Sheep Farming (Hansard, 7 June 2000)

§ The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Hayman)
My Lords, we recognise that the strong pound and low prices have severely reduced sheep producers' incomes. However, since the early autumn prices have recovered substantially and are now 5 per cent above the level of 12 months ago. The more significant and sustained increase in returns depends on all elements of the food supply chain working together to respond effectively to consumer demand. The support system needs reform to reduce reliance on subsidy and to make the sector more market oriented. Our implementation of the rural development regulations will also help to strengthen marketing and collaborative approaches.

§ Lord Geraint
My Lords, I am grateful to the Minister for that reply, but is she aware that it is estimated that farmers' incomes this year are dropping by £50 per week? Unless the Government lift the ban on sending our mutton carcasses to Europe within the next few months, we are in for a had period in the autumn when sheep farmers will be selling their produce.

§ Baroness Hayman
My Lords, I appreciate the concern of the noble Lord, Lord Geraint, about farmers' incomes. Sheep farmers in particular have 1121 had an extremely difficult time. There is not a ban as such on the export of whole carcasses. The problem is that, since the BSE-related legislation on specified risk material, spinal cord must be removed from sheep over 12 months old. Splitting carcasses to remove the spinal cord is not acceptable to customers in France, which was our main market for mutton. We have managed to negotiate arrangements with France for whole, unspoilt ewe carcasses to be sent direct to listed cutting plants in France under official controls. The spinal cord is then removed under France's regime, which is similar to our own. But the industry has made representations that the requirement for consignments to be sent direct to premises creates difficulty for the trade and we therefore proposed to France a system of export in sealed compartments or cages within vehicles so that deliveries can be made en route.

§ Lord Cledwyn of Penrhos
My Lords, I am interested in what my noble friend said, but is she aware that in Gwynedd and Anglesey, for example, the sheep industry is in considerable difficulties? In particular, the wool industry is in great difficulty at present. Can the Minister say how hard the Government are working to help that area to get out of those difficulties?

§ Baroness Hayman
My Lords, it is in recognition of the problems in the sheep industry that there has been support for that sector in each of the packages of aid announced by this Government, most recently in the £22 million agrimonetary compensation and the £60 million for the hill livestock compensation allowances, which support hill farmers, a great deal of which goes to those involved in sheep production.
I understand my noble friend's point in relation to the difficulties in the wool market. Prices there have recovered slightly compared with last year. The board's price indicator at mid-February stood at 70p per kilogram compared with 62p per kilogram in 1999. But my noble friend will be aware that wool is not an agricultural product. It is not supported through the CAP. The wool guarantee was terminated in 1993 and therefore the mechanisms to support the wool trade in times of difficulty, such as it is experiencing at the moment, are simply not there to implement.

§ Lord Elton
My Lords, if wool is not an agricultural product, can the Minister tell us what it is?

§ Baroness Hayman
My Lords, I am trying to restrain myself from saying that it is what you get when you fleece a sheep.
Agricultural products are listed in Annexe I to the Treaty of Rome. Wool is not included in Annexe 1 to the Treaty of Rome, ergo it is not an agricultural product.

§ Baroness Byford
My Lords, further to the Minister's response, the only people getting fleeced at the moment, sadly, are our sheep farmers, whose situation is extremely serious.
1122 Can the Minister respond to the announcement of the £50 million cut in the sheep premium? Also, how quickly will the Government respond to the study being examined by the Scottish Agricultural College which is to be presented to the EU Commission in June?

§ Baroness Hayman
My Lords, the rate of sheep premium is set in relation to the levels available and will be lower this year than it has been in the past as a reflection of higher levels and prices on the Continent and the strong pound-euro exchange rate. I shall certainly read the report from the Scottish Agricultural College and consider what action to take. But the noble Baroness should be careful of commenting on reductions in support to the sheep industry, given the record of her government.

Noble Lords
Oh!

§ Baroness Hayman
My Lords, I know that noble Lords opposite do not like to be reminded of the facts in terms of support for hill livestock and compensation allowances, which were reduced by the previous government; but if it is fact, it is fact.

§ Lord Haskel
My Lords—

§ Lord Mackie of Benshie
My Lords—

§ Baroness Jay of Paddington
My Lords, I may be wrong, but I do not believe anybody from this side has asked a question of my noble friend on this point. Perhaps we could hear the noble Lord, Lord Haskel.

§ Lord Haskel
My Lords, the noble Lord, Lord Geraint, spoke about the export of sheep. Would it be straying too far from the Question if I asked my noble friend whether she can tell us what the Government are doing to help the export of beef?

§ Baroness Hayman
My Lords, this is another sector that is experiencing difficulties. As my noble friend will be aware, the Prime Minister asked my colleague Joyce Quin to take a lead in this area. Following the lifting of the export ban to everywhere in Europe, apart from France, which is now completely isolated in this respect—I see that noble Lords opposite are not interested—both Malta and Ghana have lifted the ban on the export of British beef. I should have thought that noble Lords opposite would be pleased to support that development.