Orders of the Day — Agriculture (Marketing Structures)

– in the House of Commons at 12:00 am on 2nd December 1976.

Alert me about debates like this

[Relevant Commission Documents: R12157/77, R/471/76, R/2208/5P and R/238/76]

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ashton.]

10.31 p.m.

Photo of Mr Edward Bishop Mr Edward Bishop , Newark

I welcome the opportunity to debate these three EEC proposals on marketing and processing, hops and potatoes. It will be useful to take these measures together since they all concern the structure of agricultural markets. Both the hops and the potatoes proposals have implications for the present United Kingdom arrangements, where our arrangements are rather different from those proposed in that we have a different form of producer involvement in the statutory marketing boards for hops and potatoes. The marketing and processing proposal is the first attempt by the Community to achieve long-term improvements in marketing structures in a planned and concentrated manner.

I will deal briefly with each of the proposals in turn, beginning with marketing and processing. When the Commission draft was first discussed in 1975, we doubted whether the measure as drafted could achieve the objectives set out for it and whether it could, therefore, represent a worthwhile use of limited Community funds. But we recognised that in certain sectors investment designed to improve marketing could benefit both producers and consumers, and the United Kingdom has, therefore, participated fully in the extensive discussion of the proposal over the last year. This has led to a number of improvements in the draft, as described in the revised explanatory memorandum submitted to the House on 26th November. In particular, a more coherent plan for drawing up programmes has emerged from discussions, and this would enable Agriculture Departments to direct investment to those areas which require priority for assistance. These areas could cover, for example, improvements to slaughter-houses, such as the programme recently announced for assistance to bring them up to standard.

So far as other sectors are concerned, the Government will be considering what arrangements will be necessary in order to ensure that United Kingdom applicants can benefit from this new Community scheme, subject, of course, to the need to ensure that assistance is sufficiently concentrated to bring lasting benefit to the agricultural and fishing industries.

I shall leave this aspect at this point and resume the theme later when I discuss our attitude to potatoes not only our attitude to the Potato Marketing Board but to marketing boards generally.

Turning now to hops, which as everyone knows are an essential ingredient of beer, but which have no other outlets, we are dealing with a draft proposal to modify an existing regulation 1969/71, which sought to stabilise the market and ensure a fair income for producers by measures such as annual income aid for growers, aid to replanting with improved varieties and rewiring hop gardens and assistance with the formation expenses of producer groups.

The Commission now considers that these measures have proved insufficient to prevent the surplus on Community and world markets which has occurred since 1973. It has, therefore, put forward draft instruments to amend the existing regime in a number of ways. In particular, Document R/471/76 would grant annual income aid by groups of varieties of hops with similar uses and qualities, would strengthen producer groups by requiring members to market their total production through the group, and would grant annual income aid only to producer groups. It would also make available aid for replanting with new varieties and rewiring hop gardens for a further two years, on condition that the area of hops benefiting from grant was reduced by at least 40 per cent. Document R/2208/76 proposes that a two-year ban should be imposed on any increase in the area under production. It also enables the Council to take measures to prevent market imbalances in advance of the harvest concerned, rather than retrospectively.

In so far as these proposals recognise the need for a more organised Community market, they are welcome, since a firmer market throughout the Community could be of considerable benefit to United Kingdom producers, whose returns depend on conditions in other producing countries as well as on the domestic market.

However, we need to reconcile our system of marketing through the Hops Marketing Board with the definition of producer group which was agreed in the original regulation drawn up before we joined the Common Market.

Photo of Mr John Wells Mr John Wells , Maidstone

Can the Minister give an indication of the value of United Kingdom hops which are exported? He referred to the prosperity of the world market being important to the prosperity of this country. Can he give an indication of how dependent our industry is on overseas markets?

Photo of Mr Edward Bishop Mr Edward Bishop , Newark

I shall be coming to that later. There is a surplus at present, and we took steps in recent legislation to deal with other aspects of the matter.

Negotiations on marketing systems and related problems are proceeding in Brussels at official level. The solution we aim for must be one that ensures that the Commission's market stabilisation proposals have maximum benefit both here and in the rest of the Community. This is important.

I turn now to the Commission's proposal for a common organisation of the Community market in potatoes. Potatoes are late-comers to the Community scene, and it may be that this is due to the problems they present in terms of marketing arrangements on a Community scale.

The production and marketing structures in Community States vary widely, and it will certainly be no easy task to find arrangements which will work satisfactorily on a Community basis and, at the same time, will not cut across the arrangements which are working reasonably well in individual member States, including this country.

The Commission's proposals have been on the stocks since January, and, frankly, little progress has been made so far. At present, the views of the member States do not seem to be sufficiently close to expect any early solutions, and it is difficult to see in which direction the path is likely to lie. This is not to say, however, that the problem is insoluble on a Community basis—merely that there is a long way to go yet. It is therefore useful to have this debate now so that hon. Members have an opportunity to express their views well before substantive decisions are taken.

Photo of Nicholas Winterton Nicholas Winterton , Macclesfield

Does the Minister confirm that it is his view that the Potato Marketing Board in this country has a valuable part to play in the planting of certain acreages and the distribution of potatoes and that it will continue to do so?

Photo of Mr Edward Bishop Mr Edward Bishop , Newark

The hon. Member has anticipated some of the things I intend to say about the Board. We have paid tribute to the Potato Marketing Board and the other marketing boards for the general functions that they have carried out. It is the functions that we want to see for orderly marketing in future.

The Commission's proposal envisages a free market in potatoes conforming to enforceable grading standards, regulation of supply by adjustment of the grading standards and encouragement to producer groups to hold potatoes off the market in times of assessed surplus. There would be provision for aid for the eventual disposal of surplus production by producer groups at low prices for dehydration into animal feed. On new potatoes, imports would be subject to reference price arrangements and a high tariff of 21 per cent. ad valorem from 1st April instead of 16th May as at present.

Since the original proposal was put forward, some changes have been suggested by the Commission, but these do not alter the basic structure of the proposals. I should, however, mention in particular that the Commission has accepted that producer groups could receive aid for potatoes taken off the market and denatured raw for stockfeed as well as for those dehydrated for stockfeed at the end of the season.

The Commission's present proposals are not satisfactory to us as they stand. In particular, we do not regard producer groups, as defined in the proposals, as a satisfactory means of undertaking market support. The removal of potatoes from the market in times of surplus has to be carried out on a scale which ensures that the operation will be effective. Producer groups at present cover only 10 per cent. of Community maincrop production and we can see little possibility of their expanding at a sufficient rate to provide a viable support mechanism—even if we could accept the principle that such groups should be selected as the sole recipients of aid for market support.

Other methods need to be looked at. For instance, one aspect which needs further examination is the possibility that producers collectively should contribute towards the cost, whatever system eventually operates. Our present view is that potato producers need some protection in seasons of heavy surplus—it seems a long time since that was so, due to the weather—when low prices could discourage producers from future plantings and so create instability from year to year, to the consumer's disadvantage. In other words, confidence is essential for adequate production.

The proposals for reference prices for imports of new potatoes from third countries coupled with an early increase in the common customs tariff could, as the Scrutiny Committee has recognised, inhibit our traditional practice of importing new potatoes from these countries in the early spring to bridge the gap between our old and new home crops, and this is another feature of the proposals in which we see particular difficulty.

The Committee stated that the existing guarantee and marketing system which we have operated has served both producers and consumers well for many years. This is my answer to the hon. Member for Macclesfield (Mr. Winter-ton). Indeed it has, but I do not think that it is realistic to envisage our own system, which is tailored to the particular needs of our market and to the circumstances of our own production, as being necessarily suitable as it stands for direct application throughout the Community as a whole, bearing in mind that the conditions in other member States vary widely from our own. We have pointed to the advantages which our present system has brought us, but we have to try to find a common solution, and I think that it is right to start with an open-minded approach, while not forgetting the benefits which our own system has achieved.

I think that, whatever the speed of progress and the eventual outcome of the EEC negotiations, potato producers in the United Kingdom face a more competitive future, particularly as the transitional period will end next year and we shall not be able indefinitely to insulate our market from Europe. I do not think that our producers should be discouraged by this, and I hope that they can regard it as a challenge and look towards the future with the confidence which I am sure is justified.

I want to say on this aspect of the Potato Marketing Board and boards generally what my right hon. Friend, the Government and I have stressed several times, namely, that our marketing boards have on the whole performed a worthwhile job in providing a marketing structure that gives not only confidence to the producer but security of supplies and generally reasonable prices to the consumer. Whilst we may not be able to preserve the structure of our marketing boards, we shall seek to ensure that their functions essential to the orderly marketing of the crop are fulfilled in the future. That is an important point to bear in mind with any changes that come about in these directions.

I have spoken only briefly on these topics as I am anxious to allow full scope for hon. Members to express their views.

10.45 p.m.

Photo of Mr Michael Jopling Mr Michael Jopling , Westmorland

I thank the Minister for coming to the House to explain the contents of these four regulations, but I became extremely concerned when, at the end of his speech, I heard him talking about the future of the marketing boards. [HON. MEMBERS: "Hear, hear."] I am glad that I have support from both sides of the House.

I hope that the Minister will not take it amiss and think that I am trying to be difficult to him personally, or awkward in any way, but the House is in some difficulty because of the lack of continuity in dealing with these matters. The Scrutiny Committee considers these matters. We know that in one case the previous Minister, Lord Peart, gave evidence, and that on the two documents dealing with hops the Parliamentary Secretary gave evidence. It does not seem as though the Minister of State spends much time dealing with these matters. I say this in no sense of criticism, but it is unhelpful for continuity in dealing with these topics if one Minister gives evidence to the Scrutiny Committee and deals with the regulations in Brussels and the Minister of State comes to the House to explain the contents of the regulations. I hope that the Government will give some thought to the possibility of having some personal continuity, so that only one Minister deals with the Scrutiny Committee, explains the regulations to the House and negotiates these things in Brussels.

Photo of Mr Edward Bishop Mr Edward Bishop , Newark

I appreciate the point, but the fact is that all Ministers work together. We are all in the same Government. If I may follow the hon. Gentleman's argument about the need for continuity, that is a reason why he should not expect to come to this side of the House.

Photo of Mr Michael Jopling Mr Michael Jopling , Westmorland

I notice that the hon. Gentleman gave evidence to the Scrutiny Committee only on fishing affairs. All I am saying is that the Minister who handles these matters on the Floor of the House would be in a better position if he were to handle the subsequent negotiations in Brussels after having heard what goes on here. I hope that the Minister will not think that I am being personal, because I am not.

The difficulty that I find in dealing with these four complicated and highly important regulations is that in a short debate lasting only one-and-a-half hours it is impossible to go in to detail, and, therefore, I must stick to the fundamentals and background to these documents.

I begin by declaring once more my interest as a farmer and one who has grown a fair number of potatoes each year for the past 20 years. These regulations deal with marketing, and we have always acknowledged the importance of improving the way in which farm produce is sold. Since the war, as an Opposition we have given our support to improved marketing arrangements.

I am glad to have this opportunity of putting on the record my party's attitude about methods of improving agricultural marketing. As a party we supported enthusiastically the measures for farm co-operatives entered into in the 1967 Agriculture Act. I can remember that in my party's 1973 manifesto we gave an undertaking that we would give added support to the Central Council for Agricultural and Horticultural Co-operation. As a party we have always supported improved agricultural marketing. I can remember that my hon. Friend the Member for Devon, West (Mr. Mills) and I made our maiden speeches in the House, almost 12 years ago to the day, on the setting up of the Home-Grown Cereals Authority, which has done so much to improve the way in which grain is marketed.

We have always given our consistent support to the statutory marketing boards which do so much to help marketing in this country. As an Opposition we put particular emphasis on the importance of the marketing boards. We believe that the statutory marketing boards do a fine job. We strongly believe that they must be protected. This is why these regulations alarm us and why the last sentence or two of the Minister's speech alarmed us. The Select Committee has done a fine job in proposing to the House that these regulations should be discussed again. It has interviewed a number of Ministry witnesses to clarify the regulations, and that is a great help to us.

I turn now to the regulations and deal first with Document R2157/75 dealing with the marketing and processing of agricultural produce. I am afraid that the House has had some difficulty in getting hold of the latest explanatory Memorandum dated 26th November, to which the Minister referred. I notice that when the Select Committee considered these matters it said that it recommended that some way should be found of informing the House in good time of changes in the explanatory memorandum so that the document was meaningfully debated. I regret to say that I was not able to get a copy of the latest memorandum until some time after five o'clock this evening. I do not consider that that allowed sufficient time for study before a meaningful debate.

I welcome the gist of what is in the document. It endorses the sort of work we have always supported through the Central Council for Agricultural and Horticultural Co-operation. I am glad to see that the document does more than help co-operatives. I know that there have been some in the agricultural trade who have been concerned that assistance was available only to co-operatives. As I read the document, particularly paragraph 3 of the explanatory memorandum of 26th November, assistance will be available for private investment as well as public and semi-public organisations.

The crux of this scheme is whether the Government will be prepared to back up any money which is available from the Community. If the Community says "We will give you 25 per cent. grants on expenditure which is approved under the scheme" and the Government say "We will not give you anything" the people in Brussels might just as well have kept quiet. When money is available from Brussels it is important that the Government endorse such a move. The Minister has said that the Government will provide money for slaughter-houses. I hope he will tell us, when he replies, whether they will be prepared to match Community money in other respects.

I come now to what I regard as the most important part of these regulations; namely the effect they will have on the existing schemes under our statutory marketing boards for the marketing of hops and potatoes. We regard the three documents which deal with these matters as constituting threats both to the Hops Marketing Board and to the Potato Marketing Board. We have very serious reservations indeed about this set of documents. We think it is right to make it perfectly clear to the Government that we have these serious doubts.

Dealing with Document R/238/76, which is concerned with potatoes, I was interested to see that the memorandum produced on these matters by the National Farmers' Union states on page 3 that The draft regulation is entirely unacceptable in its present form… We are convinccct that unless substantial improvements can be obtained both consumers and producers will suffer considerably. That is in paragraph 12. In paragraph 13 it is stated that The main functions of the Potato Marketing Board would be vitiated. These results would be directly contrary to the assurance given in Article 43(3) of the Treaty of Rome. They would also go beyond the assurances regarding the continuation of Marketing Boards given by the British Government in the course of negotiations prior to entry into the Community. That is why many of us are very concerned about these suggestions. We have also seen that the Potato Marketing Board is as hostile to this document as is the National Farmers' Union.

I was astonished to find, in the explanatory memorandum produced by the Government, a rather complacent attitude. There it states: Thus the structure of the industry generally and the position of the Potato Marketing Board would probably be affected if this part of the proposal were adopted. I think that is pitching it very low indeed.

Photo of Mr Peter Mills Mr Peter Mills , Devon West

If my hon. Friend studies that document carefully and looks at the signature at the end, he will find that it is the very Minister who is here tonight who has not really come clean on these matters and said what is the attitude of the Government to the future of any of these boards. The Minister himself actually signed it.

Photo of Mr Michael Jopling Mr Michael Jopling , Westmorland

I observed it and was about to come to that in the latter part of my remarks, if my hon. Friend will wait a moment. The document which the Minister of State has signed is a stupendous piece of understatement, because this is a very dangerous statement indeed.

I understand that the document is also opposed by COPA, the European farmers' union. The Minister said that there was no early solution to these matters and that he was unhappy about it. I suggest to the Government that this document should be thrown out. I have heard rumours emanating from Brussels that the Commission is having serious second thoughts about the document. So it should, I may say.

I am astonished at the way this document was produced. If we look at the evidence which the previous Minister of Agriculture, now Lord Peart, gave to the Select Committee on 16th June 1976, we can see from page 99 that there was no discussion about this document between the Government of this country and the interests in this country before these proposals were produced. I hope that we shall hear no more of these regulations tonight.

The two documents which refer to hops also concern us very much indeed. They provide for a scheme for the marketing of hops. Although I accept that they will not in themselves result in the decline of the Hops Marketing Board, they will provide a scheme which will deprive United Kingdom producers of hops of income aid under the scheme. This is purely because the Hops Marketing Board does not operate according to the Commission's arbitrary definition of a producer group. Does not the Minister agree that the Hops Marketing Board performs this duty just as effectively as any producer group that might be set up to market hops? Why can he not negotiate an arrangement to allow the Hops Marketing Board to operate as a producer group?

Finally, would not the Minister agree that if the Community wants to strengthen the position of hop producers, as it professes, these schemes will not do that? These schemes, if applied to the United Kingdom, will weaken the position of hop producers by perhaps dividing them and otherwise weakening their powers to market their produce.

I therefore greatly hope that the House will give to the Minister tonight the message that this scheme is not in the best interests of hop producers in Britain, and I hope that he will state that he accepts that.

We believe that these documents constitute a threat to the system of organised marketing of farm produce which has been carefully built up in Britain over the years. It is a system which is in the best interests of producers and consumers. It stabilises production to ensure that adequate supplies of food are in general available to the public at reasonable prices.

Lest any hon. Member is tempted to point to what has happened to the potato crop and potato prices over the past two years, I submit that that is not basically the fault of the Potato Marketing Board. The very high potato prices we have had in the past two years have been due largely to two factors—first, the weather, and secondly, the Government's failure to give an adequate guaranteed price to farmers so that adequate acreage of potatoes was planted.

Once we start to give way over the matter of statutory marketing boards within the Community, I believe that it will put the rest of the system of statutory marketing boards in jeopardy and, in particular, we shall put that magnificent organisation the Milk Marketing Board in danger. The Milk Marketing Board does more good to producers and consumers in Britain than any other statutory board. [HON. MEMBERS: "Hear, hear."] I am delighted to be carrying the House with me.

This does not mean that we believe that the present situation is sacrosanct. We have accepted for a number of years that on accession to the EEC some adjustments might be necessary, but this is where I come into conflict with what the Minister of State said. At the end of his speech he implied that there might have to be considerable changes in the structure of our marketing boards. I believe that that would be unacceptable to the House. I was very suspicious when I heard those words of his.

In general, we believe in what the Minister of State has said in the past. I was interested in the reply he made on 8th July: Our aim is to maintain the functions of the marketing boards, including the MMB, which are essential to the orderly marketing of the products concerned."—[Official Report, 8th July 1976; Vol 914, c. 1583.] That was a fine statement, and I hope that we shall have from the Minister tonight an unequivocal restatement of the views he then held. We want an acceptance of the proposition that if one removes one fundamental brick—say, the Hops Marketing Board—the whole structure could some crashing down. We want a statement of intent from the Government that they will set out at once to negotiate with the Community the matter of the future of the marketing boards. I believe that the Community will be helpful.

We have heard of delegations from the European Parliament which have come to this country at the instigation of my hon. Friend the Member for Norfolk, North-West (Mr. Brocklebank-Fowler) and seen the Milk Marketing Board. They have gone away impressed with the way our marketing boards operate. Great credit is due to my hon. Friend, who has to be in Europe tonight and, therefore, cannot attend this debate. Many Members of the European Parliament have returned and asked why they cannot have marketing boards in the same style as ours. That is why I say that I believe that the Community will be helpful.

We do not seek to express displeasure by voting against the motion to adjourn. That would not be a sensible attitude to adopt. However, there may come a time when it is necessary for us to make our teeth meet. It will not be necessary for us to insist, by opposing the motion, that the powers of the marketing boards be not torn to pieces, but I warn the Government that unless they are prepared to preserve our essential marketing boards —they have had a warning in the way that the House reacted to the Poultry Hygiene Regulations—they may find themselves in trouble in future.

I give the Government the firm warning that in their negotiations in Brussels we shall be watching carefully to ensure that the essential and valuable structure of the marketing of farm produce in this country is not turned aside in the most disastrous way.

11.6 p.m.

Photo of Miss Joan Maynard Miss Joan Maynard , Sheffield, Brightside

We have one of the most efficient agriculture industries in the world, but it is not much good being good at producing food if one is not much good at marketing it. The workers in the industry support the statutory marketing boards. We believe that they have been good for producers and consumers. That is true of the Milk Marketing Board.

Tonight we are discussing hops and potatoes. The threat lies in that area tonight, but it may well be that the threat will be extended to the Milk Marketing Board. I believe that the boards have brought stability to our industry. It is important to maintain the boards and the marketing system, but, if possible, we must extend the arrangements so that producers may get a proper return for their produce.

Good marketing is essential. Our agriculture marketing needs to be better organised to withstand the many pressures that the industry has to face. Let us consider, for instance, the vast sums that have been made out of the agriculture industry by the fertiliser firms, the machine manufacturers and the cereal manufacturers. Those people are extremely well organised. Farming people have also to be well organised to withstand that sort of pressure.

I understand that, as the hon. Member for Westmorland (Mr. Jopling) said, when the EEC representatives came to this country they were impressed by the Milk Marketing Board. We are not saying that our marketing system is perfect or that it should be transplanted to other EEC countries, but we find it extremely satisfactory and we hope that the Government will fight to retain it. We do not want them to be complacent. I see the regulations as a threat to our industry, and I ask the Government to give a firm assurance that they will fight to keep our statutory marketing boards.

11.9 p.m.

Photo of Mr Michael Hamilton Mr Michael Hamilton , Salisbury

First, I pay tribute to the Scrutiny Committee. As a member of the Foster Committee, I think that it is doing its job well. It is thanks to the Committee that we have this debate tonight. It is not its fault that the time ration is so meagre.

At the outset I must declare an interest. I am a member of the Hops Marketing Board. I was a member before coming into the House. I have an affection for the hop trade and industry. What is more, in these days when English Members are getting rather bored with talk about devolution, it is refreshing to talk about English hops. There are no drying kilns in Wales and there are no oast houses in Scotland. Hops are an essentially English product.

The Hops Marketing Board consists predominantly of hop growers. Each represents a district, each represents the views of his neighbouring growers within his district, and each is subject to election and re-election. It is a hard-working, practical and experienced body. I find that farmers sitting round a board table are just as refreshingly direct and outspoken as they are when hon. Members go to farmers' meetings in their constituencies on Friday evenings.

The Hops Marketing Board is a more sophisticated and efficient method of marketing hops than anything anywhere within the European Community. I have no doubt that the overwhelming majority of English growers wish the Board to retain its powers.

Looking back to the period between the wars, to the days before the Board came into existence, we see an industry crippled by over-production, with bankruptcies and depression. It is interesting that, in their troubles, growers formed themselves into an association. In 1925 they created what was known as English Hop Growers Ltd. Growers representing about 90 per cent. of the acreage of hops were persuaded to join. Members agreed to restrain their picking of hops so as not to pile up the surpluses any further. The hop is a very expensive crop to grow. English Hop Growers Ltd. also persuaded its members to hold out for a sensible price. That was a notable example of self-help.

Yet, by 1928, after only three years, that association collapsed. The House may ask: why was that? The answer is that it was wrecked by the 10 per cent. of growers who stayed outside, sold all the hops that they could grow, and were always prepared to undercut the 90 per cent. The biggest danger to a producer group is the man outside. When that happened, despair returned to the hops industry.

In 1931 this House passed the Agricultural Marketing Act and growers saw in it again their hope of salvation. In March 1932 hop growers were the first body of farmers to ask the Minister to bring in a marketing scheme. The Hops Marketing Board—the first marketing board to be set up—has served the industry now for nearly half a century. It has abolished surpluses, brought stability, and succeeded in a job where others in Europe have failed.

The hops market in Europe is in a parlous state. Over-production is rife, as the Minister knows. There is a multitude of small growers, particularly in Germany, who are incapable of organising their own market. This system may be picturesque, but it is 50 years behind ours.

These regulations have excellent intentions and the highest motives. They deserve praise. They are admirable for the continent of Europe and a major step in the right direction. I concede second place to no one in always having believed in the concept of the European Community and, indeed, our membership of it, and I am on record in Hansard as far back as 1961 in saying so. But the irony of the whole situation is that these EEC regulations, so excellent in intention, are nevertheless grievously damaging to the industry here in the United Kingdom. The voluntary principle is attractive. The idea of people being able to opt in and out of a producer group has great merit. But, I repeat, the biggest danger to a producer group is the man outside.

As the House realises, if the hop growers want their marketing board to he wound up, they have only to approach the Minister and he will do it for them tomorrow. There is no difficulty about it. But they have not yet asked for that, and, of course, they remember what happened in the 1920s.

Moreover, it should be said that the English hop grower does not want to be subsidised. He does not want the taxpayer or EEC funds to guarantee him a certain level of income. That is not what he is looking for. He has not asked for it in the past. What he would like is a Hops Marketing Board for Europe. But if that cannot be, if eight countries will not follow one, and if Europe cannot attain our standards of marketing, what then? At the least, there is no argument there for weakening our own organisation, and no argument for penalising our own growers. Nor is it an argument for denying our own growers aid which may be available. In the long term, to subsidise some and not others means that others are driven out of the market.

There is only one possible solution, and that is the solution proposed by my hon. Friend the Member for Westmorland (Mr. Jopling) in his excellent speech—that the Hops Marketing Board must be regarded as a producer group as it stands.

There is more at stake than the Hops Marketing Board. We are concerned tonight with wider issues. We are concerned with statutory marketing powers. Scrub out the Hops Marketing Board and the sun will still come up in the morning. Only a small industry in this country will have been injured. But scrub out the Hops Marketing Board and a precedent is created, for it is the concept of marketing boards which is challenged, and if this outpost is sacrificed other will fall.

My constituents in Salisbury do not grow hops, but they realise full well that if the Government allow this, the senior of the marketing boards, to fall, others will follow. As night follows day, the Milk Marketing Board and the Potato Marketing Board will follow, as my hon. Friend the Member for Westmorland said. It is the "domino theory" with a vengeance. Therefore, it is here, or it is nowhere, that the Government must make a stand.

11.19 p.m.

Photo of Mr William Ross Mr William Ross , County Londonderry

I cannot pretend to take up what the hon. Member for Salisbury (Mr. Hamilton) has said about hops. We do not grow hops in Northern Ireland. Indeed, I have never seen a hop in my life. But I am the owner of a farm. I have grown most other crops normally grown on farms, and I do not imagine that hops are all that different in their economics from anything else.

We should realise that these EEC documents represent a further attempt to maintain the myth that the common agricultural policy works. But I think it significant that in the explanatory memorandum to Document R/471/76 the second paragraph draws attention to the fact that previous efforts failed, and indeed contributed to the failure These efforts proved insufficient in a time of surplus. No one should be surprised at that, for the CAP has given us mountains of butter and beef and even a lake of wine, and now, from the final product of hops, we shall have a lake of beer on which to float a mountain of chips—although it looks as if there will be no fish. That situation arises because Common Market countries are potentially and actually growing more of most staple food stuffs than are needed on the European Continent. We are bound eventually to be an exporting market rather than an importing market in all such commodities.

There is talk of a structural surplus. What is meant by that? It appears that structural surplus means that too many hops are grown. It means that the EEC Commissioners decided that there must be not only a 40 per cent. reduction in acreage but a total reduction in hops grown. We want to know whether that cut in acreage and production will fall specifically on England or whether it will affect less efficient producers in Europe.

The memorandum relating to document R/2157/75 deals with the marketing and processing of agricultural products. I wonder whether the Government have taken note of how efficient marketing boards are. I felt slightly chilled by the Minister's closing remarks. He seemed to be saying that the Government will not hold the fort for the marketing boards of this country.

I draw the attention of the House to paragraph 10 of the memorandum. That says that the aim is to improve the returns of agricultural producers in a cost-effective way. If that is so, it must be done in a successful manner because it will take about one-quarter of the Guidance Fund's expenditure. There is nothing in the EEC proposal that will create that return.

What is the aim? Paragraph 5 states that to be eligible for aid projects would have to aim: to guide production in a direction sought by the Common Agricultural Policy". We have not been told item for item and product by product in what direction we shall be guided.

Paragraph 5(b) states that there must be an aim: to lighten the burdens of intervention mechanisms by effecting long-term structural improvements". In other words, by forcing out the small producer.

Paragraph 5(c) states: to aim to remove the need for intervention in the long-term". In other words, we must create a deficit or in balance" situation.

Paragraph 5(f) states that another aim must be: to help to improve the quality of products and the use of by-products". The memorandum also says that an aim must be is encourage research into new methods and techniques and to assist in making market intelligence more easily available. Surely those are the things which the marketing boards in the United Kingdom do. Therefore, I cannot see that we have any need of these regulations. Indeed, it appears to me, in the light of what the Minister said, that the whole thing is being aimed at removing the marketing boards in this country, to the detriment of the agricultural industry and ultimately of the consumer here.

Then we are told that the things that are to be set up to improve marketing efficiency, and so on, are to be situated in areas which are experiencing difficulties from the CAP. I once more draw attention to the fact that the Northern Ireland farmer is suffering from the difficulties of the CAP, but the principal reasons why we are suffering from those difficulties are a land boundary and the green pound. The Government have consistently failed to make any efforts to correct that situation in a manner that is meaningful and lay the proper foundations for the protection of the farming industry in Northern Ireland.

I know nothing about hops other than what I have said tonight. Some months ago we had a debate about male and female hops, and so on. However, I know quite a lot about growing potatoes. I have grown a lot of them. For many years my father and I grew propagation plots for the seed potato industry in Northern Ireland. I have probably seen more varieties of potatoes grown—many of which never came on to the market—than most people. I think that I can claim to know quite a bit about growing potatoes.

I disagree with the hon. Member for Westmorland (Mr. Jopling) when he said that there were two reasons for the shortage of potatoes. I believe that basically there has been only one reason. That has been the queer weather conditions that we have had for the last two years, which have inhibited the growth of the potato crop to a totally unforeseen extent. In Northern Ireland this year our crop was much more successful than that in the rest of the United Kingdom, because we had at least enough rain to keep the crop moving.

If we are to get anywhere with potatoes, the Minister should give more information on the subject. At present we compete in the sale of potatoes in other countries of the world. Northern Ireland's principal reason for growing potatoes is to export seed. We export quite a variety and number each year, especially to Middle East countries and England. We have competed very success- fully. Looking at the explanatory memorandum dealing with potatoes, it appears that we are now being asked to have a mountain of very dear potatoes. It states The proposals provide for the possibility of granting export refunds to the extent necessary to enable Community products to compete on the world market. That may make sense to someone, but it does not make much sense to me. What exactly is it intended shall be done about the growing of potatoes in the United Kingdom as a whole and, specifically, the seed crop in Northern Ireland? In Northern Ireland we have a very efficient Potato Board for marketing our seed. We want to keep it, and we do not like the idea that it will be filched away from us or that its powers will be reduced in such a way that it will get into the position of the hop growers in 1928 and for exactly the same reasons.

Perhaps the Minister will also expand on his opening remarks when he said that one method of controlling the amount of potatoes for sale would be to change the grading requirements. I have personally grown potatoes, and more, I think, than most hon. Members. What precisely did he mean by that remark? I am sure that all who grow potatoes would like to know.

Taken as a whole, these documents highlight the basic problems of the CAP for the United Kingdom, especially in view of our situation vis-à-vis the rest of the Continent of Europe. The plain truth is that all the nations of the EEC other than ourselves are food-exporting countries, whereas we are a food-importing region. It is impossible for a system which suits exporting regions to suit the United Kingdom, which has to import.

11.30 p.m.

Photo of Mr Peter Mills Mr Peter Mills , Devon West

I want first to congratulate my hon. Friend the Member for Salisbury (Mr. Hamilton) on his excellent speech. It was interesting to hear his views.

I welcome this opportunity to say a few words, because we who serve on the Select Committee felt that these were important measures which should be discussed by the House. That is why we hope that, when we have finished, we shall have a much clearer idea about the Government's views.

Frankly, I thought that the Minister of State spoke in a very hesitant manner. His speech lacked any clear vision and determination on these very important matters. I can assure him that if he goes to Brussels with a hesitant note in his voice he will not get very far. I hope that he will take with him the very clear messages being given to him by hon. Members and will go to Brussels with much firmer views, determined to fight for what we believe to be essential.

It was gratifying to hear Labour Members supporting us, especially the hon. Member for Sheffield, Brightside (Miss Maynard). Their support means that, at the end of this debate, the Minister will know that the House is determined to take a firm line. I hope that there will be no more hesitancy on his part. We want a firm declaration on these matters.

Photo of Mr Peter Mills Mr Peter Mills , Devon West

With respect, we have not had it. My hon. Friend the Member for Westmorland (Mr. Jopling) put his finger on the very matter about which we want to hear from the Minister: will the Government back up all these words with money, and will they back up the Community and ensure that these schemes go forward, especially in relation to marketing?

To say the least, we are very worried about what the Minister said towards the end of his speech, about his attitude to the boards. If that is the attitude of the Government at the moment, all that I can say is "Please bring back from another place Lord Peart, who at least was firm on marketing boards."

There must be no weakening in our attitude towards producer marketing boards. They have been tried, and they have been proved to be right. We must continue with them. Any alteration, even in the case of the Hop Marketing Board, will be the thin end of the wedge and will put us on a slippery slope from which we shall not be able to escape once we have started down it.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

The only matter which may separate the two sides of the House is that the hon. Member for Devon, West (Mr. Mills) and his right hon. and hon. Friends did not insist when they could have done that stopping the erosion of the marketing boards should be a condition of British entry. If they had done that, my hon. Friend would not be under pressure to do so now.

Photo of Mr Peter Mills Mr Peter Mills , Devon West

I do not agree. It was a Labour Government who conducted the renegotiations, and they did not make this a firm condition either. In any event, I do not think that the position is so serious as long as the Minister and the Government do not weaken. We are trying to strengthen the hon. Gentleman's resolve so that he goes forward determined to make this stand.

There are serious doubts about the Government's determination to help agriculture. One sees this in other respects. What are their intentions for the future of agriculture? The hon. Member for Londonderry (Mr. Ross) mentioned the green pound. I should be out of order to discuss that, but all these items add up. If the Government weaken their stand on marketing boards, there will be question marks over their intentions for agriculture and increased home production. This occasion will be another test of whether they take seriously the production of food at home.

If we lose on the issue of the Potato Marketing Board and the Hops Marketing Board, the position of the Milk Marketing Board will become extremely difficult and it will be hard to resist demands for its abolition. The common agricultural policy has enough problems without making more, but there will be more if a potato marketing regime is introduced. The CAP has many difficulties, mostly caused by monetary problems. I still believe in the CAP and its underlying concept, but this is not the best time to come forward with a potato regime as is suggested.

We should say "No" to such a scheme for the moment and we should say "No" to the hops scheme. We may be able to go forward later when the monetary and other problems of the CAP are resolved, but at the moment we should say "No" to both schemes.

I come finally to marketing. I believe that the House can give its blessing to this proposal, although there are some issues to be ironed out. There are nearly 400 million units of account to cover the first five years, and the whole scheme is intended to be completed in 10 years. That is far too long. We cannot wait for these marketing adjustments and improvements to take as long as that. The Community should channel far more money into getting marketing right, and it should do so over a much shorter time.

The hon. Member for Londonderry queried some of the objectives. We do not want to put food into intervention. If we can get better marketing, there is no need for intervention. It is far better to find the right solutions to these problems. It may well be that, as a result of our aid and encouragement, we can get the French, German and Dutch farmers to have a milk marketing board so that marketing is properly organised on the Continent to ensure that we do not have a surplus as we have at present. I whole-heartedly welcome the marketing proposal.

It is right to mention the problems of the trade in connection with eligibility for Government or EEC assistance being decided on the merits of the project and not on the constitution of the organisation concerned.

Photo of Nicholas Winterton Nicholas Winterton , Macclesfield

My hon. Friend has referred to what was said by the hon. Member for Londonderry (Mr. Ross). Would he deal with what the hon. Gentleman said about the eight other countries of Europe being basically food-exporting countries while we are importers and yet so many of the documents that we have to consider have the exporting interest in mind? Does he not agree that our own future and that of the Common Market should be based not on destroying a successful marketing board but on exporting our successful boards to the EEC?

Photo of Mr Peter Mills Mr Peter Mills , Devon West

Absolutely. The other countries may have certain products to export to us, but we have to remember that there are products that we export to them. We export seed potatoes all over the Community. It should be a two-way affair.

There is the problem that certain organisations will not be eligible for this help. The National Poultry Federation is concerned about this, and I hope that the Minister can reassure the corn and seed merchants and the National Poultry Federation.

I do not like the proposals for hops and potatoes, but I do like the arrangements for marketing. I hope that the Minister tonight will give us not just words but a firm promise that the Government will back up the Community schemes for marketing with the finance required.

11.41 p.m.

Photo of Mr Geraint Howells Mr Geraint Howells , Cardigan

I declare my interest as a farmer and also as Vice-Chairman of the Wool Marketing Board, on which I have had the privilege to represent Wales for the last 10 years.

This is one of the most important Adjournment debates for a long time. It is crucial for the agricultural industry that the marketing boards should retain their statutory powers. If one removes the statutory powers of the marketing boards one might as well disband them tomorrow. I favour many of the principles involved in the marketing boards, and tonight I am a worried farmer, politician and Vice-Chairman of the British Wool Marketing Board. I cannot see eye to eye with the Minister of State, who said that he was unsure whether the boards' future would be secure. I am therefore, very wary of these proposals, which seeem to be the first steps on the road to the abolition of the boards and their statutory powers.

The majority of farmers and producers are indebted to their marketing boards for the way that they have marketed commodities, whether milk, wool, potatoes or hops, over the last 10 years or more. We are all aware that it was because of the producers' wishes that the Milk Marketing Board was formed in 1932 and the Wool Marketing Board in 1950. These are producer boards with statutory powers. All these boards are in danger of becoming targets for our counterparts on Europe, who will do everything in their power to abolish the system of which we are so proud.

Production in all sectors of the agricultural industry is on the decline. Our import bill for food and feeding stuffs is increasing at a colossal rate every year. We must restore confidence in the industry, and hold on to our marketing system and our guaranteed price system. If we abolish this system we are doomed to failure. Like many others, I hold the view that we must have a floor to the market or we may, as producers, face a very weak market indeed. Unless we are careful, it will be only a matter of time before the Milk Marketing Board is abolished, and others, such as the Wool Marketing Board, follow. Therefore, it is important that the Minister should give us an assurance tonight, before we accept any proposals or suggestions to change the system, that he will not throw away our marketing system which is operating so successfully, as it has done over the past 20 to 30 years.

The NFU brief makes clear that the unions strongly believe that both producers and consumers in this country have been well served for many years by the potato marketing scheme administered by the Potato Marketing Board. The NFU—whose view is the most important on this subject—draws attention to the safeguards outlined in the Treaty of Rome concerning the introduction of common regimes for commodities and Government assurances on the future of United Kingdom marketing boards.

There are rumours of talks taking place in Brussels about the future of the Hops Marketing Board. The talks have been kept secret, and many hon. Members would like to know how they are progressing. It is safe to say that the Board is under threat.

I beg the Minister of State to stand firm in support of our marketing structure and support system, which is unequalled in any other EEC member State. Let us stand firm and united in support of our marketing system and our agricultural industry, which are operating so successfully.

11.47 p.m.

Photo of Mr John Wells Mr John Wells , Maidstone

I shall confine my remarks to the Hops Marketing Board and the orders affecting hops.

My hon. Friend the Member for Salisbury (Mr. Hamilton) has spoken with great expertise and warmth on this subject, and we are all grateful to him. One of his remarks may have slipped by unnoticed by some hon. Members. He reminded us that the Hops Marketing Board is the senior and most successful board. It is maintained by producers and costs the country virtually nothing.

As the thin end of the wedge to replace it, we are being offered a European system which may be excellent for the small acreages of German producers who are in almost exactly the situation which the growers of Kent faced 40 or more years ago.

Are we not absolutely mad to allow the Minister to consider the imposition of a system which operates at the taxpayers' expense in lieu of one which costs the taxpayers nothing? It would be disastrous to step backwards in this way and cost ourselves money.

The hon. Member for Londonderry (Mr. Ross) said that he did not understand the term "structural surplus". It just means that too much of a product is being grown. Lamentably, it applies particularly to apples and hops in the EEC—crops which are often grown side by side on the same holding. One naturally has to grow slightly more hops than are required in order to provide a leeway against bad years, and that is why orderly marketing is needed.

The surplus of apples in Europe makes it all the more important that growers in Kent, Herefordshire, Worcestershire and Hampshire should get protection. They are generally the growers who are producing hops as well, and it is imperative that they are protected.

My only quibble with the admirable speech of my hon. Friend the Member for Salisbury was over his statement that we could not expect eight countries to go along with one. I think he is wrong. After all, no hops are grown in Italy or Ireland. I doubt whether many hops are grown in the great Duchy of Luxembourg. Some are grown in France. But, really, we have only to persuade four countries to go along with us. Because our system is pre-eminently good, that should not be beyond the capacity of a forceful negotiator like the Minister of State.

11.51 p.m.

Photo of Mr Jerry Wiggin Mr Jerry Wiggin , Weston-Super-Mare

I shall be brief because I know that the House wants to hear the Minister answer this excellent debate.

This debate has not really been about hops and potatoes; it has been about the whole principle of marketing boards. It is the clause in the Treaty of Rome which is aimed at monopolies which has produced the Commission's initiative for these directives. Both in our arguments with Brussels and as Conservatives, we have to defend the monopoly elements of marketing boards.

I restrained myself from interrupting my hon. Friend the Member for Salisbury (Mr. Hamilton) when he was rightly singing the praises of the Hops Marketing Board. One of the greatest things about it is that the brewers have accepted the hops through that organisation and not attempted, as they could have done, to break its monopoly. They have realised that it has been in the interests of the consumer to have an organisation producing the quantity and quality of hops required and dealing with all the intricate problems it handles. But it would be wrong to argue this immensely complicated case tonight.

The main problem of all EEC countries—indeed, of all Western food-producing countries—is not just marketing but the constant endeavour of all Governments, using all means available to man, to marry the supply of and the demand for agricultural products. No matter what the product, that is the constant difficulty. Our marketing boards so far, provided that they have had the full monopolistic powers under the marketing boards legislation, have been more successful than any other system in the world.

I would go so far as to say that the very fact that both the Potato Marketing Board and the Hops Marketing Board have a quota system has greatly helped their success. It is significant that boards which have failed have done so through failure to limit supply to meet demand.

As we become increasingly familiar with Brussels and the operations of the EEC, it is clear to us all that what really matters is the attitude of the Government of the day—of whatever party—in negotiating the interests of this country. Although my hon. Friends have dealt with the details of this matter with great expertise, it is our duty to impress on the Minister our unanimous view that the marketing boards of this country have been one of the great successes of the agricultural scene of the last 45 years. Ministers who go to Brussels to negotiate this matter must do so with a determination backed by the unanimity of the industry and this House.

11.54 p.m.

Photo of Nicholas Winterton Nicholas Winterton , Macclesfield

I shall speak for about 50 seconds. I have been stimulated to react to this debate, which has been very interesting and of profound importance to the House.

From the Order Paper, one would have thought that this would be a dull and unimportant debate. It certainly has not been. It has been fascinating and of profound importance to the future of agriculture. Every speech has been useful and has added something to the argument we have been putting to the Minister.

I cannot believe that the future of the Common Market will be based on the destruction of successful and proven systems in this country. I believe that the message that the Minister must take to Brussels is that we believe in our marketing boards, that we intend that they should remain to play their part in the future of agriculture in this country, and that we believe that Europe as a whole should take them on board. We look to the Minister not to let this House down.

11.55 p.m.

Photo of Mr Edward Bishop Mr Edward Bishop , Newark

At this late hour—but not too late to discuss such an important issue as this—I feel that much of the criticism that might have been sent in my direction was emphasised for Brussels to hear. I welcome the strong views that have been put forward tonight because I know, and the industry knows, that they show the pride that we as a country have in our marketing board system.

I believe that membership of the Community is not a matter of putting all our systems and traditions into a common pot and taking what comes out of it. The essence of the Community, the co-operation that is necessary, and the changes that are necessary to ensure the utmost efficiency in agriculture and food production in the Nine must lie in an acceptance and recognition of those countries that have efficient and well-proven institutions on which their agricultural output is based, and the acceptance that in this country we have an agriculture system with production methods and traditions that are second to none. It is with that sense of pride that I take on my responsibilities in the Ministry.

With regard to exports, everywhere I go I find that other countries recognise the lead that we have in producing so much by such a small percentage of our population. Other countries envy us. We must stand firm on a number of issues. There is no difference between the two sides of the House on this matter.

In my opening speech I made some comments that caused the hon. Member for Westmorland (Mr. Jopling) to be doubtful about the stand that the Government had taken. I said that I wanted to emphasise what my right hon. Friend and I have stressed several times, namely, that marketing boards on the whole have performed a worthwhile job in providing a marketing structure that has given confidence to our producers, guaranteed a fair return and given security of supplies. I said that, while we may not be able to preserve the structure of our boards—indeed not entirely—we shall seek to ensure that the functions essential to orderly marketing are preserved.

The hon. Member for Westmorland huffs and puffs and says that that is not good enough, but then he says that these things are not sacrosanct and that on accession to the Treaty of Rome some adjustment was necessary. What really matters is that the functions and objectives of the boards are preserved. There may have to be some adjustment. We may not be able to keep the boards indefinitely in the form in which they have existed for many years, but we want to make sure that those whom they serve are given the kind of support, assurance and confidence that has been a feature of our boards.

The hon. Gentleman quoted my comments in July. I am on record several times, as are many of my hon. Friends, as saying, there is a great deal of pride in the way in which our Milk Marketing Boards and the other boards carry out their functions. Membership of the Community necessitates changes in marketing arrangements for a number of commodities. The hon. Member for Westmorland has said that. I went on to say, Our aim is to maintain the functions of the marketing boards, including the MMB, which are essential to the orderly marketing of the products concerned."—[Official Report, 8th July 1976; Vol. 914, c. 1583.] That is the message that we take to Brussels. Our officials have been working on the review of the Commission documents on the basis of that kind of philosophy. Ministers of Agriculture and other members of the Government have said much the same. The point is that we have to ensure that in any changes which come about this principle is maintained. The role of the producer groups is a feature of the changes to the marketing boards for hops and potatoes.

Mention has been made of the Potato Marketing Board, another board in which we take a pride. EEC negotiations are still at an exploratory stage. It is important to work towards a Community regime that is satisfactory to producers and consumers and then to consider the Board's role. I was asked whether the Board can be accepted as a producer group. This clearly depends on the definition of "producer group". The Board's constitution at present would not comply with the current definition in a number of important respects. We are in touch with Brussels on these matters and have made our views known to the Community.

The hon. Member for Salisbury (Mr. Hamilton) is a member of the Hops Marketing Board. He has made a useful contribution to the work of the Board and will be aware of some of the proposals before it. I have confidence that these proposals, if we can get them accepted by the Community, will commend themselves to the industry as a whole as well as to the present members of the Board—

It being one and a half hours after the commencement of proceedings, the Adjournment of the House lapsed without Question put.