Farm Incomes (Hansard, 25 June 2002)

§ Lord Livsey of Talgarth
asked Her Majesty's Government:
What plans they have to raise family farm incomes above the national minimum wage.

§ The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty)
My Lords, the Government recognise the economic problems facing British farming and we will work in partnership with the industry to help it meet the challenges that it faces. In the autumn we intend to publish a strategy for sustainable food and farming in England, which will build on the valuable work of Sir Don Curry's policy commission. Devolved administrations are also pursuing their own strategies.

§ Lord Livsey of Talgarth
My Lords, I thank the noble Lord for his Answer. Will he acknowledge that the national minimum wage now stands at £8,100 per annum and that the figures just published for the year ending 2001 show that the average net income for all UK hill beef and sheep farms was £4,000—half the national minimum wage? The average income for all farms in the UK was £5,000. That is the difference between £4.10 an hour on the national minimum wage and £2 an hour for family farms. Is not that an intolerable situation? Families cannot be sustained on farms any more. What will the Minister do urgently to raise incomes above the national minimum wage for farmers and their families? Will he also legislate to make it illegal for supermarkets to sell farm produce at below the cost of production?

§ Lord Whitty
My Lords, the position of the incomes of many of Britain's farmers is very worrying and leads to some of the consequences that the noble Lord referred to. However, a direct correlation with the minimum wage is not appropriate, as the income is in part a wage and in part a self-employed income and is profit rather than gross wage, to which the minimum wage figure applies. I do not think that there is a direct read-across. Moreover, it is not the Government's responsibility to determine the incomes of the workforce, self-employed or employed. We are attempting to provide a framework for the recovery of 1197 farming that will enable profit to come back into farming over the medium term. We shall not intervene directly on the income front.

§ Lord Carter
My Lords, is my noble friend the Minister aware that overall farm incomes are now at their lowest level in real terms since 1975 and in money terms have fallen by 71 per cent since 1995? At the same time, British agriculture receives more subsidy than the rest of British industry put together. Is there not something fundamentally wrong with our system of agricultural support?

§ Lord Whitty
My Lords, that is absolutely right. I welcome my noble friend's intervention in the debate. He has remained silent on agricultural matters for far too long. We recognise that there is a fundamental problem with the common agricultural policy, which not only does not benefit the taxpayer and the consumer, but also is of detriment to farmers and has for many years given the wrong signals to farmers. It has not supported their incomes, the kind of production that consumers want or the environment. That is why we are proposing a positive programme of reform for the common agricultural policy. We hope to see a proposal from Commissioner Fischler next month that will introduce some radical reforms through the mid-term review. Unless we alter the direction of the common agricultural policy, some of these problems will continue to affect British and European farming.

§ Lord King of Bridgwater
My Lords, the Minister said that he would be publishing a reply to the Curry report, but I did not hear him say when he would do that. The Government certainly cannot be responsible for the incomes of individual farmers, but he knows very well from the present situation that we are at a critical moment. Many people will look at this year's harvest and the outcome of this year's accounts after the end of foot and mouth and may then make a final decision on whether to stay in agriculture. The Government will certainly have to face the consequences of that, even if they do not get into the issues of individual incomes.

§ Lord Whitty
My Lords, the Curry commission rightly pointed out that some fundamental changes are needed in farming. That will inevitably involve some restructuring of farming and some refocus of farm production. Many in the industry will have to take some painful decisions. We are trying to establish within the food chain as a whole a viable medium-term framework under which money will get back into farming and farmers will be producing closer to the demand from consumers. We have already taken some steps following the Curry report to put in place a structure that will help farming in the rest of the food chain. We have also said how we want to change the nature of regulation on farming, which at times is too great a burden on many of Britain's farmers. That is already beginning to fall into place. Following the public spending review, we will be able to establish a 1198 three-year programme of expenditure in support of the modernisation of farming to which the Government are committed.

§ Baroness Miller of Chilthorne Domer
My Lords, apart from the food chain, will the Minister comment on all the parts of an animal—for instance, a sheep—that can no longer be marketed for reasons such as the Russians no longer taking sheepskins and the Food Standards Agency now suggesting that sheep's intestines cannot be sold as natural sausage casings, although I believe that that is not based on firm scientific evidence? What is the effect on the incomes of sheep farmers of all those losses into the rest of the chain?

§ Lord Whitty
My Lords, I am aware that the most vulnerable and hardest-hit sector of the livestock industry is sheep farming, partly for the reasons outlined by the noble Baroness and partly because of past production decisions and the aftermath of foot and mouth. I am not sure whether she is suggesting that some of the burdens of the losses in the sheep sector should be borne by the processors and the supermarkets, to revert to an earlier question. What is needed now and in the medium term is a stable market for what remains of the sheep sector. That is part of what is being dealt with in the output from the Curry commission, both in the establishment of an English Collaborative Board and in the Food Chain Centre which we have established.

§ Baroness Byford
My Lords, I remind the House of my family's farming interest. I should also like to push the Minister further on the issue. He has talked about the medium term, the Curry report, and the other reforms for which we are waiting. Frankly, however, many farmers—but particularly small family farmers—are going bust and have no time to wait. Therefore, while we are waiting, how will the Government ease back on some of the emerging regulatory measures, lessen the paperwork that burdens all farmers, and ensure fair competition so that our farmers can compete fairly with other European colleagues?

§ Lord Whitty
My Lords, I regret to say that many of the noble Baroness's requests either are, or help towards, achieving medium-term solutions. The regulation process certainly needs to be rationalised, both in the number of regulators with which farmers must deal and in the ease of access to the regulations. We also need to simplify the relationship between UK and European regulations. However, the regulatory burden is not the essential problem of farming. Farming's essential problem is that farming production has been distorted by the common agricultural policy and other pressures on farming and that it does not meet the needs of the ultimate consumer. That is what we have to address, that is what the Curry commission pointed to, and that is what the Government are pursuing.