Agriculture: Discussions with NFU (Hansard, 27 October 1998)

§ The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Lord Donoughue)
My Lords, we hold regular meetings with the National Farmers Union. The Minister and I last met NFU representatives on 8th October when a wide range of issues was discussed as a follow-up to the list put forward by the NFU rally at the Labour Party Conference in Blackpool.

§ Lord Monro of Langholm
My Lords, is the Minister aware that throughout the countryside in the United Kingdom generally, but particularly in livestock areas, the rural economy is in crisis? Is he also aware that incomes have plummeted and that all the good work done by previous governments to enhance the countryside, the environment, wildlife and rural employment is gravely at risk? Does he appreciate that we cannot wait for the reform of the CAP? What action are the Government proposing to take in the next few weeks to stave off disaster?

§ Lord Donoughue
My Lords, we are acutely aware of the serious difficulties facing all areas of the agricultural industry. We are not so aware of all the good work done by previous administrations. I assume that the noble Lord has in mind issues such as BSE and the beef ban. The situation is serious and we are looking at it most urgently. We are investigating what actions can be taken to mitigate it. Of course, that is not wholly for MAFF, which does not have funds to assist the sector further than the large amounts it already gives. Other departments are involved and it is a matter for the Government to decide on their priorities.

§ Lord Palmer
My Lords, will the Minister confirm that his colleagues in the Scottish Office are having similar talks with the National Farmers Union of Scotland where the situation is every bit as dire? Many farmers in Scotland have not yet finished their wheat harvest and we are, after all, at the end of October.

§ Lord Donoughue
My Lords, severe difficulties face all the nations of the United Kingdom. They are slightly worse in Scotland, Northern Ireland and Wales than in England. I believe that Ministers in the Scottish Office, which is well represented in this House, are currently holding talks to discuss the situation.

§ Lord Cledwyn of Penrhos
My Lords, does my noble friend agree that the Welsh farmers are going through a particularly difficult time? Is his department meeting the Welsh farmers' union? What action is being taken by the Welsh Office to help the Welsh farmers?

§ Lord Donoughue
My Lords, yes, the situation in Wales is acute. My right honourable friend the Minister 1813 went to Wales in order to meet representatives of the Welsh farmers. We have had talks and the Welsh Office is involved in investigating the situation. There are in Wales more highland and fragile upland areas with sheep and similar farming, which is particularly affected by the present situation and did not benefit proportionately during the bonanza enjoyed by British farming from 1992 to 1995.

§ Lord Hooson
My Lords, the Minister described the Government as considering the matter urgently. They have been considering it urgently for more than four months. Are they aware of the desperate situation in certain of the hill areas, including those in Wales, while they give no promise of real action? One thing they could do immediately would be to increase the headage in relation to sheep because many farmers cannot afford to send their sheep to market. They could also remove the necessary burden on abattoirs for killing sheep, which adds £8 to the cost of every lamb killed in this country. What do the Government intend to do in this urgent situation?

§ Lord Donoughue
My Lords, the Government have properly been considering the situation seriously. Many departments are involved, including the Treasury. Some of the possible actions which would help farming will involve the co-operation—indeed, the approval—of the European Commission. It is not a case of providing one-off, quick help; we must view the whole situation to ascertain what strategy would be best for farming.

Lord Davis of Coity
My Lords, I appreciate the difficulties facing the British agricultural industry, but is it not the case that agriculture already receives more taxpayers' money than any other sector of the economy?

Noble Lords
Reading!

Lord Davis of Coity
Therefore, does it not follow that if more money is directed to agriculture less is likely to be directed to other areas of the productive sector?

§ Lord Donoughue
My Lords, it is certainly the case that agriculture, although one of the smallest sectors, amounting to 1.1 per cent. of the economy, receives by far the greatest help; greater than any other sector of the economy. It receives two and a half times more than the next sector and nearly four times more than the whole of manufacturing. However, our view is that the importance of agriculture and the seriousness of the problems justify major aid. We believe in the long-term welfare of British agriculture.

§ Lord Boardman
My Lords, in the opinion of the Government, is the deplorable state of agriculture at the present time primarily the fault of interest rates and the Bank of England, or the CAP, or the undoubted efficiency of the British farmer?

§ Lord Donoughue
My Lords, in looking at fault, one is looking at a most complex subject. What is particular 1814 about the present situation is that all the factors which can have a detrimental effect on a sector have affected agriculture at the same time. There is no doubt that the high rate of sterling is probably the most significant factor, and there occurred at the same time the secular decline in commodity prices throughout all sectors.