§ 7.3 p.m.
§ The Parliamentary Under-Secretary of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington) rose to move, That the draft order laid before the House on 7th June be approved. [22nd Report from the Joint Committee.]
§ The noble Baroness said: My Lords, I propose to describe briefly the background to this order, which was discussed in another place yesterday, and then to outline its main points.
§ As your Lordships will know, the Government are currently implementing their decision to withdraw from what is known as "near market" research and development work. We believe it right that such work, from which industry derives direct benefit, should be funded by industry, although government funding of basic research in areas of environmental concern and the public good will of course continue.
§ In keeping with this approach, the Government will be withdrawing from the near market research and development work which they currently undertake into oilseeds. At present the Government spend between £500,000 and £600,000 per year on such work.
§ It is for oilseeds producers to decide whether to take over funding of this type of research, if they believe that it is of direct benefit to industry. At the request of the farming unions, the Government therefore conducted a poll of oilseeds producers earlier this year to establish their views on possible future funding arrangements for research of this kind. The results of the poll indicated overwhelming support by producers for the setting up of a levy scheme which would enable them to fund research and development work in this sector.
§ The Government recognise the need to provide the industry with an appropriate mechanism for raising funds for this purpose. Following wide consultations, we have concluded that the best way to achieve this is by extending the functions of the Home Grown Cereals Authority (HGCA) to allow it to operate a levy scheme for oilseed crops for research and development purposes. The levy would be paid by oilseed producers and be collected at the first point of sale of the crop.
§ As a first step, before the HGCA can establish an oilseeds R&D levy scheme, it is necessary to extend the remit of the authority by statute to include the various oilseed crops. Such an extension is provided for under Sections 6(1) and 6(4) of the Agriculture Act 1986, which gives agriculture Ministers powers to amend the Cereals Marketing Act 1965.
§ There are two main elements in the order now before the House. First, the order amends Section 24 of the Cereals Marketing Act 1965 by extending the definition of "home-grown cereals", as covered by the remit of the HGCA, to include the oilseed crops of rapeseed, linseed, soya bean and sunflower seed. This will allow the HGCA to start work on a levy scheme for oilseeds. Secondly, it further amends Section 24 of the Cereals Marketing Act by changing 1336 the definition of "year" from a period of 12 months beginning on 1st August in any calendar year, to one beginning on 1st July. The purpose of this is to bring the HGCA's present financial year into line with the EC marketing years for cereals and oilseeds.
§ I should like to make it clear that the present instrument does not itself set up the levy scheme. If this order is given parliamentary approval, the HGCA will then be able to undertake the necessary consultation on, and preparation of, a draft levy scheme, which it will put to agriculture Ministers for consideration. That scheme will then come before Parliament. The Government would hope to be in a position to present that order early next year so that the levy scheme may come into operation in time for the 1990 oilseed harvest.
§ Oilseeds producers have demonstrated overwhelming support for the proposal to extend the HGCA's remit to oilseeds. This shows their readiness to support near market research and development in this important sector. I commend this measure to the House. I beg to move.
§ Moved, That the draft order laid before the House on 7th June be approved [22nd Report from the Joint Committee]—(Baroness Trumpington.)
§ 7.9 p.m.
§ Lord Carter
My Lords, I should like to thank the Minister for her explanation of the order and declare an interest at the outset as a rapeseed grower, a director of a major oilseeds co-operative, one who voted "yes" in the recent grower poll and one who wrote in the agricultural press and urged other farmers to vote "yes".
It gives me particular and personal pleasure to speak on this order. In the mid-1970s I was one of the prime movers of a plan to set up an oilseeds development council. It was supported by the then Minister, Mr. John Silkin. We were on the verge of conducting the producer poll that was required, using the Ministery computer at Guildford. The computer broke down, the 1979 election intervened, and with the change of Government the whole idea of the oilseeds development council was definitely out.
The purpose of the proposed council was to set up a mechanism to allow for the collection of a compulsory levy for research and development into oilseeds. This proposal was turned down by the new Minister, Mr. Peter Walker, in 1979. Now here we are, some 10 years later, considering the preliminary and parliamentary mechanisms needed to bring in just such a compulsory levy. As the French say, the more things change the more they are the same.
As I understand the order, to bring in the levy scheme it is necessary to turn oil seeds into cereals. Judging by the report of the Joint Committee on Statutory Instruments, MAFF has got itself into a fair old muddle in its attempts to bring about this statutory transmogrification. The Minister will know that the dictionary defines "transmogrification" as meaning to transform in a magical and surprising manner. I shall be interested to hear the Minister's comments on the searching criticisms in the report of the joint committee on the magical and surprising manner in which this order has been drafted, 1337 including the quite magisterial rebuke in the final sentence. The committee found the memorandum persuasive in that there is recognition of the need for caution in amending primary legislation by order.
I have some specific questions as regards the order itself. When the levy scheme comes forward, can the Minister ensure that the money raised by the levy on oilseed will be ring-fenced and used only for oilseed research and development, and that it will not be allowed to leak away into other areas of HGCA activity? Can the Minister also say what control there will be over the administration charge that will be made by the HGCA in connection with the levy? The final question on which the Minister may wish to write to me is why Evening Primrose has been left out of the list of oilseeds?
As regards the turning of oilseeds into cereals for the purposes of the 1986 Act, can we be quite sure that this will not bring oilseeds into the scope of any EC restrictions that may be placed on proper cereals in the future? For example, I refer to the possibility of quotas and the like. Can the Minister say whether oilseeds will be affected by anything that the EC does with cereals? I repeat my thanks to the Minister. We are pleased to support this order from these Benches.
§ Lord Rochester
My Lords, I have had occasion to use Evening Primrose oil for medicinal purposes. Like the noble Lord, Lord Carter, I wonder why it was not included in this order.
§ Baroness Trumpington
My Lords, I am most grateful to both noble Lords. I shall first deal with the original points made by the noble Lord, Lord Carter, and finish with the joint question raised by both noble Lords. The noble Lord, Lord Carter, referred to the criticisms of the terms of the order by the Joint Committee on Statutory Instruments. I assure him that the officials in my department are indeed capable and skilled at distinguishing between cereals and oilseeds. Moreover, they are absolutely brilliant at differentiating between different types of cereal and different types of oilseeds. Perhaps I may tuck in at this stage the joint point made by both noble Lords; namely, that Evening Primrose is not considered an oilseed.
§ Baroness Trumpington
My Lords, it is a primrose by any other name. I understand why the joint committee raised questions about the wording of the draft order. There are many ways of drafting an order. The joint committee suggested two possible versions. However, I am satisfied that the order as drafted by the department falls within the terms of the enabling powers. In drafting the order the department was concerned to achieve maximum clarity of style while being needful of the desire for caution in amending primary legislation by order.
I can assure the noble Lord, Lord Carter, that the moneys raised from the levy will be spent solely on oilseeds research and development, apart from a 1338 small proportion that will go to the HGCA's administrative costs. As regards the question of bearing the cost of collecting the levy, it will be collected at the point of first sale. The first buyers deduct the levy from the price they paid to growers for the seed. I understand that the first buyers will not require a fee for collection of the levy but will make payments to the HGCA at six-monthly intervals although possibly at four-monthly intervals in the first year. The interest accrued during this time will go towards the administrative costs incurred by first buyers in handling the levy.
I am very well aware that the noble Lord, Lord Carter, is a pioneer in this matter and that he has a keen interest in the oilseed industry. I am grateful for his "yes" vote. I assure your Lordships that this order, together with the levy scheme to follow, are of considerable importance to the oilseeds industry. They should help to ensure the continued funding of research and development in this sector and thus play a part in the long-term viability of the industry.
§ On Question, Motion agreed to.