be established in "specified environmentally sensitive areas"—a description which in that Bill covers green belts and conservation areas, as well as national parks or areas of outstanding natural beauty. One appreciates the need for some selectivity; but all the more need then for a safety net like the proposed landscape conservation orders to catch individual situations not otherwise provided for.

I hope that in his winding up we may have some comment from the Minister about these matters which are of concern to a number of us. Time is going on and I shall not comment further on the Bill, except to say that as with most other Members of your Lordships' House one gives it a modified welcome.

6.45 p.m.

Lord Middleton

My Lords, had we been discussing this Bill as it was after its Committee stage in another place it would have had my unqualified support; but, as my noble friend Lord Belstead reminded us in his clear introduction, the new Clause 11 and its 10-page schedule of unbelievable complexity were inserted into the Bill at Report stage. It could not be examined in Committee but was debated one evening on the final day of its passage through the Commons on 17th April.

By introducing in this way an amendment which, to judge from my mail, has already caused deep division in the farming industry, I fear that the Government may be laying themselves open to criticism for repeating some of the mistakes that were made in 1976. Noble Lords will remember that what happened then was that an ill-digested, complicated and very controversial amendment introducing succession provisions was tagged on to an Agriculture (Miscellaneous Provisions) Bill at a very late stage in the Commons.

The industry was divided. A measure was forced through which did great damage to the landlord and tenant system in agriculture, and so an attempt had to be made by this Government to repair the damage by means of the agriculture holdings Act of 1984, after great trouble was taken to draft legislation that was broadly acceptable to the industry and to the professions.

I am not saying that Clause 11 and its schedule are in quite the same category as the 1976 succession provisions. In this case the intention behind the amendment is praiseworthy and sensible. But some of its effects could be damaging to that very landlord and tenant system which this Government have rightly been so keen to rescue. It would be a tragedy if the Government, with the best intentions, promoted a measure in such a form that its long-term effects were the opposite of those which had been intended.

I am wholly in favour of what the Government are trying to do by Clause 11. Where a tenant has by his skill, by his hard work or by investment, enhanced the value of his landlord's property, then he should be rewarded. This principle was enshrined in the compensation provisions of the old holdings Act of 1948. They have long been accepted by landlords and tenants as fair. The professional valuers have no difficulty in applying them in practice. They work.

The Government, through Clause 11, are—quite correctly in my view—trying to bring compensation for tenants' improvements up to date. The aim is to legislate to cover the case of an efficient dairy farmer who, at the end of this tenancy, leaves his farm with a milk quota larger than average.

But, as we all know, and as I think the noble Lord, Lord Walston, reminded us, no farm in the United Kingdom is similar in all respects to any other farm. Every dairy business is different, and the respective contributions of landlord and tenant are infinitely variable. It is not surprising therefore that in attempting to codify a basis of valuation that will cover a vast number of different cases, the Government have produced this immensely complicated schedule to Clause 11.

This is not the time to examine the Schedule in detail. Suffice it to say that after a series of paragraphs instructing valuers how to arrive at what is called a "standard quota", the calculation of which will depend on an arbitrary figure of yield per cow to be promulgated in an order by the Minister, we then have a page of schedules devoted to what is called the "tenant's fraction". The first paragraph of page 20 provides an example of what valuers will have to try to understand.

The Minister at Report stage on 17th April (at col. 1951 of Hansard) said: In preparing the proposals, I have been greatly assisted by the contribution of ideas from the Royal Institution of Chartered Surveyors and the Central Association of Agricultural Valuers. Schedule 1, if we leave it unaltered, must, as my noble friend Lord Stanley has suggested, surely provide a fertile field in which the professions may safely graze for a very long time.

The fact that a schedule to an Agriculture Bill is lengthy and convoluted will not in itself do damage to the landlord and tenant system to which the Government have so rightly given support in their 1984 legislation. The risk to the landlord-tenant system from this Bill, if we leave it as it is, is that the proposed basis of valuation in conjunction with the Minister's proposed scale (by which a standard quota is to be measured) may produce amounts of compensation that while highly satisfactory to the outgoing tenant, may be crippling for his ingoing successor. The Government's record of encouraging young entrants into agriculture is very good. I beg them not to spoil it.

I am no great expert in agricultural holdings law, but I believe that existing legislation is perfectly adequate with perhaps a little adaptation to cover the case of the tenants' milk quota. The old 1948 Act, now consolidated into the Agriculture Holdings Act 1986, provided that where a tenant had damaged the reversionary interests of the landlord he could be dilapidated. It provided also that where a tenant's high farming had been beneficial to the holding so that the value of the holding had increased during the tenancy, then the tenant would be entitled on quitting to obtain from the landlord compensation equal to the increase. It is set out extraordinarily simply in Section 70 and valuers have operated it for 38 years.

I hope that when we come to the Committee stage we can do what could not be done in another place which is to look closely at Clause 11 and its terrible schedule. With other noble Lords who have spoken I hope that we can find a less cumbersome way of compensating a good dairy farmer when he retires. I am encouraged by what my noble friend Lord Stanley of Alderley has said that agreement on a method may not be too difficult.

As for the other parts of the Bill, I have little comment to make except perhaps this. While I applaud the recognition by the Government in Clause 12 of the need for balance in the exercise of the Minister's functions, it worries me slightly when I see such subjective concepts as "natural beauty" and "amenity" drafted into the wording of legislation. Some people wish to see a landscape covered with trees; others prefer it totally bare.

A public inquiry was held not very long ago about a proposed routing of huge 120 feet high electricity pylons across some very attractive countryside. The objectors were many and vocal. Only one witness was thoroughly in favour of this controversial development. He was a retired Admiral who said he would be immensely happy to see these structures from his house stretching away into the distance as they would remind him of the grand fleet at sea in line ahead.

6.54 p.m.

Baroness Elliot of Harwood

My Lords, this has been a most interesting debate and it will, I am quite sure, continue to be so up to the end because all of us who are speaking today have different experiences of the agriculture industry. We are all united in our desire to see that it prospers. Listening to the debate, on the whole there is not a tremendous difference in the methods in which we would really like to operate. If your Lordships agree, I shall not talk about the problems which my noble friend Lord Middleton, who is a great expert on these things, has so brilliantly outlined. I am not an expert and I know little about the problems of the quota in the milk industry. But I should like to speak about one or two of the other matters that have arisen.

I should very much like to congratulate the Minister on the way he presented the Bill and the clear and simple manner in which he explained its many clauses. The first clause, concerning the provision of agriculture services and goods, is excellent. It puts forward the whole basis upon which this new agriculture Bill will be carried on. I entirely support that.

I should like to say one word about Clause 12, which is as the noble Baroness, Lady White, said, almost a new clause in an agriculture Bill. The two particular provisions I should like to mention are subsection (1) (a) and (b): the promotion and maintenance of a stable and efficient agricultural industry"— that is in a clause concerned with conservation—and: the economic and social interests of rural areas. Both those are of enormous importance. This clause is one which I am sure will be satisfactory and will keep a balance between what is economic in agricultural production and what is conservation-related. Here, as my noble friend Lord Middleton said, the balance may be difficult between someone who objects strongly to putting up electrical pylons and someone else who thinks the pylons very attractive. I am not keen about pylons, but that is neither here nor there. Clearly there are difficulties and different ways in which these matters will be thought of.

We have organisations which are able to give good advice to people. The Nature Conservancy has already been mentioned. Co-operation between the conservationists and the farmers is not impossible. As I read it, the Bill will give grant aid or compensation to the farmer if he is severely hampered by being prevented from developing his land as he wants to. That is only fair.

Clauses 13 and 14 are of great importance. I should like the Minister to assure us that the compensation and the consultation will be absolutely fair to the farmer as well as to those who are concerned about conservation.

I should like to say one word in support of what my noble friend Lord Ferrers said about Food from Britain. He has put the case very well indeed. I had hoped this organisation to help sell food from Britain all over the world might have brought in more demand and more success, though it has done a lot. Those who have organised the work have done very well, but the organisation has not done as much as some of us had hoped. The fact is that some parts of the farming industry have really not supported it on the scale they ought to have done. I have a bee in my bonnet about selling, but I believe we do not think enough about how to sell the goods that we produce. Each year as time goes on we improve our production, but we must somehow get across to the public here and abroad in the EC that our goods are as good or better than anyone else's and we must sell them. This is what Food from Britain was set up to do. It would be a tragedy if, because we do not give it enough support, it comes to an end.

We have had many discussions in this debate and elsewhere about how to vary agricultural production and the use of land due to overproduction of certain items. I do not think this applies in the United Kingdom as much as it does in other parts of the world. But it is true, and under the new Bill there will be aid for ancillary farm-based businesses or crafts, as they are described in one of the clauses. That could include social activities, the development of the tourist industry—although at the moment we are suffering a horrible knock in tourism as a result of something over which we have no control: I hope that that will pass over—and helping small farms to vary their production and develop catering for the tourist trade in the countryside. This will all be encouraged in the Bill. It is therefore up to us to try to see what we can do to use the opportunities which this Bill gives us.

I speak from long experience and personal interest, and I am in favour of the extension of the less developed areas for grant aid. I am sure that will be of great advantage at least in making the land attractive for those people who go hiking, rambling, riding or touring.

I have one criticism which many people have made of this Bill. That is the large reduction in many organisations such as ADAS and those specialising in all forms of research development. To date we have had excellent advice and services from agricultural research institutes. Naturally I know the Scottish ones better than the English, but I cannot speak too highly of them. They have been a tremendous asset to all of us who farm, very often in difficult areas, and who need their help from time to time. They have meant a great deal to farmers and to the industry. The cuts which are being asked for today are very severe indeed, and might produce such severe alterations that we should all suffer greatly from what is being advocated in this Bill.

I think that it is only fair that we should pay some amount. I am perfectly prepared to pay for advice when I ask for it. But I want to get the best advice. I do not want to pay for something that is not good enough. So far I cannot speak too highly of the way in which these different institutions have helped our industry.

My noble friend Lord Stodart put it much better than I can. He has had long experience in the department. However, I hope that the Government may think again before they reduce the many research stations and put out of work about 20 per cent. of the skilled personnel in those organisations. It would be a terrible waste. With less and less advice available I can see a lot of enterprises also going to waste. I would hope very much that the Government will think again before these very drastic cuts.

One paper I received stated that the cuts would amount to £40 million. This will stop new developments; the finding of cures, for instance, for diseases of plants or animals; it will waste a lot of trained personnel who, if we want to get them back at some period—as we may well do—will not be there. This is my most severe criticism of the Bill, I hope that the Minister will think again about this matter before it is too late and before any irreparable damage is done.

I note that my noble friend Lord Stodart, like many of us, is worried. We are saying to ourselves, "What is the future plan for agriculture?" It is not easy to state. No doubt many of us have ideas. They may all be different. But I am sure that the need is there. We must not exaggerate overproduction. We could have one or two bad winters and a lot of our cereal production would automatically be no longer available.

The Earl of Onslow

Or another Chernobyl, my Lords.

Baroness Elliot of Harwood

My Lords, absolutely. I do not want to play down the fact that there is overproduction. We know that there is. But let us consider that much production depends on the conditions in which we are all working. One might have very hard winters for two or three years running, in which case one would not have this overproduction. Therefore, while I entirely agree that we have to think very seriously about overproduction, let us also remember that there will be times when it will be not so great, and that we might have six months' store to use which might not be sufficient. Let us not be too depressed about it. I think there will always be a need for production. There will always be a need for the care of the land. We have to find the best way to produce and the best way to use what we grow and sell it, and still to continue our great industry.

7.5 p.m.

Lord Moran

My Lords, I was greatly impressed by the account given by the noble Earl, Lord Ferrers, of the successes of Food from Britain. I hope that his powerful appeal for support from the industry will be heeded.

But my principal reason for speaking in this debate is that I want to say how much I welcome Clause 12, requiring Ministers to seek a reasonable balance between the needs of farming and conservation. The wording of the clause seems to me excellent. A year ago, when I spoke on the Second Reading of the Wildlife and Countryside (Amendment) Bill, I argued that, what is needed is a fundamental rectification of the balance towards preserving the countryside", and that it was, only common sense that the Government should accept the obligation … to take account of conservation and the environment". At Committee stage I supported an amendment in that sense moved by the noble Lord, Lord Buxton, and I was sorry that it was resisted by the Government. I am therefore delighted that 12 months later the Government themselves should be presenting us with a very similar clause. This seems to me to give us exactly what we wanted and it is a milestone in the history of conservation in this country—as far as I know the first such change in the responsibilities of the MAFF since it was set up in 1919.

Of course, much—indeed everything—will depend upon how the new duties are carried out. I hope, for example, that in the light of the new approach the MAFF may be prepared to reintroduce the prior notification arrangements for capital grants so that their impact on the environment can be assessed. But I accept the Government's good faith. I am sure that their conversion to an active belief in the importance of conservation is genuine. I hope from now on that we shall see this all-important balance between farming and conservation reflected in all aspects of policy and applied by the ministry's staff at every level.

I should also like to say a brief word about Clause 13 of the Bill. I do not much like the name "environmentally sensitive areas". As the Council for the Preservation of Rural England has rightly pointed out, a great deal of our countryside, not just half a dozen small areas, is environmentally sensitive. Its suggested name, "Conservation farming areas" seems better. But this is clearly a well-intentioned initiative by the Government, which has been welcomed by the main conservation bodies. For the first time the MAFF is taking responsibility for funding methods of farming designed not to damage the environment. But since we insist that we must pay farmers not to do such damage and will not contemplate subjecting them, like others, to some form of planning control we are left with the problem of money. A point I made last year on the Wildlife and Countryside (Amendment) Bill was that our adherence to the voluntary system seemed likely to lead to vast expenditure. In this case the Minister has said in another place that there is no Community money to implement our schemes, that initially the Government will provide £6 million—a small sum when measured against the sums we spend on storing unwanted farm produce—for only five or six areas and that, any extension will depend on the availability of cash at the time". This does not sound promising, but there are many other areas which cry out for such treatment. The Countryside Commission, I believe, put forward a list of 46 suitable areas, and farmers who enter the scheme clearly need some assurance that it will not be merely temporary. The scheme ought obviously to be extended and ideally to cover the whole country.

The noble Lord, Lord Walston, asked the Minister about existing production grants. In the ESAs these may come from both the MAFF and the Forestry Commission. I would imagine that they should be phased out in the chosen areas; otherwise we might still be giving grants for drainage or afforestation in areas chosen as particularly important because they are wetlands or open moor. I hope the Minister can also assure the House that these areas will be properly managed by competent and adequate staff, in full consultation with the Nature Conservancy Council and the Countryside Commission.

Clause 13, as at present worded, does not seem to cover forestry. May I ask the Minister whether it is true that damaging large-scale forestry operations might take place within an ESA? If so, it seems to me important that forestry operations should be brought within the scope of the Bill. This may be especially important in Wales, where I believe that all the short-listed areas could be affected by forestry. Nothing is sadder than to see so much open hill and moorland with its merlins and curlew, giving way to sitka spruce. According to the Royal Society for the Protection of Birds, in the Cambrian mountains over a dozen forestry grant applications have come forward in the last 18 months. Private forestry companies, I believe, can avoid scrutiny by planting without grant, and they have done this on some occasions recently. So I think it important that Clause 13 should specifically cover forestry operations.

I understand the logic of Clause 1 and I think it is not unreasonable that ADAS should charge for its admirable farming advice. But I think the charges ought to be moderate; otherwise farmers may shy away from ADAS and so not receive the free conservation advice. They will be thrown back on advisory services offered by those with specific commercial interests, like the agro-chemical industry or the makers of farm machinery.

Finally, Clause 14, bringing Community farm grants within the scope of the Wildlife and Countryside Act is much to be welcomed.

There are therefore some questions to be answered, but in general the conservation aspects of the Bill mark a substantial step forward. Above all, I welcome the requirement to balance the needs of farming and conservation.

7.12 p.m.

Lord Forbes

My Lords, I shall begin by declaring an interest because I have now been a tenant farmer for 36 years. I should like to welcome this Bill in general, and, like the noble Lord, Lord Moran, especially Clause 12, which imposes a duty on Ministers to achieve a balance between agriculture, economic and social interests and conservation. I believe that the interpretation of this clause could have far-reaching effects on the rural areas.

I am going to confine my remarks mainly to the upland areas, but further north than the area covered by my noble friend Lord Stodart. I shall refer mainly to the uplands of the north-east of Scotland because it is there that I have seen great changes in the farming pattern during my lifetime. Before the war the land was mainly used for the rearing of cattle and sheep and the growing of some corn. Then during the war years some dairy farms were started up on the low ground. It was during the 1970s that the really big change came about, when grain went progressively further and further up the hillsides, at the expense of livestock. Today it looks as if the winds of change are about to blow and that horn may once more replace corn in much of the uplands.

The replacement of grain by livestock and other land uses must be right for the uplands. I would, however, add a word of caution about forestry. Undoubtedly it is an excellent alternative land use, but unfortunately it is a long-term investment, especially in the north-east of Scotland, because it takes 25 years before timber provides any income. Also, unlike livestock, it does riot hold the rural population.

It is the holding of the rural populations which will have to be considered under Clause 12 (1) (b) when dealing with the economic and social interests of the rural areas. In this connection there is no doubt that it is livestock which provides the main anchor against depopulation because although people can be transported from a distance to work in the woods, when it comes to calving a cow or looking after livestock people have to live on the spot.

Then there is the question of conservation, which, rightly, is receiving considerable importance today. Our countryside and our wildlife have been handed down to us. It is up to us to care for them so that others in the future can enjoy them. In many upland areas today it is difficult to scratch a living by pure farming. Thus there is scope for the encouragement of some conservation by financial incentives. we have magnificent conservation areas and places which are of national importance, such as our national parks and a host of other places. What is wanted now is a mass of really small areas, consisting of just an acre or two, dotted about all over the country, just for the encouragement of flora and fauna: a little area of bog as a habitat for water-loving birds; a small copse of thicket for roe deer; a tiny patch of ground where wild flowers will grow in profusion.

That is what is needed now, so that people living in towns and villages have areas within easy reach where they can enjoy the wildlife, fauna and flora. Today too much land is under cultivation. The problem could be greatly eased if masses of tiny areas all over the country were given over to some form of conservation. These tiny areas would in themselves add up to a substantial acreage to be taken out of cultivation.

Then there is the question of the balance of interests. Great care will have to be taken to maintain a sound social structure. Possibly the most worrying aspect here is the future of the uplands, where depopulation of the resident population, as opposed to week-enders, is likely to become a cascade in the near future unless something is done urgently. Farming in some upland areas, notably the north-east of Scotland, is in dire trouble, largely due to the appalling weather last year—the worst weather in living memory. The weather, Coupled with narrowing margins, has had a disastrous effect on farming enterprises in the north-east of Scotland which were previously really sound enterprises.

I have heard it said that given a good summer this year it is amazing how quickly farming in the north-east of Scotland will bounce back into the black again. This view is absolutely irresponsible, as can be proved by anyone who has taken the trouble to do their sums. With the knock-on effects of last year's disaster, it will be impossible to get back into the black this year. Pastures were ruined by animals walking about in mud up to their bellies, and only last week a vet told me he had never known such a spate of deaths and infertility problems among livestock due to the atrocious weather, lack of sunshine and very low-quality winter fodder. Last year's disaster is still with us and is being made worse by a very late spring and increased bank borrowings.

For the social structure of the uplands to survive the threat of depopulation, the livestock sector in these areas must be given further encouragement. One way to do this would be to enlarge the less favoured areas with a much wider stroke of the brush to cover all land that is difficult to farm owing to soil, climate, geographic situation and other such considerations. I hope that when the Minister comes to reply he will give an assurance that increased assistance will be given to those farmers in the uplands and less favoured areas.

There is no doubt that Clause 12 will give Ministers an excellent opportunity to create conditions so that the correct balance between agricultural, economic and social interests can be achieved in the upland areas. Corn should recede down the hill while much of the acreage released should carry livestock. In addition, there will still be room for some diversification, including the growing of timber and the creation of small conservation areas.

Changes there must be, and for that reason I also welcome Clause 1, which enables Ministers to give help over marketing, diversification and conservation. There are many areas in the country where help and advice will be needed over diversification, because in areas like the north-east of Scotland it is difficult to move away from the traditional cropping and stocking owing to climatic and geographic limitations. When I left Aberdeenshire this morning, there were snow patches on the low hills, the high hills were covered in snow and yesterday afternoon the temperature was six degrees Celsius where I live.

Turning to marketing, one finds that in the past most farmers have been very much production oriented. Now, like other businesses, they have to market as well as produce goods. Any diversification or change into other fields of agriculture will require considerable research. Here I am surprised that Her Majesty's Government have been cutting down on research. There may be a legitimate case for cuts in the advisory services: however, research is a different matter. Research is long-term requiring expertise, specialist equipment and, above all, finance, all of which the individual farmer cannot provide.

Then there is Clause 11, on which my only comment is, "No comment", not because it does not affect Scotland but because I have a herd of 250 milking cows and anything I say on the value of milk quotas will largely be biased. Make no mistake, my Lords: the future of the uplands depends on the prosperity of farming in those areas. If farming in the uplands is not prosperous, our uplands areas will become depopulated; that is a certainty.

Finally, I warmly welcome this Bill and wish it a speedy passage to the statute book. Of course, the real test will come in the future, as it will depend on how the Act is interpreted and how it is made use of by Ministers.

7.24 p.m.

Lord Craigton

My Lords, the widening of MAFF's responsibilities under Clause 12 and the environmentally sensitive areas under Clause 13 is a major step forward, and I follow the congratulations given to Her Majesty's Government by the noble Lord, Lord Moran, and the noble Baroness, Lady White. For the first time, income support for farmers in certain areas will be partly divorced from increased food production and will be made conditional on good environmental practice, of which my noble friend Lord Forbes spoke with great authority. Although initially Clause 13 is to have a narrow application, I hope the Minister will say, as the noble Lord, Lord Walston, asked him to, that the intention is to see support of this type available to farmers across the whole countryside.

The days will come when the nation will have to seek other ways of using farmland which is no longer needed for food production, and this has been mentioned by several speakers. It is surely our duty to ensure that this Bill, when enacted, is a help and not a hindrance in arriving at the correct solution for each separate plot of land thrown vacant from food production. There will be a separate solution for each particular plot. The noble Lord, Lord Stodart, said that vacant land will be replaced by forestry. In the all-party conservation committee just the other day we heard the NCC telling us about their publication dealing with this very point—what is to be done with land that is thrown vacant from food production. Any of your Lordships who are members of the all-party conservation committee will get a good report of that speech in the circular.

I have a few constructive suggestions for the improvement of this Bill, and I hope that they will be thought to be more worthwhile when considered in this long-term and wider context. In Clause 13, the powers of the Minister seem to me to be unnecessarily limited. For example, he cannot, as the noble Lord, Lord Moran, said, control damaging afforestation methods on the site. Why is that? It is because the definition of "agricultural" is limited to woodlands as an ancillary use on the farm. Again, he can only require or promote the protection of buildings and living things in an area to the extent that they are being damaged, or can be improved, by agricultural methods. This is a ridiculously limited scope for doing the job properly.

Again—and this is almost in the form of a question —Clause 12, which overrides all agricultural functions, includes the promotion of enjoyment of the countryside. Ought not that promotion of enjoyment of the countryside also to be in Clause 13? Finally, if, for example, the Government's countryside and nature guardians recommend steps for improving a building, such steps are limited by having to be taken only by adopting a particular agricultural method, which seems to limit the scope far too much.

In drafting Clause 13 the MAFF are taking an important step in active participation in measures and policies that are not strictly agricultural. The limiting factor in the drafting of this Bill is that the only tool to achieve anything is agricultural methods within the meaning of the 1947 Agriculture Act and the 1948 Agriculture (Scotland) Act. This can easily be amended—I hope to put down an amendment—by referring in Clause 13 to agricultural "or other appropriate measures". Indeed, in relation to Clause 12, the more I think of it the more forcibly I ask myself whether the Minister, in carrying out his new, wider and welcome objects, will not have to have the present definition of agriculture amended, As I read it, in order to carry out the requirements of Clause 12 he will need wider powers.

I have one other point. There is cause for concern in subsection (6) of Clause 13. Having taken the advice of the Department of the Environment bodies, the Minister designates the area and lays down provisions also to meet the DoE's suggestions. What happens under the Bill as at present framed when a farmer has acted on the advice of a private consultant—and, as we have heard already, a private consultant is under no obligation to give conservation advice—and the advice of that private consultant endangers the purpose of the provisions? Or what happens when some new and unforeseen conservation problem arises? Under the Bill the DoE advisers have no standing. They are consulted in the first place, and that is that. Even if they are allowed to be consulted, which is essential, as I read the Bill the Minister has no powers to amend the provisions. The DoE advisers must remain on the scene and their advice must be heard and acted on if the Minister agrees.

My final very short point has already been mentioned by the noble Lord, Lord Moran. Clause 13 will be applied to areas most suitable for the scheme as enacted. They will certainly not be the most environmentally sensitive areas. The CPRE has suggested calling them conservation farming areas. The noble Lord, Lord Moran, did not say whether he agreed, but I think I do.

7.31 p.m.

The Earl of Dundee

My Lords, although the provisions of this Bill have had a mixed reception, there would of course be general agreement that the nature and balance of incentives given to farmers should always be subject to review from one time to another; and thus implicitly it would be accepted that these reviews should occur whenever one set of circumstances gives way to another—such as the scarcity of food and supplies which prevailed at the time of the 1944 and 1947 Agriculture Acts compared with recent Common Market food surpluses which form the background to proposed legislation now.

However, while the re-emphasis on conservation contained in the Bill is widely supported as following from the present condition of over-production, it has not been equally conceded, as noble Lords have already reminded us, that just because farmers overproduce collectively they should now be required to suffer individually by paying for some goods and services which hitherto have been free. Yet how do farmers stand to be affected by the present draft of the Bill; and if at all adversely, what type of amendments may now be called for?

First, there is the distinction between principle and detail. If all farmers could easily afford the new charges, it might still be objected in principle that any charges should be made at all. And although the accompanying argument would hardly be very compelling, that principle might always be defended in spite of the context of over-production and even in the event of a universal ease of ability to pay. But on a point of detail, if while most farmers might afford to pay quite easily a certain number could do so only with difficulty, then there would be a case either for exempting the latter from charges altogether or else for enabling them to pay at reduced rates. Perhaps the best balance will come from a clarification of "reasonable charges", but as my noble friend Lord Stodart and the noble Lord, Lord Walston, have pointed out, these have not as yet been sufficiently explained.

The noble Lords, Lord Walston and Lord Moran, mentioned another difficulty which arises if we accept the allegation that the Bill's conservation measure introduces a conflict of incentives to the farmer. In theory, at least, this conflict exists whenever the Ministry of Agriculture would continue to pay production grants to producers who are operating within so-called environmentally sensitive areas. Can my noble friend the Minister say what plans he and his department may have to resolve or minimise such a conflict, either during the passage of this Bill or at some later stage? Equally, can he indicate what steps the Government are prepared to take to remove or mitigate the impact of charges on those farmers less able to afford them?

Turning to the interests of the consumer, there is of course a parallel inference to be drawn from overproduction. If everyone has more than enough to eat, then all the greater emphasis can be put on the aim of achieving quality rather than quantity. Regarding the quality of food available on the market and irrespective of marginal price differentials, there has in fact been increasing consumer demand for a wider choice which takes note both of particular foods themselves and of how these have been grown and processed. What bearing therefore does this type of demand have on production processing and marketing?

On what is grown, there is certainly no good reason for discouraging traditional produce such as butter, milk and beef. Yet this may be a point which would cause people to have mixed feelings. If medical opinion were to be constant and undivided, then at least we could know definitely what to avoid. But if doctors keep changing their opinions about which foods are good or bad in themselves, then, although no doubt in moderation, we might as well always eat what we like. This is really quite a satisfactory state of affairs. It removes the need for awkward and irrevocable decisions, and many of your Lordships will agree with me that life would hardly be the same if certain foods, such as roast beef and Stilton cheese, were to be out of favour for a long while.

On the other hand, how foods are grown and processed is an entirely different point. Recently there has been significant demand for produce which has been grown organically as distinct from that subjected at various stages to chemicals and artificial stimulants. The signs are that many more people would wish to benefit from a choice if relevant differences in the production process were communicated through better advertising and promotion. While over-production can mean that the farmer is able to pay more attention to conservation, it also means that the consumer should be able to benefit from a wider choice of healthy food. In this respect can my noble friend the Minister reveal what initiatives the Government are prepared to take to encourage organically grown produce free from chemicals and to help stimulate further consumer demand through advertising and in other areas?

Then there is the effect of the Bill on improved conservation and amenity in the countryside, to which Clauses 12 and 13 are directed. One objection has been that the current propositions are on a very small scale compared with what is recommended by the Countryside Commission and Nature Conservancy Council. The noble Baroness, Lady White, pointed out that the original number of designated areas was quite high and then it came to be whittled down. Will the early evidence of the success of this exercise be able to generate more public funds? And apart from that, do the Government now plan to give any direct incentives to assist the useful work which is being carried out by the forestry and farming wildlife groups and other voluntary conservation bodies?

This Bill is to be welcomed insofar as it attempts to bring British agriculture up to date and reflects the fact that the CAP has now been taken into the environmental field through a British initiative. While overproduction leads to problems of mountains rather than molehills, it can also present many exciting opportunities. Clearly these should be taken whenever possible to achieve diversification of land use by the grower, healthier food for the consumer and, not least for all concerned, greater enjoyment of the countryside.

7.37 p.m.

Lord Melchett

My Lords, I should like to start by saying a word about the environmentally sensitive areas in Clause 13. Needless to say, along with, I think, everyone else who has spoken, I warmly welcome this clause of the Bill. There is not a great deal left to say about it as a number of noble Lords have touched on the subject but I want to echo what has already been said by the noble Lord, Lord Moran, and others about the name of these areas. "Environmentally sensitive areas" seems a complete misnomer. "Conservation farming areas" would be much better.

That might prevent someone like the noble Lord, Lord Stanley of Alderley, from falling into the trap which he did of suggesting that in these areas farmers would be paid for doing nothing. The noble Lord suggested that the public would object to that. Payment for doing nothing was a feature of the Wildlife and Countryside Act 1981. In these conservation farming areas farmers will be paid for farming in a particular way that benefits the environment. I do not think there will be any public opposition to that—indeed there will be overwhelming public rejoicing, as there has been in both Houses of Parliament and from all political parties.

The noble Lord, Lord Stanley of Alderley, also suggested that these areas would be very expensive and he said that the Treasury should not forget it. But I understand that just today the Countryside Commission and the Nature Conservancy Council produced a report detailing their recommendations on which areas should be included in the first group of areas to be designated under Clause 13. They reckon that they could manage to get 14 areas in England and Wales—my noble friend Lady White will be pleased to hear that that includes five in Wales—for a maximum sum when the scheme is fully running of £9.25 million.

As I understand it, the Government are prepared to commit £6 million in the first year of the scheme, and the Countryside Commission seems to be of the opinion that that would be sufficient for 14 areas initially, not six. We would need to look at the detail of what level of payments was being provided for, but it shows that areas can be designated under Clause 13 at a not excessive sum of money. I hope that the Government will be able to agree to all 14 areas being designated initially, given the modest costs for which it appears it will be possible to do that.

It is worth remembering that it is not very long ago that the noble Lord, Lord Belstead, appeared before at least one if not two Select Committees of your Lordships' House, arguing very fiercely that such a payment could never be made by the Ministry of Agriculture; that it would be contrary not only to the Treaty of Rome but to everything that everyone who loved the countryside held dear. There has been a dramatic conversion. I welcome it, and the noble Lord has played a considerable part in changing the Government's policy. All of us who care about the countryside are grateful for that.

I am afraid, however, that that conversion has not been an easy one and there are still signs of resistance to the new policy. For example, I find it quite extraordinary that in Clause 13(2) the Treasury should be involved in deciding which areas should be designated under that clause. In Clause 13, the Treasury are not being set up to provide some overall amount of public expenditure that will be involved, but apparently they will be tramping round West Penrith, the Orkneys and the Cambrian mountains looking at fields, orchids and sedges to decide whether this field should be in an environmentally sensitive area and that one out of it, and so on. That is a perfectly ludicrous proposition. I cannot imagine what on earth the Treasury are doing, notifying areas of the countryside as being environmentally sensitive or not. I sincerely hope that the noble Lord, Lord Belstead, despite what he will no doubt be briefed to say, will be with us in spirit when we move an amendment to delete that part of the Bill—and I am sure that his colleagues in the Ministry will.

There are, as other noble Lords have mentioned, problems as to what happens if somebody in an environmentally sensitive area does not play ball with the concept. It is possible to imagine a whole area being destroyed by the actions of one, two or three landowners or farmers in the middle of it—particularly in the case of a wetlands area, an area notified for its high water table, which could be effectively destroyed by one or two people undertaking a drainage scheme.

Similarly, an area of moorland could be totally negated from any environmental value if a large block of forestry were to be established in the middle of it—even if many farmers in the area had not gone in for afforestation. Clearly, it must be right that there should be controls over such destructive activities in a notified environmentally sensitive area, for the benefit of the other farmers and landowners who will be receiving public money to farm in an environmentally sensitive way.

It seems to me vital also that the Nature Conservancy Council and the Countryside Commission, who have played such a major role in identifying areas to be notified, should be closely involved in the management of what I hope will shortly be called conservation farming areas.

Before I sit down, I want to say a few words about matters that have not been mentioned to any great extent so far in the debate. I want first to comment on Clause 12, which I warmly welcome being included in the legislation. It is a clause that a number of us argued should be included in a Bill that came before your Lordships' House last year. Again, it is one where there has been a considerable conversion on the Government's side, which I very much welcome.

I stress to the noble Lord, Lord Belstead, although I am sure he is aware of this, that many people are expecting new initiatives as a result of Clause 12, and I shall simply point to things that are already happening as being evidence that the effectiveness of the clause in a Bill that is not yet an Act of Parliament will be very unsatisfactory.

I suggest one way in which your Lordships could help the Government implement Clause 12(1)(d), which refers to the need to promote, the enjoyment of the countryside by the public". It seems to me that with the introduction of payments for conservation farming in environmentally sensitive areas, the Government will be putting right one of the major mistakes made by Parliament and the Government in the Wildlife and Countryside Act, where we went in for a system of trying to secure nature conservation by a very weak series of controls while the financial inducements were all pushing in the other direction. Now we have some financial inducements pushing in the right direction, and that is very welcome.

However, we made another mistake in the Wildlife and Countryside Act, which was to change the law to allow beef bulls to be grazed with cows and heifers on fields crossed by public rights of way. Since we made that change in the law, the Health and Safety Executive has issued advice contradicting what was said by the Government when the Wildlife and Countryside Bill was being debated.

The executive has now said that all bulls are unpredictable and that no bull that might be a danger should be placed in a field which is crossed by public rights of way. That means, so far as I can see, that any farmer putting a bull in a field crossed by a public right of way is in breach of the Health and Safety at Work Act. We therefore have two Acts of Parliament in conflict with each other. I hope that in order to promote the enjoyment of the countryside by the public, as Clause 12(1)(d) suggests that both the Government and the Ministery of Agriculture should do, we will be able to change that particular part of the Wildlife and Countryside Act when we reach the Committee stage of this Bill.

I want finally to say a word about the approach to agriculture that the Government have adopted, not only in this legislation but more generally. At the start of this long debate, the noble Lord, Lord Belstead, spoke about this Bill creating a partnership between government and farmers. I, as much as anybody else who has lived in the countryside and who has been involved in farming, have always been taught that the Agriculture Act 1947 created a partnership between government and farmers; a partnership that has been continued under governments of different political parties very successfully for many years.

It seems to me that that partnership only started to break down—and I believe that it has broken down now—in the past five, six or seven years, in a period when political dogma has been allowed to intrude into agricultural policy. The Government set about a piece of socialist legislation from 1947 that provided for state finance for agriculture, many state controls, marketing boards, state-funded research, state-funded guidance, and advice for farmers. Those are all provisions that noble Lords on both sides of the House have said during this debate that they felt were important and should be retained, and which they are concerned about losing in this Bill. Those provisions have all been under steady attack for many years now.

When prior approval for agricultural grant aid was removed, the Government assured your Lordships' House, in a long debate on an amendment that I put down to an order, that ADAS staff would not be cut but that they would be redirected into areas such as conservation advice. As the House has already heard in this debate, there have been massive cuts in ADAS over the past few years and no redirection into conservation advice of the kind that we were promised then. There has been some increase but no stopping of the cuts, as we were told there would be. There have also been cuts in the research capability and in many other areas of support for agriculture that the Agriculture Act 1947 established.

There have also been the cuts in capital grant aid without any really significant switching of funding into the new kinds of grant and development for which so many people have been arguing for so long, and for which Clause 13 of this Bill at long last represents a very modest step towards.

Nevertheless, the fundamental approach that the Government have adopted has been a monetarist one. It has been to remove state support and state funding for the agricultural industry that the 1947 Act established, and which successive governments have supported. That is why the partnership between farming and the Government has broken down, and I do not believe that this Bill will do enough to re-establish that partnership. The general attitude that is exemplified by the Treasury's odd appearance in Clause 13, which I have already mentioned, continues to dominate the Government's approach.

For example, after a great deal of pressure, the Government took on board the concept of environmentally sensitive areas. They went to Europe and secured a notable victory. But they do not seem to have pursued it. They are not trying to make policy once again. The UK is reacting to policy initiatives from Europe rather than leading the way, which in this field in particular I think we could.

The noble Earl, Lord Dundee, has already mentioned that the Government are doing nothing to promote organic farming. In Germany, there are three state-run research farms already converted to organic farming. There are more than 1,000 farms that are farming organically. There is state research, and so on, going into organic farming there. In this country, the Ministry of Agriculture does not have a single experimental husbandry farm undertaking organic work, despite years of pressure. The ministry has buried a report on organic farming, and so on and so forth. The ministry is still looking backwards, with the Treasury breathing over its shoulder not just in respect of ESAs but also in respect of every other aspect of agricultural policy. That is why I believe that we still have a long way to go before we re-establish the partnership between government and farming that all of us want to see.

7.50 p.m.

The Earl of Radnor

My Lords, I should like to congratulate my noble friend the Minister on putting this Bill before us so clearly. To me it is rather like a farming rotation: it darts from subject to subject and it is intended—indeed, it is—to be in keeping with the times and with what one wants to be accomplished. However, like my rotations, it is probably not executed always perfectly and there is probably quite a lot of work that we can do on this Bill later, as I think my noble friend Lord Stanley mentioned.

We are getting through this debate, and most matters have been referred to. Some noble Lords have spoken on their own particular subject, and some have covered the whole Bill. However, to my immense surprise nobody has mentioned what I think I have noticed walking through this debate—the spectre of rural unemployment. We have talked about the environment—and no one, least of all myself, hardly dares be anything except an environmentalist these days. Conservation is, in a way, a bandwagon—a very proper one—which I very much go along with, but it is not always compatible with work and with work-people in the countryside, and they are as much part of the environment as are rabbits, butterflies, trees or whatever. Therefore, we must keep in mind, as we consider this Bill, that we should put as a top priority the retention of as many people working in the countryside as we possibly can. This must be done even if it is at the expense of sacrificing one or two of these recent sacred cows of the environment that are talked about so much and about which we have so many laws.

When we are referring to Clauses 12 and 13, which are concerned with working the environment into farming and with designating areas of special beauty to be looked after in a special way and, I gather, to be paid for by the European Community (not all a bonus, because I suppose we put the money there in the first place), I confess that I am a little confused as to how this slots in with all the other things now going on in that respect—tree preservation orders, listed buildings and sites of special scientific interest. There are a number of strictures which are put upon farmers over quite large areas, and, if he will pardon my stupidity, I should like my noble friend to clarify whether these new areas sweep away all the existing strictures or whether, like a hat, they are placed on top of everything to complicate the issue and bring in more bureaucratic control, which is not necessarily compatible to the objectives that many noble Lords would like to achieve.

If I may, I should like to work backwards through the Bill. I must strongly refer to the whole question of milk quotas. I would not dream of mentioning this in any detail after the very clear exposition of my noble friend Lord Middleton and the remarks made by my noble friend Lord Stanley of Alderley, but it horrified me to read that schedule. It will perhaps be an embarrassment to all of us if that ever gets on to the statute book. I think that my noble friend Lord Middleton probably has a very good idea in suggesting that we should cast our eyes backwards to the Agricultural Holdings Act 1986 and look at that closely to see whether it is not possible to do something that is a great deal clearer, which does not rely so much on supposition and which does not take into consideration the types of dairy farming that might have been practised, the type of farm on which it might have been practised and that sort of thing. On the face of it, that seems to encourage people, if they want a good pay-out at the end of the day, to go for high production. In point of fact that is one of the things we are told (and rightly so) are not required.

To jump now to the beginning of the Bill and payment for advice, I must admit that I see nothing wrong in that. I do not think that it would be right, in this day and age, for farmers to go on expecting to receive their advice free. I do not think it right that they should go on expecting not to pay for certain statutory duties that have to be done as outlined in this Bill. What I do sympathise with immensely is the rundown of ADAS. I do not know whether its morale is good or whether it is bad. I cannot possibly believe that it is good. I think that is a sorrow to all of us who have worked with it. I hope that those who are out of jobs will find suitable employment elsewhere.

As regards the various authorities mentioned in the Bill, there is a certain amount of juggling with numbers. I noticed this particularly with Food from Britain, which I believe I am right in saying without referring to the Bill is to have more people. I hope that, if that is so, it will extend the optimism that my noble friend Lord Ferrers put to us, that more people will now join in and that this increased representation anticipates that other lines of endeavour will be represented by Food from Britain.

I feel that in this area it is quite difficult for the individual to contemplate selling abroad. I wonder exactly what Food from Britain does as well as promotion. Promotion is obviously of prime importance. It is the details that always worry me. I have tried a small amount of exporting, but have totally failed on very simple aspects. To start with there is the language barrier, and then there are licences, transport, health regulations, and so on. I am talking about exporting fish. I hope that Food from Britain will be looking at that aspect as well as straight promotion at fairs throughout Europe.

As regards the duties of, in particular, the Home-Grown Cereals Authority, I note that they have been expanded from marketing to production and marketing. I see here a little hope that the authority might feel inclined to use what influence it has with us farmers to teach us a little about farming at very low cost. It is in this area that I see the best hope of keeping people on the land. I should like to see as much land as possible kept under cultivation, but that it should grow less and yet the margin should be maintained as best it possibly can. That is the path I would take, and that is where I hope the Home-Grown Cereals Authority will play some part.

I think it is a useful Bill. It had to happen at this time. I think with a little bit of luck and the help of my noble friend Lord Middleton we will get it back to what apparently it was when it came to your Lordships' Chamber. Like the noble Baroness, Lady White, I give the Bill a qualified welcome.

8 p.m.

Earl Peel

I also should like to join with other noble Lords in welcoming this Bill. I think that if any criticism is to be made, it is that perhaps there is a shortage of detail, but I exclude from that remark the schedule pertaining to milk quotas, which I think goes rather the other way. I do not wish to say anything about milk quotas. I do not for a moment pretend to understand the schedules, but there I am in good company with other noble Lords. We have heard what I might describe as two agricultural heavyweights from this side of the House, my noble friends Lord Middleton and Lord Stanley, also criticising this part of the Bill, so I think I can assume that when we come to the Committee stage we shall have a long debate on this particular clause.

Moving on to other parts of the Bill, it is gratifying to see an ever-increasing acceptance from the Government that neither agricultural production nor the social needs of the rural environment nor conservation can any longer be seen in isolation. I wonder whether this is not heralding the day when we shall see a Minister for rural affairs, which I think many of us would see as an advantage.

I very much welcome Clause 12 of the Bill. I remember only too well when my noble friend Lord Buxton last year moved a similar amendment to the Wildlife and Countryside (Amendment) Bill. I gave it my support then. Though it is somewhat differently worded now, I support this clause in exactly the same way. However, I think we shall have to wait and see what real commitment the Government are prepared to give in carrying out effectively these new responsibilities. For example, will capital grants, which are contrary to the best interests of conservation, be rejected by the Ministry of Agriculture in the future?

I hope that this clause will allow the Ministry of Agriculture to come to terms with some of the abuses which exist within the HLCA systems. My noble friend the Minister knows my feelings about this matter and we have had correspondence about it in the past, but I think that it is perhaps a pity that the problems to which I refer have not been sorted out before the ESAs have come about. The whole ESA principle is basically an extension of the HLCA system and the Commons Registration Act of 1965. This is not working, and I urge the Minister to take another look at it.

Moving on to Clause 13 relating to ESAs themselves, I suppose I should declare an interest because I think some of my land is on the short list to be included within an ESA. I congratulate my right honourable friend the Minister upon achieving what I think we all hope will prove to be a real breakthrough in the effective integration of rural needs. I wish this scheme every possible success, but I think it is important that we do not rush it, that we take it carefully with a small number to begin with, which must be the right approach to ensure that ESAs work effectively.

One point that I should like to make was also mentioned by the noble Lord, Lord Melchett, in reference to something which my noble friend Lord Stanley said, which was that we would be paying farmers to do nothing. That is not the case, of course. We shall be asking them to farm in a particular way, but simply reducing stock numbers does not mean that they will be doing nothing; after all, good husbandry can go equally well with reduced stock numbers.

I am aware of the considerable debate that took place in another place regarding the arrangements pertaining to ESAs and whether they should be directed solely towards the tenant or towards the landlord as well. I know the Minister has made it clear that such arrangements would be made with the tenant, but with an obligation on the tenant to notify the landlord. There are degrees of notification, and I believe that the landlord should and indeed will want to be involved in discussions at the very earliest stage. As the owner of the land, he is likely to want to know how his land is to be farmed and it is important that any such agreement should not stifle his ability to negotiate a free market rent. The important thing about this whole ESA system is that it must be fair to both sides.

Another point I should like to raise concerning ESAs is the question of compensation. I appreciate that there will be different rates of compensation in different ESAs, but I ask the Minister the question: Will there be differing rates within each ESA? After all, within existing management agreements there are different rates, and I should have thought that a blanket rate or one single rate within ESAs simply will not generate the necessary incentive for ESAs to work effectively.

The noble Lord, Lord Moran, and other noble Lords raised the question of forestry. I, too, ask my noble friend whether in fact forestry will be included in ESA designations. The impact of forestry on the countryside is perhaps the greatest of all changes that affect the aesthetic value of such land, but I would go further and if I may I should like to extend the forestry debate outside the remit of this Bill because I think that the time has come when the Government will have to have another look at the whole question of forestry. Personally, I believe—and I accept that many noble friends on this side of the House will not agree with me—that over and above certain acreages forestry should now be brought under planning control.

I also wonder whether we are not very far from a situation in which we shall have to consider some form of zoning in the upland areas under which certain activities will be given priority over others, although of course there will always be the opportunity for integration to some extent. With regard to forestry in the uplands, we are witnessing as a result of the tax incentive schemes that are available trees being planted in quite ridiculous places which I doubt very much will ever yield a productive crop. Therefore I again urge the Government to look closely at the whole question of forestry in the uplands and to give it their urgent consideration.

Returning to the Bill, it is possible that in the near future we may find a farmer who is working land which is in a national park, in an ESA. Part of his land may well have been designated within the moor and heath area under the Wildlife and Countryside Act. He may be involved with a managment agreement and may well have the odd SSSI thrown in, and to top it all he may soon be subjected to a Landscape Area Special Development Order. He has probably spent a great deal of time over the last few months, or years, as the case may be, discussing these designations with the various people responsible for them. He may have a great deal of difficulty in being able to tell one from the other, because as far as I can see most of them have beards—apart from the girls, that is. Perhaps he thinks, "What am I going to do, given all these restrictions and all the red tape around my neck?" He may say, "I shall go to my friend the ADAS officer, the man with the cloth cap and wellingtons, who I can talk to". Then what? He may well be told in the future that he will be charged for this service.

I really believe, and other noble Lords have affirmed this as well, that Clause 1 is a retrograde step. After all, European governments create and dictate the agricultural policy and, if they expect farmers to adapt to this policy, then surely the service offered to farmers must be free and must be effective.

Other noble Lords have mentioned the demise of the research side. That too concerns me greatly. It is often the small farmer who needs the service most who is least likely to be able to pay, and the pressures on him at the moment are considerable. We shall come back to this in Committee, but it concerns me greatly.

Despite my comments, like other noble Lords I welcome the Bill and congratulate the Government on bringing it forward.

8.10 p.m.

Earl De La Warr

My Lords, I shall speak about the Bill for only a couple of minutes because I want then to range over wider aspects of farming. I can give a cautious welcome to the provisions that enable ADAS to make charges. I say "cautious" because I am concerned, as I am sure my noble friend is, to see that it is not thereby dispersed, as it is a body with considerable skill and experience.

I fully support the concept of management schemes in environmentally sensitive areas. Like the noble Lord, Lord Walston, I hope that it is only a beginning, and we shall see the system grow into something much larger.

Finally on the Bill itself, let me say a quick word, and perhaps a contentious one, about the outgoing farmer scheme and quotas. I do not understand how it creates an asset to tell a tenant farmer who has milked his cows for 20 years that he is liable to a levy on everything that he produces (over 90 per cent. of what he produced in 1983), as has been done in the past few years. That goes further to the heart of the question than perhaps any other speech has done. I have no doubt that the noble Lord, Lord Mackie of Benshie, will help me to get my thoughts in order. I look forward to hearing from him, but at the moment to me it is the logic of the looking glass.

I want now to turn to the farming outlook and the finances of the industry. In the Second Reading debate on the Bill in another place my honourable friend the Member for Hereford, Mr. Shepherd, referred to a letter that he had had from a farmer friend in the constituency; he was a good farmer, so he said. He wrote about the unpalatable fact that farming is going into a deep recession which will lead to further depopulation of the countryside and increased rural unemployment. I entirely agree. I add only that I believe that the recession has only just begun.

I do not want to pour out a large number of figures or statistics to your Lordships. But as noble Lords will know, farm incomes in 1985 were 43 per cent. down on the previous year and in real terms no less than 22 per cent. down on the previous worst year since the war, 1980. Perhaps what gives us more of an indication is what has happened with bank lending over the past 10 years. Bank lending to farming has gone up inexorably from £1 billion nine years ago to over £5½ billion today. Since 1980 in real terms it has gone up by 45 per cent. Last year, partly because of high interest rates, bank interest went up by as much as £100 million to a total of £700 million. It is not given to us to know what proportion of that is money lent for new investment and what proportion is roll-up of interest due, merely adding to the existing overdraft; the classical primrose path for any business. But I guess that a good deal is for that reason.

No industry has ever gone on for long producing unwanted goods, and farmers are no exception to that rule. We have to realise that pressures on farmers are bound to increase, whatever the nature of the pressure. It may be in the form of reduced prices or it may be in the form of reduced outputs, either by quotas or by managed set-asides. For the farmer the effect is exactly the same. All such pressures reduce his revenue, and most of that will go almost direct to the bottom line. I fear that many farmers cannot survive.

The other day I was looking at some work by the farm management services of the Milk Marketing Board which looks at the total costing of farms. It produced remarkable figures. Of a sample of 800 farms, 50 per cent. were unable to pay their interest because they had negative cash flows. The bottom 25 per cent. had fixed costs so inflated by finance charges that they can never hope to get out from under. Let me read a comment at the end of the report. Referring to the bottom 25 per cent., it states: This is the major problem area where improvements in gross margins or in cutting [fixed] costs are unlikely to solve the chronic problems of the business. They will all be making losses with large cash deficits". It states that some farms may be able to sell off assets such as a house or some land but, for others … the best course of action is to sell up", and the realistic farmer will make the bold decision before it is too late. That does not indicate that 25 per cent. of all farms in the country are in that sorry state, but it must indicate that a frighteningly large percentage can take no further pressures of the type that I have mentioned.

I shall not present your Lordships with further figures, but I believe that we must never let up on our understanding of how frail is the financial plight of far too many farmers in this country. I fear for many producers of beef, for many of our small dairy farmers and, above all, for the smaller cereal producers who are producing cereals on the lower quality of grade 3 land and are thus operating on substandard profit margins.

A very large number of farmers—not all of them small ones—will, I believe, be moving out of farming. Some will go due to bankruptcy, but many more, I believe, by choice. This is not a happy thing to have to say. I look to see, over the next five years or more, fewer farms in this country. I look to see less land in production, particularly less cereal land at the lower end of grade 3. This could amount to as much as half a million hectares. I look to see fewer people employed in farming, the other side of the unemployment penny. This is a point already made by my noble friend Lord Radnor.

I look to see further changes, as a result, in the infrastructure—the disappearance of farm roads, and farm houses and farm cottages being separated from the land. There is something about that which is irrevocable. I farm myself in the Weald, one-third of which, perhaps surprisingly, is grade 4 and the rest grade 3 land. Some of us can already see what I have been describing. We can see poor fields with unkempt hedges and thistles growing. It is not a happy sight. It is not a sight that one would have seen 10 years ago. But it has all happened before. It happened in the 1870s and again in the 1920s. It was, I believe, the noble Lord, Lord John-Mackie, who said in a debate not long ago that his father said that he had had so many crises in his lifetime that he doubted whether there was one left.

All industries go through recessions. This industry is no exception. Farming is never comfortable. I took great heart, however, from the typically stalwart speech of my noble friend Lady Elliot of Harwood. Like her, my anxiety for the future is combined with an overwhelming faith in the skill and stoicism and, when the chips are down, the flexibility of the British farmer.

8.23 p.m.

Lord Hunt

My Lords, I have to start the few words that I wish to contribute with an apology. I was kept outside your Lordships' Chamber for the duration of about seven-and-a-half speeches by an inescapable engagement in connection with the environment or conservation. I have therefore missed a great many of the valuable contributions that have been made. I shall do my best, however, not to repeat what I think may already have been stated. I have, of course, paid careful attention to those speeches made since I returned to the Chamber.

My noble friend Lord Walston began his speech—it was at that point that I had to leave—by giving faint praise to the Bill. I gather that a number of noble Lords and the noble Baroness, Lady White, have given it a qualified welcome. I should like to be slightly warmer in my feelings about the Bill than is indicated by those adjectives. I should like to pay credit where, I believe, credit is due. This Bill has its origins, I believe, in a distinguished report by your Lordships' Select Committee on the European Communities which dealt with agriculture and the environment under the chairmanship of the noble Lord, Lord Greenhill. There is no doubt that credit is due to that report. Credit is also very much due to the Minister of Agriculture, Mr. Jopling, and no less to the noble Lord, Lord Belstead, for their historic role—I use that adjective advisedly—in Brussels. Everyone knows the outcome of that. I would therefore pay tribute where it is due.

I am unable to follow the noble Earl, Lord De La Warr, for the simple reason that while I am a countryman at heart, I am not a farmer. I listened with tremendous interest and some concern to what the noble Earl said. My contribution will be limited to those clauses of the Bill that deal primarily with environmental matters and Article 19 of the agricul tural structures directive of the EC regulation that is their inspiration. I shall therefore concentrate on Clause 12. I believe that the Bill will be seen as historic in years to come. It is unique in a long line of legislation on agriculture in placing responsibilities upon the Ministry of Agriculture, Fisheries and Food for environmental protection and for requiring the Minister to achieve a reasonable balance—I underline the word—between that responsibility and that of agricultural production.

The word "balance" goes to the heart of the Bill. That having been said, much will depend on how this new policy is put into practice; I stress the word "new". I was concerned to read in the record of the Committee stage of the Bill in another place that Mr. John Gummer averred that this was not a new departure. His words, which I am, I think, entitled to quote, were: What we propose is the recognition of what is already being done". I would not dissent from the fact that a great deal is already happening in that sense. We are concerned with the exceptions. I was concerned after hearing the spokesman from the Labour Front Bench, the noble Lord, Lord John-Mackie, that an agricultural heavyweight—I use the description, following mention by the noble Earl, Lord Peel, of heavyweights on his side of the House, entirely in a professional and political sense—should throw his weight down, as I saw it, to tip the balance extremely heavily towards agriculture. It is balance that we need. Such an attitude could mean that nothing beneficial will come from Clause 12 of the Bill. I would therefore welcome the Minister's reassurance on this point. How do the Government intend to interpret and to implement this policy? I was interested to hear the views and the suggestions of the noble Lord, Lord Melchett, in that connection.

In regard to Clause 1, to which reference has, I suppose, been made by every speaker, I reiterate the point that it is both undesirable and, I would say, impracticable to separate free advice by ADAS about conservation from agricultural advice that may have to be paid for. The noble Lord, Lord Belstead, used, I believe, the word "possible", but I should like to hear his clarification of that point. Conservation and the need to balance that aspect of rural land use with that of agriculture means that both, surely, must be perceived in an integral sense and not as two separate parts. The fact that advice may be provided on different financial terms makes for accounting complications and may also inhibit requests for, and provision of, advice about conservation, especially requests from small farmers. I noted with interest the words of Mr. Jopling at Second Reading in another place on 25th November, when he said at col. 622, in referring to the Secretary of State for the Environment: I greatly value this visible sign of the shared interests of myself and my right honourable friend the Secretary of State". How real will that be if this first sign of a shared interest and responsibility for the environment is flawed by separate arrangements for financing advice? And how are those interests to be shared between the two departments? This is a matter of intense interest and great importance. Perhaps the Minister will enlighten us.

I also noted from debates at the Committee stage in another place that for advice on agricultural matters ADAS may have to compete commercially with the private sector. Is it not at least likely that private consultants will be called in by many farmers, perhaps more than before, instead of ADAS? Of course, the former, the commercial consultants, have no responsibility, perhaps no interest and no special knowledge in offering advice on conservation. The logic for providing free advice on both agriculture and conservation by ADAS seems to me to be inexorable.

I turn to Clause 13 and, like other noble Lords, I especially welcome this clause. I note with approval the Government's intention to begin, to use Mr. Jopling's adverb, "warily" with a few pilot schemes in order to gain knowledge and experience in the management of and the resources required to make a success of the ESAs. The ESAs must succeed and a cautious beginning is a sine qua non for the success and, even more important, the extension of these specially protected areas. That I think was a point made by the noble Earl, Lord Peel.

However, is the choice of only six areas sufficient? Does it match the urgency of the situation, given the danger of harmful development in other key areas already recommended by the Countryside Commission and the Nature Conservancy Council? Of the 13 which they selected in their short list, at a glance I would have said that they are all of equal merit. Those selected areas would appear to have equally strong claims and, as it is, more than half of them will have to wait a matter of years before they are designated. To give one example, we have seen on Exmoor in the 1970s, and subsequently in other national parks, how much irretrievable harm can be done in a matter of a few years. The need for designation is therefore wide and urgent. Having said that, I still say that it is wise to start on a limited basis.

I shall not touch on the financial matters concerning the funding of ESAs because that point has already been covered. However, there is one further and final point which I should like to put to your Lordships about ESAs which seems to me to be crucially important. This scheme could be undermined by a few farmers in one ESA, or even by one farmer who refused to co-operate, who declined the opportunity to enter into a management agreement and proceeded with environmentally damaging development on his land. For instance, it might take the form of tree planting in an upland area within an ESA as part of his plan to diversify his farming in the wake of restrictions imposed by the farm surplus situation. We have had examples of refusals to accept MAFF grants in connection with the national parks over the last few years.

This has been mentioned, but I repeat it: what about the Forestry Commission's felling and planting plans, over which there is still no control whatever? At the Committee stage in another place the Minister, Mr. John Gummer, made great play about his powers to require the commission to consult, for instance, the National Parks Authority before going ahead with its plans.

However, consultation falls far short of restricting operations which may be environmentally harmful. Surely the success of this scheme of ESAs cannot be put at risk on this account. Does it not strengthen the case, which has been argued over a number of years going back to the Porchester Report on Exmoor in the 1970s, for fallback powers to be held in reserve for use as a last resort, available to the Countryside Commission and to Ministers, as is already the case with the Nature Conservancy Council under Sections 28 and 29 of the Wildlife and Countryside Act 1981?

I am all for the voluntary approach preferred by the Government, but not to the extent of risking the success of the ESA scheme. Therefore, perhaps the Minister would say something about landscape conservation orders which the Government undertook to consider following a recommendation in another place of the Select Committee on Agriculture and the Environment last year.

8.35 p.m.

Lord Mackie of Benshie

My Lords, when I saw that 22 speakers were on the list to speak, my heart sank, but I have listened to nearly all of them, apart from a short break for lubrication, and I have enjoyed and been much impressed by what has been said. The debate has shown a real and genuine concern for the whole of the countryside and for the environment in which most of us live, and has not been concerned with our personal financial position.

There have been some notable speeches. The noble Earl, Lord De LaWarr, was teasing me in the bar about some trivial remark that he intended to make; then he went and made a notable speech, which I greatly enjoyed and which went right to the heart of the problem. Then, I have seldom agreed more with my noble kinsman, not that we disagree about much when it comes to farming matters.

I was sorry that my noble friend Lord Hunt was disappointed in the heavyweights and what they said, but he must understand that we are concerned with the environment in which we live and with the people who live and work there. They are at grave risk and that is the point which the noble Earl, Lord De La Warr, and the noble Earl, Lord Radnor, raised—rural unemployment. We are facing masses of it at present. We are in an appalling position as an industry and we have only just started to see it.

In this country we have a surplus 5 million tonnes of grain; on the Continent they have 18 million tonnes. These are ridiculous figures for surpluses. Above all, we have a budget in the EC which is running out of cash. Therefore, without any doubt, agriculture is in a desperate position here and must be looked at.

It is true that the conservation measures are excellent, but they will not solve the agricultural problem. When it comes to giving advice, of course the 14,000 farmers whom the noble Earl, Lord Ferrers, mentioned who have 500 acres or more can pay for it. They are the people who normally pay quite happily for advice. But many of the people on whom we shall depend to keep an environment in the countryside are unable to pay for advice, or are unwilling to pay for it, but, to be slightly complicated, will need advice to enable them to pay for it.

Therefore, we start with a situation where farming is facing desperate times and now the Government say they want more of our money in return for advice. In my view it is illogical, because the advice will be needed by us all. It will be needed by the people on the good land who will have to grow extra crops in order to maintain their farms and hedges. I could not have planted the daffodils along my roadside unless there was a bob or two in it. By scratching for every penny or making a loss there will be no daffodils planted at all. So far as I can see, this Bill does very little to help.

Turning to Clause 13 and matters of conservation, I am extremely worried. Indeed, the noble Lord, Lord Melchett, is worried about this clause concerning the Treasury. The Treasury always behaves like this. It should give a block grant and say, "That is all you will get", but it keeps hold of every little thing; it always wants to check on what is going on and interfere in matters which are not really its business. It is still at it, and of course this will not be a little thing. If we are going to do well and maintain agriculture reasonably well, then the good land has to be well farmed, with the best technical advice, the best R and D and everything of that nature, and people of ability involved in it.

The small farmers, the farmers in the hills and the uplands, are going to have to be supported. That money has to come from somewhere. The only place that it can come from is from a saving on the EC budget by the people on the good land producing grain, for example, at less money by more competent means. The money we save in export subsidies can then be put in sufficient quantities into the countryside to save it.

I am glad that this Bill is introduced in this House by the noble Lord, Lord Belstead. He listens, and in addition to listening he is not afraid to say that he will do something about it. I am sure that, with the array of advice he has from his own Back-Benchers, he will be listening extremely hard and thinking hard how he can introduce some sense into the Bill.

The most important clause is Clause 12, where it says that one of the considerations is "the economic and social interests of rural areas". That is what we are about at the present time. We have to preserve those interests. That means people. The greatest thing that we need to preserve in the countryside is the people who live there. It will only be done by a wide spread of interests.

I was in agreement with the noble Earl, Lord Ferrers, that we have to market well, and of course we have to pay for it. But that is not enough in the countryside. In the countryside we have to do a lot of other things. The noble Lord, Lord Stodart, was unkind enough to refer to my cheese that I was trying to flog in Paris. I had this cheese from Caithness. It was good cheese, but it was the wrong concept for the area.

I regret to tell your Lordships that though I did a right thing in the area—I went into the hotel business with a good chap and I made some money out of that—I lost the lot in cheese, which I should never have been producing in that area. I say that to show that planning is enormously important. One should be promoting the things in the countryside which are natural to that countryside. If the Government want to do something about the bad land which will have to come out of production and go into extensive grazing and/or trees, then they will have to produce a scheme and a lot of money in order to give people an income where the trees are growing.

They want to promote the look of the countryside by building walls. I have built my stone walls around the outside of my farm (they were all built up in the good days), but the inside is still pretty rocky, and, if the noble Lord, Lord Belstead, would like me to build up walls to improve the look, then he will have to give me nearly a 100 per cent. grant to do it, because one cannot pay a part of it unless one is making some money.

This is being gone about in an extraordinary way. It is not that I am wishing to criticise the Government, because this is a totally non-party matter. Quotas are a nonsense, because every time you set a quota somebody loses money. A quota cannot save you money. You might as well get your cut in a straightforward way, because every time you have a quota some other hydra raises its head: you cut that off and then it pops out somewhere else because it is artificial. The noble Lord knows perfectly well where the value of a quota comes from, because the value is there and it is there probably because the man who has produced a lot of milk has a higher quota.

The Government would do well to listen to the advice coming from behind them. Their PR has not been very good either. Whoever heard of a phrase better calculated to raise resentment than "the tenant's fraction"? It makes you think of the widow's mite. If the PR is not right it means that the thinking is not right. I know plenty of tenants in some of the traditional areas who do not deserve a penny for their quotas because the landlord has put up the buildings, the land is traditionally let but he has kept them up. I know plenty of places too where the landlord has done absolutely nothing. The tenant has put up the buildings, he has bought the cows, and brought the land up, and everything else. We have the vehicle in an excellent set of valuators to simplify this Bill enormously, and I am certain that we must do it.

There are many heads to the Bill. The main thing about it is that it brings in the concept of the Ministry of Agriculture co-operating with other Ministries to keep up the countryside as a viable area. That is the main thing, but it will take a lot more money and thought. The Bill has the makings of something that could be used if the Government have the will to do it and can get the cash, and can organise the EC, but it is only a start and there is a rocky road ahead.

8.46 p.m.

Lord Gallacher

My Lords, I shall confine myself mostly to Clauses 4 to 8 of the Bill. Fortuitously they are the clauses about which I know a little, and they are also the clauses which, despite 20 speeches, have been least discussed. The first question I should like to ask is whether the Home Grown Cereals Authority and the Meat and Livestock Commission, described in the Bill as "non-departmental public bodies" are really in the best statutory form for the tasks they are called upon to undertake in this Bill, and which they will certainly have to discharge in the future?

On occasions like this, when we are partially amending the rules for bodies like this, we should ask ourselves whether, if they were to become, for example, marketing boards or, better still, statututory producer co-operatives—which is the guise in which the Milk Marketing Board now describes itself; quite properly since they have introduced the principle of one member, one vote—a change of legal format would not enable these bodies to discharge their obligations more effectively, and perhaps at the same time please Brussels by reason of the fact that they had lost this peculiar British character of non-departmental public bodies.

I am prompted to ask in this connection, in view of the reduction in the size of the membership of the Home Grown Cereals Authority proposed in the Bill, whether growers and users are satisfied with their present representation on the authority, and whether following the reduction they will still consider their representation adequate, and also whether the method of appointment of people to the authority is acceptable to both growers and users.

I should be interested to know from the Minister whether the Home Grown Cereals Authority is to be the body responsible for collecting the proposed co-responsibility levy of 3 per cent. included in this year's EC price settlement, which I understand is to run for a period of five years. Will this levy be collected by that authority? If so, will its collection costs be met by the EC? Also, is there any prospect, as is hoped, that the Home Grown Cereals Authority might share in the proceeds of the co-responsibility levy that I have just described?

The Meat and Livestock Commission caters for a diverse industry. So much so that reconciling interests in the meat industry presents the Meat and Livestock Commission with what is a nearly impossible task. For example, 24 organisations have to be consulted in respect of the appointment of seven out of the 10 present commissioners of the MLC.

That leads me to ask also whether a narrow range of functions for the MLC will not enable the Commission to work better? Conditions in the meat industry have changed remarkably since the Act of 1967. We were not then a member of the European Community, and I ask myself, and I ask the Minister, whether there is not a case for a review of the Meat and Livestock Commission's total operations to take account of the many changes in the industry since the commission was established. In this connection also I note an increase in the number of commissioners proposed for the MLC from 10 to 15, and I wonder whether this is designed to achieve more "flexibility", which is the word used in the Explanatory Memorandum about Clause 7.

Clause 7 also provides for consultation about levy schemes. Does this not already take place? I can remember when I used to earn my living that I was for ever consulted by the Meat and Livestock Commission about levy schemes, and I wonder what is meant by that under the present proposals. In particular, how will the Meat and Livestock Commission adjust, the proportion of levy from a particular sector of the meat and livestock industry for a particular purpose given the diversity and the controversy which sometimes surrounds the Commission's operations? That is a phrase which I think will need clarification.

Has any consideration been given to the sales of poultry? If so, which body is responsible for the poultry industry, growing as it is by reason of the competition it is currently offering to red meat? I would ask whether there is now a good working relationship between the Meat and Livestock Commission and the Food from Britain organisation and whether there is any duplication of effort and resources between these two organisations?

When Food from Britain was established three years ago some of us were well aware that we would quickly reach a point of controversy. The noble Earl, Lord Ferrers, described that in some detail for us this afternoon. The organisation was created in rather a hurry. There was no problem about establishing it when the Minister of Agriculture kindly and generously agreed to pay the whole cost of operating the organisation. Now, however, that Ministry of Agriculture funding is being tapered (I think it is still generous) and the industry is expected to self-fund to an ever-increasing degree, the conflicts which were latent three years ago are now beginning to emerge. To some extent they represent vested interests because there are many bodies which, long before the Food for Britain organisation was thought of, undertook what they believed to be a useful task in promoting British food both here and abroad.

In this connection, can one ask whether the increase in the membership of Food from Britain from 15 to 21 is designed to give seats to organisations and bodies from whom Food for Britain expects to get funding? Under Clause 8 perhaps the Minister can tell us what conditions the Minister envisages on grants and loans to Food from Britain. One of the questions which has never been asked about the organisation is whether it sees itself mainly as a generic advertiser and quality mark promoter, or will Food from Britain get into the market place in its own right particularly in the European Community? If, as a former retailer, I can make a suggestion to Food from Britain it would be that it should explore the possibility of collaboration between food manufacturers and major retailers in establishing a permanent Food from Britain presence through a chain of shops in the Community's major cities, including the secondment of top people from food manufacturers and food retailers in order to establish such a chain. That secondment might be acceptable to those organisations and to Food from Britain in lieu of a cash contribution, because it seems to me that if we are to make any impression with Food from Britain in these markets we need a permanent presence of the kind that I have described. A permanent presence might also help us to overcome the problem—which is no problem in Britain but which is a problem to promoting food abroad—of the growth of own brands which are meaningful to British consumers but which must surely have little significance for Continental consumers.

If Food from Britain goes through a bad patch or, regrettably, has to be wound up, what about work concerning the Agricultural and Horticultural Co-operative Movement? When Food from Britain was established, that body was taken under the wing of Food from Britain and we were given assurances at the time that in no sense would its work be diminished. I think it is fair to say that that has been so during the past three years. Nevertheless, grants for agricultural and horticultural co-operation have been reduced from 2nd May this year, although the reduction coincided with an assurance that the reduced grants will be paid for at least a period of five years. It is important that the development of agricultural and horticultural co-operation in Britain should continue and should not be allowed to die with the adversity which Food from Britain is currently experiencing.

Turning briefly to the environment, may I thank the Minister for the reference he made to my noble friend Lady Nicol regarding her work in seeking approvals for capital grant applications. I have noted the designation of a short list of 14 environmentally sensitive areas with the actual choice to be made in consultation with the Department of the Environment. This enables me to put yet another question to the Minister; namely, the role of the body known as the Whitehall Green Policy Unit whose existence was described in The Times on May Day this year. To whom will that body report? It seems to be an effort by Whitehall, and indeed by Government, to take seriously the propaganda which now exists in favour of the environment and to do something constructive and cohesive about it. I think its existence must be taken note of and taken account of not only in this Bill but in future developments concerning the environmentally sensitive areas.

Clause 13 implements EC Regulation 797/85 and the Minister of Agriculture deserves credit for achieving this regulation. What about current proposals by the Community, however, for socio-structures in agriculture? Your Lordships' Select Committee on Community Affairs is about to address itself to this question. It seems to me to raise even bigger issues than environmentally sensitive areas, although inevitably consideration of socio-structures in agriculture will touch upon this question.

One cannot help but repeat to the noble Lord the Minister that the fundamental question in all this is the future of land use in Britain including those areas where alternative land use is available and could take place without detriment to the environment but with considerable financial advantage to the country as a whole. As I see it, Clauses 1 and 11 and Schedule 1 are the areas of controversy in the Bill and this was fully evidenced in the speeches that we have heard this afternoon and tonight. For that reason, and for others, we shall follow the Committee stage of the Bill with interest and we hope to put down a few amendments ourselves in the expectation that, as always, the noble Lord the Minister will give them every possible consideration.

8.57 p.m.

Lord Belstead

My Lords, when the noble Lord, Lord John-Mackie, spoke at the beginning of the debate this afternoon he said that the gap between the Committee stage in another place and the time when the Bill had come now to your Lordships' House had made many people almost forget that the Bill existed. But the number of your Lordships who have taken part in this afternoon's very interesting debate and the quality of the speeches show that your Lordships have remembered well enough the main features of this comparatively short but important Bill. They are features to which undoubtedly we shall be returning when we come to Committee stage.

I should like simply to say at the beginning of my reply that I am grateful for all the speeches that have been made by your Lordships on this Second Reading, even though the noble Lord, Lord Mackie of Benshie, almost in an aside, said that he felt there was a rocky road ahead. I do not think the noble Lord was referring to the Committee stage, but more to the general agricultural scene. I hope that the Committee stage will not be rocky, although I am sure from the speeches that have been made that it will be very thorough.

I ask your Lordships at the beginning of my reply to forgive me if I do not deal with everything that has been raised. The speech that we have just heard from the noble Lord, Lord Gallacher—who speaks from considerable experience of the meat industry—is a good example of the important but detailed points which can and should be raised on this Bill, but which I think if I attempted to reply to all of them would keep us here well into the night. I shall do my best, but your Lordships will perhaps acquit me of discourtesy if I am unable to deal with them all.

The first question, essentially, which was put to me was: why charge for advice? It was, in essence, the noble Lord, Lord John-Mackie, who asked that. In this context I was grateful that my noble friend Lord Ferrers recorded his belief that the agricultural industry is facing a period of radical change. This afternoon my noble friend (I have heard him speaking previously on the same subject) expressed his deep concern about the way some of those changes are leading us. However, this must lead us inevitably to the conclusion that in order to meet a new and challenging situation we have to ensure that we have the best advisory services that we can provide. This means that they must be tailored to the requirements of the industry, that they provide what farmers want, and that they can be adapted to meet changing needs; and charging will ensure that ADAS provides farmers with what they want, and value.

The noble Lord, Lord Walston, my noble friend Lord Stodart of Leaston and my noble friend Lady Elliot, to mention only three of your Lordships, all said, as I understood them, that in principle they had no objection to charging for advisory services—a practice which has existed in many of our competitor states in the European Community for several years. However, so that I do not misrepresent my noble friends and the noble Lords opposite who said that, I realise that all three noble Lords and others made it very clear that they will look critically at the way in which charges are introduced.

Many of your Lordships referred to the fact that Clause 1 is not making the advice given under that clause mandatory, but permissive. I was very grateful to my noble friend Lady Elliot for saying that she thought that Clause 1 was an excellent clause. In that context I would say that the clause covers a wider range of ADAS services than those which we have to provide at the moment under existing legislation. Clause 1 is intended to provide ADAS with greater flexibility and the ability to respond to what the industry wants. I would only add that if ADAS were required by statute to provide advice on every single issue falling within the scope of Clause 1, all at the same time, this could seriously hinder the speed and the flexibility of the advisory service response to market forces.

I recognise that concern was expressed during the debate by the noble Lords, Lord Hunt and Lord Walston, that the move to a permissive power could be interpreted—I am not quite sure that the noble Lords put it in this way, but I think that this is what they meant—as being a reduction in the Government's commitment under the 1981 Wildlife and Countryside Act to provide advice on conservation and related matters. If those noble Lords and others of your Lordships think that, I beg you to consider that that concern does not take into account the statutory duties which will now be laid on Ministers by Clause 12, if your Lordships' House agrees to that clause. I repeat what I said to your Lordships at the beginning of this debate; that is, the undertaking given in another place that we have no plans to charge for the kind of advice now given to farmers on conservation, rural diversification or animal welfare matters.

Your Lordships asked me some detailed questions about this first clause of the Bill. The noble Lord, Lord John-Mackie, said that, bearing in mind the cost of collecting ADAS charges, the money could be raised by a system of levies. The noble Lord was indeed critical of choosing this moment to introduce charging for the advisory services. I shall not go over that second point again. We genuinely believe that by charging for services farmers will show what they need and value. We also believe that the market place, not levies, can provide the right signals from the farming community. With regard to the cost of collecting charges—which the noble Lord mentioned—I would emphasise that we are aiming to keep the costs of collection to the minimum and to avoid as far as possible extra administrative work falling on ADAS officers, whom we all want to be in the field doing the work for which they are trained.

My noble friend Lord Stanley of Alderley was worried that the state veterinary service might squeeze out commercial veterinary practices. I would say to my noble friend that we believe there is no question of that happening. The services which ADAS intends to introduce will complement rather than compete with private veterinary practices. This is a matter upon which we intend to keep a very close eye indeed.

My noble friend Lord Stodart of Leaston asked me a direct question. The essence of that question was: why have the reductions in the advisory services in Scotland been greater than the reductions south of the Border? The 1984 public expenditure White Paper forecast the expenditure reductions for the next financial year, 1987–88. For ADAS, they amount to £16½ million so far as England and Wales are concerned and £3½ million for Scotland, which amount to the same proportion of expenditure on advice and promotion of £40 million for England and Wales and £8.3 million for Scotland. The proportionate reductions are the same both sides of the Border.

Baroness White

My Lords, perhaps I might interrupt the Minister for one moment before he leaves this matter. Could he deal with the point raised by a number of Lords about free advice upon questions of environment and charges in respect of other questions, and how one distinguishes between the two?

Lord Belstead

My Lords, there is a difficulty, I feel, here. I hope that we can go into this in more detail in Committee. As I understood speeches being made—not least from the noble Baroness and the noble Lord, Lord Hunt—both were saying that if one had the situation which is in the Bill, where there is no statutory provision for free environmental advice, this is not desirable because one would not give integrated advice. My understanding of the situation is the exact opposite. A statutory right to free advice, I suggest, could make it impossible to provide integrated advice without the risk of a sterile argument on almost every occasion as to whether or not the advice which was being given to the individual farmer should be free by statute. Advice on conservation would have to be split off into a completely separate category, and this, we feel, would not benefit the farmer or the environment. I think this is something we need to come back to, but I am simply saying that if you start putting in statute the fact that consultation should be free, you have to decide in statute where the dividing line is to be drawn. That could lead us into difficulties, but this is something we must come back to at Committee stage.

Turning now to milk quotas, the noble Lord, Lord John-Mackie, was critical of the fact that the Bill had been held up while this matter was being considered. I would just say that the complicated schedule which has been brought forward this evening during our Second Reading debate from the other place is of course the result of a long period of discussion with representatives of landlords and tenants. That did not lead to agreement, and in the end the Government felt they had to bring forward proposals; otherwise tenants would get no compensation at all.

I should just like to say that our minds are by no means closed in relation to the details of the calculations contained in that long schedule. I should like to think that is shown by the decision, to which I referred at the beginning of my remarks, to table amendments which we hope will meet many of the concerns which have been expressed, particularly about marginal land farmers, and will allow the arbitration increased flexibility to take individual circumstances into account.

Your Lordships asked several detailed questions. My noble friend Lord Stodart wished it to be possible for the tenant to get more than about 66 per cent. of the quota, which he felt would be the ceiling. Perhaps I may just underline the fact that no minimum or maximum percentages are laid down in the Bill. Individual circumstances have to be taken into account under the schedule, and the more so because of the amendments which I announced that we would bring forward at the next stage of the Bill, when we can return to this particular subject. My noble friend Lord Stanley put a very similar point, and again I say to him that our minds are by no means closed on the details of these calculations.

The noble Lord, Lord Middleton, raised a rather different point. With his great experience in these matters my noble friend said he felt that the Agricultural Holdings Act was adequate for dealing with milk quotas. I hesitate to cross swords with my noble friend, but your Lordships will remember that that is legislation which deals with physical improvements to the land and not with anything like milk quotas. To have amended the holdings Act for this purpose would have meant we would have tried to apply the Act to a situation for which it was never intended and with which we think it would really not be adequate to deal. But, once again, we can return to this (and I have no doubt we will) when we reach the next state of the Bill.

Finally, I come to all the matters concerning conservation which your Lordships have raised. I should like to thank the noble Lords, Lord Moran and Lord Hunt, who were particularly generous—many other of your Lordships were also generous—in the welcome they gave to Clause 12. Several of your Lordships asked: what difference is Clause 12 going to make? The noble Lord, Lord Hunt, moved on to that point quite swiftly, as did my noble friend Lord Radnor, and I understand why. I would say that I believe Clause 12 will ensure that whenever policy is being formulated or advice given by the agricultural departments, full account will be taken of the diverse interests in the countryside and a proper balance will have to be struck between them.

The noble Lord quoted a statement made by my right honourable friend the Minister of State in another place that this clause is a recognition of what is already being done. I share and support that view of my right honourable friend, but that does not mean that the Ministry of Agriculture will not continue to develop and improve policies concerning both agriculture and the environment. We are going to have to do so.

My noble friend Lord Radnor asked: is this clause going to be a bit of bureaucracy which will overlay other things which are being done already? Clause 12 imposes—perhaps it is right for me to say formalises—the duty to balance the interests of conservation and enjoyment of the countryside with those of promoting agriculture and economic and rural interests in rural areas. In a sense that is a cap, in that it is an overall duty. Of course, we do not think it will necessarily be the last measure concerning both agriculture and the environment. We also hope very much that it will not lead to increased bureaucratic controls in the countryside, except where these are necessary for the protection of the countryside.

Then your Lordships asked questions about grant. The noble Lords, Lord Walston and Lord Melchett, among others, asked the straight question as to whether there would be capital grants in environmentally sensitive areas. In the vast majority of cases I am sure that we shall continue to grant aid farm capital investments in ESAs, since grant aided capital improvements can, we hope, have a good effect on an individual holding and not an adverse environmental impact. But, of course, there will be cases in which it may appear that a grant aided capital investment could be environmentally damaging or run counter to the objectives of ESA designation. In these cases we shall want to look more carefully at grant applications to ensure that what we pay out of one pocket is not being undermined by what we pay out of the other.

The noble Lord, Lord Moran, said to the Government: bring back prior notification. I think the noble Lord will be pleased to hear that, in fact, we already have taken powers, at the time of the agricultural improvements scheme, which was the new type of grant brought in last autumn, to enable us to reduce or withhold grants on investments which have destroyed or damaged the natural beauty and amenity of the countryside to an extent which cannot be justified by any resulting agricultural benefit, and, if necessary, we shall be able to use that power in environmentally sensitive areas—

Lord Walston

My Lords, may I interrupt the noble Lord for a moment just to clarify this rather important point? Am I right in thinking, particularly from his last sentence, that in designated areas grant will still be available as it has been in the past, but will be withheld if, in the opinion of the ministry, it is detrimental to the environment?

Lord Belstead

My Lords, it will indeed. I am saying that it is our intention that grants will be available, and I am saying that in the circumstances which I have endeavoured to outline there will be powers to withhold grant.

However, some of your Lordships then went a step further. The noble Baroness, Lady White, and the noble Lord, Lord Hunt, talked specifically about landscape conservation orders, and my noble friend Lord Craigton, in a very interesting speech, raised the need for some mechanism to guard against the farmer who deliberately farms in opposition to the concept of an environmentally sensitive area, even though he is living in one.

It is true that the Government agreed to consider the possibility of legislation on landscape conservation orders. It is a difficult question. I recognise that some areas, both within and outside existing designated areas, deserve protection. But this can, I suggest, be provided by other means, such as management agreements under Section 39, and the Government are still considering the possibility of action on landscape conservation orders. But I do not think it would be right to consider inserting any provision in this Bill at this stage in a hurry. I am therefore inviting your Lordships to come back in a rather more leisurely way and to discuss this again at the next stage of the Bill.

Then my noble friend Lord Stanley made a statement which several of your Lordships picked up, not least my noble friend Lord Peel. My noble friend warned—I think understandably—as a farmer about the dangers of the perception of the general public that farmers would be paid for doing nothing. I think that is the way in which my noble friend Lord Stanley put it. My noble friend Lord Stanley is well aware, as are all your Lordships, that we are talking in designated areas—and that will include environmentally sensitive areas—about positive management; doing things which will positively contribute to the way in which an area is supposed to be run. I think I shall just leave that point there.

If your Lordships will forgive me at this hour, I am not going to say anything about forestry because I know that we are going to return to it. I also know from the way your Lordships have made your speeches that you understand very well the difficulty which the Government are in, so far as legislation is concerned, in that forestry falls outside the Treaty of Rome as regards the definition of "agriculture".

But I want just to say a word on what I think was an important point raised by the noble Lord, Lord Walston, about consultation, as I think the noble Lord put it, with the Nature Conservancy Council and the Countryside Commission, and indeed other organisations as well. The clause on environmentally sensitive areas places a statutory duty to seek the advice of the Countryside Commission and the Nature Conservancy Council on Ministers, including, of course, my right honourable friend the Secretary of State for the Environment, as well as my right honourable friend the Minister of Agriculture when we are dealing with the selection of areas for designation.

They—that is to say, the Nature Conservancy Council and the Countryside Commission—in their turn will have consulted widely and have filtered further valuable advice through their own organisations for the Government to hear in order to decide on our designations. However, in addition to that, there is the question about the setting up of the arrangements for environmentally sensitive areas, which I think was in the mind of the noble Lord and of the noble Lord, Lord Melchett—what we call management prescriptions. It is true that no bodies have been singled out in the clause for statutory consultation on management prescriptions, and there is a simple reason for this. The Countryside Commission and the Nature Conservancy Council are, quite clearly, those with the expertise on which areas are important from an environmental point of view. But when it comes to the management prescriptions, although the Nature Conservancy Council and the Countryside Commission have an important input and indeed have already provided us with detailed advice which we are considering carefully, there are others who have an interest or expertise on which we should like also to draw directly. I am referring here to local authorities, English Heritage, the farmers themselves, voluntary conservation bodies and so on. It is for that reason that we have not designated particular bodies so far as consultation on the management prescriptions, which I know is a very live issue, is concerned.

If I may, I would just draw to a close by trying to answer two or three quick questions of the noble Lord, Lord Gallacher, and then one about Food from Britain. The noble Lord asked me about the collection of the coresponsibility levy by the Home-Grown Cereals Authority, a matter on which the details have not yet been settled. The noble Lord also asked me whether the status of the Home-Grown Cereals Authority, and indeed the Meat and Livestock Commission, was approved of by the European Commission. That, in essence, is what the noble Lord said.

There is no reason to believe that we are going to have to change these bodies to please anybody at all. I think that they are firmly entrenched and, so far as the representation on both of them is concerned, I know of no complaints. But, of course, there are the changes in the Bill to which the noble Lord drew attention and which we shall be able to discuss when we come to those clauses.

Perhaps finally I may refer to what is possibly the most important thing of all, and it is in the Bill; that is, the importance of the funding of Food from Britain, to which my noble friends Lord Ferrers and Lady Elliot characteristically drew attention. On this may I just say that I was most grateful to my noble friend Lord Ferrers for giving some very arresting figures about the splendid increases in food and drink exports in areas which have been promoted by Food from Britain.

The Government believe that we must play our part in funding Food from Britain in the future, and the moment has now come, if I may echo my noble friend, when the industry must make up its mind as to whether it wants a national marketing organisation and will make a firm commitment of the funds that are needed. The food industry and the meat sector have already pledged some money for Food from Britain, but the total is well short of what is needed. The noble Lord, Lord Gallacher, asked me whether the size of the council for Food from Britain is being expanded in order to recognise the increased interest, as we hope there will be, in Food from Britain from the industry; the answer is, yes.

I should like to say thank you again to your Lordships for taking part in this debate. It is a short but an important Bill. I hope that I have covered most of the points which have been raised, but we shall be returning to many of them in Committee. To assist the House in preparation for the next stage I shall, if it is acceptable to your Lordships, make available in the Printed Paper Office explanatory notes on the clauses of the Bill and a textual memorandum containing for ease of reference the legislation which is referred to in the Bill as affected by its provisions. I hope that these will be of use. In the meantime, the Government will consider very carefully everything that has been said in this debate. Once more, I beg to move that the Bill be now read a second time.

On Question, Bill read a second time, and committed to a Committee of the Whole House.