Organic Food and Farming

HC Deb 05 July 2000 vol 353 cc64-84WH

11 am

Joan Ruddock (Lewisham, Deptford)

I am grateful for the opportunity to introduce a debate on Government support for organic food and farming. I am only sorry that it coincides with the Select Committee on Agriculture's taking evidence in its inquiry into organic agriculture. Perhaps that merely proves the subject's topicality.

My interest is long-standing, and was greatly increased by my involvement with Sustain, the coalition of organisations that drafted the Organic Food and Farming Targets Bill. I first raised the issue in the House as a ten-minute Bill in the previous Session, and the hon. Member for North Cornwall (Mr. Tyler) introduced it this year as a private Member's Bill. I pass on his apologies for his absence for the early part of the debate; he hopes to join us later.

I acknowledge the Government's support for organics, and especially the interest shown by my right hon. and hon. Friends. Last year, more than £11 million was allocated to farmers who wanted to convert to organic production; in 1997, the figure was just £1 million. I was delighted by last month's announcement by my hon. Friend the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food that a further £140 million will be made available over the next seven years.

The number of farms that have converted has trebled. In 1994, there were only 715 certified organic farms in the United Kingdom; by November 1999, there were more than 2,000. Research funding has increased, too. I do not know the details of today's announcement by my right hon. Friend the Chancellor of the extra £1 billion for science, but I hope that some of it might find its way into the sector.

As in many other aspects of Government policy, much has been done, but there is much more still to do. The Government's declared policy and strategy is to expand organic farming in an open-ended way as far as the market will allow. I must tell my right hon. Friend that there is great scope.

UK farmers currently supply only 30 per cent. of the organic market—a market that is set to treble by April 2003. Given such a rapidly expanding market, there is an urgent need for more research, for expansion in certification capability and for infrastructure building. Much of the demand for organic produce stems from objections to genetically modified foods. Yet organic farming is set to receive 1.8 per cent. of the research budget allocated to agriculture this year, while biotechnology and genetic modification will receive more than 23 per cent. That equates to £2 million for organic farming and £26 million for biotechnology research, although organic farming has a huge market, and GM foods almost none.

I hope that my right hon. Friend the Minister of State will take the opportunity to tell us how she plans to increase the amount of organic food grown in the UK. Demand is already growing at 40 per cent. per year, and Iceland's welcome decision to go 100 per cent. organic, along with plans to set up dedicated supermarkets all over the country in the next four years, suggests an even greater acceleration. The irony is that that demand cannot be met by crisis-ridden UK farmers, as the organic farmers scheme ran out of money eight months ago and will not reopen until April next year. Farmers will naturally hold off until incentives are in place, while other countries take advantage of our growing demand.

The Government's information line has received more than 2,000 inquiries about conversion to organics while the scheme has been closed. Can my right hon. Friend give any encouragement to those who are seeking to convert now? Are there any prospects of additional funding that could enable her to give guarantees of retrospective funding for farmers who could start converting before April 2001. I also invite my right hon. Friend to give us her estimate of market demand and the financial support necessary to achieve the Government's objective of meeting that demand. She will know that I, and the supporters of the Organic Food and Farming Targets Bill, estimate that £90 million per annum, or £70 million more than has been promised, would be necessary for English farmers in the new organic farming scheme if the targets in our Bill were to be met.

I now turn to the wider picture. The current EU average for the percentage of land farmed organically is 2.2 per cent., so we can be pleased that the UK figure of 3 per cent. is above that target. That is partly due to the Government substantially increasing the amount available for conversion. However, we are nowhere near the top of the league table for European countries. In Sweden, more than 11 per cent. of the land is organically farmed. In Austria the figure is 10 per cent., and in Denmark and Finland the figure is around 6 per cent. Some—but not all—countries have had a longer period of conversion, but there are significant funding differences. First, the total funding that is paid to organic farmers in the UK is lower than in many other EU countries. Secondly, two of the 14 countries also pay on-going maintenance payments to farmers after the conversion period has ended. I suggest that we are considering a straightforward competition issue here, which my right hon. Friend might use in any conversations with the Treasury. I would be grateful for her comments on that.

Finally, UK organic farming is at a comparative disadvantage because the four European countries with the most organic farming are those that have set targets and developed a strategy to achieve them. That is no coincidence. My hon. Friend the Parliamentary Secretary has acknowledged that targets can be useful in terms of fixing aspirations and underlying commitment. I guess that our competitors agree.

Organic farming straddles so many sectors and Government Departments that it is increasingly clear that its sustained and balanced development cannot be achieved without one clear target for all interested parties to work towards. Denmark made no fewer than 65 recommendations in its action plan, which resulted in increased investment in research and training, increased agri-environment support and the removal of barriers to increased organic production. We need to do the same. We need to examine the barriers to the development of the organic sector and find ways to overcome them. That need not mean extra Government funding in every area. In some cases, the Government could simply act as a catalyst, analysing problems and promoting market support.

What should the Government do to benefit from increased organics demand? How can the Government put the UK among the best in Europe, rather than it being just one of the rest? Many of my right hon. and hon. Friends agree with me that the Government should adopt a target based on projections for the market. We believe that the market will require 30 per cent. of agricultural land to be organic by 2010. A strategy should also be developed to achieve that target, as suggested in the Organic Food and Farming Targets Bill, as proposed by the hon. Member for North Cornwall. The Government's strategy is to expand the organic sector only to the extent that the market will accept. That clearly has an undeniable logic, but it is far too passive. Even a strategy designed to follow the market has already fallen way behind it. Setting targets and a strategy to meet them has many advantages, as the experience of other countries demonstrates.

Most of us believe that farming in this country is in crisis, and farmers have been encouraged to get themselves out of it through Government plans to help them diversify. The last thing farmers need is to plan to diversify by converting to organic farming, only to find six months later that the Government's money has run out again. That could result in financial ruin, and farmers will clearly not undertake the risk. They need to have confidence in the sector, and they need to see that the Government have a strategy and a clear direction.

We need to change from an organic sector that is developing in fits and starts, grinding to a halt when money runs out, to one that is set on a sustainable course of growth. A strategy to ensure that would need to be based on analysis of past demand and trends to predict demand from farmers and consumers. Enough money could then be allocated to the organic farming scheme to guarantee its continuity. The confidence of farmers and the industry in the sector would be raised enormously by a clear Government commitment to targets and a strategy to achieve them.

Such a strategy would also reduce imports. As a result, our farmers, wildlife, environment and economy would begin to benefit from the increased demand for organic production. The Government have found targets useful for procuring progress on many other subjects, such as poverty reduction. Why should organic food and farming be any different? Increasing organic farming through a target will not distort and restrict Government priorities. Instead, it will help to deliver current Government objectives on other matters, such as the environment, health, jobs and animal welfare.

The benefits of organic farming are now being well documented, but I would like to emphasise a few of them. There are major biodiversity benefits. Wildlife figures are plummeting, especially in farmyards, which is a major Government concern. Research carried out by the British Trust for Ornithology found that populations of most farmland bird species were higher on organic than conventional farms. That is one of the main reasons why the well-respected Royal Society for the Protection of Birds supports the Organic Food and Farming Targets Bill.

There are human health benefits too. Organic food is less prone to synthetic chemical residues. For example, a quarter of conventionally grown new and salad potatoes tested for pesticide residues in 1998 were found to contain them, but none of the organic potatoes tested did. The Ministry of Agriculture, Fisheries and Food still advises the peeling of fruit and vegetables because of concern about pesticides. The continued use of lindane in this country is a specific worry, due to its link to breast cancer. Male fertility levels have fallen by about half since the second world war, and a new Dutch study suggests links to pesticide exposure. The steady rise of food poisoning costs between £1 billion and £3 billion a year, and is thought by many to be caused by some of the methods used in intensive food production. No agriculture debate can take place without reference to the BSE crisis, which cost £4 billion and the loss of 37,000 jobs, while the organic sector was BSE-free.

Organic farming also has benefits for the economy. It is estimated that between 10 per cent. and 30 per cent. more jobs can be created in organic systems. Importantly for the Government, organic farming, through delivering those benefits, eliminates some of the enormous hidden costs of conventional production, which have been estimated by Professor Jules Pretty of Essex university to be about £2.3 billion a year. Water companies estimate that it costs around £120 million a year to remove pesticides from drinking water. I urge my right hon. Friend to attempt some audit to find out how much a widespread take up of organic farming would reduce costs to the Treasury and other Departments and organisations, such as the national health service.

I tabled early-day motion 51 in support of the Organic Food and Farming Targets Bill, which will target 30 per cent. of land to be organic by 2010. That early-day motion has been signed by 221 right hon. and hon. Members. In addition to that support, 71 groups representing more than 3 million people within their membership, also support the Bill. All sectors of society are represented in those groups, as are many private-sector organisations, including four of the largest supermarkets—Asda, Sainsbury, Waitrose and Marks and Spencer. The British public clearly want to green not only the fringes, but all of agriculture, and I believe that it is time for the Government to catch up with them.

The time is right for a total re-evaluation of Government agriculture policy. It would cost £90 million a year to ensure that the targets in the Bill were met in England. Although that represents only 3 per cent. of the £3 billion being spent under the common agricultural policy, it would be a highly constructive investment for the agriculture industry. In only a few years, there has been a colossal change in public attitudes to food standards, animal welfare and the environment. Food processors and retailers have been quick to respond.

As someone who buys as much organic produce as I can find in my local Sainsbury and Tesco—sadly, there is no local Waitrose—I am conscious that the supermarkets are monitoring my purchasing patterns. I am the target of mailshots that give me increasing amounts of information about the organic products that are available so, for a change, I am delighted to receive junk mail.

There is clearly a risk that expansion in market competition could undermine the benefits that I have extolled today. That is why the Government need to take a lead. Conservation standards and accreditation will undoubtedly become real issues in the continuing expansion, and I hope that my right hon. Friend will have something to say on those matters. Choosing organic food used to be the preserve of a tiny minority of the better-off, but today it enjoys widespread popular support. Research commissioned by Iceland, the food retailer, shows that 53 per cent. of people questioned said that they would like to be able to do a complete organic shop. Iceland mainly serves the less well-off in the community, but it has led the way in organics.

In conclusion, Madam Deputy Speaker, there will be enormous beneficial possibilities for this country if the Government give us a greater lead by embracing the targets in the Organic Food and Farming Targets Bill. I urge them to accept those targets, or some of their own devising, to ensure that we seize on the great opportunity that will deliver real health, environmental and economic benefits. Such a course of action has widespread support.

Mrs. Marion Roe (in the Chair)

Before we continue, I remind hon. Members that I should be addressed as Mrs. Roe when I am in the Chair.

Joan Ruddock

On that point, I have previously been told precisely the opposite. That is why I did not follow the previous speaker.

Mrs. Marion Roe (in the Chair)

Perhaps I should clarify the position. Deputy Chairmen have been appointed to take the Chair in this Chamber, but I have been nominated from the Chairmen's Panel. That is why hon. Members should address me as Mrs. Roe.

11.20 am

Ms Julia Drown (South Swindon)

Thank you, Mrs. Roe, for giving me the opportunity to contribute to the debate. I would like to congratulate my hon. Friend the Member for Lewisham, Deptford (Joan Ruddock) on securing the debate.

My hon. Friend mentioned that the Agriculture Committee is taking evidence, in connection with which it visited a successful and long-established organic farm in my constituency. I want to raise some points mentioned to me by local organic farmers and farmers who are trying to become organic, so that my right hon. Friend the Minister can respond. I acknowledge the huge increase in support that the Government have given to organic farming. I welcome that, but I agree with my hon. Friend the Member for Lewisham, Deptford that more help now could make a huge difference in the future.

The first and most crucial point is that money to help to convert to organic farming has stopped for this year. There is no more available until next April, which is frustrating for farmers who want to get on with the conversion programme. A farmer in my constituency has 80 per cent. of his land already covered by the conversion scheme and wants to get further involved by going 100 per cent. organic. He cannot do that because that extra 20 per cent. of the land cannot be covered by any other grant. It is a shame that someone who is enthusiastic cannot get extra support this year. When consumers are crying out for more organic food, and when farming is in such huge difficulties and has a real need to diversify, that situation seems crazy.

There is a growing demand for organic products across the board; the way in which the markets are increasing month after month, with no prospect of the demand falling back, is a salesperson's dream. More support now would make a big difference, especially in light of concerns raised over genetically modified crops and the other directions that farming might take. More support for organic farming would be widely welcomed by communities.

In organic farming, we have a golden opportunity that should not be missed. I say that for three reasons. First, Iceland has bought up supplies of organic food; that retailer would have liked to buy more from this country, but that has not been possible, so it has had to go abroad. Every month the number of GM crop imports increases, exceeding the growth of United Kingdom production in organic food. Therefore, every month the trade deficit widens. I would have thought that the Chancellor might want to consider that; perhaps he should discuss the matter with my right hon. Friend the Minister.

Secondly, the Government should invest more in organic crops because farming makes a huge contribution to biodiversity and would help to achieve the Government's sustainable development targets. As those involve the percentage of land farmed organically and change in the number of farmland birds, having more organic land would help us to achieve them. The Soil Association recently produced a report containing not anecdotal, but real evidence that organic farming contributes to biodiversity. The report brings together the findings of nine studies on biodiversity and organic farming. Lowlands were the main focus, but the study's conclusions can be broadened to other areas. Organic farming was compared to conventional farming systems.

The studies found greater levels of abundance and diversity of species on organic farms. There were five times as many wild plants in arable fields and 57 per cent. more species. Several rare and declining wild arable species were found only on organic farms. As to bird species, 25 per cent. more were found at field edge; 44 per cent. more in field in autumn and winter; and there were 2.2 times as many breeding skylarks.

Greater biodiversity was found in vertebrates; there were 1.6 times as many arthropods, which are important as bird food; three times as many non-pest butterflies in crop areas; one to five times as many spiders and one to two times as many spider species. On crop pests, there were significant decreases in aphid numbers and no change in the number of pest butterflies. Those significant findings provide concrete evidence that organic farming makes a positive contribution to biodiversity.

Farmland represents 76 per cent. of the UK's total area, so organic farming can clearly make a major contribution towards the conservation of our biodiversity. Organic farming is not limited to species that we can see in the fields. It also offers huge biodiversity benefits for soil and aquatic ecosystems, while reversing the dangerous trend of falling agriculture and genetic diversity. For all those reasons, we should support a major increase in organic farming.

Another reason for seizing a golden opportunity and finding more money from every budget in MAFF relates to jobs. The Government rightly made the creation of jobs a priority and succeeded in doing so through the new deal. Conversion to organic agriculture could create even more jobs. Sustain, the alliance for better food and farming, estimates that 17,000 more full-time jobs—in rural areas, significantly—could be created. Job creation schemes can be less successful in rural areas, so rural employment is important.

It is widely acknowledged that organic farming creates more jobs—by somewhere between 10 and 30 per cent. Sustain adopted a middle course and estimated that 20 per cent. more agricultural jobs could be created. Increasing the current 3 per cent. of land farmed through organic methods to the 30 per cent. target in the Bill that we all support would create an additional 17,000 jobs—and perhaps even more down the line, through local markets and so forth. That should not be ignored; it could make a real difference.

Finally, I should like to raise a couple of specific issues mentioned by farmers in my constituency. The first is from a farmer who wanted to convert: he received his grant payment, but decided for several reasons not to proceed. One reason was that he did not own his land: he was a tenant and, although the grant came to him as a person, the land was separate from him. If the land were not farmed for the requisite number of years, he, as an individual, would have to pay back the money to the Treasury.

That is unfair because part of the problem is outside his control. If something went terribly wrong, and he had to move off the land, he would be in danger of having to pay back the grant if the next tenant did not want to farm the land organically. Will my right hon. Friend confirm that there might be some flexibility in future to accommodate circumstances in which a farmer unexpectedly cannot continue to farm the land and someone else takes it over?

The farmer's second problem was that the banks put a lot of pressure on him, querying whether the market would exist for organic food. Banks are known to be prudent but that is taking prudence to extremes. They argued that because Iceland is buying up the market, prices would drop. Iceland has said that it does not want to drop the support that it gives to farmers and that it does not intend to drop its prices. The banks, however, were using the mere fact that it has woken up to this and has quite rightly bought up some of the organic supply to argue that they do not know what will happen in future. That is regrettable. There is obviously some concern out there.

The other concern, which has been raised by a dairy farmer who is converting in my constituency, relates to the different time limits. It takes a minimum of two years and three months to convert from milk to organic in the UK. In some other European countries it is possible to convert in three to 18 months. Denmark and the Netherlands were mentioned as areas where conversion takes place more quickly. Surely there should be a level playing field. Is it perhaps a question of different accrediting bodies in different countries? Will we get to the point where farmers in Britain go to Denmark or the Netherlands to ask for accreditation? We could end up with two different definitions of organic in this country. Consumers want to know that a product is genuinely organic and properly registered. They would rightly expect organic food from France and organic food from the Netherlands to be the same as that from this country. Any comments that my right hon. Friend the Minister can make on that would be much appreciated.

I am pleased that we are having this debate. It is very timely as the Select Committee on Agriculture is in South Swindon today. I congratulate the Government on everything that they have done on organic farming. There is a golden opportunity: please can we find some more money to convert more farms to get closer and closer to that target of 30 per cent. of land farmed organically in this country?

11.32 am

Mr. David Drew (Stroud)

I am a member of the Agriculture Committee, which is taking evidence at the moment, so, had I not been given leave of absence, I should trying to be in two places at once. I should preface my remarks by saying that I do not intend to go into our investigations, other than in general terms. The Committee is fortunate to have the evidence of the House of Lords inquiry, which looked into organic farming and the European Union a couple of years ago, and I shall dwell on some of the ideas contained therein. A lot of evidence has already been provided by my hon. Friends the Members for Lewisham, Deptford (Joan Ruddock) and for South Swindon (Ms Drown) and I shall not go over that again. Instead, I shall raise some points that my right hon. Friend the Minister of State might want to consider before she and her ministerial colleagues give evidence to the Select Committee.

I support the Bill proposed by the hon. Member for North Cornwall (Mr. Tyler). It is important that we stand up and argue the case for organic food production. That case is clearly gaining momentum, as shown by Iceland's decision and that of millions of individual consumers. They have decided to go organic in part because of the problems with genetically modified organisms—the scandal I could say—and, more particularly, because of the BSE difficulties. There is also a positive aspect, which is that people genuinely want to know what they are eating, where it comes from, and what the possible impact on their own health and general disposition will be. That is a jolly good thing.

One of the arguments against the Bill is that its supporters are setting unrealistic targets that interfere with the natural market mechanism, which is not the right way to go about the problems: if the movement is driven by the consumer and the retailer responds, why are targets needed? That argument is wrong in two respects: first, there are stop-start problems, so there should be some smoothing of the conversion pattern, and to set a target for annual improvements enables the allocation of appropriate sums for the purpose. Secondly, we should take a more humane and sensible approach to agriculture per se than is possible in the madness of the common agricultural policy. We want to discuss the matter with other European Union member states and within the World Trade Organisation, so that we can learn the extent to which organic farming can progress, and how it can be measured and encouraged.

Much of the evidence accrued on organic farming is anecdotal. An objective study of its environmental, economic and consumer benefits is needed; a study should also be made of the controversial subject of health benefits. I am in favour of organic farming, but I am not necessarily against conventional farming. There should be no trade-off. The notion that organic farming is good and conventional farming is bad is not the way forward. Objective research can benefit everyone. Besides helping those who wish to go into organic farming, research will also drive up standards in conventional farming, which will be no bad thing. There is much evidence for the benefits of integrated crop management schemes and reduced use of pesticides and fertilisers.

I am confused by the regulation and certification processes. Evidence to the House of Lords inquiry showed that the United Kingdom register of organic food standards—UKROFS, as it is lovingly called—is under pressure. There is a dispute about the role of the state in setting good standards for organic food, and it is argued that UKROFS should become the regulator in such matters. Self-regulation may be all very well, but the role of advocate must be separated from that of regulator if organic farming is not to fall into the same traps as those to which conventional farming has fallen victim. I hope that my right hon. Friend the Minister of State will comment on the role of the regulator.

Finally, I want to give the diversity of the organic movement a quick plug. I have in my constituency a biodynamic farm, Koliska: biodynamic farming is a pure form of organic farming. People use the term "organic farming" to suggest that it entails a massive changeover to a Soviet-style approach, but it is not like that at all. Organic farming is a philosophy and those who believe in it know that there are different types of organic farming, of which biodynamic farming is one.

The debate is timely both because the issue is being investigated by the Select Committee on Agriculture and because of a consumer-led upsurge of interest. We are right, as parliamentarians, to tease out some of the issues. If we are not careful but simply allow events to unfold and arrangements to fall into place, adverse consequences may follow. I support the Bill introduced by the hon. Member for North Cornwall and I congratulate my hon. Friend the Member for Lewisham, Deptford on securing today's debate.

11.40 am

Mr. Colin Breed (South-East Cornwall)

I welcome the opportunity to make three brief points on matters that are almost side issues, but which I believe are pertinent to the thrust of the debate.

First, organic farming requires a somewhat higher level of skill than is needed for conventional farming. Therefore, it is essential that we put enough resources into training courses, particularly in places such as Duchy college in my constituency, which now offers people involved in farming more opportunities to acquire the additional skills needed to manage organic farming properly. I hope that we will not forget that it is necessary not only to encourage new entrants to organic farming, but to give those farmers that want to change their methods the opportunity to hone their farming skills.

Secondly, many people are switching to organic farming because they can obtain premium prices for produce, so the Government should recognise that the premium should not be eroded. We must ensure that new entrants' margins meet the expectations on which they base their business plans, and that can, in part, be achieved by not allowing supermarkets to attain a dominant position. At present, supermarkets are scrabbling around to find organic produce and they are prepared to pay higher prices than they would normally expect to pay. However, as supply increases to meet demand, the supermarkets will slowly and inexorably reach a dominant position. I hope that the Competition Commission report due out shortly will deal with fair trading contracts, which ensure a fair contractual arrangement between primary produce growers and retailers. We cannot allow the supermarkets to reach a dominant position from which they can squeeze farmers and growers, as they have done in other sectors dependent on supermarket trading.

Thirdly, the danger grows that unscrupulous traders will jump on the wonderful bandwagon and threaten the integrity of the organic farming movement by passing off non-organically grown produce as organic to obtain a much higher price for it. We must ensure that the powers of trading standards organisations are strengthened so that only truly organic produce can be presented as organic. If the public become less supportive because they feel that they are being conned, the process of regulation will be undermined. Trading standards organisations need the powers and the resources to assure consumers that when they choose organic produce, they get organic produce.

11.43 am

Mr. Paul Tyler (North Cornwall)

I am delighted to contribute to the debate, but I apologise to you, Mrs. Roe, to the Minister and especially to the hon. Member for Lewisham, Deptford (Joan Ruddock) for being a few minutes late, as I was involved in a Select Committee.

If I am the adoptive parent of the Organic Food and Farming Targets Bill, the hon. Member for Lewisham, Deptford undoubtedly is its godmother. I pay tribute to her for all her work and for succeeding in securing the debate. I have not the slightest doubt that if that Bill does not reach the statute book, she, other hon. Members and I will redouble our efforts to ensure that we make real progress.

I am delighted that the Bill has attracted cross-party support. As the Minister will know, it is supported by not only a number of former Ministers, such as the right hon. Members for Bridgwater (Mr. King) and for Chesterfield (Mr. Benn), but a cross-section of all parties and people of wide experience in agriculture and related sectors. I am interested in the subject for a number of reasons, not least because my constituency is agricultural and is suffering a great deal as a result of the decline in mainstream agriculture. Organic food and farming represent an extremely important opportunity for diversification by a hard-hit part of the rural economy. I pay tribute to other hon. Members, some of whom have spoken this morning, who do not have a huge number of farmers in their constituencies. However, the Bill has attractions for us all. I have the pleasure of being a neighbour of my hon. Friend the Member for South-East Cornwall (Mr. Breed), who is our party spokesman on food and fanning. In the previous Parliament, I was responsible for that policy. Therefore, I approach it with some experience.

I take as my text—having been properly brought up in a churchy family—the important statement made by the Prime Minister to the annual general meeting of the National Farmers Union on 1 February. He said: Our plans envisage a trebling of the area under organic farming by 2006. I have discussed with Ministers whether that is a target, pledge, promise or merely an aspiration. I do not want to play semantic games. I take that statement as an encouraging sign. I think that all hon. Members will acknowledge that organic food and farming is an idea whose time has come. We may differ on the mechanisms by which our objective is achieved. However, we are all concerned to ensure that our fellow citizens, who are crying out for more choice of organic food, get that choice, with the assurance of quality, integrity and, if possible, that the food comes from British sources. I emphasise that point.

At present, British farmers supply less than a third of the organic food that appears on our retailers' shelves. I participated in an extremely interesting conference on 14 June, organised by Marketing Week. As far as I was aware, there were only one or two farmers in the audience of 100, but the representatives of the retail sector were there, clamouring for more choice, sourcing and supply from British producers. That is the challenge that faces the Government and, indeed, Parliament.

For reasons that have been well advanced by hon. Members, it is incredibly important that we enable British producers to meet the demands of the market. It is important to get a sense of the relative investment that has already been made. The hon. Member for Stroud (Mr. Drew), to whom I pay tribute for being a dogged defender of the organic sector of British agriculture and an effective champion on its behalf, referred to research. Organic farming is set to receive 1.8 per cent. of the total research budget allocated to agriculture in the current financial year, while biotechnology and genetic modification will receive £26 million. Organic food has a huge potential market. As we all know, genetically modified food has a very small market and it is probably declining. I would like to know how we should address that discrepancy.

Retailers are making it only too clear that the discrepancy in demand is huge. Unless we can speedily bridge the balance of trade gap, to which the hon. Member for South Swindon (Ms Drown) referred, we shall have a difficult problem. The evidence of retailers speaking at the conference that I mentioned is that they will simply have to source elsewhere.

I take to heart the comments made by a number of hon. Members about quality control. Perhaps the Soil Association can be reasonably confident of comparable standards in other EU states, but I am afraid that we cannot be entirely confident about the current monitoring of food imported from other parts of the world. I imply no criticism—that is a fact of life. However, it is clear that we cannot rigorously monitor production methods and the supply chain in distant countries.

It is therefore extremely important that we investigate quality control on imports. Conservative Members have raised this issue in this Parliament, and I support them in that regard. I raised it in the previous Parliament, when the Conservative party was in government and could have made a start on the problem. There must be quality control, so that British farmers can be confident of—to repeat the expression used by the hon. Member for South Swindon—an even playing field.

I shall speak only briefly, because I want to give the Minister maximum time to respond to this debate. There has been no full statement on the Government's position in recent months, but I realise—and hope—that things might be changing. I endorse everything said by the hon. Member for Lewisham, Deptford, who opened the debate, and other hon. Members, but I should add two specific points that relate to my own part of the country, the south-west.

First, as my hon. Friend the Member for South-East Cornwall said, the Duchy of Cornwall has taken a pioneering role, and I welcome the Duke of Cornwall's setting a practical example of what can be achieved. I hope that it will not be taken amiss if I describe the Duchy of Cornwall as a large operation—it is certainly a lot larger than most farms in my constituency. It is easy for such land-owning organisations to take a long view, but given the current state of the market and the profitability levels to which my hon. Friend the Member for South-East Cornwall referred, it is extremely difficult for smaller organisations to take a risk on conversion. In the light of the hiatus in support to which reference was made this morning, diversification by small farmers, who are the backbone of the rural economy in the south-west, presents them with a major problem.

We must put the figures in perspective. Last month, when I asked about the total amount paid under the common agricultural policy to farmers in the United Kingdom in 1999–2000, and what percentage of that money was paid to organic farmers, the Minister produced the following figures. Under the CAP, total forecast UK and EU expenditure on national grants and subsidies was £3,172 million, but the figure for the organic aid scheme was just £11.35 million. I would argue that that discrepancy is too great.

The second issue is of particular significance to the south-west, but it is also important elsewhere. In a number of areas, the relationship between methods of agricultural production and various forms of environmental protection is very close. That is true not only in the south-west but in East Anglia, where pesticide residues in the water supply present a major problem. They raise health concerns, but they are also expensive to deal with; indeed, they could even prove a major problem for water undertakings and water consumers in your constituency, Mrs. Roe.

Water charges in the south-west are already extremely high. I should hate to think that we had to pick up a bigger bill for environmental protection and reduction in pollution simply because we failed to invest positively in a better form of agricultural production. That is an important issue, to which reference was made earlier. The rural White Paper, which is due in a matter of weeks, must contain a balance sheet showing the investment in organic food and farming and the benefits of reduced expenditure in other Departments because of the value that organic food and farming can give the rural economy.

In summary, the Bill is a win, win measure. There will be no losers in agriculture, because farmers who continue to farm conventionally will not lose out if some of their neighbours move over to a different form of production. Indeed, there could be a useful spin-off for conventional husbandry at a time when many farmers are really up against it and are seeking opportunities to diversify. There would be huge advantages for them if they could obtain this support, especially after their first conversion. Maintaining and sustaining the organic conversion is so important. Other European Union countries have been a great deal more successful than we have in that area, which is why we are comparatively far down the league table.

Major environmental advantages will be gained by promoting biodiversity, as the hon. Member for South Swindon said, and by reducing pollution and its related costs. There will be huge health advantages for consumers. I have tabled many questions on that subject. I regret that, so far, the health advantages have not received the attention or the research investment that one would have hoped. Water companies will also enjoy great advantages, at a time when they face increasing problems relating to chemical residues.

Rural communities will benefit from the employment opportunities. I would not go to the stake over the figures produced by SUSTAIN, but there are clear advantages in a more labour-intensive form of agriculture. Anyone—such as Mrs. Roe and I—who avidly listens to "The Archers" will know that Tony and Pat Archer work themselves into the ground. Sometimes, I think that they slightly overdo it. If they went to a real, modern organic farm, they would find that it was not quite as bad as we are given to understand.

The biggest single change will be the huge advantage for food retailers and processors. Market demand has leapt in recent months, and I was told by one of the most revered forecasters and analysts in retailing, at the conference to which I referred, that that increase in demand is unprecedented. Nothing has ever hit the retail sector with such speed and on such a scale as the demand for organic produce.

Last but not least, the Government are in a win, win situation. Having set their hands to this plough, they will reap great benefits if they are prepared to go the whole way, and to set clear targets and strategies for the development and expansion of this sector. I have noted hundreds of targets in publications from various Departments. There are so many that I have not managed to count them. Even the Ministry of Agriculture, Fisheries and Food has more targets of various kinds hidden away. I have no doubt that when the rural White Paper emerges in a few weeks, it, too, will contain targets. Those who have sponsored my Bill simply ask that there should be a target for the expansion of organic food production in this country. We have set a realistic time scale of 2010, and we look forward with considerable appetite—and, we hope, cheerful digestion—to the approach that the Minister will take.

Finally, if we can do anything to assist the Minister, to strengthen her arm and to give her any support and encouragement that she needs in terms of another statement that the Government will make shortly on the comprehensive spending review, she has only to ask us.

11.59 am

Mr. Malcolm Moss (North-East Cambridgeshire)

I congratulate the hon. Member for Lewisham, Deptford (Joan Ruddock) on securing this important debate.

Frankly, the Government's record to date on organic farming is a sorry one. It is characterised by an underestimation of demand, incompetent planning and inadequate resourcing. The Minister of State will doubtless claim that the Government have greatly increased funding for organic farming under the organic aid schemes and the organic farming scheme. However, the Government are being less than honest with us because they compare the situation with that in May 1997, when British consumers' demand for organic produce exploded. Before May 1997, the organic market was tiny, but that did not stop the then Conservative Government setting up the organic aid scheme as far back as 1994.

The real question is whether the Government have capitalised on the opportunities of the organic boom that is taking place or thrown them away and held back the British organic farming sector at a crucial phase of its development. As has already been said, the organic farming scheme in England opened for applications in April 1999. The Government set a budget of £6.5 million for 1999–2000 and of £8.5 million for 2000–01. However, they massively underestimated demand from the farming community. That two-year funding ran out in six months because the scheme was over-subscribed. In October, the Government pulled the plug and said that no more money would be available until April 2001. Incredibly, they slammed the door on the growth of Britain's organic farming sector just when demand for organic produce was booming.

In an excellent briefing paper sent to hon. Members, the Soil Association stated: To us it seems unacceptable that while UK agriculture is undergoing such a serious crisis and organic farming is one of the few sectors with an undersupplied and growing market, that its development in the UK is now on hold and foreign producers are taking advantage. Late last October, the Government were shamed into providing £10 million in additional funds for the organic farming scheme, but that was sufficient only to clear the backlog in applications. They have since confirmed that they will not consider further applications until April 2001. By shutting off the flow for the new conversion payments for 18 months, they have ensured that foreign producers will tighten their grip on our organic market.

The Government say that they will reopen the organic farming scheme in April 2001, when they will start providing £18 million or thereabouts each year for the sector through the England rural development plan. During that plan's seven-year period of operation, the Government are committed to making £140 million available through the organic farming scheme. The Soil Association says that that is not enough. On 15 June 2000, Simon Brenman stated in Farming News: At least £25 million a year is needed to meet the demand. It is interesting to note that £25 million was needed to satisfy demand from farmers during the six months in which the organic farming scheme operated before it was shut down.

Spending under the England rural development plan will amount to £140 million over the next seven years. The Soil Association calculates that that will take the level of organic farming to about only 8.5 per cent. in England by 2010. In view of the fact that domestic supply currently constitutes only one third of the market, which is expected nearly to triple by 2003, there should be enough funding to increase current supply, in the Soil Association's estimate, by 10 times by then if the Government's aim is to be met. Extrapolating forward, the Government should plan for 30 per cent. to be converted by 2010. In the Soil Association's calculations, the English scheme would need annual funding of £87 million a year. The Soil Association estimates that the Government's suggested figures are wildly out.

Mr. Drew

Is the hon. Gentleman saying that the Opposition are committed to the 30 per cent. target and will fund it accordingly?

Mr. Moss

I do not have much time, if the Minister is to respond.

The signs are that the Government are no less complacent now than they were at the outset of the organic farming scheme. Commenting on the first six months, the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food told the Farmers Guardian: There was an enormous rush. But I suspect we have reached a peak in those two years. We think the new money is enough to manage a careful expansion of the sector. We must have a steady increase, because if it is too sudden it could damage the market. Such comments are patent nonsense. For a start, the peak was not reached in two years, but in six months. In the remaining 18 months, until the OFS is reopened, it is likely that demand for conversion payments will accumulate, not dissipate. Furthermore, as demand for organic produce is increasing at 40 per cent. a year, while British supply increases at only 25 per cent., failure to step up the rate of organic farming will weaken further the share of the domestic market held by British farmers. As a final twist, the Government have confirmed that farmers who start conversion outside the OFS—that is, those who convert during the 18 months for which the scheme is closed—will not be eligible for OFS payments, once the scheme reopens.

The Government's support for organic farming is more than a matter of finance, although the Government fail in that respect, too. Little has been done to control imports of food that calls itself organic, but which falls well below the organic standards legally required of British producers. Most importantly, the Government's incompetent policies on genetically modified crop trials have placed the future of the British organic sector in some doubt. Organic farming is threatened by the Government's insistence on pressing ahead with the commercial planting of genetically modified crops, before research into their environmental impact has been completed. A survey by the National Pollen Research Institute puts the risk of cross-pollination as high as one in 93. Organic farmers have the right to farm without such a threat from neighbouring farms. Indeed, the Government do not seem to care about genetic pollution of GM crops. On 18 January 2000, Baroness Hayman told the Select Committee on Agriculture: The organic movement has to recognise and find a way of living with…contamination from conventional crops. The organic market is one of the fastest growing sectors of British agriculture, as it attempts to meet consumers' demands for new food sources. Organic farmers should benefit from common agricultural policy reforms that encourage less intensive and more environmentally sustainable methods. All European Union member states support farmers who convert to organic methods, and we feel that the Government should match the help afforded by their continental counterparts. The next Conservative Government will fund increased payments by redirecting the rural development regulation and seeking our share of the redistribution of the tobacco subsidies paid under the CAP. The research and development budget for agriculture has been skewed by the Government's overhasty endorsement of genetic modification. We would redirect the £120 million research and development budget and increase the £2.1 million allocated to organic farming. The Government's mismanagement has obliged farmers to spend money to start the conversion process, only to learn that funding has run out. The next Conservative Government will reform the system to guarantee support to suitably qualified farmers, before they embark on conversion.

As I said, the Government's record on organic farming is sorry indeed. The Soil Association believes that the Government fail on three counts, and we concur with some of its findings. First, there has been no forward planning. Secondly, specific problems have not been addressed—for example, the poor conversion rate in the horticultural sector and the fast-growing imbalance between conversion of the livestock and arable sectors. Thirdly, there are no targets. It is no coincidence that the countries with the highest levels of organic farming in Europe have all adopted targets and a strategy to meet them. Based on an analysis of targets in other countries and the development of the market here, the Soil Association believes that a target of 30 per cent. by 2010 is desirable and practicable. The Organic Food and Farming Targets Bill proposes such a target.

Wherever one turns and whoever one listens to, this is a major opportunity for British agriculture, but the Government are failing agriculture by failing to support the embryonic and fast-developing organic sector.

12.10 pm

The Minister of State, Ministry of Agriculture, Fisheries and Food (Ms Joyce Quin)

We have had an interesting and worthwhile debate with a number of thoughtful speeches. I welcome the opportunity to discuss an issue that is important to the future of agriculture and food production.

I pay tribute to my hon. Friend the Member for Lewisham, Deptford (Joan Ruddock) for introducing the debate. The House recognises that she has considerable knowledge of the sector and that she has taken an interest in it for many years. I am glad that she and most other speakers acknowledge the greatly increased commitment to the organic sector that has been shown by the Government. Like other hon. Members, I welcome the fact that the Select Committee on Agriculture is investigating the issues. We were fortunate to have in attendance the hon. Member for Stroud (Mr. Drew), who is a member of the Select Committee; the Government look forward to the outcome of its investigations.

My hon. Friend said that I might be giving evidence to the Committee, but that is unlikely. My hon. Friend the Parliamentary Secretary, who has shown great commitment to the organic sector, is responsible for the matter in the Department, but he is away at an international conference at the moment. However, I am an enthusiastic supporter of the organic sector and more than happy to be responding to this debate.

The exception to the interesting contributions was that of the hon. Member for North-East Cambridgeshire (Mr. Moss), who speaks for the Conservative party. He could at least have recognised that we are spending more than 10 times the amount that the previous Government spent on the organic sector. It is bizarre to witness, as we so often do, Conservative Front Benchers talking about unspecified but huge increases in spending on whatever subject is under consideration when their party has an apparent tax guarantee policy based on decreasing public expenditure. The figures quoted by the hon. Gentleman this morning do not add up.

One of the obstacles to the Government's providing money for rural development generally has been that we were held back under European rules by the historically low level of funding that our country has spent on that matter and which we inherited from the previous Government. I am glad that my right hon. Friend the Minister of Agriculture, Fisheries and Food was able to increase the amount of European support for rural development measures, including organic production, by around 30 per cent. Those historically low levels; have caused us real problems when trying to reach agreement at European level on the way forward for the rural development regulation.

I hope to respond to several of the issues raised in the debate, especially the detailed points made by the hon. Member for North Cornwall (Mr. Tyler) in connection with his Bill. However, I do not have any dramatic or particularly good news to give him other than that which he has already received.

Organic production has made great strides, especially in the past two years. It has certainly caught the interest of a much wider consumer base and is well placed to consolidate and expand. This is an exciting period in the history and development of the organic movement, which holds great promise for its future development and expansion. We all know that consumers take a considerable and increasing interest in being better informed about the food that they buy. They take a much greater interest in what they eat and in the quality of food, and their considerable purchasing power can obviously effect changes in types of food consumption. The degree of that consumer interest must be regarded as a healthy and welcome development.

Consumer pressure can lead to changes in the behaviour of retailers and processors, and in recent months we have witnessed such changes. That is particularly true in respect of the sale of organic food in multiples, through which about 70 per cent. of organic food is sold. We all witnessed a great expansion in the range and quantity of organic produce that they now offer. As well as increased interest from supermarkets and multiples, there has been welcome expansion in the number of specialist outlets, for example through box schemes and farmers markets, to which reference has been made this morning. I recently visited a farmers market in London and it was good to hear the dialogue between farmers and customers, much of which focused on issues such as the safety and quality of the food on offer.

Mr. Breed

Sometimes when people want to set up a farmers market, they are prevented from doing so by an ancient charter relating to a nearby city. Will the Minister not give consideration to such matters? Is it not time to sweep away such arrangements, so that farmers markets can be established where they are wanted?

Ms Quin

I certainly accept that, in some areas, there have been difficulties arising from antiquated arrangements. It is important that we look for ways to encourage farmers markets in areas where people want to establish them. In some cases, changes in legislation are needed, and they take time, but it is sometimes possible to exploit more flexible interpretation of planning guidance and planning rules. I agree that it is a matter to which we should give our attention.

One of the commitments made at the farming summit on 30 March was to work with planning authorities, especially on issues such as farm diversification. Farmers markets are an important part of the diversification of British agriculture, so we need to address and solve the problems that have frustrated the farmers market movement. None the less, we should rejoice in the fact that the number of farmers markets has increased so dramatically: from having almost no farmers markets a couple of years ago, we now have about 100 of them flourishing and doing well, and the movement continues to gather momentum.

Farmers are obviously seeking new ways in which to sustain their livelihoods. Those in the United Kingdom have become more environmentally aware and sensitive in recent years, in part because of financial incentives that encourage them in that direction. It is also part of a wider trend that reflects the growing desire in society as a whole for environmentally benign and environmentally friendly methods of production.

Ms Drown

Is my hon. Friend conscious of the distinction between other agri-environment schemes, which are funded continually and which, I am glad to say, farmers throughout the country have taken up, and organic farming, which does not receive any more funding once the farmer has converted? Will the Government consider that issue?

Ms Quin

Organic farmers are eligible for participation in other environmental schemes and some take advantage of such provision. We should not consider aid to organic farmers solely in terms of the organic farming scheme or its successor under the rural development regulation. Several agri-environment and other schemes under the rural development regulation are of interest and benefit to organic farmers.

I stress the worthwhile nature of agri-environment schemes. Yesterday, I visited the Royal show, where I was pleased to see some of the pilot work that is being done in arable stewardship, by which I mean arable farming that promotes bio-diversity, the habitats of farmland birds and a tremendously welcome array of wild flowers and plants. It was a pleasure to see fields of colourful poppies and other flowers that were once prevalent in the English countryside, but which have disappeared in the post-war years. It is important that organic farmers consider such schemes, as they can have a real impact on British agriculture and on the countryside generally.

The demand for aid under the organic farming scheme shows the considerable interest of farmers in organic farming. Organic farming is not necessarily an easy option: it demands commitment. It is not simply a matter of not doing things—for example, not applying synthetic pesticides, herbicides and fertilisers—but one of disciplined and positive management. Close attention must be given to the health of crops and livestock and to the early management of pests and diseases. Above all, it requires the adoption of an holistic approach to the farming enterprise based on an effective rotation that ensures soil health and fertility, and many farmers have grasped that approach with enthusiasm. None the less, organic farming certainly needs to be undertaken with a sense of responsibility and commitment.

The Government's general ambition is for British farming to be prosperous, forward-looking and sustainable. It must be competitive and sufficiently flexible to be able to respond quickly and effectively to market changes and consumer needs.

Mr. Moss

Before the Minister finishes, will she enlighten the Committee on the Government's forward-planning approach for organic farming?

Mr. Deputy Speaker (Mr. Nicholas Winterton)

Order. This is Westminster Hall, not a Committee of the House.

Ms Quin

Those are precisely the issues that I intend to address. The Government have a strategy for the organic sector that will have a positive part to play in agriculture in future. However, I accept some of the views expressed about there being a great deal more to do. The area now under organic cultivation in the United Kingdom is modest, as are sales of UK organic farms in our shops and supermarkets. I recognise the potential for replacing imports, to which many hon. Members have referred: we can supply considerable amounts of some organic produce through domestic production, but the amount of some other types of produce supplied by the UK industry is disappointingly small—I refer to fruit and vegetables, although some of them grow better in climates warmer than ours. However, I am convinced that a considerable increase in UK organic production is possible, and I hope that it will take place in the next few years.

We want organic farming to prosper and succeed. The schemes that have been in place since the Government took office have channelled a huge increase in money into the organic sector. Under the new scheme and the rural development regulation, the aid available from next year will be more than 20 times that which was available under the previous Government. That sum will increase in the next six years, which is the period of the regulation. The extra money that we have brought in has enabled us to tackle the backlog, which is important. We are aware that several farmers were frustrated by the fact that, especially under the previous Government, money was limited and that the incentive to go organic was therefore not as strong as they would have liked.

It is worth mentioning that some farmers are converting without aid. The sector is so attractive that there is a movement to go organic even among farmers who have not been successful at achieving aid so far. We are conscious of the fact that aid during the conversion period is especially important, as that is when various measures that result in a loss of income to the farm have to be taken. Despite the fact that farmers expect increased income once the conversion period is over, there is a difficult period to get through first. We have been especially eager to target aid on the conversion period, rather than on a system of on-going aid, as is the case in other European countries.

The Government have increased aid to research and development in organic farming; that support is now worth slightly more than £2 million a year, and organic farmers benefit from some of the other research programmes that my Ministry administers, for example, some of the £8 million aimed specifically at research into biological methods has a direct and beneficial spin-off for the organic sector. Public expenditure on organic research in the UK is significantly higher than in most European countries. We should welcome that, although I am not averse to hon. Members telling me that we could do more, as that is also true.

The hon. Member for North Cornwall referred at some length to his Bill in respect of targets. He will be aware of the reaction to the Bill of my hon. Friend the Parliamentary Secretary. He referred to the Prime Minister's words at the farming summit—

Mr. Deputy Speaker

Order. Time is up. We now move to the next debate, which is a standard half-hour Adjournment debate initiated by the hon. Member for Birmingham, Selly Oak (Dr. Jones).