HL Deb 09 November 1998 vol 594 cc502-6

2.48 p.m.

Lord Geraint asked Her Majesty's Government:

Whether they are satisfied with the present state of the agricultural industry in Wales.

Lord Williams of Mostyn

My Lords, the current problems in farming bring into sharp focus the need for Welsh agriculture to adapt. The Government's aim is to create a viable future for agriculture and to encourage sustainable economic growth in rural Wales. I fully recognise the real difficulties facing the farming community in Wales.

Lord Geraint

My Lords, I am sure that the Minister is aware that farm incomes in Wales have dropped by nearly 100 per cent. since his Government took office. Ewes and lambs have been sold this autumn for £1 each or less. Can the Minister give an assurance to the farmers of Wales that the Government will re-coup them for their losses?

Lord Williams of Mostyn

My Lords, I do not believe that anyone—let alone the noble Lord, Lord Geraint—would expect me to offer a blank cheque, or even an open postal order. However, we regard these matters with great seriousness. As I have said on previous occasions and happily repeat, it is not simply a question of economics because the farming community in Wales is extremely important socially, culturally and traditionally. It is fair to say that the previous Secretary of State for Wales carried out extremely important work in being open at all times to speak to all representatives of the agricultural industry in Wales. His successor, Mr. Michael, is having a meeting tomorrow with the Farmers' Union of Wales, the NFU Wales, and the Wales branch of the Country Landowners' Association.

Lord Hooson

My Lords, the noble Lord expresses sentiments with which one can entirely agree. Is he aware, however, that although the Government have expressed such sentiments, nothing has been done to help the farming community? There has been talk, but nothing more. It has been going on for months and months while the crisis has deepened. If he is concerned, as I know he is personally, about the social and cultural effects of the crisis in Wales, is it not time that we had some real action from the Government?

Lord Williams of Mostyn

My Lords, the time of real action is in the past. Specified risk material legislation was amended with effect from 8th October to allow farmers to resume exports of unsplit sheep carcasses to listed cutting plants in France. We have secured private storage aid for the sheepmeat sector with effect from 19th October this year. The sheep annual premium value will rise significantly this year. We are presently listening to arguments about the closing of the calf processing aid scheme. So it is uncharacteristically unfair for the noble Lord, Lord Hooson, to say that nothing has been done.

Lord Crickhowell

My Lords, I never remember an occasion in my lifetime when the condition of the hill farmers in Wales was worse. Can the Minister tell us what he means by saying that they should now adapt?

Lord Williams of Mostyn

My Lords, I think that the noble Lord's first proposition is a fair one. The fact is that it is necessary for all engaged in industry in this country to adapt to changing conditions. There are many schemes open; for instance, in terms of Tir Gofal, the development of agri-tourism and the question of changing the emphasis of particular farms. The fact is that there is no industry, in what is an increasingly competitive market, that can always say, "We shall never change".

Lord Elis-Thomas

My Lords, the Minister knows of my personal respect for him, but does he not recognise that farmers in Wales have already adapted? The extent of support for, and take-up of, agri-environment schemes such as Tir Gofal which he mentioned among farmers is an indication of their willingness to adapt. Does he not recognise that adapting to the current crisis is made more difficult by the substantial drop in end-price support? Will he ensure that in terms of agri-environment schemes such as Tir Gofal there will be adequate income return for the loss of end-price support at the market? Will he also look at the issue of the renationalisation of the CAP in terms of Agenda 2000? If there is to be renationalisation, should not support be delivered by the National Assembly for Wales?

Lord Williams of Mostyn

My Lords, I agree that to alter one's farming practices will not be an immediate answer. I was saying in answer to the noble Lord, Lord Crickhowell, that people must be astute to the fact that things cannot remain as they are. However, it is a fact that the Government have already made available £85 million of agri-monetary compensation. In Wales alone farmers have benefited by more than £12 million from the aid package: £8.3 million for suckler cows and £3.8 million for sheep producers. That is not a perfect answer but it is worth bearing in mind that it means almost £2,000 extra on average for most cattle and sheep farmers in the Welsh uplands.

Lord Thomas of Gresford

My Lords, is the Minister aware of the claims in the Welsh edition of today's Daily Post that the telephones of farmers' leaders in North Wales are being tapped? Is that true; and if so, what is the justification for it?

Lord Williams of Mostyn

My Lords, first, I have not read the Liverpool Daily Post. Secondly, I do not know whether it is true. Thirdly, if there is any evidence at all of unlawful activity, it should be reported immediately to the police.

Lord Cledwyn of Penrhos

My Lords, is my noble friend aware that, as from today, Welsh farmers will be encouraged that he is handling their affairs?

Lord Williams of Mostyn

Well, my Lords, I do not want to look even a gift horse in the mouth, so I am definitely encouraged.

Lord Campbell of Alloway

My Lords, is there not in the mind of government an emergency package to help the perilous state of agriculture, or is that a rumour? If it exists, can the noble Lord say something about it, because something more surely needs to be done?

Lord Williams of Mostyn

My Lords, in answer to the noble Lord, I can confirm that agriculture Ministers are considering urgently the representations that have been received about the difficult state of the industry and the requests for financial support. I recognise that there are serious difficulties. I can only ask your Lordships to be patient for a while.

Lord Bruce of Donington

My Lords, is the noble Lord aware that I have followed with some interest the claims that have been made on behalf of farmers in Wales who allege, either incorrectly or correctly—I have no information on that point—that lambs are being sold for a derisory sum of money; under £1 a lamb, I am told, in some instances? I am not in a position to verify that but, on the assumption that it approximates to the truth, may I inform the noble Lord that only last week I purchased from a leading multiple store four lamb chops for £2.59?

Lord Williams of Mostyn

Well, my Lords, I think it is probably all the fault of Europe.

Lord Mackie of Benshie

My Lords, is the Minister aware that farmers in the Highlands of Scotland, the hills of Cumbria and in Wales are changing and will change? They are changing because a large number of them will be unable to continue. In view of the fact that money is available from the European Union for the Government to draw on, although they have to pay as well, could they not set up a general scheme to assist the change via retirement schemes and other assistance which would allow reasonable change without people going out of business simply because they have lost all their money?

Lord Williams of Mostyn

My Lords, the answer is not as simple as the proposition the noble Lord puts. If money is available from European sources for compensation, it does not come as a blank cheque from Europe. It requires a substantial contribution—not far off three-quarters—from the United Kingdom Government. I repeat that £85 million of agri-monetary compensation has already been made available to livestock farmers. What the noble Lord says about encouraging retirement and trying to deal flexibly with individual farmers and their problems is a perfectly legitimate proposition which the Government have well in mind.

Lord Roberts of Conwy

My Lords, is the Minister really aware of the prospect facing Welsh hill farmers? The majority face a halving of their incomes this year and there is very little they can do about it. Can the noble Lord at least give an assurance that the levels of farm incomes will be taken into account in fixing the HLCAs?

Lord Williams of Mostyn

My Lords, of course they will be considered. I have every sympathy with those who are driven to change their livelihoods and, just as significantly, their habits of life. But I cannot say to your Lordships that the world is flat when I know it to be round. On other occasions a number of your Lordships who presently face me frequently commend the validity and moral value of a free capital market. There are bound to be changes for farmers. What we have to undertake to do is to make those changes as acceptable as possible and to view farmers with every sympathy. I believe that the Government's record is not a bad one in that regard.

Lord St. John of Bletso

My Lords, is the Minister aware that last week lamb prices in Abergavenny market fell below 50 pence per kilogram and that in the area of Gwent in which I live many farmers who have been farming there for generations are being forced to give up farming? Does the Minister agree that to adapt is not the answer and more dramatic action needs to be taken to prevent total social collapse in Wales?

Lord Williams of Mostyn

My Lords, to adapt is not the entire answer but it is a very significant part of it. Nor do I believe that the proper answer is 100 per cent. government subsidies. Those times have gone for ever.