Common Agricultural Policy

Part of the debate – in the House of Commons at 9:15 pm on 26th March 1981.

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Photo of Nicholas Winterton Nicholas Winterton , Macclesfield 9:15 pm, 26th March 1981

The debate is weighty and important I am delighted to see the Secretary of State and the Minister of State in their places for what I hope will be a rousing conclusion.

I have never known my farmers so angry and concerned. On Saturday morning I attended a special meeting requested by my NFU. Having spoken in Gainsborough on Friday evening, I rushed back to be greeted by farmers not only from my constituency but from over the border in Derbyshire, Staffordshire and parts of Greater Manchester.

For the first time in my 10 years in the House my Cheshire NFU has issued what I can only describe as a panic document relating to the 1981–82 EEC farm price proposals. The House will therefore appreciate how strongly my dairy and livestock farmers feel about the situation. The document is headed: Don't let them sell out Cheshire farming. Three of the major points that it makes are: Can you afford to have your milk cheque reduced by 6p in the pound?Do you know that the revaluation of the green pound could take a further 25 to 30 per cent. of your income?United Kingdom farmers have a worse income position than anywhere else in Europe, except Denmark—the proposed Euro-package will make the position worse! The document has been posted through many doors in Cheshire, so that members of the public have been made aware of the situation.

My right hon. Friend has resolved some of the queries in my mind, and will have pleased my dairy farmers by much of what he said, particularly that he would be prepared, if necessary, in the interests of Britain and the British farmer, to use his veto in the Council of Ministers. My farmers will be greatly reassured.

The meeting on Saturday lasted for about 2½ hours. One dairy and potato farmer in the village of Siddington, outside Macclesfield, reported an overdraft £20,000 up on last year's figure. Another leading officer of my NFU reported that if he did not reduce his overdraft during the next year the bank would foreclose. In a letter that he subsequently sent to me he stated: As you know, five years ago we made a large investment to make our farm efficient. By now that investment, plus hard work, should have started to pay. In fact, our income has gone down and our overdraft has increased.If the new prices are ratified we will get less cash next year. Our input prices are and will go higher and our loss will be greater. Our answer is to cut all spending on repairs and improvements, to reduce the breeding herd. This will mean less trade for other industries and dearer food for the consumer.May I remind you that the wealth of this country is in the land. If farmers go bankrupt, so will the country. He could not have put it better. I am delighted to see my right hon. Friend the Minister nodding his head. Our farmers produce a commodity that the people need, which is perhaps much more important than coal, steel or the other industries that receive generous handouts from the Government. We cannot live without food. The letter accurately reflects the concern of the dairy industry.

Another farmer reported his profits down £4,000 from the 1979–80 figure. The county chairman, Mr. Geoff Morris, who happened to be at the meeting, reinforced the views of my farmers and those from adjoining areas. He said that the tax adviser to the NFU in Cheshire reported that at least 30 per cent. of his dairy farming clients had used the two-year tax average in 1980 as against hardly any the previous year, indicating a drop in profits of at least 30 per cent. That shows clearly the serious position that we face.

I now quote briefly from a letter sent out by the chairman of the NFU in Cheshire: As the elected leader of Cheshire farmers I write seeking your support to prevent the farmers of this county being forced into bankruptcy unless the levels of EEC farm prices now being discussed are significantly improved.I do not use the word 'bankruptcy' lightly. Official data"— and this data was provided by the Ministry itself— clearly spells out the precarious plight in which our farmers and growers find themselves. Just look at a few of the facts: Over the last full farming year our incomes fell by 10 per cent.—or an even more alarming 25 per cent. when measured in real money terms. I am quoting here from people who are actually in farming and should know the position for themselves. It is vital to put this on record so that the Government know how strongly people feel. Mr. Morris continued: Because of this and the long-term nature of farming operations our indebtedness to the banks and other finance houses reached the highest level ever—and much of this was disaster borrowing.Glaring gaps are also beginning to appear in our breeding herds and this is an ominous sign and one which will affect the pockets of consumers unless the growing crisis of confidence on Cheshire farms is reversed.You might well say that other industries are also in difficulties"— indeed, we know that they are— which we do not dispute. But what I have to point out is that agriculture's crisis started several years ago and has deteriorated to such an extent that by 1980 the total decline in own real income had been down by more than half over four years. Input prices i.e. what we pay for goods and services, soared by 92 per cent. over the past five years whilst our farmgate returns rose by only 58 per cent. This matter was highlighted by my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop).

I summarise the points quickly. I am speaking for my farmers in Cheshire and the North-West, and the dairy and livestock industry in particular. First, the industry in Cheshire is in the first stages of what I and they consider to be a serious decline. It is not particularly due to the present recession or the recent high interest rates, but to the simple fact that costs have risen at a much higher rate than returns over a period of years. Income has therefore dropped by an increasing rate and bank borrowings, to give a figure provided by the National Westminster Bank, have increased by £2,500 million to more than £3,000 million in one year. That is a dramatic statistic. Moreover, 50 per cent. of farm income now goes towards interest payments, compared with only 11 per cent. 10 years ago.

With reference to the Minister's use of slaughtering figures when I asked his him a question last week, the NFU and I consider that this was a rather unfair comparision to draw. It is my view and, I believe, that of farmers that it would be far better if he and his Department looked at the accounts of some of the farms in the area to assess the problems faced by dairy and livestock producers at this time. If he referred to Murray Smith and Company, chartered accountants, of Northwich, in Cheshire, they would gladly supply him with details of the drop in incomes of many of their clients who are my constituents.

Secondly, it follows that a substantial rise in farm prices is required, with no revaluation of the green pound—and I am delighted that my right hon. Friend indicated that he would not support such a revaluation—to offset the benefit of a rise to United Kingdom farmers. Any further co-responsibility levy must apply only to those countries which increase their surplus commodity production.

Thirdly—and I say this with every emphasis that I can muster—the national help given to other members States must be either stopped or matched by our own Government.

Fourthly, the point has been made that there is increasing resentment that other member States in the Community seem to show more determination in looking after their farmers' interests than apparently the Government have shown for farmers in the United Kingdom.

I have been reassured by many of the comments made by my right hon. Friend the Minister. He has said time and again that he is keen on promoting good marketing, but if we cannot secure fair competition within the Community surely we shall lose our own market by default. The most glaring example, which has been quoted several times in the debate, is that of the problems in the horticulture industry and the way in which the Dutch subsidise their heating costs.

I know that another of my hon. Friends wants to participate in the debate, so I shall conclude. My right hon. Friend is doing an extremely good job in difficult circumstances. I was appreciative of the amount of work that he put into preparing what he said today. I shall be happy to send a copy of that speech, with my limited remarks, to the many farmers who attended the meeting in my constituency on Saturday, many of them missing the first half of the rugby international in the afternoon as a result. I know that much of their concern will have been laid to rest by my right hon. Friend's speech.