§ Lord Geraintasked Her Majesty's Government:
Whether they consider that the present state of the British agricultural industry is satisfactory.
§ The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Hayman)My Lords, the agriculture industry is currently facing serious difficulties and farm incomes are under pressure as a result. The Government have taken a number of steps to help, including a package of measures announced by my right honourable friend the Minister of Agriculture, Fisheries and Food.
§ Lord GeraintMy Lords, does the Minister agree with me that many of the supermarkets with their marketing power and skills are forcing many farmers to sell their produce for less than production costs? Therefore will she intervene to safeguard the interests of family farms in view of the stranglehold that the supermarkets have on them?
§ Baroness HaymanMy Lords, as the noble Lord will be aware, a Competition Commission investigation is being undertaken with regard to the supermarkets at present and that is ongoing. believe the main point that the noble Lord makes is that we should consider the implications of this matter throughout the food chain and make retailers, wholesalers, producers and customers aware o the different points as regards adding value within that chain. That is an important point. It is an initiative that my right honourable friend has tried to take forward with a range of interests throughout the food industry. We hope to see that initiative bear results.
§ Lord Cledwyn of PenrhosMy Lords, is my noble friend aware that family farms which have always been important in rural areas such as north Wales and parts of England are experiencing acute difficulties which are recognised? What advice can my noble friend give them to enable them to improve matters, or they will be destroyed?
§ Baroness HaymanMy Lords, we recognise the great difficulties under which farmers, particularly small family farmers—as my noble friend said—are labouring at the moment. That is one of the reasons that £60 million of the package which my right honourable friend announced is allocated to the hill livestock compensatory allowance which is 376 particularly valuable to hill farmers in Wales where I believe that nearly 25 per cent. of the sum will be allocated. I refer also to the waiving of charges for specified risk material and for cattle passport charges. We hope that those measures will help. Of course in the long term we look to the restructuring of the common agricultural policy as a way forward, but I do not suggest that there are not also immediate, short-term problems which we are trying to address.
§ Lord PalmerMy Lords, does the noble Baroness agree that farming being a long-term business, there must be a long-term policy rather than a series of short-term policies which only wallpaper over the cracks in the industry?
§ Baroness HaymanMy Lords, I agree with the noble Lord, Lord Palmer, on that point. That is why we have consulted widely on the Agenda 2000 package in relation to the future of the industry which undoubtedly will not remain the same. However, we need to look at that and, for example, at the growth in organic farming. Today my right honourable friend has announced £10 million—which I know will be welcome to Members of your Lordships' House who spoke on this subject on Friday—to help those who wish to convert to organic farming. Therefore we need to consider the long term and we need to work in Europe for a more radical reform of the common agricultural policy than that which was agreed in April. However, in the short term, because of the great difficulties that are being experienced, we are taking some immediate measures which we hope will help.
§ Lord Stanley of AlderleyMy Lords, does the Minister accept that an all out trade war would be a complete disaster for the British industry, particularly the sheep industry?
§ Baroness HaymanMy Lords, I realise that. I am grateful for the support of the noble Lord and I hope that he will share his views with some of his more febrile colleagues in the House of Commons.
§ Lord Ewing of KirkfordMy Lords, is my noble friend aware that having been in another place when there were crises in both the coalmining industry and the steel industry I have seen hundreds of thousands of people in those industries thrown on the unemployment register? I congratulate my noble friend, and through her the whole of Her Majesty's Government, on the superhuman efforts that they are making on behalf of the farming industry in this country.
§ Baroness HaymanMy Lords, I am grateful to my noble friend for recognising that, in dealing with the crisis affecting farmers and with the potentially devastating effects on them and their families, we are not prepared to take the same kind of "hand washing" attitude as was taken as regards the decimation of some other industries.
§ Baroness ByfordMy Lords, I thank the Minister for repeating the announcement of the £10 million in 377 respect of organic farming. We on this side of the House welcome that. However, does she not accept the importance of labelling, which I know we shall debate later? In order to help our farmers it is crucial for customers to be able to see clearly whether they are buying a British product. At the moment that is not the case. I hope that the Minister can support us on that issue which would be the best way to help our farmers.
§ Baroness HaymanMy Lords, I can offer more than strength and support; I can offer positive action. Yesterday we issued a consultation document for public comment on strengthening guidelines to ensure that British labelling does not hide imported ingredients. These new guidelines highlight the importance to consumers of accurate and clear information. This matter has greatly concerned the pig industry in particular but it also has applications in other areas. We shall also lobby in Europe for a system of clear country of origin labelling and—as this is an international matter—with the Codex committee which considers this matter. Today we have also announced £5 million of marketing aid which we hope will help pig farmers and the pig meat industry in particular. We seek to make clear to consumers the high standards of home produced produce in terms of public health and animal welfare.
§ Lord Mackie of BenshieMy Lords—
§ The Lord Privy Seal (Baroness Jay of Paddington)My Lords, surely there is plenty of time for both the noble Lord, Lord Mackie, and the noble Lord, Lord Bruce of Donington.
§ Lord Mackie of BenshieMy Lords, I have now forgotten what I was going to say! Will the Minister tell me what benefit flowed to the consumer from the abolition of the Milk Marketing Board and the breaking-up of its successor, Milk Marque? To say that the price paid to farmers has fallen steeply is an understatement; it has fallen very steeply. I do not think that the Minister can point to any advantage to consumers of that action.
§ Baroness HaymanMy Lords, I know that the noble Lord will be aware of the DTI investigation into Milk Marque which recommended a split on competition grounds. We hope that the split into three will be advantageous to consumers. There are potential advantages and opportunities for producers in the split although I am aware of difficulties in the short term.
Lord Bruce of DoningtonMy Lords, will Her Majesty's Government consider augmenting the efforts that they are already making in aid of the farming industry by taking steps at Council level of the European Union to ensure that the hundreds of millions of pounds that find their way from the British taxpayers' pocket to subsidise the production 378 of non-existent or substandard tobacco are diverted (when the budget is considered) to further aid the British farmer?
§ Baroness HaymanMy Lords, I said in reply to earlier questions that the CAP reforms agreed in April did not go as far as we would have wished or think necessary, and that some major sectors remain unreformed. We are committed to reforms that move agriculture away from excessive subsidies and supply controls to a more market-oriented position.