Agriculture

HL Deb 21 January 1998 vol 584 cc1516-82

3.8 p.m.

Earl Ferrers rose to call attention to the importance of agriculture within the United Kingdom; and to move for Papers.

The noble Earl said: My Lords, I should at the outset declare an interest. I read agriculture at university and I have been involved with it, practically and financially, ever since. I hope that the debate which we shall have today will cover all aspects of agriculture. I am glad to see that my noble friends Lord Prior and Lord Jopling, two former Ministers of Agriculture. will take part.

Any business which occupies 75 per cent. of the land surface of the country, as agriculture does, is bound to be important and sometimes controversial. Only 2 per cent. of the population may be engaged in agriculture, although in some parts of the country the figure rises to 10 per cent., but the lives and the livelihoods of many others—those who supply the machinery and the ingredients for it, those who dispose of and who process the fruits of it, and those who just live on or about it—depend upon it.

It is fair to say that at the moment agriculture is going through one of its most difficult periods for many years. Those noble Lords who are less charitable—there are not many, but I dare say that if one hunted around one could find one or two—might say that it is just farmers moaning. That is not so. Since biblical days farmers have had their lean years and their fat years. That is an accepted part of the practice of agriculture. However, in those days the determining factors were usually the weather, predators and the Almighty. Now we have politicians, ecus and intervention boards to add to and obfuscate the whole issue; and they are a great deal more sinister to deal with.

There is no way in which agriculture can be isolated from political influence, and even interference. In almost every country throughout the world agriculture and politics become intertwined, and for very good reason. Agriculture provides the stuff of life, and not many countries are prepared to leave that to chance. Those who do have a pretty miserable form of agriculture which means a pretty miserable form of life for those who live on it.

There are those who feel that a successful agriculture and a successful environment are mutually antagonistic, but that is not so. If you have a rundown agriculture, you get a rundown environment and rundown country. Far from being antagonistic, they are complementary to each other. The environment only gets looked after properly when there is a successful agriculture.

The countryside which we all love is what it is because of the way in which previous generations of country folk looked after it. The prerogative of protecting the rural environment does not rest just with politicians, local authorities and people with long hair and sandals. It is the responsibility of country folk too. Many of the woods which are so loved and admired by people were planted in the way in which they were because of—dare I say it?—fox hunting. That is not a sport in which I have ever been involved or taken part. I have always regarded horses as dangerous at both ends and uncomfortable in the middle. But it is a wonderful sight and all part of the rural scene in which agriculture is deeply entwined.

The future looks threatening because Britain has become so urban minded that the Government, the media and public opinion are all, sadly, far too ignorant of the facts of rural life. Since May we have had a predominantly urban government. There is nothing basically wrong with that. But it is important that the Government should ensure that rural interests do not become trivialised or disregarded. When, in a debate like this, we have 33 speakers, and, despite the avalanche of new Peers whom we have been happy to welcome here, only two Labour Back-Bench Peers find it possible to take part, it really speaks volumes about the Labour Party's interest in and knowledge of agriculture. And it says volumes about agriculture's anxiety about a Labour government.

Over the years we have had a highly successful agriculture, one which has revolutionised itself in terms of its methods of operation, equipment, size of holding and care of the environment. It has taken advantage, and rightly so, of all that science and technology have had to offer.

However, recently the unexpected has come to jolt the whole industry sideways; I refer to the strength of the pound. Recently my noble friend Lord Rotherwick asked a pertinent supplementary question at Question Time. He asked: Does the Minister agree with me that the high interest rates have made our currency so strong that the farming industry has had great difficulty in exporting grain?".

It was a perfectly reasonable question. He received a pretty dusty answer from the noble Lord, the Captain of the Yeomen of the Guard, which caused a certain rumbling of dissent from your Lordships. That provoked the noble Lord to add: I thought that that would identify the farming interests in this House".—[Official Report, 10/12/97; col. 144.] That was a characteristically flippant answer to a serious question which happened to be bang on the ball. The noble Lord, the Captain of the Yeomen of the Guard, is a gregarious fellow; I do not hold that against him. Indeed, I elevate him, if I may, to the level of F. E. Smith. He once made a speech and someone said to him, "My word, you did talk a lot of rubbish this evening", and he replied, "When you talk as much as I do. you are bound to talk a certain amount of rubbish."

It is not a question of the farming interest in your Lordships' House. The fact is that the strength of the pound is affecting every single farm, big and small, up and down the country. The strong rise in the value of sterling since the general election has affected the level of the green pound—that mysterious beast of Community origin—in such a way that the level of prices which United Kingdom farmers receive is now lower than the prices they should receive, and lower than the prices which other European farmers receive for the same goods. I give as an example milk. Because of the strong pound, and because UK milk has to compete with milk produced on European farms, the price paid to the British fanner has dropped from 25 pence per litre to 20 pence per litre. That means that the income of the dairy industry has dropped by £600 million in one year.

Let us take wheat. Two years ago wheat was trading at £120 per tonne. Now it is £75 per tonne and half the wheat crop is still left unsold on the farms. Two years ago barley was trading at £115 per tonne; now it is £71 per tonne. Two years ago pigs were selling at 128 pence per kilo; now they are down to 86 pence per kilo. Two years ago beef imports accounted for 18 per cent. of the beef we consumed. The strong pound, and therefore the cheapness of imports, resulted in imports last year nearly doubling from 18 per cent. to 31 per cent. Farm incomes have dropped 50 per cent. this year compared with last year. Hill farmers are in despair.

I shall not be so naïve or stupid as to blame the Government for all this. All I say is that these are facts; and in so far as the Government are influenced by and can bring influence to bear upon agriculture they are facts that they should take into account.

There are remedies available. When the currency of a country becomes strong there is a mechanism within the common agricultural policy for alleviating the very effects we are now experiencing. If the United Kingdom were to take advantage of that, it would bring £980 million more into British agriculture. Other countries take advantage of it when their currencies are strong. Austria, Luxembourg, Germany, the Netherlands, Sweden, Ireland and Belgium did so. But not the United Kingdom. Yet our farmers are being ruined.

It may surprise the noble Lord, Lord Bruce of Donington—1 am glad to see him in his place—when I say that all is not bad in the Community. There are good things too. The only bad thing is not taking advantage of the good things. Perhaps the noble Lord might try to exert a little pressure upon the Government, preferably in the characteristically flamboyant manner in which he used to castigate us, to take such advantage.

Everyone hides behind the joke of Treasury parsimony; but Treasury officials only advise Ministers. And when the farming community sees its industry in the straits in which it is, and the Government deliberately not availing themselves of that which is available, it knows where the blame lies. It is with Ministers. If farmers are to compete in Europe, it must be on a level playing field. The field is not level. The Government can help to make it level. I hope that the noble Lord, Lord Donoghue, will say that they will do so.

Then there is our old friend bovine spongiform encephalopathy, or BSE, which is supposed to be connected to Creutzfeldt-Jakob disease, or CJD as it is usually known in humans. What a devastating mess this has made of everything, and what a devastating mess everyone has made of it. There is in my view only one really important fact about this: it is that there is no known proven connection between BSE in animals and CJD in humans. It may be likely, or even very likely, that there is a connection. The agent which causes BSE in animals may be the same or similar to the agent which causes CJD in humans. But no one knows if there is a transmission from animals to humans or, if there is, what is the route of that transmission. No one can say without doubt that new variant CJD can be contracted from BSE in animals.

This is a highly complicated business in which difficult decisions have had to be taken and will have to be taken. I am thankful that it never fell to my lot to take any of them. The biggest decision a junior Minister usually has to take is whether or not to switch off the light on his desk.

It does us no harm to stand back and look at the miserable position in which we now find ourselves. The media have wallowed in it; they have fanned the flames of fear and have arrogantly considered it their public duty to apportion blame. The great thing nowadays is to apportion blame to people for whatever happens, and the media love that. "BSE—Who is to blame?" was a trailer for a "Panorama" programme. To a large extent it was the media who were to blame.

What did we do? We decimated our dairy and beef herds by slaughtering 1,900,000 head of stock. That is unbelievable. We tried to incinerate the carcasses and make electricity but the fat gummed up the works. Up to some 280,000 tonnes of meat and bone meal and 150,000 tonnes of tallow are now in deep freeze waiting to be incinerated because our incinerating capacity is, not unsurprisingly, insufficiently large to deal with it. Some £4,000 million has been spent by the Government, not for health and safety reasons but, in order to restore consumer confidence".

That is what the right honourable gentleman the Minister of Agriculture calls support for agriculture. Of course, it is nothing of the sort.

We claim to be concerned about the third world and about the inadequate supplies of food there. I wonder what they think of this wilful destruction of perfectly good meat and whether they would not have given anything to have had it.

Cull dairy cows which two years ago fetched £600 now fetch the statutory £311 for incineration. Cull dairy heifer calves, which two years ago fetched £100, now fetch £26. In 1995 we exported 250,000 tonnes of beef; last year we exported none. What a terrible state of affairs. What is this for and why is it done? Because 23 people in all have died from CJD.

The right honourable gentleman the Minister of Agriculture said that BSE—not CJD—had the "gravest human consequences" and described the disease as a national tragedy. I venture to suggest that it is nothing of the sort. We all have the greatest sympathy for anyone who has lost friends or relatives, whether from CJD or from any other cause, but I question whether we have not got this completely out of proportion. Three thousand people die each year from motor accidents, but we do not ban cars. Thirty thousand people die each year from lung cancer but we do not ban smoking. But 23 people die over three years from CJD—not from BSE—and we destroy all these animals and ruin an industry. Now the Government are going further and are to make it a criminal offence—one which will carry a penalty of an unlimited fine or two years' imprisonment or both—to sell beef on the bone.

There are only three species of animals in the whole country which could possibly—not which will definitely—carry the infection in what is so delightfully called the dorsal root ganglia. The Spongiform Encephalopathy Advisory Committee (SEAC), which advises the Government, says that there is only a one in 20 chance of one person in the whole country catching—not dying from—new variant CJD this year. It does not fall within the limits of being what the scientists would call even a "negligible risk".

I do not know whether your Lordships know that there is a one in 800,000 chance of your Lordships dying as a result of drowning in your bath, a one in 10 million chance of being killed by lightning, but only a one in 600 million chance of dying as a result of eating beef on the bone. I really think that we have all gone completely mad.

Noble Lords

Hear, hear!

Earl Ferrers

Except myself! The Government were not advised to take this action. They were merely advised to make the facts public. They took this action without any consultation at all. People do not want to be nannied and bossed about like this. It is not surprising that before Christmas one butcher in Oxfordshire had a notice in his shop saying:

We sell beef on the bone. We sell lamb on the bone. Stuff Blair". It is not very parliamentary language, but one gets the drift of what he was feeling.

We cannot live a risk-free life. The biggest risk in life is to be alive in the first place. because you know that you are bound to die. I sometimes think that the mental agitation of making a speech in your Lordships' House is more likely by a factor of 10 million to one to damage your health than eating a slice of beef on the bone.

Of course, these are not easy matters, and I sympathise with the right honourable gentleman the Minister of Agriculture and his predecessors in having to deal with them. The simple fact is that we have all—the Community as well as ourselves—got into an appalling mess over this, from which we must now try to extricate ourselves.

Every effort must be made to ensure that, even if Europe will not take our beef, we should be allowed to export it to third world countries. After all, it is perfectly good and wholesome beef, but the Community says that we cannot export it. It is that kind of infuriating and irritating behaviour by the European Community which gives the noble Lord, Lord Bruce of Donington, such ammunition in his invective against the Community.

Of course, the CAP has to be changed: everyone agrees on that. But it is not very easy to get 15 countries, all with different interests, to agree on how it should be changed. We must take care of our hill farmers. There is often no other form of employment for them. We must see that the efficient farms are not made to subsidise the smaller or inefficient ones. There are plenty of people in Europe who would like to see that happen.

With all these anxieties, it is not surprising that the farmers held a rally yesterday outside Parliament, cows and all, to complain. It was not farmers out on a jolly; it was a manifestation of an industry in despair. They want to feel that the Government understand their problems and that they care. I am bound to tell the Minister that at present the agricultural industry does not feel that the Government do care.

Perhaps I can conclude on a more encouraging note. Deloitte & Touche, a national firm of accountants, recently said that, efficient farming is not about size, soil type or luck. What really counts is that the top 25 per cent. of farmers have developed their farming skills". Its senior agricultural partner, Mr. Hedley Lewis, said:

Our best clients are already extremely competitive. No reform of the CAP would affect this natural instinct. They are also the ones who spend time and money enhancing the Environment by planting hedges. trees and wildlife habitats. All this brings big benefits to the whole country. But it is only made possible by a profitable agriculture which funds investment on and off the farm, into the Environment, into the Community, and back into the industry". So said Mr. Hedley Lewis. I believe that he is right, and it is up to the Government to see that that happens. I beg to move for Papers.

3.28 p.m.

Lord Hooson

My Lords, I congratulate the noble Earl, Lord Ferrers, on robustly introducing this timely subject in his own inimitable style. As I listened to him, I thought that it was a great pity that the previous government did not listen to him when they were in power; had they done so, they would not have made such a mess of the BSE situation.

I have not the slightest doubt that the crisis in agriculture is a very real one. It is a national disaster. I have an interest to declare in that I am a hill farmer in mid-Wales. There 13.1 per cent. of the workforce in my county are employed directly in agriculture, the highest figure for any part of the United Kingdom. I shall be very surprised if 50 per cent. of the farmers in my area make any profit this year at all; I believe that they are all facing a loss. Your Lordships will have seen the table published in the Financial Times on 19th December last which showed that the average farm income in the United Kingdom had dropped by 23 per cent. last year—by far the highest drop in Europe—but this year will be even more devastating.

The effect of that is to threaten the whole rural community. Looking at the present state of agriculture and the reasons for it—I agree with many of the remarks made by the noble Earl on this subject—and the present attitude of this Government, I feel sure that we are facing the possibility of a rural depression with renewed rural depopulation which, if not arrested in time, will eventually cost this country far more in financial, economic, social and human terms than it will cost to take remedial measures now to prevent the crisis from deepening into a depression. The noble Earl referred to mistake after mistake being made by the previous government in the handling of the BSE crisis. Those mistakes have been continued by this Government in their knee-jerk reactions such as the banning of the sale of beef on the bone. Our approach to our fellow members of the European Union has been adversarial rather than seeking their understanding and support.

The whole of the approach does not appear to stem from any ill will, but is due to the fact that impractical people have been dealing with the matter. It is due to ignorance, a failure to understand and a failure to listen and consult. The result has been to place a huge overlay of bureaucracy on the farming industry, the abattoirs and so forth. For example, all inspection costs at a French abattoir in relation to lamb amount to 18.5p per lamb. At the present time in the United Kingdom it is 70p per lamb. After 1st April this year, due to the Government's policy, it is estimated to increase to £1.50 or £1.70 per lamb. Additionally, abattoir owners in this country have to pay £100 per tonne for the disposal of heads. In France they are saleable items. I did not know until recently that, up to around three weeks ago, the intestines of lambs were sold for 70p each. Their price dropped suddenly to 50p, and they will almost certainly be worth very little, if anything, soon because of a possible impending ban.

The actual all-in slaughter cost for a lamb in this country is now approximately £6 per head. The average slaughter cost in Spain, where all the costs of the inspections are not placed on the farmers or the abattoir owners but on the state—it is regarded as a public matter because it is to protect public health—is £2 per head. How can farmers in this country compete when such bureaucratic costs are being placed upon them?

Recently, I learnt of a British exporter of lamb who has his own abattoir in this country, but now still buys the lambs here, but takes them live to France and has them slaughtered there because it pays him to do that. The French abattoirs have to obey the same regulations under the European requirements as those in this country. British Ministers, officials and the Government do not seem to have any idea of what is happening and do not do anything about the parlous state of the lamb trade. They do not take any steps to improve and to acquire a more efficient system.

I was told recently by an abattoir owner, "We have all these inspectors, but look at their room. It is the untidiest room in the abattoir". Supermarket chain spot inspections, in his view, were much more effective, being carried out by those who were buying the lamb. They would descend suddenly on the abattoir and make sure that the conditions were right. Instead of that, we have an army of officials, many with no qualifications for the job, who have been placed in the industry over the past two or three years.

What should the Government do to alleviate the situation? First, to echo the words of the noble Earl, they should immediately apply to Europe for the funds that are available. I should correct the noble Earl on one matter. He mentioned £980 million, but that includes the contribution that will have to be made by our Treasury. Due to the Fontainebleau agreement it may be somewhat higher than the 50 per cent. that applies to other countries. On the other hand, the Fontainebleau agreement has enabled us to save £20 billion over the years so we can certainly afford to make a contribution now to agriculture.

It is interesting that, apparently, all the other European Union governments, made their contribution, but Ireland and Germany added to their contribution and enabled their farmers to survive unscathed what could have been a crisis in Europe as well. The question is whether this Government will give up their blind adherence to the Tory spending limits imposed by Mr. Kenneth Clarke, but about which he says he would take a pragmatic view and would change them if the situation required it. We want to know today from the Government whether they are prepared to seek aid from Europe on this matter.

Secondly, for heavens sake let us get the beef ban lifted or lifted to this extent. I have declared an interest before. I am a representative of beef rearers in this country. I have a suckling herd that was established over 30 years' ago and, like many other breeders, have never had a single case of BSE in that herd.

Lord Hoyle

My Lords, I must remind the noble Lord of the time constraints.

Lord Hooson

My Lords, I am sorry, I did not realise that time had passed so quickly. It is time that the beef ban was lifted from herds where one can make sure that there has been no BSE outbreak for at least the past 10 years.

3.37 p.m.

The Lord Bishop of Bath and Wells

My Lords, I am grateful to the noble Earl, Lord Ferrers, for initiating this debate at a time of such severe crisis in the farming industry. I spent most of my working life in East London trying to explain and often defend the inner cities and urban life. Now I work in Somerset and find my concern there sharpened by my travels and consultation in my diocese, not only with farmers who are regular churchgoers, but with many others through my presidency of the Royal Bath and West of England Show.

I am especially concerned, not only for hill farmers in my diocese, but also for lowland livestock farmers. I recently wrote to the Secretary of State expressing their anger, frustration and near despair at what is happening. In 1997 there has been a £1.9 billion overall fall in farmers' income. In the South West the income of dairy farmers has fallen by between 55 and 59 per cent., and that of livestock farmers by between 37 per cent. and as much as 85 per cent.

In addition, farmers are coping with increased overdrafts and the threat of extra charges that have just been mentioned. As a farmer on Exmoor said to me this week, "Half of us will soon be on family credit". That seems to be the reverse of the Government's policy: it is a move from work to welfare. People who give their all, whatever their conditions of work, will be brought down to dependence. The phrase most commonly used by farmers, as we heard this afternoon, is that all they ask for is a level praying field—I apologise, I mean a level playing field, though perhaps they ought to have a level "praying" field as well!

The market, the green pound and the lack of confidence are making the situation nearly impossible, but it is not only about the financial crisis that I want to speak—others are much more qualified than I am to do that. Important though that is, there is also a serious crisis of morale which goes far deeper. It concerns fear for the future of farming itself.

It has been my real pleasure in my years in Somerset to go to many harvest festivals. They are a reminder every year of what lies at the heart of agriculture. It is a covenant, a deep agreement, involving rights and responsibilities. The covenant made between God and the people provides the framework for stewardship of the land. In the United Kingdom the majority of people have delegated the care of our countryside to the farmers. Most of the people I dealt with in East London certainly did just that. Even in the national parks the farmers are substantial partners with the authorities responsible.

The way we express this covenant now, this covenant with God, is through ecology. Ecology includes the proper moral balance in playing our human role, without greed or abuse of nature, and proper harvesting from the generosity of the Creator. This covenant between the nation and the farmers has been breached. Sometimes the agricultural industry itself has done damage, usually in the struggle with market forces, or corporate demands for profit, or in some of the process of industrialising and intensifying farming. The agricultural industry has not been blameless. But now, through successive governments, there is an even more serious breach. The situation has become untrustworthy and it is feared not only that farmers will go broke but also that their sons and daughters will turn away—indeed, they are turning away—from farming itself. A most precious tradition is undermined.

Many of the urban population are becoming alienated from nature, prissifying it, not recognising its laws. Neither do they realise sometimes how much the farmers do day by day to maintain, preserve and protect our countryside which goes totally unrewarded financially. Recently my home was flooded. The three people who came to my aid were local farmers. They found the source of the trouble and they dealt with it there and then. I have no doubt that it would have cost a great deal to the local authority if they had not taken that care.

Personally, I believe that present subsidies have frequently distorted that trust and have drawn us further away from the farming that will enhance and strengthen our ecology. It seems to me that there ought to be a shift towards a recognition of the role farmers play in preserving our countryside. But a farmer cannot walk away from his herd. If the losses pile up, he cannot just lock the door of the countryside and walk away from it. This loss of income will not be sustainable for long. Already Churches, unions and others have had to set up for farmers Samaritan organisations and now the Rural Stress Information Network. This is not imagination. These are the realities of farming life as I see it in my diocese.

It is not just on this issue that farmers feel oppressed by what they see as largely urban priorities and urban understandings. It is essential that moves are taken, after full consultation and exploration, so that farmers know what is happening, so that they believe the Government want them to carry on this important responsibility, so that people appreciate the many services done to support and preserve our countryside and to feed us. This covenant goes very deep within our culture and our society. The current breach has cracked the fabric of farming interests, mostly in those places where survival is often the name of the task, where I meet very few farmers living in luxury.

I fully recognise the problems faced by the Government, but there needs to be financial help; there needs to be a policy which sustains farmers in their essential task of feeding us and conserving the countryside; and there needs, above all, to be good communication and understanding which works for change with farmers and not against them.

3.45 p.m.

Lord Jopling

My Lords, I begin by declaring an interest, as did my noble friend Lord Ferrers, as a farmer involved in arable and lowland beef farming. I do not wish to spend all my time talking about the present crisis but it is the most serious I have known in 40 years of active agriculture. The point has been extremely well covered by my noble friend Lord Ferrers, the right reverend Prelate and the noble Lord, Lord Hooson, who demonstrated clearly just how serious the crisis is.

I was brought up with the saying that there are two things in life you never see: one is a dead donkey and the other is a satisfied farmer. It is difficult to find satisfied farmers today, and they have every justification. I want to say to the Minister that there are two areas, in which I am not involved, which cause me the most concern. This stems from my previous incarnation in another place. I refer to the prospects for hill farmers. Already public support to that group exceeds the level of their income. It is highly worrying as to whether they will be able to maintain a living on the hills. The nation as a whole would suffer grievously if the hills were to revert to dereliction. I am also concerned—perhaps even more so—about some of those smaller tenant farmers who do not receive the benefit of hill subsidies, are not on good land, do not have secondary incomes and face the most serious prospects of all at this time. I hope the Government will give particular attention to those groups.

One of the ways that could be done is through the environmentally sensitive areas scheme, in which I claim a paternal interest and which fulfils many of the needs in the areas I am most concerned about. But there are many other things which the Government could do through opportunities arising from our membership of the European Union and through the common agricultural policy. Those of us who have been involved are very familiar indeed with the arguments put up by the Treasury at times like this, when discussions revolve around green pound adjustments. I have to say in passing that the complexities of green currencies and the bovine stubbornness of the Treasury have given me a long-term sympathy for a common European currency. That would be a way of escaping from all the nonsense that arises from green pounds.

What concerns me especially at this time is the widely held belief that the urban vote and urban interests are ganging up on country people. There is a certain amount of evidence for that. I find it hard to accept that the Labour Party—and the current Minister in particular—is both deaf and blind to the current situation. Dr. Cunningham, who was for many years a constituency neighbour of mine, followed a highly distinguished line of Labour Ministers—Tom Williams, Fred Peart and the noble Lord, Lord Cledwyn, all of whom did admirable and honourable service to agriculture and the countryside. I cannot believe in my bones that the Labour Party and the Labour Government will ignore the interests of agriculture at this most difficult time. So I hope that the Government will bring relief in a positive way. I also hope that they will avoid negative steps and proposals at this time.

I remain unhappy at the recent ban on beef on the bone. I recognise, of course, that there is a massive ministerial mantra in setting aside highly technical advice which is given to Ministers, especially by people like lawyers and scientists, where the Minister does not have the training to be able to question fully the advice that he receives. Obviously, I have not seen the advice given to the Minister by scientists as regards beef on the bone, but my guess is that that advice was even more compelling given how little we know about the science of BSE.

I would like the Minister to answer one question either at the end of this debate or when we come to debate the beef bones regulation next Tuesday. It relates to my own recollections. When the scientists recommended to us that there should be a ban on the sale of green top milk—milk which has not been pasteurised—we were told that it was a serious health risk, that many people each year became ill through drinking unpasteurised milk and that in the future people might well die unless its sale was banned. After giving the matter some thought, we decided in the end to ban all but direct sales of green top milk from the farm, but to let the thousands of people who seemed keen to take the risk continue to drink it, while we gave full publicity to the hazards about which we had been told. I believe that was a sensible solution in response to this type of scientific advice.

As regards my own point of view on green top milk, for 25 years I have made it publicly clear that I would not touch the stuff. But if people want to—which they do—I do not believe that it is up to us to stop them. So my question to the Minister is this: will he tell us what is the difference between unpasteurised milk and beef on the bone—because to me the situations seem exactly similar? We have to ask the question: is there some evidence about beef which has caused this ban, but which has not yet been revealed? It is a highly important question and I hope the Minister will refer to it at the end of the debate.

3.52 p.m.

Lord Grantchester

My Lords, I am grateful to the noble Earl, Lord Ferrers, for initiating the debate. I declare an interest. I own and manage a dairy farm in Cheshire. It is particularly poignant to debate the importance of agriculture at the moment when the United Kingdom begins a six-month term of presidency of the European Union, when reform and change are at the top of the agenda, and when all sectors of agriculture are simultaneously suffering.

The national statistic is that agriculture produces only 1.4 per cent. of gross domestic product, employing only 2 per cent. of the workforce. A far more accurate portrayal of the importance of agriculture comes from the fact that 77 per cent. of total land area is shaped by agriculture. It has an overwhelming influence on our environment. Agriculture underpins the rural economy. Using OECD's area classification, agriculture accounts for 11.6 per cent. of total employment in predominantly rural areas. It is only the continuing presence of farming that ensures that many communities remain viable.

The situation in the livestock sector, especially meat, is desperate. The all-cattle price last week stood at 89.78p a kilo, down from the already low figure of 110p one year ago. Meanwhile, the added costs of regulation are being heaped on to the industry. From April it will have to meet all the Meat Hygiene Service's costs of £44 million, the rendering industry's costs, the start-up and annual costs of the cattle movement service, and now the food standards agency.

If farming is to absorb these costs and be competitive, it needs to know that the Government are treating them in exactly the same way as other countries treat their farmers. It needs to know that quality controls are uniform. The "Back British Meat" campaign is being promoted precisely because they fear imported meat is not demonstrably produced to UK standards. Nor can farmers accept that only in the United Kingdom is there no compensation against green pound revaluations.

It is vital that the Government hear these concerns as they start the UK's six-month presidency of the EU with Agenda 2000 proposals to be agreed, and with fundamental CAP reform on their mind. Three issues face agriculture at the present time—standards, confidence and responsibility.

The view from most political persuasions is unanimous. Agriculture must learn to live without subsidy; to be able to compete at world prices; to operate in an ecologically sustainable manner; and to create an environment to be enjoyed at leisure.

What does it mean to produce at world prices when trade is often only of marginal surplus production that is then dumped? To produce everything at world prices means fundamental changes in production methods to drive down unit costs and increase volume.

Are British cereal farmers to be told to compete against American and Australian wheat prairie farmers? Are beef farmers to be encouraged to set up massive intensive beef lots? Consumers and environmentalists would presumably vote against that form of farming. But they are very glad to import its food and eat it.

The BSE debacle means that the United Kingdom is uniquely setting standards of hygiene and control. But the problem of BSE is not unique to Britain. Consumers perceive all produce, whatever its source, as potentially hazardous. But British agriculture must not be unique in meeting these costs and controls. The standards being enforced with their cost implications are vital in restoring consumer confidence. Where it is possible to give the consumer information on standards, this must be done to rebuild confidence. Abattoirs are now being inspected and scored on their hygiene methods, and those results are now available. The Government must act to look to a method to bring this information before the consumer at the supermarket shelf as an issue of confidence and not leave it to the industry as a promotional tool.

Finally, I wish to deal with responsibility. Agriculture looks to the Government to provide effective administration; to provide a framework to the industry; and to provide policy on agriculture, the environment and rural development issues. Is this being adequately performed by the Ministry?

Following the election last May the Government signalled the importance of agriculture and food issues with the appointment of Dr. Jack Cunningham as Minister, thus raising its importance in the Cabinet. Dr. Cunningham has said: This department will be changed beyond all recognition in a period of months from now. We have already begun to reorganise the department, to separate out the Food Standards Agency personnel … I have inherited a closed, inward looking, secretive unresponsive department which has not enjoyed the best of reputations in the past two or three years". Those were strong words for a Minister to say of his department. However, I am now more confident that fundamental reform issues are being addressed and that British agriculture can look to the future with confidence.

Despite all the reviews being undertaken by government, for MAFF, the fundamental questions remain. With the food standards agency coming under the Department of Health and the regional development agencies, which have taken over some of the Rural Development Commission's functions, coming under the Department of the Environment, it is vital to the agricultural industry that MAFF fulfils a strategic role and provides a rural voice in government. However, this is being jeopardised because it has a distinctly separate structure.

The regional development agencies will operate from government regional offices which do not correspond to MAFF's regional centres. Furthermore, the regional boundaries do not correspond to those operated by MAFF. For example, my area of Cheshire, Staffordshire and Shropshire is operated from the Ministry's Mercia office in Crewe while the West Midlands government office in Birmingham includes Staffordshire and Shropshire but not Cheshire, which is defined as being in the north west. There are very grave concerns that MAFF will be unable to provide a strategic input if it is not even in the same room.

The importance of agriculture in rural areas demands that it should take a full role in the regional development agencies. How can these agencies fail to be dominated by urban perspectives if MAFF will not participate? Rural and urban issues must be taken together if the development of a region is to reflect all enterprises.

The Ministry of Agriculture, Fisheries and Food must not continue with its inward-looking, siege mentality. MAFF must be reformed into a leadership role at the centre of rural and regional development issues. It is vital that MAFF be re-born as the Ministry of Agriculture, Rural Affairs and Fisheries. It must help to meet the objectives of government in rural affairs and to ensure they do not become more isolationist and producer-focused but, rather, keep consumer and environmental concerns as high priorities to accord with developments to transform the CAP into an integrated rural policy. Such developments will strengthen the relationship between farmers, the countryside and the country as a whole. The long-term future of British agriculture demands nothing less.

4.1 p.m.

Lord Prior

My Lords, my noble friend Lord Ferrers made a splendid speech. He is able to combine a rumbustious style with a felicitous touch which does not seem to upset people too much. At the same time, he manages to include many facts. That leaves very little opportunity for any other noble Lord to say something new.

This is the first time that I have taken part in an agriculture debate in Parliament for over 25 years. I come to this debate not as someone who takes much interest in agricultural politics, but as someone who has farmed all his life, who loves the countryside and who has great affection and respect for all in the farming community. However, that does not mean that I do not understand some of the "crying wolf' that we have heard from the farming industry over the years. To my cost, I have known times when things were nothing like so bad as the farming community used to make out. That needs to be said because when farming gets into trouble—I believe that it is now in serious trouble—many people say, "We have heard all those arguments before from the farmers over the years and we simply do not believe them".

Unfortunately, the position is worse now because of the way in which the subsidies paid to farmers through the common agricultural policy changed some three or four years ago so that they reflected more an acreage payment and less a commodity payment. The result is that some very large payments are being made to a number of very large farmers whereas previously, when the subsidy reflected the commodity, it was included in the price of the commodity and not on the basis of acreage. It was perhaps also unfortunate that just when those changes were being made the world was suffering a possible food shortage. Prices rose and the pound was devalued. That gave us an added advantage. I should add that the profits being made on arable farms two or three y ears ago were very high.

None of that alters the fact that the situation has now changed totally. Sometimes in agriculture—perhaps one should say "always in agriculture"—it is "up corn" and "down horn" or vice versa, but now, most unusually, it is a case of "down corn" and "down horn".

The industry has to try to see through this difficult period as best it can. As my noble friend Lord Ferrers said, I believe that we can legitimately look to the Government for some temporary and immediate support. If there is a change in the value of the pound and if circumstances generally change, British agriculture can stand pretty well on its own feet, certainly in competition with anyone else in Europe. So, in the long run, I do not think that there will be problems. However, there will be a problem if we so erode British agriculture now in the short term that it loses its great advantage in European agriculture in the long term. Therefore, I believe that short-term assistance now can be justified.

I am not certain that I agree with my noble friend Lord Jopling who said that he would do almost anything to remove himself from the maw of the British Treasury. I have wanted to do that all my life, but I am not certain that I would want to put my life into the hands of central bankers because they are not known for their humanity and kindness to industries such as agriculture. We need to be careful about thinking that European monetary union is the answer to all our problems. I am not at all certain that it is.

I turn now to BSE. Twenty-seven years ago, when I had some responsibility for agriculture, there were periodic food scares. Products used to be removed from supermarket shelves, and the matter referred to a committee of experts which produced a report before everything went back to normal. The media paid very little attention and nothing really happened. Now, any food scare is built up into a national disaster. Everything is different now. I remember saying in the House when Statements about BSE were made last spring that I hoped that the Government—at that time, the government of my own party—would try to think through how to deal with future scares because they were bound to happen. Even after the latest beef-on-the-bone scare, I am certain that there will be other scares over the next year or two with which the Government will have to deal. Some proper risk assessment and a judgment of the risk needs to be made in a period of calm so that the Government can make up their own mind more adequately about whether or not we need the sort of publicity that there has been in the past two or three years.

I hope that the Government will listen. We have had a good run in farming for a number of years. Perhaps it could be said that arable farmers still have a bit of fat to last them through another year but, after that year, the whole industry will be in great trouble; and that will be a national disaster. As the right reverend Prelate and others have said, it will cause great trouble in the countryside if farmers feel that they are being neglected to that extent. The plight of the small farmers in the hills is very difficult. They are the salt of the earth and they produce wonderful people as well as wonderful stock. I hope that the Government will not allow them to go to the wall.

4.8 p.m.

Lord Beaumont of Whitley

My Lords, I join those who have congratulated the noble Earl, Lord Ferrers, on introducing the debate and for a set piece of almost unparalleled brilliance on the farcical tragedy of BSE. It was necessary for the noble Lord, Lord Hooson, to temper that set piece a little only by pointing out how much of it occurred under the previous government.

Attention has been drawn, and will continue to be drawn during the debate, to the financial plight of the farmers. As has been said, farmers are always in a financial plight: The farmer is such an unfortunate man He lives with his heart in his boots For either the rain is destroying his grain Or the drought is destroying his roots". But those were the normal hazards of farming and those farmers did not have to deal with the CAP, BSE and the green pound. However, anything which affects the ordinary farmer—and he is now facing real trouble—affects the family farmer in spades or, in this case, in bloody shovels, doubled and redoubled.

In your Lordships' House I have sung, as have the noble Duke, the Duke of Buccleuch, and others, of the importance of the family farmer to rural life as well as agriculture. I am delighted to see that at last even the National Farmers Union is beginning to pay attention to it.

There are, according to Marie Skinner who farms 445 acres and is therefore not a small farmer, three categories of farmer who deserve public sympathy and government support: First, the hill farmers who are suffering, not because this year is bad, but because it comes after many, many years of struggle and low incomes. Second, beef producers, hit by the BSE disaster. They have had two years of suffering in which their businesses have declined, regardless of what they have done. They face a future which is uncertain and over which they have no control. Third, those on small, family, lowland farms. However hard they work, they cannot compete with the economies of scale of their larger neighbours. Their fields and farms that have sustained families for generations are seen as ripe for takeover by ambitious agribusinesses. Their precious holdings are being gobbled up at an alarming rate. Overnight they disappear, another livelihood gone. Whole farms turn into just another field on a large estate". We must act to put this situation into reverse. It is not just the general run of things that makes family farms a real problem at the moment. There is the added problem of BSE and milk. The noble Lord, Lord Jopling, asked the Minister what the Government intended to do about BSE in the light of what had been decided in relation to milk. As I understand it, the Government are considering banning the sale of unpasteurised milk from the farm gate. I hope that the Minister will be able to tell us that that is not so. If that were the case it would have a greater effect even than BSE. In an article in the Sunday Telegraph last week Adam Nicolson wrote: the grand headline of the great Rooker Milk Reform: Government Triumph—Minister Acts To Prevent Four People Going to Hospital". That is the level of risk about which we are speaking in this area; and in the main small farmers are involved in that particular problem, too.

One of the answers is to have a modulation of subsidies. I understand it has been suggested that subsidies should be paid on only the first 50 hectares of land. That is probably too drastic a measure but there is a lot to be said for it. Certainly, it would help family farms, see hedgerows restored and bring back farms on which animals are known by name by those who tend them. These are the kinds of action we need to take. We must come to the help of the family fanner. We must come to the help of the whole agricultural industry if we want a decent rural countryside and a decent environment in the countryside. In particular, we must help the small farmer.

That splendid writer on small farming, Paul Heiney, said recently that he had real faith in the future of the small farm and that eventually, after all the trials and tribulations, the small family farm would come strolling down the catwalk to a standing ovation. I look forward to that day but I doubt whether, when the day comes, there will be any family farms left to stroll down the catwalk. That would be a real tragedy.

4.15 p.m.

Lord De Ramsey

My Lords, I am extremely grateful to my noble friend Lord Ferrers for this debate and his vigorously expressed views. I must declare an interest as I farm on the edges of the Fens. The recent precipitous downturn in agricultural fortunes has been vividly described by many noble Lords, but it has come as no surprise to most of us who have any knowledge of the history of agricultural fortunes. In my grain store is pinned up the Latin quotation—most of my tractor drivers have had a classical education—semper in excretia sumus solim profundum variat, which means, "We are always in the manure; only the depth varies".

One sometimes gains the impression from the media that all agriculture in the Community is subsidised, whereas many of us are already competing on world markets because we produce unsupported commodities. The simple truth about world markets is that the closer you get to them the greater the price variation from year to year. Onions are among the unsupported crops that I grow. In the past four years I have sold class 1 onions at anything from £25 per tonne to £387 per tonne. Even the supermarkets are forced to reflect that price variation in their retail sale price. My old neighbour Fred Hartley commented to me, "Well, my boy, while you grow vegetables it will be either pop and cockles or champagne and oysters." I do not see much champagne on the horizon at the moment. Therefore, world market prices affect both farmer and customer.

But agriculture is unique. What other industry has so many or such important responsibilities as landscape, recreation and conservation? In the 1930s bankruptcy caused dereliction in the countryside. For instance, the land between Huntingdon and Cambridge—some 18 miles—was unfarmed and was worth only what one could get for rabbit shooting. It quickly became scrubland of little or no conservation value. The British public knows what it wants its countryside to look like and it is not scrubland but cared for farmed countryside. This land was quickly brought back into production in the first years of the Second World War.

I am amazed to discover how few people realise what continental Europeans had to cope with during the closing years of the Second World War. Forty thousand Dutch people died of starvation in the last 18 months of the war and there were food riots in Italy and France. It is hardly surprising that we swore we would never starve again. Thus, the common agricultural policy was born out of dire necessity. That does not mean that reform is not overdue. In food terms it has been stunningly successful but now society realises that it has gone too far and wants to repair some of the damage to the countryside which it paid farmers to do to avoid starvation. What a wonderful opportunity for the European Union to seek environmental improvements in the reform of the CAP, or Agenda 2000 as it is known.

The UK leads the Community in its environmental schemes such as ESAs, farm stewardship and farm woodland schemes. But these are extras or add-ons and they will remain so unless the environment is made a central part of the goods bought by society from farmers. They must do this in a positive way, not by so-called cross-compliance but by buying green goods. I have never understood the argument for tying environmental payments to agricultural support. To suggest this at a time when all the signals are that support will be reduced to nil seems madness. It is a bit like a nurse in hospital who wakes up the patient in order to give him a sleeping pill. I understand the logic of competing in world markets but not the logic of tying environmental conditions to a doomed and dying system.

In order to compete on world markets we need economic units, not part-time small holdings. The call for the return of the small farmer can be sentimental and thoughtless. The many profitable small farmers will always survive—and very enterprising they are in the Fens and in other parts of the country. To subsidise them with ever larger sums to try to make them competitive on world markets is clearly illogical. Why not use their skills to deliver green goods as we do in the hills? Let us have profitable farms that can compete on equal terms in a world market.

I was delighted to hear the Minister of Agriculture at the Oxford Farming Conference defend our larger farm structure against modulation. Only successful farmers restore streams, plant hedges and either save elm trees or plant replacements when they are attacked by elm disease. No bureaucracy or institution can achieve that for the whole country; it must be farmers with their skills and knowledge who can care for the countryside. Only successful agriculture can afford the technology which will reduce chemical inputs to soil and groundwater. For instance, I am now using satellite technology to map soil nutrients every 10 yards, enabling pinpoint accuracy to applications for all chemicals. That technology is essential for sustainable agriculture, and for our children's future, so they, too, can play their part in caring for the countryside.

I go back to those three factors: landscape, recreation and conservation. They are a key part of the beauty and spiritual quality of the country in which we live. There is far more at stake than the profit and loss accounts of farmers. We are risking the very soul of our countryside.

4.21 p.m.

Earl Peel

My Lords, I, too, thank my noble friend for having introduced the debate in his inimitable style which the House has come to appreciate and greatly enjoy. Today was no exception. It may be too early to tell whether we are witnessing a genuine crisis in the agricultural business, unless, of course, one happens to be involved in the beef sector. I should perhaps declare an interest in that I own land in North Yorkshire which is tenanted, and some of my farmers there are experiencing a very serious crisis. We have heard various figures as to how much farm incomes have dropped over the past year or so. They vary according to whether one reads the NFU report or the CLA report, but it is obviously about 40 per cent. to 45 per cent.

Today's debate considers, among other things, the importance of agriculture within the UK. Farmers obviously play an important part because they produce food. They have done so effectively and efficiently. The nation owes them a great debt of gratitude. They are also responsible for managing 75 per cent. of the land mass, so they have additional responsibilities.

The CLA figures, which many noble Lords will have read, show that agriculture and its ancillary activities create major levels of employment in many of our rural areas. So often farming is the linchpin which holds together the social structure of much of our countryside. Another point is that agriculture commands high levels of investment for both the tenant and the landlord, and any serious collapse in the industry could have widespread financial ramifications.

We are told that CAP reform is on the way. That depends largely upon whether one listens to Mr. Fischler or Chancellor Kohl. It seems inevitable that we will move towards world market prices. I wonder what the effects of that will be on farming, land management, and employment in the countryside. Figures I saw the other day indicated that only 25 per cent. of cereal producers in this country would survive on a free market price of £75 a tonne.

What will happen to the smaller farms, the marginal farms, the family farms about which we all care so much? I suspect that many of them might suffer; they might go. We would have larger, more intensive units, with fewer people to support the rural infrastructure and the traditional skills of the countryside.

In addition, we cannot ignore the effects of genetically modified plants, which we discussed on a Question the other day. There would be less land, producing more, with, I suspect, major environmental implications. It is fair to say that modern farming practice has not always been kind to the countryside. Habitats have been destroyed and agri-chemical sprays have taken their toll. As we all know, there are innovative farmers who have done much. Field sports have done as much as anything to help habitats and wildlife in this country. We have government schemes, ESAs, and a whole range of different things which have helped. We have the work of the NGOs and the RSPB. My noble friend Lady Young will be addressing your Lordships later, and I applaud the work that that organisation has done.

With the exception of one or two rogue farmers, the vast majority have merely responded to conditions. There is no doubt that they have played a major role in this country's economic success. However I fear that as profits are squeezed, and the freedom to farm—as the Americans call it—becomes more intense, the environment will be put under ever-increasing pressure.

The balance between agricultural needs and environmental objectives must be addressed through CAP reform. Surely the time has now come to consider seriously a Minister or ministry of rural affairs. I am interested to know what the Minister has to say about that. The state of agriculture cannot be judged solely by short-term economics. Farmers know only too well that there are good times and bad times. So much has to do with confidence, and that confidence often emanates from government. At the moment the messages coming from Whitehall are not as helpful as they might be.

We have already discussed the strength of the pound, and the Government's perceived reluctance to seek compensation. The recent ban on beef has already been referred to. With regard to beef on the bone, I just cannot understand how a government who are so keen on consumer choice could have taken that choice away from the consumer, and kicked the farming industry in the teeth.

We have seen the abandonment of the agricultural regional advisory panels. That was a means by which the grass roots of the agriculture business had a direct line to civil servants and Ministers. They have now been replaced by an advisory group to the Minister made up, as I understand it, of 11 consultees—if I may call them that—only one of whom is a part-time farmer. I have a great deal of respect for members of the panel but it is an imbalance which I find extraordinary.

We have recently witnessed the demise of the Rural Development Commission. In addition we have the threat of the right to roam, which will remove property rights, bring conflict when we seek harmony and introduce a theme park mentality which would undermine respect and management of the countryside.

As my noble friend Lord Ferrers said, there is the threat of the demise of hunting, which plays such an important part in the social fabric of the countryside. All those points show, me at any rate, that there is an attack on rural communities. It can only drive a great wedge between town and country. The Government have a responsibility to bring the two sides together. Farming is changing. There are opportunities for improvement, particularly with regard to environmental sustainability, but the principles remain the same: there must be support when support is necessary; there must be confidence, clear direction, and an incentive to manage. We cannot abandon a major sector of society when we need its skills for the future. If we are to take the best of the new and retain the best of the old, the country needs to take the farming community with it. We must work with it, not against it, and the Government must take a lead.

4.29 p.m.

Lord Palmer

My Lords, I, too, am grateful to the noble Earl, Lord Ferrers, for tabling this important Motion. I hope by now that the noble Lord, Lord Donoughue, is fully aware of the deepening crisis—the worst in living memory—that is facing agriculture in this country. Dare I say it, if Her Majesty's Government's proposals to exclude hereditary Peers from the right to speak in your Lordships' Chamber had been in place, this debate would have had half the number of speakers, thus depriving it of many valuable contributions.

Many of us speaking today care passionately about the countryside and it is our forebears who created the countryside that is so widely and universally cherished today. I must declare an interest as one who struggles to survive as a farmer in the Scottish Borders. How much longer I shall survive I do not know. That is one of the frightening aspects of farming: you have no control of your own destiny. Very few other businesses can claim the same.

All winter crops are safely in the ground, but no one has any idea how much they will cost to nurture, to harvest, to dry and, of course, now in these troubled times, virtually no idea what they will produce in financial terms. It must not be forgotten that farmers are also greatly reliant on getting the right weather at the right time. This winter having been so mild, prospects for a good yielding harvest are slipping away fast and furiously.

One of the saddest things in farming today is that I do not believe there is a single farmer in whatever sector who is getting one ounce of job satisfaction. I suspect that also applies to the 604,000 people who make up the United Kingdom's farming workforce.

Another important point not to be forgotten is the chain and ball of long-term planning. Farmers simply cannot just change production methods or what they grow or produce overnight. As other noble Lords have mentioned, a vibrant and buoyant rural environment greatly depends on a thriving and profitable agricultural industry.

May I make a plea to Her Majesty's Government to keep the paperwork that farmers are now required to complete to the barest minimum? The average 500-acre farmer now spends two days every week of the year on paperwork. Surely that is crazy. I believe that all these are important points for Her Majesty's Government to take on board when assessing the overall crisis facing this country's farming industry.

Many interesting figures have been bandied about today by other noble Lords regarding the crisis, but when you study Professor Nix's Index of UK Farming Income (down by 70 per cent. since 1970) and Deloitte Touche's prediction that a 76 per cent. fall in income will be incurred by farmers for this coming year, the rural scene looks bleak—bleaker than at any other time this century.

Other noble Lords have mentioned the green pound and with a 14 per cent. reduction in its value last year following a 5.5 per cent. reduction in 1996, I strongly urge Her Majesty's Government to put in motion the mechanism available. As other noble Lords have said, virtually every other European Union country has implemented this mechanism to compensate farmers for the effects of the strong rate of the pound. I also urge Her Majesty's Government vehemently to resist any attempts at modulation as this would further unjustly penalise our farmers.

Finally, I believe most strongly that more money should be ploughed into research and development for renewable energy from agricultural crops. The taxing of such fuels should be looked at again most seriously. I urge the Minister to take up that point with his right honourable friend the Chancellor of the Exchequer. I am sure that no one here today believes that North Sea oil will last for ever. We owe it to future generations to invest now and on a massive scale.

I read a piece of wonderful poetry over the Christmas Recess and I think it sums up why this country's agricultural industry desperately needs help from Her Majesty's Government: A farmer was outside the Pearly Gates, 'What have you done' St Peter asked 'That you seek admission here?' 'I have been a farmer. Sir' he said 'For many and many a year'. The Pearly Gates swung open wide As St Peter pressed the bell 'Come in' he said, 'and choose your harp You've had your taste of hell!

4.34 p.m.

The Earl of Radnor

My Lords, I too am grateful to the noble Earl, Lord Ferrers, for bringing up the subject today. It comes at an important moment in farming history and, as he pointed out, an unhappy one. I must declare an interest. I am chairman of a large farming company and I am in a number of farming partnerships rearing practically everything except—thank goodness!—poultry. Like the noble Lord, Lord Prior, I believe that there are two stages to the problem, because problem it is. One is the immediate one which has been described fully and I shall go through parts of it again. The second stage is the future.

Farming is a slow process. The seasons roll by slowly, although they seem to go faster as one grows older. We want to be able to plan ahead better than we have in the past. I have been reading parts of Agenda 2000, which points out various ways in which the CAP might move. I wish to comment on that too.

To start with, I point out that farming is of huge importance. It is not just a matter of how much land it covers, I believe it is more important that it produces two-thirds of our food every year—and very good food it is. At the same time, as many people have mentioned, agriculture keeps the country looking as it should. There have been good stewards and there have been terrible scenes, small events blown up by the press, of the gentleman who grew linseed on the Sussex Downs. We can think of a number of others, such as the farmer who cut down a line of trees. But by and large we enjoy the countryside because of the farmers. The noble Earl, Lord Peel, added that it was because of the sportsmen too, I expect he is right but basically it is because of the farmers. There is one hobby-horse which I always wanted to bring up in the House. It is that one of the most awful things that happened to the countryside was the invention of the hedge cutter. It roars along the tops of hedges and never allows the tillers and saplings to grow up into trees. So people say that we must plant them. They grow perfectly well in hedges, and in the days of the billhook you could preserve the saplings.

As regards the area of land, one of the few points that has not been mentioned today is that it will shrink fast if the Deputy Prime Minister has his way and builds as many houses as he currently intends through the Midlands, Sussex and all over the place. The scheme will involve thousands of hectares, and with it will go roads and all the rest of it. The real desecrators of the countryside have not been the farmers; the desecration has been caused by society, with its need for more and more houses. We hear of the present need for masses more houses when the population of the country is static. Perhaps it is because of single parent families, or because we live too long. It is distressing to feel that about 65,000 houses or some such number will be built in Sussex. You can bet your bottom dollar that some will go up on the Chichester plain with the richest and best soils we have in farming in the whole country, comparable to Romney Marsh and the Fens, mentioned by the noble Lord, Lord De Ramsey.

I agree with the noble Lord, Lord Beaumont of Whitley, that there should be some differentiation in any future subsidies between the big farmer and the small farmer. I see perfectly well the dangers that will lay us open to being taken for a ride in Europe. But surely throughout history, since the war, and since a gentleman called Mr. Evans in another place accused farmers of being feather-bedded, the problem has been that if we support the small farmer, we give too much to the rich farmer. In some way that must be sorted out, and it is mentioned in Agenda 2000.

I remember some time ago—and I have a note of it—when I was privileged to sit on Sub-Committee D, at least twice examining the CAP and how it should be reorganised. Professors Tangerman and Marsh had perhaps too slick an idea of solving the business of subsidies by the issuance of an income-earning bond in proportion to the smaller and larger farmers. In time, it would lose its income-bearing capacity and be saleable, so that the farmer could choose whether to sell the lot and get out of the game or buy a whole lot more and build a bigger unit. I suggest that it might be worth taking that idea out of the cupboard and dusting it down. I refer to the 16th report of Sub-Committee D, for 1990 to 1991.

Strangely, I am worried about competition in farming. I had always sold my cattle in an open market, but these days that is not popular because it is said that it is uncomfortable for the animals. Our food outlets, the great supermarkets, are powerful and have long since influenced the purchasers of food. I am sure that now they are in the country they are determined to get rid of the markets, bring matters into their own hands and begin to dictate the price. I live outside Salisbury, where there are 40,000 people. There are two Tescos, one Sainsbury's and two Safeways, and an ASDA is about to arrive. I am frightened of them with their Aberdeen Angus clubs and so forth.

4.42 p.m.

Lord Stanley of Alderley

My Lords, I thank my noble friend for initiating the debate. I am sure he will agree that agriculture today is totally different from that of 1973 when I first came into contact with him as Under-Secretary of State for Agriculture. We are now controlled by CAP rules and future direction, which up until now has been a fortress Europe policy. Most of your Lordships, and the Government in particular, would agree that such a policy should not continue.

I shall concentrate my remarks on the particular problems which an open market policy will cause in western areas of the United Kingdom, but most of my remarks apply throughout the UK. These western areas are predominantly devoted to beef and sheep production. The first is inherently unprofitable, and unless sheep flocks are very considerably larger than at present, or managed on a part-time basis, they, too, are—or will be—unprofitable. Anyone who has noted the problems of St. Lucia's banana farmers, or is conscious of the problems which British agriculture faced from 1870 to 1914, must see the frightening similarity to today's position when the market is left to work totally unguided. However, we might well take unnecessary action before we need to because fortress Europe, for better or worse, will be propped up by continental farmers for a time.

More importantly, small farmers and their families are the backbone of stability and social life, particularly in the rural areas that I have mentioned. Such a course of action would cause problems. We would see much more than beefburgers thrown into Holyhead harbour. I hope, therefore, that the Government will support a long-term plan to encourage a more efficient and economically viable system of farming, keeping, not preserving, farmers in these areas.

The Government will not achieve that unless they provide as level a playing field as possible for those remaining in farming. The failure of the Government to adjust our currency has destroyed what little credibility they had with farmers. It is just not acceptable to state that it would cost too much. That is the price the Government have to pay for following a free market policy. Lord knows, it is costing farmers far more.

There are a number of other actions which the Government can take. For instance, they can ensure the prompt payment of accounts by MAFF; encourage co-operatives, particularly between neighbouring farms, coupled with retirement grants; actively encourage part-time farming by making planning simpler and sympathetic to alternative forms of income earning; and improve the infrastructure which will encourage outside firms to operate in rural areas.

I accept that we have no satisfactory alternative but to operate in a more competitive world, but I would hope that the Government would accept the measures that I have suggested in order to ease some of the pain. They could make an immediate start, costing nothing, by recognising that there is such a thing as a rural philosophy and code which is closely tied to nature and in particular to animals, both farm and wild. It seems that that is not recognised on the Benches behind the Government spokesmen because I can see only four noble Lords there.

I conclude by supporting my noble friend Lord Ferrers and saying that I regret having to waste both my time and that of your Lordships' in speaking today, for like any farmer I know that this Government will not listen to the farming or rural voice. I have not seen a dead donkey for years. One day the Government will regret it.

4.47 p.m.

The Duke of Marlborough

My Lords, I, too, thank my noble friend Lord Ferrers for initiating this important debate. As a landowner and farmer, I declare an interest. Today I wish to address your Lordships' House as a farmer and a lover of the countryside in which I have the privilege to work and live. I am aware of the problems facing UK agriculture. In my own fanning business we have to manage and adapt to changing markets, legislation, currency fluctuations and even climate. Farm incomes have been coming under severe pressure this year, falling by more than 40 per cent. in real terms, mainly as a result of the strength of sterling. The inevitable result will be reduced reinvestment and further restructuring of the industry. Alas, one fears that unless something is done many will be forced from the land in the coming years.

To me, farming and agriculture are now even more important to the UK than they were 50 years ago. Although the emphasis of that importance has changed in the public's eye, its fundamental strength as the backbone of the rural economy is undiminished. Without a strong and prosperous agriculture, the countryside will invariably suffer and public tolerance of that will be stretched to the limit. As times have changed and public awareness has been heightened by closer media attention, agriculture has had to adapt to the likes of BSE and other animal welfare issues such as battery cages, sow tethers and tail docking. The arable fanner has equally been closely scrutinised and concerns over pesticides, nitrates and so forth continue to have to be dealt with.

The fundamental issue is still abundantly clear. The customer, whether it be the housewife, the supermarket, the greengrocer or the butcher, wants the best quality at competitive prices. That is precisely what UK agriculture is able to produce. We may have been caught out by recent food scares, but the UK fanner has been quick to react and is working hard to rebuild confidence across all sectors. The proposed new food standards agency will do much to restore consumer confidence but not, it is hoped, at further cost to the farmer. Wide-ranging animal welfare issues are being adopted throughout the country to end some of the less savoury practices which originally stemmed from the drive for ultimate efficiency and production. It is my belief that UK produce is the safest, highest quality and most attractive in Europe. I wish it to continue to be so for many years to come.

We welcome those who choose to move from towns and cities to the countryside but ask that they respect the traditions that we have inherited from previous generations and that they, too, learn to adapt and understand the rural pleasures of our beloved countryside that we from time to time take for granted.

Farmers have limited assets with which to work. However, the asset which is fundamental to their well-being and that which they prize more highly than anything else is the land that they work. The vast majority of farmers that I know—and I certainly follow the principle myself—believe that we must look after the land resource at all costs. I do not believe that farmers have ever ignored their environment. It is the public, who are now taking a greater interest in that, who have heightened perceptions as to how it should be managed.

As the vast majority of rural land is cultivated or grazed in one way or another, it is surely the farmers who should be entrusted with that well-being. They have many generations of experience and are intimately aware of the intricacies and peculiarities of the land in their control. Many farmers—and I am pleased to say that I am one of them—continue to strive to improve the conservation and environmental features of their holdings. Like many others, we have undertaken widespread hedge and tree planting programmes and actively encouraged managed access across our farms. I stress the word "managed" because we do not want a right to roam.

Farmers are proud of what they are entrusted with and enjoy sharing it with a wider public. Subsidies and grants certainly help us to promote those activities, but without the knowledge, expertise and long-term commitment from farmers, one suspects that there would be very little active environmental management within the countryside.

Finally, I confirm my belief in the importance of agriculture within the UK. Agriculture, and in particular food hygiene, have become important issues. I am afraid that there is little prospect of any significant improvement for farmers in the coming years, especially with the cloud of BSE and the strong pound hanging over them. We need a reform of the CAP to produce a rural policy which will sustain agriculture, our countryside, environment and rural communities. We need encouragement and support from the Government.

4.53 p.m.

Lord Geraint

My Lords, I thank the noble Earl, Lord Ferrers, for his sound, sensible and constructive contribution on behalf of the agricultural industry today. I hope that the Minister will take heed of what the noble Earl said. I should also declare an interest as a hill farmer.

The first Labour government after the war in 1947 transformed the agricultural industry. The late Tom Williams, who was Minister for Agriculture at the time, introduced the Agriculture Act 1947 which guaranteed prices for farmers' produce—beef, lamb, wool, milk and other commodities. Security and stability helped to secure a sound and prosperous agricultural industry for decades thereafter.

But today, the scene has changed. The agricultural industry would not be in the financial predicament in which it is today if the previous Conservative government had not mishandled the BSE crisis two years ago. That is the main cause of the disastrous decline in farmers' incomes. For the agricultural industry it was one of the greatest political blunders of all time.

In my view, the lifting of the beef export ban is a must, and sooner rather than later. It should be given top priority by the Government if the beef industry is to be given any chance of recovery. The Government must provide help to a sector which contributes to the rural economy, employment and the countryside in order to maintain a much-needed level playing field in Europe.

I have several questions for the Minister. What are the latest developments regarding the lifting of the beef ban in Northern Ireland? How strong is any German opposition to the easing of the ban? In my view at present the Germans are having the best of both worlds in relation to the beef industry.

Can the Minister confirm that the British Armed Forces consume very little of the beef that we produce in this country? When will he have talks with the Ministry of Defence about that indefensible action?

Perhaps I may quote from Farming News, one of our leading agricultural publications, where the following appeared in the opinion column of last week's edition: Yet, if we don't eat subsidised beef off subsidised fields at home, we will be dining instead on Irish and French beef that is even more heavily subsidised by British taxpayers. Given a choice, and a little encouragement, the big retailers will offer domestic products in preference to imports. The problem lies with manufacturers who source their farm commodities from wherever they are cheapest in terms of Euros. These people aren't swayed by patriotism; they answer only to exchange rates. The only way to persuade them to buy British is to allow sterling to fall". In my view, leading supermarkets control the future destiny of British agriculture. Once more I urge members of this Government to discuss their future role in order to protect the interests of producers and consumers alike. I should also like the Minister to try to sort out the problems in the dairy industry with the chairman of the Milk Marque and other organisations. It is well known that producers are paid approximately 20 pence per litre today for their milk. Many consumers pay more than 70 pence per litre. It is time that someone did something to help the dairy industry.

I have seen a set of figures from Messrs. Morgan Evans, auctioneers, of Gaerwen, Anglesey, North Wales. On 27th November 1987, the price of steers was 103 pence per kilo, while on 16th January of this year that was down to 86 pence per kilo. On 27th November, 1987, lambs were 184 pence per kilo, while on 16th January 1998 they were 75 pence per kilo. I have just telephoned my friend Aled Ellis who runs the Aberystwyth Mart in Cardiganshire and he tells me that lambs today at the sale average 72.2 pence per kilo.

The farmers out there want one very important question answered. The question is to the Minister. Can he give us an assurance that the beef ban will be lifted in three months, six months or by the end of the year? If not, what is the alternative? Will it be compensation on a large scale, or the end of the agricultural industry as we know it? The choice and the challenge is in the hands of the Government: remember what your predecessors in government did in 1947 for the industry. Please do not fail the industry this time.

5 p.m.

Lord Kimball

My Lords, at no time in the last half century have all sections of the agricultural industry been in such serious decline, and that applies right across the board—sheep, corn, sugarbeet and cattle. In all quarters of the House I believe we agree that the Motion of my noble friend Lord Ferrers comes at a most opportune moment. We shall have an opportunity next Tuesday afternoon to look in depth at the whole question of beef on the bone and the situation of cattle.

However, what is really annoying the farming community is the simple fact that they know that there is £980 million of European compensation money waiting to be given out, but the Government are not prepared to act. As my noble friend Lord Ferrers said, most of the other European governments have done this. Worse still, the German and Irish governments did so with an added supplement, and the German and Irish farmers do not have the problem of the strong pound that we have in this country.

I wish to concentrate on two other fears that arise in the countryside and which have not so far been mentioned. First, there is the threat of the new regional development agencies; and, secondly—and I rather thought my noble friend Lord Radnor was going to develop this point—there is the modulation of the IACS payments on farm structure. The Regional Development Agencies Bill is grinding its way through the other place. In the rural areas they will replace the much respected Rural Development Commission to which my noble friend Lord Peel paid tribute. I add to that by paying tribute to what my noble friend Lord Shuttleworth has done. In rural Lincolnshire it is quite incredible what has been achieved as regards the diversification of rural employment. From 1979 to 1997 half a million jobs were created in the rural countryside thanks to the efforts of my noble friend.

What are we threatened with? The Rural Development Commission has gone and we find that the regional development agencies have powers which override those of local authorities in areas of planning and environmental improvement. Those RDAs represent nothing more than the biggest quangos ever invented. All members of the regional development agencies will be appointed by Ministers with no responsibility to the locally elected representatives. The position of the new RDAs was best summed up by my noble friend Lord Deedes in the Daily Telegraph where he referred to the, creation of 9 urban committees deciding how the urban dweller can make best use of the countryside". When the Minister replies, can he give the House an undertaking that representations will be made by the Ministry of Agriculture that at least one person with knowledge of agriculture and the countryside will be on each one of the regional development agencies?

My second point concerns farm structure. In good times and bad, farm business structures have to adapt to ensure competitive production. Farm businesses are capital intensive, resulting in ownership structures which are frequently complex but which reflect the diverse interests of different members of farming and landowning families. One of the factors that must be taken into account is the availability of payments under the various IACS schemes.

It is clear that the EU is not seeking to frustrate changes in farm structure, nor is it the intention to deny new farm business IACS payments. However, there is, as so often in this country, what appears to be a different view in MAFF. There is a growing fear that MAFF is administering the claims in a way which may well deny them their proper entitlement to IACS payments. Clarity is necessary but is, at present, seriously absent. Can the Minister say if the European Commission has prepared any guidelines as to what constitutes a separate business? Are the guidelines known to MAFF? If so, can they be published?

I have in mind the problem when the ownership of farms is vested in trustees but the responsibility for management lies elsewhere. When a trustee is involved in another farming business, even as an active manager, it would be unjust that the business where he is merely a trustee should suffer modulation or be denied IACS payments. I must press the Minister for clarity and a more enlightened approach than we have had so far.

The countryside is very unhappy today, however urban and suburban modern Britain may be and however much more of rural England has to be built on as the green belt gives way under pressure from the Rural Development Commission. A government who neglect the countryside and agriculture will destroy all that is best in Britain.

5.6 p.m.

Lord Astor of Hever

My Lords, I, too, should like to declare an interest as the owner of a small agricultural estate. Today's debate concerns the importance of agriculture. Equally important for the further prosperity and quality of our countryside is the stewardship of our woodlands. In recent years government has encouraged farmers to diversify their enterprises and improve the farm environment through new woodland planting under the Woodland Grant Scheme and the Farm Woodland Premium Scheme. Many more farmers now have an interest in forestry and woodlands. For many, their woodlands are not just a landscape feature, but a key part of their commercial enterprise.

Yesterday, the Prime Minister launched the new UK Forestry Standard, which he rightly described as, the most significant forestry document of the past decade". The standard provides, for the first time, a clear picture of the high standards woodland managers are required to achieve. It is particularly welcome as it is the result of a broad consensus across the forestry environmental spectrum. What the standard demonstrates, very clearly, is just how much woodland management is required to deliver the public benefits now required from woodland owners and farmers, such as landscape quality, biodiversity and recreational opportunities. These public benefits can only be provided through active management.

Nowadays farmers get paid for provision of these sorts of benefit under schemes such as MAFF's Countryside Stewardship Scheme. Grants are payable for the likes of annual management or capital work and, in addition, for provision of access. According to the literature, the scheme, aims to make conservation part of farming and land management practice". If such positive encouragement to good practice is to be provided to farmers, why should it be forced on foresters? If woodland stewardship payments could become an integral part of our woodland grant structure, then everyone would gain.

At a time when timber prices have fallen right back and the restocking grants, which were halved in 1994, have not been increased even in line with inflation, many woodland owners find they have little option but to scale down activity. There is very little financial support for good stewardship of our woodlands under the current grant scheme. The economics of forestry are highly marginal for many owners at the moment, and I am afraid that, with the move to recycling, there is little prospect of immediate improvement, even if currency exchange rates were to move in our favour overnight.

With the new Government now in place, it is time to look again at how we can best support good woodland stewardship. Forestry organisations such as the Timber Growers' Organisation believe that the Woodland Grant Scheme needs recasting so that the promotion of good woodland stewardship is at its heart, rather than its margins.

Finally, we must make sure that forestry is made central to government policy making for the rural economy. Too often it seems to be a mere afterthought and this Cinderella status is clear when one looks at the figures. Agricultural support stands at £5 billion, while that for forestry is just £40 million. A recent example of this is the Scottish Office paper, Towards a Development Strategy for Rural Scotland.Astonishingly, although there are sections on agriculture and fisheries, the word "forestry" hardly appears—and that in Scotland, the most forested part of the UK, where over 15 per cent. of the land area is under woodland. Forestry presents real opportunities for farmers and for rural Britain. What is required is a real strategic approach for England, Scotland and Wales within the UK framework, and the sooner we can get that under way, the better.

5.10 p.m.

Lord Clifford of Chudleigh

My Lords, despite the favouritism shown towards the urban and suburban population by the elected Members of Parliament, members of the rural community are most grateful to have the opportunity to vent their feelings about how they use and cultivate the land in the island of Great Britain and Northern Ireland. I hope that the executive branch of Westminster will not only listen but react positively to what is being discussed today.

Agriculture covers not only livestock, cereals, sugar beet and horticulture but also woodlands, as the noble Lord, Lord Astor, has said. Some 7 per cent. of this country's land is under woodlands and in the largest county, Devon, 8 per cent. of land is covered by woodlands. This massive area of 148,000 hectares provides employment for those cultivating and caring for the primary woodlands as well as those involved in manufacturing and retailing the forestry product. More than half a million people—that is 540,000—are directly affected by this form of land use and still we import 80 per cent. of required timber. Why is that? That is because eastern Europe sells wood to us at £90 per cubic metre sawn and we cannot begin to sell at less than £110 per cubic metre before sawing or slabbing. So, why cut trees? Why even plant trees if one is not expecting a return sufficient to employ staff? In the past many a woodland, coppice and plantation was planted for scenic or amenity value or game shooting. But now, with the advent of the "Foster" syndrome against country sports, the incentive to plant trees and hedgerows will be severely affected.

The eastern Europeans are to be "welcomed" into the Common Market under Mr. Blair's presidency, so he will be condoning the disruption of our farming industry by approving the "no tariff, no borders" principle ratified by European members, many of whom do not apply the same strict regulations to their farmers as is the case in the United Kingdom. Let us consider deboned beef, for instance. Whereas the vast majority of imported beef is deboned, who is to ascertain that the specified risk materials (SRM) were removed in accordance with UK practice? There is less regulation, so less cost to retailers and inevitable undermining of UK beef producers. We, the UK beef producers, have been set, and have complied with, the highest standards to eradicate BSE from the food chain. However, our European neighbours recommend only that the beef ban be lifted from certified herds—that is, the computer processed variety, which is relevant only to Northern Ireland—and even then not immediately permitting the sale of marketable meat, as there is a big difference between the certified herd proposal being made and convincing other member states that it should proceed.

Labelling a product usually assures the purchaser of a certain quality and a credible standard. When the common agricultural policy is revised, origin labelling must be mandatory. At present any European Union member state may apply its name to what may be grown or reared anywhere provided the product has undergone a degree of processing in the country retailing that product.

Those involved in beef and sheep production—that is 32,000 families and their employees in the south-west—urge the Government to make rapid progress to lift the export ban on beef cattle born after 1st August 1996; to ensure strict enforcement of restrictions on beef imports; to remove weight limit payments on cattle of over 30 months with no further cuts in the standard compensation payment; to abandon the idea of extra charges for meat rendering, inspection and passports; to apply for the next slice of green pound compensation as soon as the opportunity arises, and to give the south-west the same financial aid as allocated to the Welsh to promote their agricultural market. The latest government grant for that purpose was £200,000.

If the Minister really cares about the farming industry, and if he really believes in freedom of choice, he should not impose a ban on untreated milk. Raw milk is labelled; let the people choose.

The profoundly urban Government, the House of Commons, encourages policies which appear to be driven by urban aspirations for the countryside. To a Government who call themselves caring we say, "Take care. We hope you will listen to us before imposing a right to roam policy". The 1995 dog fouling Bill was again urban oriented. No notice was taken of the damage caused by the invasion of the countryside—the workplace of sheep, cattle and dairy farmers—of unwormed urban dogs whose defecation in fields deposits the Toxocara tapeworm eggs which damage and devalue the liver and eyesight of sheep and cattle. Let me remind the Government, who are rightly concerned about public health—I refer to BSE, the ban on beef on the bone and the anxiety about too many antibiotics in animal feed—that the same worm infects those children and adults who work and play in the countryside.

The landowners and farmers in the south-west say, "Take care". If the Government impose their ban on hunting, fishing and shooting, we shall lose any incentive to plant coppices, hedgerows and woods for the future. The south-west foresters beg Mr. Elliot Morley to follow the example of the post-War Labour Government and consider the benefits gained from the 1947 Forestry Act. The Government should consider the benefit of that to our environment, our children, and, more importantly, to our grandchildren.

Farm incomes have already been covered, but farming, like any other industry, is to be subjected to the European Union inspired minimum wage at the same time as the European Union is imposing further regulations and restrictions on agricultural production. Our Government are "jogging alongside" the European Union and so minimising the essential margin necessary for any business. Brussels wishes to raise wages and to cut the opportunity to sell the product. Do we not recognise the threat of redundancies? And the Government try to reform the present system. It is madness.

I have not touched upon the horticultural, poultry or cereal markets but implore the Minister, Mr. Cunningham, and the Prime Minister, Mr. Blair, to think of the British families involved. Grant them priority when using the taxpayers' purse. Encourage the food industry to buy British.

Lord Hoyle

My Lords, I am sorry to remind the noble Lord of this—we are enthralled with what he is saying—but there is a seven minutes time limit for each speaker.

5.20 p.m.

Lord Marlesford

My Lords, I found the speech of the noble Earl, Lord Ferrers, one of the most powerful I have heard in 30 years of listening to politicians in both Houses. I declare an interest as a farmer, including having a dairy unit, and as someone who has drunk milk direct from the bulk tank all my life.

This Government were elected with an overwhelming mandate from all parts of the country, including many rural areas. I, like many others from different parties, believe that they deserved to be elected and, in the interests of the country, I wish them well.

As with any government, the quality of Ministers is variable but I would like to say that I believe that Britain's farmers are fortunate in having at MAFF a Minister with the political experience and intellectual calibre of the noble Lord, Lord Donoughue.

In many areas the Government are doing the right thing and with courage. However, when it comes to the countryside interest, I fear that the Government are not only disappointing their rural constituency but disillusioning them, and in some cases infuriating them.

First, as we have already heard from many noble Lords, the agricultural sector, which since the war has had an unequalled record of productivity increases, is suddenly, through no fault of its own, facing financial disaster. What a condemnation that is of the CAP, which was designed specifically to avoid such situations. Unfortunately, the Government have not yet given farmers the feeling that they understand, let alone sympathise with, the farmers' predicament. Secondly, in the Government's ambivalence towards the hunting issue—I take no side on it—I fear they are getting the worst of both worlds. They are seen as wet by the "townies" and anti-country by those who live in the country.

Thirdly—this is to me the most important, as chairman of the CPRE—they seem indifferent to the protection of the countryside, which had been one of the two great triumphs of the post-war Labour Government. I refer of course not only to their unrealistic targets for the construction of up to 5 million new houses in England and Wales by the year 2016, at least half of them in rural areas, but also to their apparent readiness to sacrifice the green belt to do so. I hope very much that we may shortly have the opportunity of debating this issue in more detail in your Lordships' House.

But I wish to focus on BSE. The Government seem to be continuing the deplorable record of the previous government. Both governments have exaggerated risks, and the taxpayer and the farmer are now paying for that exaggeration. What went wrong over BSE? In essence, it was, and I fear still is, a confusion between the role of Ministers and that of advisers. As was famously said in 1989 by the then Prime Minister, my noble friend Lady Thatcher, "advisers advise and Ministers decide". That of course is why Ministers should resign when things go wrong—not because they are personally to blame, but because it enables their successors rather than the advisers to make the crucial decisions of government.

The first person to get this publicly and badly wrong in the early days of the BSE scare was Mr. Stephen Dorrell, the then Health Minister. I shall never forget the morning I heard him say on the "Today" programme, "We will act on the best advice". The interviewer said: "If the experts advise you to slaughter the entire national herd, would you do so?" His fatal reply was, "We shall act on the best advice". Within the hour the news headlines were, "Cabinet Minister envisages slaughter of entire British herd". How the hearts of the French must have leaped for joy. The ever glowing embers of schadenfreude burst into flame, a flame which is burning as brightly as ever.

The latest 1997 government estimate is that over the four years 1996–97 to 1999–2000 the financial cost of the BSE crisis to the Exchequer—that is, to the taxpayer—is £3.7 billion. Three thousand, seven hundred million pounds. To get that into perspective, let us remember that in 1997 the entire British contribution to the CAP was some £4.3 billion. And what have we got for this £3.7 billion? How many lives have been saved? How many lives have been lost to CJD? With every hospital in the land looking out for CJD—it is almost a triumph to find a case—I believe that the total death toll is still under two dozen. And the cause and effect between BSE and CJD is still not proved. What is the opportunity cost of that vast sum of money—in the treatment of other diseases of the heart, the kidney, cancers and those terrible killers such as Alzheimer's and motor neurone disease? That is forgetting what could be done for the Government's other main priorities, education and law and order.

And the present Government are following closely in the same path. It was only on 6th December last that Mr. Cunningham announced, on the best advice of course, that British beef could no longer be sold on the bone. In Europe the flames of joy rose higher still. At home the people did not know whether to laugh or cry. Butchers covertly defied the ban by selling beef as pork. Unenforceable law is bad law: it brings all law into disrepute and thus erodes public morality.

And has all this got British beef back into Europe, or anywhere else? We are told that the Council of Ministers may, just may, shortly allow beef from Northern Ireland back on to the Continent. One is reminded of Stalin's quip, "The Pope! And how many divisions has he got?" Let us be clear: BSE is still with us. The latest figure I have is that in the 52 weeks to 14th November last 5,684 new cases were reported, an average of 109 per week over the year. The figure will fall away to nothing, and would have done so much faster had the Conservative Government not waited until 29th March 1996—yes, 1996—before prohibiting the production of pet food (in which mammalian meat and bonemeal may still be incorporated) in the same premises as feed for farmed animals, thus very belatedly eliminating the main source of cross-contamination. That fatal delay was indeed a failure of the advisers.

It is seldom worth paying Danegeld. I urge the Government to review these BSE expenditures and allow the disease to burn itself out. Only then will our beef be allowed into Europe. The money saved could be used so very much better.

5.27 p.m.

Baroness Strange

My Lords, we are all grateful to my noble friend Earl Ferrers for initiating this most important and timely debate, and for the brilliant, fascinating and funny way in which he did so. We were all spellbound. Today I have seen the noble Lord, Lord Parry, cross the Floor of the House to congratulate him. If I could have climbed down from these Benches without personal danger to other noble Lords or myself in order to congratulate my noble friend, I would have done so. To listen to him is always a pleasure. To join in a debate of my noble friend's, however humbly, is a signal honour. I wish also to congratulate the Minister, on whom we farmers have to rely. I believe that he will not let us down.

I must declare an interest in that 1 am a farmer, though at present not a very active one. However, like my noble friend Lady Trumpington and many other noble Lords. I have personally picked and planted potatoes from a sack round my waist, one by one, milked cows both by hand and machine, and driven a tractor though not a combine. I stooked corn during the war (and have not yet found the sleeves which thistles could not penetrate). I have also looked after hens, picked small fruit, and picked and sorted pears, apples and plums. Indeed my noble friend Lord Onslow is to my knowledge a very expert plum sorter. I have also ploughed with a one-furrow horse plough, though not a very straight furrow. So I have some practical knowledge.

I also helped my noble father on his wartime book on agriculture, Charter for the Soil, in which he outlined the future importance of combine harvesting, supermarkets and direct farm marketing. He also advocated farming groups with their own farm slaughterhouse and resident scientist. He was also organic, and farmed with compost. Many of his ideas have been put into practice since 1944 when the book was published.

So much good sense has been said by so many noble Lords that there is little for me to add except by agreeing with most of them. But I would quote the old rhyme: For want of a nail the shoe was lost, For want of a shoe the horse was lost, For want of a horse the battle was lost, For want of the battle the kingdom was lost, And all for the loss of a horseshoe nail". Our GDP derived directly from agriculture may be only 1.4 per cent.; it may directly employ only 2 per cent. of the total workforce in employment; but from these small nails the whole kingdom is built up. A large infrastructure of jobs and people is supported by agriculture. In many underprivileged rural areas hill farms are often the only employers, the only alternative being for people to "go on the welfare". Our countryside, with its hedges, small fields and differing landscape, which so attracts tourists and makes Britain such a marvellous country in which to live, is only as it is because of our farmers and the way they have managed and nurtured the land. Let us not throw our farming land away for a mass of concrete linked by golf courses and leisure centres. Our countryside is one of our greatest assets; it is the heart of Britain itself.

5.32 p.m.

Baroness Young of Old Scone

My Lords, I add my congratulations to those which have been expressed to the noble Earl, Lord Ferrers, for the magnificent way in which he introduced the debate. He presented his case with considerable élan, though, as he knows, I may not agree with all of it.

I too wish to stress the importance of farming and agricultural policy. We depend on farmers for safe and wholesome food. They are also stewards of the countryside, which is a resource for the whole nation, not only for those who live and work there. The common agricultural policy has probably been the major cause of the decline of birds and biodiversity in the countryside over the past 30 years.

Listening to the catalogue of concerns expressed during the debate, it would be easy to be plunged into deep depression. I trust that the Minister does not think that that will be true of the whole debate, because I should like to offer two reasons for some encouragement.

I recognise that trying to sell products abroad when the pound is strong is very tough, but that is true for many other businesses. One of the features of farm incomes is their volatility. Farm incomes and land values were embarrassingly high during the period from 1992 to 1996. There was a weak pound and we saw high world prices, and it is only from those high levels that we have seen declines in the past couple of years. I believe that some of the high percentage declines in those two years over-represent the case.

Farm-gate prices do fluctuate and the inevitable consequence of "moving closer to the market" means that fluctuations are not cushioned by subsidies and so will seem more extreme and possibly less predictable. This is part of operating in a real market, which is what I understand many UK customers are calling for.

There are, of course, differences between the sectors. For arable farmers, subsidies during 1992 to 1996 were over-generous. The proposals under the common agricultural policy and Agenda 2000 will do nothing to reverse that and indeed will modestly increase incomes, mainly through the loss of the set aside provision and compensation for price cuts. Though world grain prices are currently low, long-term trends are growing global demand and increased production to meet it in the major grain exporting countries. We are likely to see continuing fluctuations and volatility in prices.

Dairy farmers have consistently done well following the introduction of quotas since 1984 and those quotas are likely to remain until at least 2006. It is beef farmers for whom we should have considerable sympathy. The continuing export ban is biting hard. That ban, together with the strong pound, the fact that domestic consumption of red meat is dropping and the long-term history of low incomes in the less favoured areas, give cause to worry about the beef sector.

That brings me to my second reason for being more optimistic than others who have spoken today. By taking action in the beef sector the Government have made considerable progress in gaining confidence in Europe, which will eventually lead to relaxation of the ban. The BSE issue is not one of risk but one of confidence within Europe about our ability to act sensibly and responsibly and to move forward cautiously. The rigorous approach of the beef-on-the-bone decision was necessitated by the need to build confidence in Europe and not based on the issue of risk.

Because farm incomes do fluctuate over the years, I believe that we should look at ways of using the situation to move forward in agricultural policy rather than simply seek compensation for the strong pound through the agri-monetary provisions. Such fluctuations in incomes will be a standard part of a market system in the future. What is needed is not a sticking plaster for the current ills but a restructuring of the farming industry. We need new structures and technologies to make it as efficient as possible and to sort out the issues of production which depend on the market. We then need a sensible common agricultural policy, sensibly implemented in this country, to support the things that the market will not deliver: social support in the uplands for small farmers and support for the environment.

Let me say why I am more confident of the way forward than other speakers and why I am encouraged in my belief that the Government are addressing the fundamentals of agricultural policy reform. I have already spoken about the progress that has been made on the BSE issue. We are now a credible player in the European Community, which we were not under the previous government, not just in the agricultural field but also in our whole presence in Europe and particularly during our presidency. We have seen the establishment of the food standards agency which is aimed at promoting confidence among consumers in this country, which I believe had been lost. I should declare an interest. Whereas some have expressed anxiety about the new structures for advice in MAFF, I believe, as a member of the Minister's advisory group. that the opening up of advice in MAFF is long overdue. The advisory group may not be totally representative but it is accompanied by a plethora of ways of taking advice from a wide sector of communities, not simply the agricultural community.

There remain a number of matters that the Government need to address. I conclude by outlining two. One is the rural development agencies issue, which many have already touched upon. I add my voice to the call for there to be representatives of the countryside on those agencies. The second is the need for faster progress in this country with the introduction of well developed and funded schemes under the agri-environment conditions to support farmers, particularly upland farmers, who are in great difficulty delivering not only for rural communities and agricultural production but also for the environment.

5.38 p.m.

The Earl of Clanwilliam

My Lords, I rise with some trepidation to speak in this debate. I am not a farmer but I do claim to have one attribute that may put me among a fairly select number of those in your Lordships' House as someone who has ploughed a field behind two shire horses. It was a great event, but, like my noble friend Lady Strange, I do not think I would have won a prize at an agricultural show; nevertheless, I did it.

Your Lordships have already been exposed to a range of statistics and, as an exponent of extensive farming, perhaps I may also add a few. The cost of fertilisers and pesticides is prohibitive and increasing. In 1996 we spent £823 million on fertilisers—up 27 per cent. on 1993—and £460 million on pesticides, an increase of 5 per cent. Machinery repairs, added to wages of £1.7 billion, make a total of over £4 billion being spent on 18.4 million hectares of farmland. That clearly demonstrates the importance of farming to the UK economy as well as what is to me, perhaps alone in your Lordships' House, a disturbing use of pesticides and fertiliser on our greatest and most important resource; that is, the soil upon which we depend for sustenance and which is our inheritance to pass on to future generations.

It is instructive to find that the MAFF-funded Scarab research programme on three ADAS research farms could find no long-term benefit to the environment from a 50 per cent. reduction in herbicides and fungicides. Starting from a base of that size, a reduction of 50 per cent. is hardly significant to the bugs and bees which are affected. The evidence of the organic farmer, on the other hand, demonstrates that farming can be successful and profitable by eliminating those poisons.

Much reference has been made to BSE. Perhaps the Minister can tell us something about the beef assurance scheme. A Starred Question is tabled for 9th February on that topic. The organic farmer has a clear record on BSE but is unable to restock his herds unless he can guarantee that he is buying from a BSE-free herd. The beef assurance scheme may solve that problem. Some difficulties may arise, in that it will be selective and possibly invidious to those who do not take part. However, it is important that it should be available.

Great efforts have been made and results obtained with the increasing number of ESAs, SSSIs and the Countryside Stewardship and habitat schemes to which reference has been made by other noble Lords, particularly my noble friend Lord De Ramsey, who is now in charge of it all. Those schemes are a vital part of agricultural policy and have an important impact on the environment. They demonstrate again the importance of farming to the economy as well as to the environment.

Again I join others in regretting the demise of the Rural Development Council and the excellent work done by my noble friend Lord Shuttleworth. I need say no more in that regard. Governments past and present have failed to give positive help to organic farmers, whose cry is for only 5 per cent., rather than 100 per cent. of the land and who should be given positive support. It may be that if modulation comes along with Agenda 2000, the organic farmers may be the lucky recipients of some benefits and that may be to their advantage.

The importance of farming as an employer varies throughout the countryside. It is the constant increase in mechanical farming and automated tractor-drilling machinery which has slightly reduced its influence. The farmer is no longer the mainstay and the backbone of the rural community.

Finally, to some extent we are still masters of our destiny. We cannot control the common agricultural policy—I doubt that anybody can other than with the consent of the French and the Germans. But we are doing something in the extensification of our farming practices and, however that may be done, it will be to our long-standing benefit. I should like to see more organic farming to meet the demand of the housewife and the supermarkets. But however extensive farming is achieved, so long as it is so achieved, it will be well done.

5.45 p.m.

Lord Wise

My Lords, I am not certain whether or not I should declare an interest. Unlike many of my noble friends and the noble Lord, Lord Grantchester, I own only five acres—a smallholding—across which my generous friend and neighbour runs his cutter in the summer.

Like other noble Lords, I thank my noble friend Lord Ferrers for initiating this debate at this time. It is evident that British farmers and growers, whatever they produce, face severe difficulties and the industry generally is in a somewhat depressed state.

During the course of this debate many figures illustrating the position have been quoted and it is most disturbing that, according to the National Farmers Union, agricultural incomes fell by some 47 per cent. last year. Heaven forbid that that should continue, but if it does it is obvious that many farmers will go out of business, especially those in the more remote rural areas which are entirely dependent upon livestock. That will be disastrous not only for them, but for the whole rural economy and the environment. In those areas farmers are not only stewards of the countryside, but they are also the cornerstone of the social structure of the local community.

In the countryside, agriculture is one of the main sources of employment not only on the farms but in other ancillary trades which depend upon agriculture for much of their business. Any downfall in farming has an adverse effect on all those other trades and at the very least must create more unemployment.

At the demonstration yesterday I saw the youngster carrying the placard saying, "Please don't take away my farming future". That placard illustrated not only his fear, but also the fear of his parents. Like the right reverend Prelate, I am concerned that farmers' sons and other young people in farming families are becoming more and more disinclined and no longer interested in embarking on a farming career. I suppose they feel that the hard graft and long hours are not worth it and that they could occupy their time more profitably in other ways.

If those young people move elsewhere, it must inevitably lead to the withering away of rural communities. The village shops, schools, bus services and so forth will all disappear. The Government are considering "right to roam" legislation. Without a stable agricultural industry, the countryside would be a far less beautiful and pleasant place in which to roam.

Agriculture plays an essential environmental role in providing both amenity and nature conservation. In order that that may continue, the Government must play their part. They must ensure that we can compete on fair and equal terms with other member states. All farmers, whatever they are producing—be it beef cattle, dairying, arable production or fruit—will face real hardship unless they are put on an equal footing with their competitors in other member states. Our produce is as good, if not better, than others, but, as has been so vividly described, it is essential that we have a level playing field.

From all that he hears this afternoon, I am sure that the Minister will be in no doubt as to what the industry needs and what the Government should be doing, so I will leave that point. However, I have one other small plea. The Minister is not in his place at the moment but he will be pleased that the matter is not too serious. I want to ask him to use all his influence to ensure that one age-old rural craft can continue. I understand that there is a European directive that, after slaughter, all sheep's heads should be incinerated. I do not disagree with that. I am sure we will comply with that regulation, as we comply with all the regulations though I am certain that we are the only state that does. Can the Minister have this amended to allow the horns on the heads to be removed before incineration? This would enable the age-old craft of making shepherd's crooks, using the horns of sheep such as Swaledales, to continue. Not only are the crooks very useful—I have used them a lot in the past—but they are useful tools for shepherds. They are also sold at sheep fairs, as they are decorative and make excellent walking sticks and they are a source of income to the craftsmen who make them. It would be an awful shame to lose them. I look to the Minister to ensure that we do not.

5.50 p.m.

The Earl of Bradford

My Lords, like so many speakers, I declare an interest as a farmer and landlord of a number of tenanted farms. I also add my congratulations to my noble friend Lord Ferrers, who robustly, as always, put the case.

We have heard many excellent speeches about the important role of agriculture to Britain. I would not wish to add to the mass of information but rather would attempt to highlight the oft-forgotten human cost to the farmer. Sadly, particularly in this marvellous, modern new age of agriculture, the pressure on the fanner is enormous, especially on one farming only a small acreage. And the life—contrary to the image of it being a highly social one, as portrayed by the Young Farmers' clubs—tends to be both arduous and very often extremely lonely.

While many stressful ingredients have always existed, such as remoteness, a sparse and scattered population, the mental effects of working extremely long hours and, in effect, being on call 24 hours a day, 365 days of the year, recently other factors have influenced the situation. The first is a public lack of appreciation of agriculture, especially by newcomers who see farmers as spoilers of land, as vandals who rip out hedgerows or as killers of animals. Particularly unfortunate is the widespread misunderstanding of the necessary role of farming in preserving the countryside. All of this has been complicated further by changing government policies and the remoteness of European decision making.

The second factor is that too many farming families exist on the economic breadline. Most farmers, if they were able to calculate their income in relation to the hours that they work, would consider the level being discussed for the minimum wage merely a pipe dream for them.

Over the past five years there has been a growing awareness that the problems and pressures facing those in our rural communities are increasing and becoming unbearable for some. This is supported by official statistics, which show that the rate of suicide among male farmers, farm managers and horticulturalists generally runs somewhere between 1.5 and 2.1 times the average for the general public. They also show that suicide is the second highest cause of death among male farmers between the ages of 15 and 54, and that in the case of farmers' wives the rate is 20 per cent. above average. Between 1982 and 1992 there were 589 recorded suicides in the farming community, an appalling rate of over one death a week.

That figure may even be on the low side, as very often farmers are known personally by the coroner, and there is a natural reluctance to deliver a verdict of suicide, particularly if there is a question of life insurance. Currently there is anecdotal evidence from both the Samaritans and the Rural Stress Information Network that the level of despair and desperation has increased further, especially since the recent ban of beef on the bone. Remarks like, "If they take my herd, they can carry me out with them" or "If my farm goes under, then I'll go with it", have become commonplace. Another sad fact is that members of the farming community have the means to end their lives always close at hand, statistics showing that over two-thirds use a firearm or hang themselves. Given the fact that suicide is very often a lonely person's plea for help, these means are too immediate and too final. No stomach pump can save them.

So, my Lords, we must always remember the human cost of government decisions affecting the farming community. It is vital that we take into account—while agriculture has made huge strides towards the once seemingly impossible goal of self-sufficiency in this country—that so many lack what would be considered a normal social life and the huge personal sacrifices that some have made in the cause of achieving success.

5.55 p.m.

Lord Alderdice

My Lords, I join other noble Lords in congratulating the noble Earl, Lord Ferrers, on initiating this debate. In my relatively short time here I have come to associate with all his speeches some of the best characteristics of style of your Lordships' House. They are always well informed and come from experience, with a certain flamboyance and flair, and all rebuttals of his opponents' arguments are conducted with courtesy and a sense of good humour. Indeed, it seems to me that in his speeches—we saw it again today—he exemplifies some of the things that are best in your Lordships' House and which are almost impossible to find in any quantity in other places.

The noble Earl's approach was well rooted, which is what one would expect in a debate about agriculture, but was informed more by that solidity of understanding of the real world than by political spin and gloss, which has been one of the biggest problems of recent times. I come from a medical background. I often find it deeply frustrating to be given apparent information about what is good for us and what is bad for us and particularly regarding what might be dangerous to eat as though it is the last word, the absolute truth, thoroughly well founded and with a considerable scientific backdrop. When I do know something about this information, or when I am led to know a little about through my pathologist wife, I find that things are nothing like as well evidenced, that it is not so much scientific evidence as media hysteria. This generates great anxiety in the community and there are almost inevitably disastrous consequences. What is deeply unfortunate is that in the past two or three years government have not rebutted this or stood against it; they have not encouraged people to look at the question more broadly and over a period of time; but, through fear of being criticised for holding back, they have responded in a knee-jerk fashion and then spent the following 12 months trying to roll back the position, at profound cost to the community at large and to individuals—farmers, traders and others.

Many noble Lords have spoken with great erudition about the general matters of importance for agriculture and the economy of the United Kingdom. Noble Lords have emphasised the hills of Wales, the Highlands of Scotland and the broad green fields of England. It therefore falls to me to say something about the position in Northern Ireland. I do not come from a background of broad acres but both my father and grandfather came from small hill farms. That is the case for many people in Northern Ireland. We are an agricultural community and few of us are far distant in geography or generations from the land and farming. Agriculture is an important part of the economy. Indeed, it is much the largest industry in Northern Ireland. While in the rest of the United Kingdom around 2 per cent. of the population are employed in agriculture and related industries, in Northern Ireland the figure is around 7 per cent.

Almost 15 per cent. of our exports, such as they are, are agricultural—or were, until the BSE crisis. For us, the industry is absolutely critical. In recent times it has been made even more so. Believe it or not (and one hesitates to describe them) there are such things as "negative peace dividends". For example, if one is employed in the security forces, the fact that there is going to be peace probably means that one's job is not as secure as it was when there was trouble. We are glad to see that; but if one's job happens to be in the police. the glass industry or something of that sort, it is not necessarily in one's immediate self-interest.

We have seen another kind of development in recent times. As peace has developed and confidence has grown in general terms, we have seen the arrival of the big supermarket chains such as Sainsbury and Tesco, which avoided the troubles of Northern Ireland for 25 years. They now provide a tremendous service to the consumers of Northern Ireland. But the downside is that, last week alone, two of our longest serving bakery firms with small home bakeries throughout the community went into bankruptcy. We are also not finding the local sourcing of materials for which we had hoped with these big, and in many other ways helpful, supermarket chains.

The Government have also indicated something like a 2 per cent. cut in public sector funding in Northern Ireland over the next three years. That will mean a cutback in the number of jobs in general, apart from those associated with security. For a community where the employment of 50 per cent. of people is in some sense connected with the public sector, that is a serious matter. So for Northern Ireland agriculture is becoming more, not less, important.

That is why, when we had our own devolved parliament and had some control over agriculture, enormous efforts were made to ensure that our agriculture was of the highest possible quality; and we were able to use the relative isolation of being part of an island to ensure a degree of quarantine and protection for the purity of our agricultural products and stock. Indeed, as is now well known—although I do not believe it was well known until the BSE crisis arose—our computerised tracing scheme ensures that we certify herds in a manner not available anywhere else in these islands or in Europe. We had focused on that system. It was therefore a deep disappointment when we discovered that we were to suffer the same fate as the rest of the United Kingdom in relation to the BSE crisis. No matter how much effort we had made, it was to be forgotten about—because the previous government felt that if one part of the United Kingdom was given a chance, the other parts would be left to one side. That was a misjudgment. If Northern Ireland had been allowed, under a pilot scheme, to ensure that at least one part of the United Kingdom was not excluded, it might have been more possible to include the rest of the United Kingdom. That is why I welcome the decision made by the current Administration that Northern Ireland can move forward—not, I hope, as an exemption or a case for special pleading, but as a pilot for the rest of the United Kingdom by re-entering the export market.

I conclude with three brief comments. First, we do not ask for special pleading for any parts of the United Kingdom, but we have our special places, and let us not ignore that. Secondly, let us not be hysterical about BSE or any of the other food issues. They will continue to arise. Let us be more thoughtful and solid, as is your Lordships' House. Finally, in agriculture things cannot be changed around so quickly. It is rather like an oil tanker: it cannot be turned around with a snap of the fingers, or turned off and on like many other things. Time must be given for any changes that are necessary. Time should be given to our farmers and to those who depend on them, in Northern Ireland and throughout the United Kingdom.

6.4 p.m.

Lord Rotherwick

My Lords, I must declare an interest as a farmer, like many other noble Lords. I gained a diploma in agriculture in 1982 and became a working farm manager of a large, mixed farm. More recently, I have been farming in my own right.

One must congratulate the Minister on the creation of a "new independent group" to advise on key food, agriculture, environmental and rural policies. Sadly, as my noble friend Lord Peel said, only three out of the 11 people on this group have any connection with agriculture and only one of them is a farmer. It seems that he is in this group because he is a director of the FWAG, which is indeed a very worthy organisation. One might, therefore, not be wrong in having some concern that their forthcoming reports would place the environment and rural policy before agriculture and food. In other words, the tail would wag the dog.

Can the Minister explain why such bodies as the NFU and the CLA, which represent the bulk of farmers and landowners, are not in this group? The NFU's primary goal, in which it has succeeded, is to ensure that farmers can continue with the important task of providing the hulk of the nation's food whilst maintaining a healthy rural economy and protecting our beautiful and diverse countryside.

Today's agricultural industry produces nearly 60 per cent. of the food consumed in the United Kingdom, which is more than ever before. The UK's total food trade deficit has stabilised at around £6 billion from a high of over £10 billion. Last year agriculture produced a turnover of £17 billion, employing 2.4 per cent. of the nation's workforce and many others indirectly. That is more people than are employed in transport, in post and telecom services or in the energy and water supply industries. Agriculture accounts for 1.5 per cent. of the country's GDP. Agriculture is a most important industry and one of the few that has produced a product for its consumer that sells, at the farm gate, for less today than it did a decade ago. This is even more remarkable when one considers the restraints that have been imposed on the industry.

Today, like most farmers, I am very angry at the position that the EU has put us in. When I started farming a decade and a half ago, my average feed wheat yields were around 6 tonnes to the hectare; they have now risen to 9 tonnes a hectare. The average price that I got for feed wheat was £115 a tonne; that has now declined to £85 a tonne. I have reduced my workforce from 12 to three employees.

On top of that the red tape and constraints mount each year and, combined with a very unlevel playing field, the agricultural industry now needs to receive area payments to continue farming. It is the policies of the Government and the EU that have put the agricultural industry in this awful position. If the UK were not the most efficient and one of the best producers of the highest quality commodities of any EU member, as borne out by many statistics, then many farmers would not now be farming and the UK taxpayer would have to fund a much higher food import deficit than £6 billion a year.

It is also interesting to note that statistics record the UK, on the whole, as having the largest holdings and herd sizes coupled with the lowest use of labour. Because of our scale of farming the UK is more productive and better able to compete with the rest of the world. UK farmers tend to have the ability to withstand higher overheads and they are therefore able to enjoy better production equipment, and thus, on the whole, to produce better quality end products.

Will the Minister encourage and help this industry to comply with Article 39 of the Treaty of Rome, to increase agricultural productivity by promoting technical progress and by ensuring the rational development of agricultural production and the optimum utilisation of the factors of production, in particular labour". This makes it clear that it is by structural development that the agricultural community is to achieve a fair standard of living and that social policy should not be funded by the CAP, for example by subsidising the growing of the low quality, non-saleable tobacco crops that are grown in some member states or, more importantly, redirecting agricultural funding towards the environment and conservation. For, if our farmers, large and small, are profitable, they are always going to be able to look after the environment and the countryside.

On the subject of the CAP, can the Minister also tell us who will be responsible for agricultural matters devolving to Scotland and Wales and to what extent they will affect the CAP as it applies to Scotland and Wales?

The United Kingdom's farmers are so often seen in a bad light, so perhaps I may take this opportunity to speak up for the farmers of this country. As we have heard, they caretake nearly three-quarters of the UK's landmass. The countryside which we enjoy today and which is admired by the world was created by our farmers and landowners who, having profitable farming businesses, were able to enhance the environment that they were born in, lived in and worked in. Like the majority of farmers, I care greatly for the environment and the rural life that surrounds us. We spend an abnormal amount of time, effort and finance to continue to enhance and renovate our living countryside, usually consulting and having to gain consent from many public bodies to carry out those works. We do this mainly at our expense, but also with public subsidies and grants: but those grants and subsidies are unlikely ever to approach the amount we pay in tax each year.

6.10 p.m.

Lord Middleton

My Lords, it is with a degree of nostalgia that after nearly 20 years I find myself on this side of the House again and debating agriculture in support of my noble friend Lord Ferrers. If there has been a common theme in this debate, it is that farmers are hard-pressed financially and depressed by the present gap that they perceive in understanding between themselves and the urban public. They have waited with some considerable interest and anxiety for a line on the present Government's agricultural policy, and they have now had it in the form of the speech given by the Minister of Agriculture, Fisheries and Food earlier this month at the Oxford Farming Conference. I am surprised that that has not yet been mentioned, and I should now like to concentrate on that statement. However, it cannot be read in isolation from the Government's statement on foreign policy, for reasons that I shall explain.

During the 4th December debate in this House on the enlargement of the European Community, the Government confirmed that enlargement was at the top of their foreign policy agenda, as had been the case under the previous government. The noble Lord, Lord Whitty, also said that the Government were "absolutely committed" to "radical reform" of the CAP. Of course, one cannot be done without the other. The enlargement pressures on the CAP, together with the pressure that will come from a renewed round of WTO talks in two years' time, were highlighted in the Minister's speech at Oxford. There are a great many other good reasons for radical reform of the CAP. I am wholly in agreement with everything that the Minister said on the need for action in this area.

Sub-Committee D, during the 12 years that I served on it, concentrated on the subject. In our 1991 report, entitled Development and Future of the CAP, we criticised the MacSharry reforms and said how such reforms should be carried out. Our recommendations have, over time, become accepted by our farming organisations. They were put up as a reform option by Dr. Fischler in his 1995 Commission strategy document, but rejected by him as too radical. So, it is gratifying to see them again appear as the basis for reform in Dr. Cunningham's speech. In his statement, he referred to the European Council launch, under the UK presidency, of Agenda 2000. It will be hard enough to find agreement on the current recommendations in the Commission's document. but harder still to get agreement to the fact that they do not go nearly far enough. Therefore, it is fortunate that the Agenda 2000 negotiations are to start this year in the Agriculture Council with a UK Minister in the chair.

Again referring to the Oxford statement, it is clear that the Minister knows that fiddling about with milk quotas is useless when we should begin to phase them out altogether, alongside the subsidies on wine and olive oil. I note that the Minister also took a robust line against modulation in the context of farm support, pointing out that differential support for small units is economically unsound and, if adopted, would be greatly to the disadvantage of the UK. There are other ways of looking after social problems in rural areas in the at present rather vague proposals in Agenda 2000 for developing what is called an "agricultural environmental policy" and a "rural development policy".

I turn now to the beef regime. For those who farm mostly in the uplands and on marginal land in the lowlands and who produce high quality calves from beef-bred cattle, the one bright spot has been the Buckler cow subsidy and the premium payments, especially the former. But it would be illogical to call for such support as may be available to be decoupled from production and at the same time to ask for the continuation of the beef, cow and sheep subsidies in their present form. However, we must continue to help our less favoured areas. The Agenda 2000 environmental and rural development proposals will need to be worked out and adapted to provide that support.

I have not had the time to refer to those parts of the Minister's speech which described the measures needed to foster "environmentally friendly" and "consumer friendly" farm practices. As I said earlier, there are huge misconceptions about farming. Nevertheless, if the urban public are to be happy about CAP production payments being diverted for the benefit of the rural economy, it is important that measures are put in hand which make sense economically and which are based on sound science, not prejudice. We need measures which will strengthen the standing of the industry in the eyes of the public.

I thank my noble friend Lord Ferrers for initiating this useful debate, which will no doubt provide an opportunity for the noble Lord, Lord Donoghue, to confirm (and perhaps to amplify) the message that came from Oxford. The message that I got from Oxford was that in the next six months the process of CAP reform under the UK presidency is more likely to advance in the right direction than would otherwise be the case.

6.17 p.m.

Lord Rathcavan

My Lords, I declare an interest, and a small involvement, in a farm producing beef and lamb. I am also a member of your Lordships' Sub-Committee D of the Select Committee on the European Communities, which is currently preparing a report on the implications for the rural economy of the European Commission's Agenda 2000 and its proposals for the further reform of the CAP.

I should like to add my voice to the many already raised in this debate, including that of the noble Lord, Lord Middleton, about the plight of the smaller. often family, farmers who rely on beef cattle and sheep for their livelihoods. For years they have been the poor cousins of the dairy and cereal men. They do not have many, if any, options to switch production into other crops or products. In my own region of Northern Ireland, which has a proud and innovative history in agriculture, as the noble Lord, Lord Alderdice, indicated. that important group of beef and lamb farmers—many, but not all, of whom are hill farmers—accounts for two-thirds of our farms in Northern Ireland; that is. 21,000 farms and over half (35,000) of the jobs in the agricultural sector. That group of farmers is undoubtedly bewildered at the moment, if not in despair. I shall briefly explain why.

I hope that the Minister will reflect on the circumstances with which those farmers have had to contend during the past 20 years—a relatively short period in the life of a family farm. They have had to contend particularly with the swings in policy direction from Brussels and with the CAP. In the late 1970s and early 1980s, the Farm and Horticultural Development Scheme encouraged them (with enormous financial support) to reclaim and to put into production marginal land; to bury walls and hedges; to build new roads into the hills—they have now become scars on the landscape; to demolish old buildings and construct new and often ugly ones, unsympathetic to the environment; and to create new pastures at higher altitudes for increased production which subsequently could not be absorbed and ended up in cold storage. This grandiose European scheme for greater production of sheepmeat and beef was followed by the about-turn of quotas for suckler cows and ewes and incentives to set aside land and remove it from production.

Now many farmers can benefit from handsome incentives to rebuild the walls and replant the hedges that they buried and repair the old building that they have neglected. No wonder these farmers are confused and bewildered. Some have to rely on 50 per cent. of their income coming from various government and European sources. There are ominous threats to that support. Even with cheap family labour, if they break even it is a good year. So much for the minimum wage in the family farm community. They ask where the CAP will go next.

There are some indications in Agenda 2000, produced by Franz Fischler, European Commissioner for Agriculture, that he will look sympathetically at the plight of the rural economy. There are few if any details of what measures are proposed. We await further proposals in March. I hope that they will at least continue and expand the ESA and similar schemes which have done so much to encourage farmers in marginal areas.

The Secretary of State for Agriculture in another place has a constituency with many hill farmers who are sheep and cattle producers. I hope that he is listening carefully to his constituents. I also hope that the noble Lord, Lord Donoghue, who has grasped the detail of his new portfolio with skill, will fight the corner of the marginal and hill farmer in Brussels and fight for the survival of the rural economy. I hope that he is aware of the turbulent background to the life of these less favoured farmers and will strive to create conditions in which they can at least plan for, rather than fear, the future.

6.22 p.m.

Lord Milverton

My Lords, it gives me great pleasure to join in this debate initiated by my noble friend Lord Ferrers with his usual fascinating and wonderful humour based on great depth of thought. All are agreed on the importance of agriculture to the United Kingdom. That is obvious but may have been taken for granted by many, although not by farmers or those who live in the countryside. Perhaps that is why the subject is before us now in such a strong way. The efficiency of our agriculture, which no one questions, may in part be the reason for the general concern about future policy. Apart from the involvement of Brussels and the much needed reform of the CAP, there is a need to generate greater understanding and appreciation of care for the land and what is involved in the production of food from it. The same applies to the breeding of animals for various purposes.

My interest in agriculture stems from my study of it in Kenya and my experience as a curate, all of it spent in country areas. I dare to make some suggestions with regard to agriculture in its widest sense. First, can a way be found for the guidelines on this subject to be better worked out to halt the decline in the number of agricultural workers? Arts and crafts related to agriculture in its fullest sense and also the commercial aspects can be established in rural areas of the country rather than in built up areas or in only a few centres. Do all farms have to be huge, pushing out smaller ones? If I remember rightly, one or two speakers doubted the importance of small farms, but most have upheld them. When they are pushed out there are fewer places for those who wish to farm. Many wish not just to work on farms but to have their own farms. We know that there are not sufficient places for them at present. Surely, there must be room for both large and small farms in England, Scotland, Wales and Northern Ireland.

With regard to personnel, my noble friend Lord Radnor, referred to hedges. Before machinery came along to cut hedges the task was performed by people, and we know that it was done with great art and craftsmanship. Surely, that can happen again. Hedges cut by machines do not look attractive. I cannot help but feel that it will kill hedges.

The building of stone walls is a craft. I remember having a conversation with an undertaker on the way to a funeral in Wiltshire. Many stone walls were disintegrating. He explained to me that the stones had been placed incorrectly. That is an art and craft. Let us have more of this rather than machines—or else just fences but no stone walls or hedges. Hedges are important for habitats.

I mentioned set aside in the debate on the countryside a short time ago. Surely, greater use can be made of set aside land rather than letting it go to nothing; it should be controlled and managed as wild meadows, especially woodlands. All of these matters can attract people to the countryside and retain those who like to work on the land. Equipment may be necessary, but it is sad to see the decrease in work on the land. I saw that in one of my parishes in the country. Years ago it had its own vicar and quite a reasonable population. As agriculture became more mechanised so the population decreased. That is why I believe that arts and crafts in the countryside will work. Forestry may bring vitality back to the countryside and the "community" aspect that it once had.

I hope that Her Majesty's Government will take note of what has been said to enable greater use to be made of the land in its fullest sense and the wonderful people who work the land and farm it, so that urban people realise that they must cherish and take care of the land. That is why we need to be careful about roaming rights.

6.30 p.m.

The Earl of Courtown

My Lords, first, I thank my noble friend for giving the House the opportunity to debate this important subject. I should perhaps declare an interest, unfortunately not as a farmer but as a chartered surveyor qualified in the rural practice division of the institution. As many other noble Lords have said, there is a great feeling of uncertainty in the industry. We have only to see the events at Holyhead and Fishguard to realise that the farming industry is taking steps that just a short time ago we saw only on the other side of the Channel.

My noble friends Lord Peel and Lord Clifford of Chudleigh said that farmers and landowners, many of whom take a responsible view of public access, now fear that a general right to roam will be forced upon them. It was interesting to note in a review of the Royal Institute of Chartered Surveyors, published 18 months ago, that, after canvassing 60 interested organisations on whether they had a written policy statement, it was found that only 36 had. When the Labour Party was asked whether it had such a policy on this important matter, it answered in the affirmative, but was unsure as to whether it had carried out any research before adopting that policy. I should be grateful if the Minister would tell the House when the consultation paper on access to the countryside, promised for July of last year, will be forthcoming.

The agricultural property market bears further examination. There is a view, with which I agree, that in general farm values will fall. The simplistic view is that that will enable more entrants to get their foot on the ladder, but we all know how difficult that is in practice. I believe that we shall have a tiered market. It will still be a buoyant market for first class commercial units, farms with a high residential value, and those areas which come on the market adjacent to other farmers keen to expand. The rest will be marginal, in all senses of the word.

The future, as the right reverend Prelate said, is far from bright for many large and small farms, with falling incomes and high servicing costs to cover. I understand that the banks and landlords are being most understanding, but, if interest rates continue to rise, the former may change their views and the latter will probably suffer the same problems as their tenants.

The Family Farms Association, of which I was delighted to be asked to become a vice president, with the noble Lord, Lord Beaumont of Whitley, has pointed out to me a number of areas where the small farmer is being hit hardest. Many in that sector of the industry cannot justify the use of computers, and cannot afford a farm secretary. They feel that they are being swamped by a plethora of regulations and paperwork which many do not understand, and cannot comply with.

The welfare of farm animals is of course of prime importance. It would be false economy not to look after one's stock professionally, but welfare does not come cheap. Another agricultural institution under threat is the livestock auction market. In 1981, there were 312 in England and Wales; by 1992, the figure had reduced to 246. Markets are still closing. Sturminster Newton, which was one of the biggest in the calf trade, is now closed. Kidderminster market is either closed or will be closing shortly.

The BSE crisis has caused, directly and indirectly, income losses to those businesses. With the change of agricultural policy towards quotas rather than subsidies, the value of trade, upon which the auctioneers base their commission income, has remained flat for some time. Market margins remain tight, with labour costs amounting to almost 50 per cent. of total cost, excluding a rental figure. BSE has required further handling and checking of the stock, which the operators have had to accept at a time when their income is dropping.

Further pressure on markets is increased by redevelopment of the sites. Many are situated close to town centres and so have a high value. Local authorities, which own many sites, are under pressure to increase rents, although I was encouraged to hear of an authority in the north which is charging a peppercorn rent because it does not want to have a market town without a market. Once again, it is the small farmer who is most reliant upon the market. It must not be forgotten also that for many rural communities that meeting place, where allied agricultural industries do business, fulfils an important social role.

The noble Lord, Lord Geraint, blamed Conservative handling of the BSE crisis for the dire straits in which agriculture now finds itself. I cannot agree with him. More emphasis should be placed on the strong green pound.

Many noble Lords mentioned the forestry industry. I wanted to ask a question at Question Time today, but I was unable to do so. I hope that the Minister can help me. His noble friend Lord Sewel referred to there being 8 per cent. of new plantings this year. Is he referring to new plantings on Forestry Commission land or private land? I shall be interested to hear the proportions.

It is vital that government support should take into account the impact of the BSE crisis on the rural economy as a whole and not solely on beef farmers. Exceptional circumstances now face the agricultural industry. The Government must take exceptional action.

6.35 p.m.

Baroness Trumpington

My Lords, I asked particularly to speak late in this important debate-I did not imagine that I was going to be the 30th speaker—because I reckoned that the subject of horticulture would not figure large in your Lordships' remarks. Apart from my noble friend Lord De Ramsey's welcome mention of onions, no one whom I have heard has mentioned fruit and vegetables. To coin a phrase, I feel that that subject deserves a bite of the cherry.

It seems to me that the word "agriculture" these days is a bad word, whereas the word "environment" is all that is good. But one cannot have one without the other. If people want the landscape of beautiful Cumbria to remain beautiful, it follows that hill farmers must receive financial help in order to provide lawnmowers, in the shape of uneconomical breeds of sheep, to keep the hills manicured. Without those sheep, the hills would rapidly develop the shaggy look of being covered with scrub—not something which is considered environmentally friendly these days.

Exactly the same principle applies to horticulture. One has only to look at set-aside to see what I mean. I suggest that noble Lords take the Eurotrain from France. By the time you emerge from the tunnel on the English side, you will be travelling sufficiently slowly to be able to admire Kent—the garden of England, so-called—but for how much longer?

Let me first examine the plight of the fruit grower; 1997 was a year of real disaster for them, owing to the late spring frosts. An estimated 43 million-pound crop was lost. Not only were apple and pear crops affected, but a further estimated £6 million of cherries and plums must be added to that amount. That act of God came at a time when growers were building a significant market share, working with their customers—in other words, the retailers—to replace imports with high quality home grown fruit.

The damaged crop and strong pound have sucked in more imports than usual this year and kept prices low. I am told that the NFU is monitoring aid packages in other member states. I understand that it is likely that France, Italy, Greece and Belgium will compensate growers for their losses. In the Trento region of Italy, £14.7 million has been made available to pay to fruit co-operatives struck by frost damage. In France, low interest loan schemes are available to growers and new entrants, thus ensuring an industry for the future. But what of the UK?

The UK fruit industry will be eroded as businesses fold due to loss of crops. The Government rejected an NFU call for a loan scheme in September. As European growers are supported, in contrast to the UK, and the whole industry faces steadily growing competition, growers will be looking for sheer survival in the next year—unable to reinvest for the future growth of the industry.

I fear that that is not the end of my tale of woe. Do your Lordships realise that a cabbage grower has received the same price for his crop from 1987 to the present day; that is, £2.50 for 12 cabbages? One grower in Kent has an annual turnover of £250,000, but he himself is on income support.

Growers of tastier tomatoes, like their fruit brethren, suffer from the high cost of sterling. Thus tomatoes are being imported at prices 30 per cent. lower than their English equivalent.

Let me remind your Lordships that horticulture is a big employer, and, apart from regular employment, it is very important that work being undertaken now on the social security review includes the issue of seasonal work. Ten thousand eastern Europeans come to this country every year in order to gather the fruit and vegetable crops. Yet those 10,000 are a mere drop in the ocean compared with the numbers needed to do the job. It is not much good having fruit on your trees and bushes and having no one to pick it.

The horticultural growers are a hardy lot despite their misfortunes and they have welcomed Commission Regulation 2200/96, the new fruit and vegetable regime, which has brought support for the development of UK horticulture. Equally, I should be wrong if I did not congratulate MAFF on the work it has done to make funds available to UK producer organisations. It is to be hoped that MAFF will continue to help the development of the industry.

I started these remarks by mentioning the Garden of England and my hope for its flourishing future. The year 2000 will see many more visitors to these shores. It has been suggested to me by those in the fruit business that an instant and beautiful orchard could be planted in the Dome at Greenwich. Now there's an idea for one item. to show what we can do in this country. It would he something that illustrates our power to produce the best. All our horticulture growers ask for is—the awful expression—a level playing field which is applied equally to them as to those on the other side of the Channel Tunnel.

6.41 p.m.

Lord Cromwell

My Lords, I must immediately declare an interest. I am one of the shrinking band of men and women in this country who try to produce beef. I shall be brief, but I feel that while I share many of the concerns expressed here today I should say a word on behalf of the consumers.

It is all very well for us who at present live and work in the countryside to resent the urban population or to sneer at their ignorance of rural matters. They are, however, our customers. If the food standards agency can positively forge this long-overdue link between the producer and the consumer, so much the better.

I am particularly concerned because in the beef industry, as in a number of other sectors, there is a burgeoning of assurance groups of various types. They are a good idea but there is a danger that they will be seen as groups, created by, speaking for, and belonging to the producers. What value will their endorsement of insurance have to the consumer? I must appeal to them to promote their consumer credentials, if they have any, and in any event to recognise that unless they forge public alliances with, incorporate, or obtain public endorsement of consumer organisations, they will not convince or carry the public.

Calls to support UK agriculture in general are all very well but they must be based on consumer support and consumer involvement. The CAP has separated many farmers from consumers and if the FSA can put us back together again, so much the better.

6.44 p.m.

Lord Mackie of Benshie

My Lords, I rise to speak with trepidation after 31 speeches. I had looked forward to this debate with a good deal of anxiety as I knew that the noble Earl, Lord Ferrers, who has been thanked often enough, would make an excellent speech. I knew that I would be jealous of what he said and would wish that I could have expressed myself in the same way. I must congratulate him on his marvellous attack on the previous government for their handling of BSE without once mentioning that he was doing so. That is skill of a high order.

The rest of the speeches have been on the whole extremely good, much better than I thought would be the case. I expected that we would all repeat ourselves. I was delighted with the speeches of colleagues on my own Benches, but I was not so pleased with their use of the term "the noble Minister". As everyone knows, a Lord is "noble" automatically, but the nobility of a Minister is a matter of opinion. So I hope that they will call him "the noble Lord the Minister" in future.

The serious side of the present crisis—and it is a crisis—has been brought out by many speakers. We all have personal experience. I have now retired from farming but I have many friends who are active in it. One of them, a smallish farmer, told me the other day that he had bought 500 lambs for fattening in the back end of the year. He paid over £30 per head for them; today, without his costs, they are worth about £26. That kind of thing is repeated throughout farming.

Mr. McLean, the agricultural spokesman in the Royal Bank of Scotland, said at the end of the year that in Scotland—and this applies over the country—farmers' overdrafts had increased by 10 per cent. That is 10 per cent. at the turn of the year but before the main bulk of income comes in there are another eight or nine months to go. So a great many people will be in serious trouble.

There is no shadow of doubt that we are in an entirely different position from the time in the past when farmers have been a little bothered and said so. I listened to the noble Baroness, Lady Young of Old Scone, with interest, but not with approval. She said that farmers had made far too much money, but I thought that she might be a little wrong. Perhaps I may produce figures from my native country, Scotland. The fall in income is quite straightforward: malting barley is down 25 per cent.; pig meat, 25 per cent.; milk, 20 per cent.; lamb, 30 per cent.; beef, nearly 30 per cent. That is quite a lot of money.

In those glorious years when farmers were wallowing in it and people were making silly jokes about farmers having to sell their second Bentley, we find that 1995-96 was one of the best years. I have the average income figures produced by the Department of Agriculture in Scotland. For small farmers, the net farm income was £1,400; for medium sized farmers, it was £22,000— riches indeed. For big farmers—farmers with over 1,000 acres—it was £54,000. The average income for the year was £18,800. That is not rolling in it. The average wage in industry for a manual worker is £314 a week, £15,000 a year. The income stated in the document does not contain anything for the farmer's own labour nor that of his wife. So it cannot be said that in this wonderful year farming was the kind of paradox which the noble Baroness seemed to indicate.

Farming faces a real and genuine crisis and we must do something about it. The Government are at fault, as were the last government, for not taking up the European offer which would give an income to assist farming of nearly £1 million over three years. I do not know why the Government are not taking it up. I suspect it is because the Tory government made a bargain at Fontainebleau which meant that instead of getting half from the European Community they would have to pay 30 per cent. of the cost. But other countries have it. Figures have already been given and it is useful to repeat them. Incomes rose in Germany, Belgium, and France. There was a I per cent. loss in Denmark, 1.3 per cent. in Luxembourg, 2.6 per cent. in Greece and so on, to 13.7 per cent. in Portugal and 23.1 per cent. in Great Britain. There is something unfair in those figures. The handling of the BSE crisis played a part in that, and this Government and the previous government are to blame.

However, we are now looking at reform of the CAP. Every political party, including ours, says that it wants to see a competitive agriculture, but I do not believe that we can see that in Europe without some organisation. During the 1930s free trade caused misery in the United States—for example, The Grapes of Wrath—and we saw the dereliction and poverty which struck the people of this country. I do not believe that unrestricted global competition is right and proper for the primary producer. One must take into account the market, but one must try to organise it otherwise we shall have the situation which existed in the 1930s.

The Government are facing other problems; the greatest is the enlargement. I was a member of the agriculture committee of the Council of Europe which undertook a good deal of work in Poland and Hungary. They do not have to be prepared to meet our competition in Europe, but we must be prepared to meet their competition. In those countries, the standard of life is such that one tonne of barley at a poor price will pay a man for nearly five weeks. In this country, it takes at least three tonnes of barley at the present price to pay a man for one week. That is the kind of situation we must resolve, but it is not easy.

Many comments have been made about the attitude of the urban population in this country. It is exemplified by what economists call the great globalisation. People in Germany and France are closer to their roots in agriculture, but we in this country have been urbanised and industrialised for longer than those in any other country. As a result, the old free trade example of cheap food has permeated the urban population with the result that they do not take farming seriously or appreciate how much it does for this country in all kinds of ways.

Any CAP reform must take those factors into account. We must have imaginative policy; for instance, the production of a retirement bond which lasts for 10 years and which the farmer can cash. He is then given time to adjust to competition from the larger farms. It gives time for farmers who have perhaps a 200 acre farm, which used to be large enough to provide a good living, to organise staying in the farm while contractors do the work. He might have a specialist niche activity which might not pay. He may grow onions in a competition—

Earl Peel

My Lords, I thank the noble Lord for giving way. The noble Lord, Lord Beaumont of Whitley, said that he was in favour of modulation. Can the noble Lord, Lord Mackie, tell the House whether he and his party are in favour of modulation?

Lord Mackie of Benshie

My Lords, I was coming to that point, which means that I now have to answer it! Of course I am not in favour of modulation. There is a case for saying that there should be special payment for small farms, for conversion or for some such feature. However, one cannot base support for a whole industry on the size of the unit. I am all in favour of doing something to help the small farmer, but it must be separate.

The same is true as regards help for the building of dry stone walls, party hedges and so forth. It is an aside; it is not central to the question. They are good and proper items for the public to spend their money on in order to enjoy the countryside, but they are not central to the support of the agriculture industry.

I have spoken for 12 minutes, which is what I am allowed, and I know that everyone is needing a drink. However, I wish to put one or two questions before I conclude. My main question relates to BSE. Does the Minister have proper information about the test for BSE that has been developed in America? I have read in the newspapers that it is now easy to administer and reliable in its results. If that is so, it would make a great difference to the handling of the problem. I enjoyed the debate. I doubt whether we shall obtain much of an answer from the Minister, but I look forward to his speech.

6.56 p.m.

Baroness Anelay of St. Johns

My Lords, I, too, am grateful to my noble friend Lord Ferrers for initiating the debate. We all look forward to and enjoy the vigorous debates which he introduces. Today, noble Lords around the House have unleashed a volley of expert arguments which have unerringly hit their target. I have behind me the benefit of the expert knowledge of my noble friends. That is just as well, because I recognise my own inexperience in this policy area except, of course, I have had half a century of experience as a consumer.

They say that confession is good for the soul, so I shall admit that during my formative years, when I grew up in what was a green belt—I hope that, despite the Government, the green belt will continue—I trespassed on the wheat fields. I dread to think what damage I did to them. I shall not say how, but in a most innocent way, of course. How could your Lordships think otherwise in those circumstances?

During the past three months, as a newcomer to discussions on agricultural policy, I have been struck by two main impressions. First, that the countryside is the shop floor of a major industry, so that the current crisis in agriculture is not only a problem for farmers. The knock-on effects for other sectors can be as dramatic and devastating as they are for farmers. Agriculture is not only the backbone of the rural community, but vital to the urban community, too.

As has been mentioned, agricultural production covers approximately 75 per cent. of the land area of the United Kingdom and Northern Ireland. The importance of the indirect employment effects of agriculture means that the contribution which the industry makes to the GDP extends well beyond the figure of 1.4 per cent. represented by farming's direct contribution to GDP.

A recent study by Reading University on the impact of changes to the CAP found that those effects would be even greater outside farming than within it. The worst case scenario estimated that the equivalent of 5,400 jobs could be lost in farming itself, rising close to 200,000 once the various multipliers upstream and downstream of farming are included. That illustrates clearly the scale of the impact which agriculture has on the economy.

Will the Minister join with me today in paying tribute to the United Kingdom and Northern Ireland farmers and growers who have worked so hard to provide this country with good quality food and sustainable agriculture of which we can be proud? Will he recognise that it is essential to ensure that that investment of effort, expertise and resources should continue to be available for the next generation. At the NFU rally yesterday at Central Hall, a representative of the young farmers reminded us that there are 30,000 young farmers ready and willing to continue the work. We need also to continue the effort for the millions of consumers who rely upon their production.

Secondly, I am struck by the fact that this Secretary of State and thereby this Government give the impression to the country that they are urban-minded and seem to know little and care even less about those who live and work in the countryside. The result is that farmers are not only facing problems in several sectors of production all at the same time, but those problems have been exacerbated by the series of decisions taken by this Government over the past nine months.

My noble friends have given a detailed analysis of government actions which have hit agriculture hard. Those actions will take £2 billion out of the farming industry at a time when farm incomes have fallen dramatically over the past nine months. This morning I visited the Isle of Wight to attend the AGM of the NFU branch there. The members pointed out to me what falling incomes meant to individuals. One farmer said that in the past 12 months he has faced a 60 per cent. drop in income. Projected forward to cover a 16-month period, that rises to a fall of income of over 80 per cent.—and he has a mixed farming background.

When I attended the NFU rally yesterday as an observer, like other noble Lords, it was clear that its primary concern is that the Government should give farmers the opportunity to compete on equal terms with other EU producers. Several of my noble friends have argued today for green pound compensation. They have proved how the strength of the pound, together with revaluations of the green pound since the election, all urged on by the Government's monetary policy, has caused mayhem. Prices of UK agricultural products have fallen by £1.8 billion; farmers' borrowings have increased by approximately 10 per cent.; the rise in interest rates since September 1997 alone will cost farmers an extra £90 million; and the strength of sterling has encouraged a dramatic increase in cheap imports—from Ireland alone, they are up by 78 per cent. All that is at a time when every other eligible member state pays the EU share of agri-monetary aid to its farmers. The Irish and German Governments have added the permitted supplements on top of that aid.

Of course I appreciate that this Government, like any responsible government, should exercise financial caution. But I understand why farmers argue that the case for government action is now stronger than ever.

Will the Minister tell the House whether the Government have explored every possible course of action by which moneys could be made available to pay green pound compensation and why they have decided not to take action? Will he tell the House also whether there are any underspends on any Community-funded programmes and, if so, what is the size of that underspend?

Noble Lords have referred today to the reform of the CAP. It is certainly the case that reform is becoming ever more essential in view of the impending enlargement of the EU; the increased problems being faced already as the EU complies with its existing World Trade Organisation obligations; and the need to arrive at a satisfactory negotiating position for the next WTO round.

Why did the Prime Minister drop the subject of CAP reform from his opening statement to Jacques Santer on 8th January? He was keen enough to talk about it as being a priority before the election. Why not now? Do the Government really intend to make any progress on CAP reform during their presidency and, if so, what progress?

If the Government do not have a satisfactory answer to those questions today, I should be even more surprised than I was at the time by the Secretary of State's Statement on 22nd December in another place. It seemed careless then; it still seems careless now. For, in a few roughly worded phrases, the Secretary of State launched a policy of restructuring of the entire beef industry and a system of subsidies that could have enormous repercussions on the countryside, let alone on the livelihoods of thousands of British farmers and those in ancillary trades.

His words on that day raise several vital questions. How will the run-down of subsidies be synchronised with EU policies in such a way that it does not risk leaving Britain at a disadvantage against other European producers? What are the Government doing now to ensure that the form of modulation support currently being discussed in the EU is not used to damage UK agriculture? Indeed, what will happen to the land? Where will the farmers go? The Secretary of State simply talked about retirement schemes. It seemed to be an extraordinary Statement.

After reform of the CAP, I presume that some areas will be unprofitable to farm. No doubt the management of many, if not all, of those areas will continue to be socially desirable for environmental as well as for amenity reasons. What are the Government's plans? Will they develop the existing agri-environmental schemes? Do they believe that such schemes should be market based? Or are the Government planning to adapt the cross-compliance route which was mentioned earlier?

The Government owe it to the farming community as well as to anybody with an interest in the countryside and to all of us as consumers to approach their proposed run-down of beef farming and the reform of the CAP in a more considered way than they appear to have done so far. Socially and environmentally, farming of any kind is a complex, multi-faceted business, the future of which really cannot be disposed of in a ministerial Statement made with virtually no warning on the eve of the Christmas Recess.

Today I have concentrated on two major issues because of time constraints. I recognise that other noble Lords have been constrained to keep to seven minutes so I thought I should keep well within my 12 minutes. I am aware also that next week we shall have the opportunity to discuss further the arguments put forward by my noble friends in relation to the beef bones ban. Therefore, I conclude by pointing out that in nine months the Secretary of State has so far not yet expounded a coherent policy which will sustain the rural economy and healthy farming. It is vital for the whole country that he should turn his mind to doing that now.

7.8 p.m.

The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Lord Donoughue)

My Lords, I wish to thank the noble Earl, Lord Ferrers, for his characteristically lively opening speech. It certainly reminded me of how we miss him at the Dispatch Box at Question Time. I also thank the many noble Lords who have contributed to this long debate. I sensed that not all were wholly on the Government's side but I felt that all contributions were interesting and authoritative. I should add that the late appearance of someone named Cromwell was extremely intimidating for someone of my racial and religious background.

Many noble Lords speak with great knowledge and long personal experience of agriculture. Therefore, I shall pay even more attention than usual to the many serious points which have been made. I shall try to respond to as many as possible this evening but the number of points and questions is dauntingly long. I have enough notes to take us through to Friday evening. It is inevitable that in some cases I shall have to ask for the tolerance of noble Lords and write to them individually.

However, before dealing with the detail, I should like to spend a few minutes getting it into general context—that is, into economic and social context—as I believe my right honourable friend did in his Oxford speech. I believe that that was acknowledged by the noble Lord, Lord Middleton, and others and was indeed, contrary to what was suggested, a coherent and measured view. I should like to begin by agreeing with all noble Lords who have argued for the importance of agriculture in our economy. Although it now accounts for under 2 per cent., I agree wholly with the noble Baroness, Lady Anelay, as regards its much greater significance for the general economy. I also agree with those who have asserted the even more crucial role of farmers in our rural society and environment.

Personally, I was born and grew up in the countryside, perhaps flattening fewer crops than the noble Baroness opposite, and I still support country sports. I also empathise with some of the vibrations emerging from the countryside. Therefore, I trust—and I say this quite seriously—that they will not be hijacked for partisan party political reasons, although there are many good political points to make, because that would actually blunt their impact on government.

The crisis in the agricultural sector, reflected in the serious decline in farming incomes quoted by many noble Lords, is complex in origins and certainly did not begin on 1st May 1997. Its severity derives from the conjunction of several factors all adding to the pressures on our agriculture and especially on beef and livestock.

First, there is the secular decline in demand for meat throughout Europe, with the consequent impact on prices. Indeed, that has been evident for a number of years. That requires structural adjustments in the industry and cannot be compensated for by subsidies forever. As has been mentioned, the dairy industry is also suffering from seriously low prices.

Secondly, there is the particular blow of the ban on exports of British beef related to BSE. We inherited that ban and that crisis and believe that it involved serious mishandling during the previous regime. We have set up an inquiry into the conduct of that handling. The lifting of the beef ban, on which I shall say more later, is a top departmental priority. One consequence of the ban is that the structural reduction in the beef industry necessary in Europe has in fact been achieved through the ban imposed in the short term on one producer—the United Kingdom. So the structural adjustment has been imposed in one go on one country. We have to change that situation.

Thirdly, there is the strength of sterling hitting most areas of farming, as was mentioned by many noble Lords. That phase originated before we took office and I do not propose to apologise for a continuing strong currency. It has many national benefits although, as noble Lords have pointed out, it hurts our farmers both by promoting imports and by reducing some, though not all, green pound compensation. However, it followed a prolonged period of sterling weakness during which farmers enjoyed commensurate benefits.

Fourthly, there is the strong consumer demand for greater food safety and animal welfare. That was especially referred to by the noble Duke, the Duke of Marlborough. We totally support that, as the establishment of our new Food Safety Agency demonstrates. But higher standards do involve higher costs throughout the farming and food chain, some imposed by government. Many, including those relating to BSE and cattle traceability, fall upon farmers, among others. But the industry benefits from greater confidence deriving from higher food and animal health standards. Therefore, it is appropriate that the industry contributes to the change. That is a financially prudent approach which was sensibly initiated throughout much of the time of the previous government; but it does add to the farmers' costs.

Therefore, the conjunction of those four major factors—there are others, but I chose those—has made this a particularly, and perhaps unprecedentedly in my lifetime, difficult time for British agriculture. As I say, none of those factors actually originated with the present Government, so it would be partisan for anyone to blame us for those difficulties. It would be argued by many on my side that much of the blame lies closer to home; namely, on the Benches opposite. But I do not propose to pursue that line as, from the beginning, it has not been my approach to agriculture. Except for the strength of sterling, where we cannot predict the future, all the factors I have mentioned are possibly permanent aspects of the agricultural landscape. They point to the need for restructuring in the sector and particularly underline the need for CAP reform.

The Government's approach will be to try to manage that change, doing as much as possible to ease the burden on the farming sector and the wider rural community during the process of change. However, given the situation, I must say that it is crude and impractical to talk as if all that is required in such a complex situation is an ever-increasing flow of subsidies to the agricultural production sector. The British taxpayer simply will not wear that. Agriculture already receives billions of pounds a year in subsidy, and beef alone received £1.5 billion this year, following an even larger amount last year.

The average British family already suffers a cost of between £12 to £15 per week to subsidise agriculture. We cannot add significantly to that burden. No other sectors in our economy, many of which are suffering equally from strong sterling and rising costs, even ask for compensation. Parts of agriculture, nobly represented by the noble Baroness, Lady Trumpington—for example, horticulture, pigs and poultry—work on and compete with very little aid. But the fact that we cannot produce endless subsidies to parts of agriculture does not mean, as has often been suggested, that we are in any way hostile to the countryside.

The argument that we are hostile has been widely presented. Indeed, many sides opposite—well, one side mainly—I thought, enjoyed particularly the vigorous, though fair, case advanced by the noble Lord, Lord Marlesford. We shall listen to the arguments very carefully. I do not accept the charge of hostility to the countryside either for myself or, indeed, for my right honourable friend, who, as acknowledged with generosity by the noble Lord, Lord Jopling, has for 27 years represented one of the largest rural hill constituencies. Nor do I accept it for the Government. In fact, the Labour Party currently has more MPs representing rural and semi-rural constituencies than the Conservative Party and the Liberals combined. We know, of course, that there are no Conservatives in rural Wales.

Therefore, in his opening remarks the noble Earl, Lord Ferrers, was wrong when he said that Labour were an urban Government. Similarly, the fact that we had, perhaps. only two Labour speakers in what is a Conservative debate does not mean that there is no Labour interest in such matters. I personally recall spokesmen in Opposition leading our side's debates on the economy and then on the arts when I believe that fewer than two Conservative Back-Benchers spoke. It did not occur to me at the time, but I now wonder whether it meant that the Conservatives were totally ignorant about the economy or the arts.

Our approach is to support the wider, sustainable, rural economy and society. Here I should tell my noble friend Lord Grantchester and the noble Earl, Lord Peel, that the role and new name of MAFF will emerge in due course. We shall certainly work to provide a strong rural voice in the Cabinet and in the country. Within that sphere, farmers do have a key role in our rural view, not only as food producers but also as stewards of the countryside, as my noble friend Lady Young of Old Scone stated. I should particularly like to thank her for being uniquely cheerful.

I wholly agree with the noble Earl, Lord Ferrers, that a healthy environment needs healthy farming. That is especially true in marginal and less-favoured areas. I can assure the noble Lord, Lord Rathcavan, that we shall fight that corner in Brussels. However, I have to point out that our policies do look beyond agricultural production. They seek to sustain the wide diversity of occupations and objectives in the broad, rural economy. I was most interested in the excellent speech of the noble Lord, Lord De Ramsey, when he spoke on the diversity of objectives in a countryside policy, some of which may of course conflict.

We shall further integrate environmental objectives into agricultural policy. We shall support the aspects of Agenda 2000 which seek to do that. We already have in place a wide-ranging package of voluntary incentive measures aimed at helping farmers to achieve environmental objectives. We are looking to add to those measures, as with the new pilot arable stewardship scheme. But pursuing our strategy for a healthy rural Britain will take time and patience. That involves departments such as housing, transport, schools, health and others, because those aspects are all part of a living countryside. It is not just a case of giving farmers money; there have to be schools, village shops, transport and access to health services. Therefore this is not a simple problem to resolve. To do so will, of course, cost money.

We are now operating the budgetary provisions for agriculture set out by our predecessors. I shall be surprised if they complain about that. They ask me questions and I wish to ask them some questions. If they were in government now, would they spend more, or did they not expect to win the election and deliberately underprovided?

Baroness Anelay of St Johns

My Lords, will the Minister give way?

Lord Donoughue

Always.

Baroness Anelay of St Johns

My Lords, I might try to keep the Minister to that promise in further debates in the House. Will the Minister comment on why it is that the cattle traceability scheme has been changed in the way it is being costed by this Government? In our budgetary arrangements we did not pass on the start-up costs to farmers. As I understand it, that is now being done by this Government which means that £10 million of costs will be passed to farmers which we would not have done.

Lord Donoughue

My Lords, the final decision has not been announced. However, we have to spend more money than was provided by the previous regime on many important aspects of farming, including hill farmers. That has to come from somewhere.

Baroness Anelay of St Johns

My Lords, as the Minister has given me the opportunity to intervene, I wish to ask him a question about hill farmers, to which he referred. I appreciate that the Secretary of State announced on 22nd December that he would make extra payments to hill farmers. However, will the Minister confirm that that is because he had already taken away £60 million which we would have allowed them?

Lord Donoughue

No, my Lords, that is not the case. The provision for hill farmers was exactly as provided by the previous government. The previous government provided an extra sum of £60 million for the previous year and budgeted for that not to recur in the current year. Had the Opposition won the election, would they have found more money and from where? Would that have been taken from the money for schools, hospitals, the disabled, or from higher taxation? We should be told that. Those are my general comments, but I now wish to deal with the many specific points that were raised although I shall not be able to deal with all of them.

Lord Mackie of Benshie

My Lords. before the Minister deals with those points, I did not hear him say that he would operate the CAP as it is operated on the Continent. We have already given figures as regards differences in farmers' incomes under the CAP.

Lord Donoughue

My Lords, I shall deal with the CAP. First, I wish to say a little more about beef and BSE, which I touched on at the beginning of my remarks. This was mentioned by many speakers and. most pungently, I thought, by the noble Lord, Lord Marlesford. I cannot comment on his long, historical analysis of BSE although much of what he said seemed to me to be close to the mark. I assume the Phillips inquiry will tell us more about that. I repeat that the first priority of this Government is protection of the consumer and the maintenance of public confidence in food. Action will be taken on a precautionary basis to ensure that consumers continue to be given the highest protection against risks from BSE. That is why we have acted decisively to introduce controls on imported meat.

It is disappointing that Community-wide controls on the use of specified risk materials are not yet in place, but in the meantime unilateral measures to ensure that food and feed products are free from risk materials will remain in place. Lifting the ban is also a high priority for this Government. We believe that we are making steady, if limited, progress. But the two priorities of health and lifting the ban together explain our action in banning beef on the bone on which a good deal of indignation has been expressed. On health grounds it would have been irresponsible for any government to act differently and to ignore the clear advice of its Chief Medical Officer on an important public health issue. I may have to remind the previous government—as they may have forgotten—that they went beyond the advice of the SEAC in 1994. However, even more immediately convincing were the implications for the beef ban. It was made clear to us that without action to demonstrate publicly that our beef is completely safe—if we had not taken the action that we did, that would not have been the case—there would be no prospect of getting the beef ban lifted. That difficult and controversial decision was taken in the interests of our farmers.

We are also urgently pursuing other measures to get the ban lifted. I note what the noble Lord, Lord Clifford, said about farmers in the south west. I also appreciate the helpful comments made on Northern Ireland by the noble Lord, Lord Alderdice. On 14th January the Commission agreed a draft proposal for the export certified herd scheme which will be presented to the Standing Veterinary Committee. The scheme would operate in Northern Ireland until the British computerised tracing system is fully functional. We have already begun work on that and expect it to be operational in the late spring. We have also now received a positive opinion from the Scientific Steering Committee on the principle of the date based export scheme, supported by an offspring cull. We are maintaining our pressure on the Commission to conclude consideration of both proposals as soon as possible.

On the agri-monetary side and compensation, I recognise the impact of currency movements on farmers which affect competitiveness and the green rate compensation payments. Certainly much of the predicted 30 per cent. fall in total incomes from farming is a direct result of the strength of the pound. Consequently we have repeated demands—made by the noble Earl, Lord Ferrers, the noble Lord, Lord Mackie, and the NFU—to collect the £980 million which is sitting in Brussels. One NFU leader has said that it is a matter of making a simple telephone call. However, as I think the noble Lord, Lord Hooson, implied, the United Kingdom Exchequer and taxpayer bear 71 per cent. of those European Union funds. That is the result of the Fontainebleau agreement negotiated by the former Prime Minister, the noble Baroness, Lady Thatcher. I wonder whether noble Lords opposite repudiate the Fontainebleau agreement. If not, where would they find the extra £600 million plus that would have to be produced by the Exchequer to sustain the claim of the £980 million? There is not a level playing field. Noble Lords ask for a level playing field but, because of the Fontainebleau agreement, there is not a level playing field, and no other European country experiences that. Against the background of a tight situation—

Lord Stanley of Alderley

My Lords, is it not true that the figure is only 23 per cent. and that 50 per cent. is provided by every other European country? It is only the addition from 50 per cent. to 71 per cent. that the Fontainebleau agreement takes account of.

Lord Donoughue

My Lords, I do not believe that that is the case but I shall write to the noble Lord, Lord Stanley, setting out the exact mathematics. Against that background of a tight situation on public spending, the one-off package of £85 million for the livestock sector which the Minister announced on 22nd December represents a fair balance between the conflicting requirements we face and will provide a considerable shot in the arm for the sectors involved. Of course that has to be agreed with the Commission, and consultations are proceeding to establish the detail of how the money is to be paid to farmers. I should report that the Commission has raised some points which we are now considering. Any change in the package which might be required by the Commission will not affect the overall total amount of aid paid to the United Kingdom farmers.

CAP reform remains, as it was in the distributed speech of the Prime Minister, top of the shopping list, and nothing has changed. It is inevitable in the face of increasing competition on world markets, and an essential precursor to successful enlargement of the European Union. I found the comments of the noble Lord, Lord Middleton, particularly interesting. He is correct. My right honourable friend's Oxford speech set out our position.

Several noble Lords referred to modulation. Our declared policy in Brussels is to resist modulation on a Europe-wide basis since the British agricultural sector is bound to lose from that. We believe that change is inevitable along the lines of Agenda 2000, but it may not be as rapid as some assume or fear. Most farmers have little to fear from a move away from production support towards a more competitive world market, providing—I stress this—they are also receiving extra environmental payments.

The change will have effects. I agree with the noble Lords, Lord Stanley and Lord Mackie of Benshie, on the need to ease and manage that change. The list of suggestions by the noble Lord, Lord Stanley, on early retirement, local co-operatives, and so on, were helpful and constructive. My right honourable friend has already announced that he is exploring the possible contribution of the European early retirement schemes.

A further list of points was raised with me. In the time available I shall answer as many as I can and write to noble Lords on the other matters. The noble Earls, Lord Clanwilliam, and Lord Peel, and the noble Lord, Lord Rotherwick, referred to the abolition of the advisory panels. They were not replaced by the advisory group with only one farmer. They are being replaced by local groups with much wider rural representation including, but not only, farmers. We are establishing local groups which report to the Minister. They report to Ministers on their regional visits. The Ministers in the department have already made more than 50 regional visits. That approach reflects our view that the ministry must reflect, and consult with, the whole rural community. That we propose to do.

I wish to take this opportunity to pay a tribute to the great contribution by the noble Lord, Lord Shuttleworth, to British rural life.

The noble Lord, Lord Kimball, and my noble friend Lady Young, raised the issue of the regional development agencies. I agree that we must ensure that the rural countryside has representation. The noble Lord mentioned, modestly, one representative on each. I would hope that that was at least the case.

On the question raised about guidelines, it is a complex issue. I have a long answer, but the House might appreciate it if I write to the noble Lord. The European Commission has not issued formal guidelines on what constitute separate businesses, but we have clear criteria. I shall write to the noble Lord.

The noble Earl, Lord Clanwilliam, referred to organic farming and pesticides. I do not have time to go into the issue in detail. However, I assure him that the new Administration in general, and myself in particular, have great sympathy with his priorities.

On the importance of horticulture, as always I appreciated the contribution of the noble Baroness, Lady Trumpington. I normally nearly slip into calling her my noble friend. It is a sector which receives little assistance and makes few complaints. As the noble Baroness suggested fruits have suffered. I can only say that I shall do what I can within the constraints on public expenditure. That public expenditure also affects loan schemes within the European Union rules.

Several noble Lords referred to unpasteurised milk. I should point out that it is already banned in Scotland as unsafe. Here we are examining its safety but we have not yet reached a decision.

The noble Lord, Lord Palmer, referred to renewable energy sources. I can assure the noble Lord that my right honourable friend is already actively engaged on the issue. The noble Lords, Lord Astor of Hever and Lord Clifford of Chudleigh, and the noble Earl, Lord Courtown, raised the issue of forestry and woodlands stewardship. I agree that these are important issues. They do not all come under MAFF. I hope that the noble Lords will accept it if I write to them.

Finally, the daunting general question ran through several thoughtful contributions on how we balance our two wishes, among many—the wish to preserve small family farms as a crucial part of the living countryside, especially in Northern Ireland, Wales, the north and the south west, together with the efficient and world competitive farming that we also want. The noble Lords, Lord De Ramsey, and Lord Rathcavan, and the noble Earls, Lord Peel and Lord Courtown, referred to this issue. It is a dilemma and a dichotomy built into the Agenda 2000 reforms to which I have given great thought but which I cannot resolve today. I did not detect an easy solution offered in the debate. Noble Lords are quite right. In the end Europe has to resolve the dilemma. We want family farms in a rural society; and we want to push forward towards world competitive prices and an efficient agriculture. It is one of the great challenges to Europe and to us to resolve the matter in a way that is reasonably acceptable to both sides.

In conclusion, I thank all noble Lords for their contributions which added greatly to my vertical learning curve. I shall write to those noble Lords to whom I failed to deliver an answer today.

7.39 p.m.

Earl Ferrers

My Lords, I thank all noble Lords who have taken part in the debate, in particular the Minister for the courteous and charming way in which he replied. I felt sorry for the noble Lord during the debate. It was rather like standing up in front of the firing squad. He had only two people behind him, but that did not worry him. Everyone else seemed to be on the other side of the House. If I may say so, the noble Lord acquitted himself with calm and dignity. He is a thinking person. I hope that he will take note of what has been said and will not just say, "Thank goodness that debate is over. We can now turn to other subjects."

What has been said is important. The countryside —agriculture—is concerned. Perhaps I may again impress this upon the Minister. Agriculture is concerned to know that the Government understand and care. I think that in the person of the noble Lord, Lord Donoughue, we have an example of someone who cares; and the Government care. I hope that the noble Lord will be able to pass that message through to the rest of the Government.

I was glad also to hear the intervention of the right reverend Prelate the Bishop of Bath and Wells. It is good when a right reverend Prelate takes part in such a debate to explain the concerns that he finds in the area in which he lives. I was glad, too, to hear the intervention of the noble Baroness, Lady Young of Old Scone. Her speech was, as the noble Lord, Lord Donoughue, said, a unique and cheerful experience for him. It was also a pleasant experience for us because it was a very elegant speech, but she scared the daylights out of me when she said that the decision to ban beef on the bone was taken in order to reassure Europe and had nothing to do with the basis of risk. My daylights were scared even further when that was confirmed by the Minister. I do not wish to labour those points further. I believe that the Government have the flavour of the concerns which are felt.

I am grateful to all noble Lords for having taken part. I should particularly like to mention the noble Lord, Lord Alderdice, whose loquacity and ability to speak without a note on any subject without hesitation, and to make common sense as well, is an art which I greatly admire. I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.