I beg to move, in page 2, line 27, at end insert—
(2A) Food from Britain shall become responsible for the Agency Agreement between the Minister of Agriculture, Fisheries and Food and the Land Settlement Association Ltd.
The Bill has been welcomed and supported by hon. Members on both sides of the House as being much needed to improve and develop the marketing of British agricultural and food produce at home and abroad. It has, therefore, come as something of a blow to discover that at the very time when the Bill is going through the House the Minister has decided on action that can only severely damage or wreck the marketing system that has been operated by the Land Settlement Association with great success for many years. That is why I am moving the amendment.
The Land Settlement Association was established before the Second World War to enable people without much capital to establish themselves as smallholders and small business men, producing food and produce for the domestic market. To provide for the successful disposal of such produce at a profit, the LSA established a completely integrated marketing and production system. It has functioned through a tenancy agreement with each tenant whereby the tenant crops his holding according to an agreed cropping plan that is determined by consultation and then markets his produce through the association. On behalf of the Minister through an agency agreement that dates back to 1947, the association has maintained a marketing organisation to serve tenants' needs.
As I understand it, the Minister's responsibility arises from the terms of the Agriculture Acts 1947 and 1970 and it has hitherto been exercised on his behalf by the Land Settlement Association. On 1 December this year, the Minister decided to give notice that he proposed to terminate the agency agreement, to end the scheme and to enable tenants to purchase their holdings if they se wished.
Whatever one may think of the effects of the disposal of smallholdings, thereby cutting off access to the first rung of the ladder in farming to future entrants to the industry who do not have large reserves of capital, the effects on existing tenants are those about which I am especially worried this evening.
Many tenants, learning that I was worried about the Minister's decision, wrote to me, and I have a large bundle of letters that express considerable anxiety about the decision. Tenants believe that their businesses will be seriously damaged and could even be ruined by the abrupt way in which it has been decided to end the scheme. Some tenants will face bankruptcy unless they are given more time. A letter from Potton reads:
Following the decision that all growers in future must obtain finance from the banks instead of the LSA the recent withdrawal by the Minister of his guarantee has placed many growers including myself in an impossible position.
Another letter from the same area expresses a similar view:
This is now putting many tenants in an impossible situation".
I could quote many other letters expressing similar views.
It is clear that the consultation that occurred before the decision to wind up the scheme was taken was inadequate—if the desultory communications between the Minister and a few tenants can be regarded as consultation. There has been no consultation worthy of the name about the future of the marketing organisation, and many tenants face serious problems.
If tenants are to survive they must establish new marketing arrangements by 1 April 1983. I have no doubt that the assistance of the Central Council for Agricultural and Horticultural Co-operation or its successor will be forthcoming to enable that to be done, but the Government are apparently asking for all the assets of the existing marketing scheme, including grading equipment, lorries and tractors, to be disposed of by 31 March. That means that the new marketing organisations will scarcely be formed in time to bid for that equipment which would be essential for its operations.
In addition, the new organisation can bid for the equipment only if it has the necessary capital. The problem is exacerbated by the fact that the Minister's guarantee of credit from Barclays Bank is apparently to be discontinued. Therefore, what guarantee is there that the bank will advance further credit or, in some cases, refrain from calling in existing loans? Indeed, it appears that officials of the Ministry are virtually telling the bank to call in loans.
I have here the report of a meeting that took place between Ministry officials and the LSA on Friday 3 December. This says:
It will then be up to Barclays Bank to serve Notice on the Grower and ourselves to regain their loan from the proceeds of any such sale. If this does not cover the outstanding loan, which it may not because of the very severe reduction in glass values, that is Barclays Bank's problem.
It is impossible to construe the Government's action as assisting growers or treating them reasonably on the basis of this statement.
The Minister knows that horticulture has had a difficult time in recent years, and that many of the growers have incurred considerable debts and could face liquidity problems. If the new co-operatives or other marketing organisations experience difficulties in raising credit, the growers may well not be able to form any scheme to replace what exists. If that is the result of the Minister's decision, it will deal a heavy blow to the existing marketing arrangements for British produce just when we are discussing a Bill designed to improve that marketing.
About 500 growers on 10 estates are involved, and the LSA is the largest producer of salad crops in Britain. If the LSA marketing arrangement is not adequately replaced, the market for those products will be taken up by somebody else. Growers in the Netherlands and other European countries would be only too glad to take advantage of such an opportunity.
The Bill speaks of national marketing, but in this instance a successful national marketing scheme is being smashed up and not replaced by any adequate alternative. I am aware that many of the tenants on LSA estates have expressed some dissatisfaction with the marketing arrangements with which they have been familiar for some time. In many cases they have also wished to have the opportunity to purchase their holdings. The majority of them, however, are certainly not in favour of the rushed manner in which the change is being carried through. Even at this late stage, further time must be provided or some transitional arrangements made.
Many of the growers would not have been dissatisfied with the existing marketing arrangement if they had had more say in it. They have objected not so much to the marketing arrangement itself as to the fact that they felt that there they were not consulted sufficiently about the way it functioned, and had conditions imposed upon them which they found irksome in certain respects. The majority of tenants do not view what is now being done as a preferable alternative in the short term. Even the attraction of buying a holding at 50 per cent. of its valuation is not very brilliant to those tenants who are unable to pay up what they owe forthwith, as the Minister has made it plain that, before buying, a grower must clear any outstanding debts to him.
The amendment would transfer responsibility for the agency agreement between the Minister and the LSA to Food from Britain and allow any desirable changes to be made at a more considered pace. It would prevent the Minister from his obligations to a group of small business men who surely deserve something better from a Government who continually laud what they are supposed to have done for small business men. Here is a clear example of the damage that can be inflicted on people in this category by the doctrinaire policies that the Government sometimes embrace.
The amendment offers a means of preventing the infliction of serious harm upon the LSA tenants. If the Minister believes that the amendment is out of place and wishes to reject it, it is up to him to suggest some alternative way of safeguarding the interests of the majority of LSA tenants which are gravely threatened by the decision so rapidly to bring the scheme to an end.
The amendment should be seriously considered by all who are genuinely concerned about the LSA tenants, and that includes hon. Members on both sides of the House. Above all, the growers need more time. At this stage, speaking in the House this evening, we still have the opportunity to prevent irreparable damage from being done to this group of people.
Horticulture has experienced very difficult problems in recent years. It is clear that the growers are deeply concerned, the NFU is deeply concerned, and the cooperative movement, with which I am associated, is very deeply concerned. In those circumstances, I hope that the Minister will see his way clear either to accepting the amendment or to providing an alternative method of assisting this group of people.
I welcome the opportunity to take part briefly in the debate, and I congratulate the hon. Member for Harlow (Mr. Newens) on raising the matter in the House in the way that he has. One can understand his concern and the concern of many smallholders and their families over what is happening, although I think that their fears are not as well-founded as they think and as the hon. Member thinks.
The hon. Member says that the Land Settlement Association has been a great success. He should qualify that statement because it has not really been such a great financial success. It has provided the opportunity for young people to get into horticulture but many serious debts have occurred, and that has to be taken into account.
Times have changed—they always do—and being able to purchase one's holding for 50 per cent. of cost is not a bad deal. It should be encouraged and people should go ahead with it, even though there may be some difficulties. Everyone in this House knows that I am a great believer in agricultural co-operation. There is no question but that the efforts of agricultural co-operatives have been very worthy, although, as I have said, times have changed. Let no one in this House underestimate the role of agricultural co-operation, with all that that means.
My mind is conditioned by my early days in agriculture, and I have always been grateful for what agricultural co-operation has done for me. Therefore, I can understand the concern of the small farmers. Some of us were once small farmers. I started a long time ago with 26 acres.
I am sure that the Minister is sensitive about the need for adequate time to be given to sort out the problem. Obviously, the Government want to bring matters to a head, but I believe that the Minister will take note that time is needed to sort out the problem. If everything cannot be worked out by the specified date, I hope that the Minister will be flexible. I believe that Food from Britain will be able to deal adequately with the proposed change. I am sure that it will be able to give advice to the growers as they move forward into a new era of marketing and of standing on their own feet.
From his experience in agriculture, does the hon. Gentleman agree that the growers have a case when they say that insufficient time has been allowed to them to make the transition?
I am not too sure about that. That is why I hope that the Minister, when the time comes, will be flexible. We wait with interest to hear what he has to say about that. I believe that Food from Britain can deal with the change. I have every confidence in the new organisation and those who are running it. I believe that they will help the growers.
The debate has been important to show the people in these holdings that they are not forgotten. I have great confidence that the Minister will be able to respond to the point that has been made. I am certain that my right hon. Friend will be flexible. As a former small farmer, I wish small farmers all possible luck in the future. I hope that they take advantage of the chance to purchase their own smallholding for 50 per cent. of the value. It is a real bargain.
I congratulate my hon. Friend the Member for Harlow (Mr. Newens) on attempting to obtain certain assurances from the Minister in response to the concern expressed by many tenants of the Land Settlement Association. My hon. Friend has referred to the co-operative movement and to a number of tenants who have written to him expressing their deep anxiety. I should like to put on record a letter that I have
received from the National Farmers Union expressing deep anxiety. The NFU states that it is contacting hon. Members in haste to urge them
to seek assurances that the Government will extend its present time-table so as to avoid hardship for the LSA tenants. The NFU though not opposed to the principles of the changes affecting LSA tenants, is very concerned at the apparent intention to implement these changes within a time scale which is bound to cause the tenants grave financial hardship and result in the severe disruption of their commercial activity.
I do not know whether my hon. Friend intends to persist with the amendment. If, however, the Bill will result in severe disruption and affect commercial activity, there is need at this stage for assurances to be given by the Minister. The letter goes on:
Because of the adverse trading conditions of the past several seasons for the range of horticultural crops produced on LSA estates, tenants are on average in worse financial circumstances at the moment than would have been normal a few years ago.
Although one hears a great deal about the prosperity of agriculture, these tenants have suffered in recent years. The letter continues:
The average LSA tenant has long term borrowing associated with the establishment/development of his business (particularly investment in glasshouses), which he must service from income. In addition he has short term borrowing which, though normally seasonal, has tended to accumulate during the past two years. All this borrowing has been arranged through the LSA organisation. It would be totally unreasonable to expect tenants to discharge these short term debts in the next two or three months, especially as it is a time of the year when there is little or no revenue from the sale of produce".
If the climatic conditions are to continue as they have started this winter, one appreciates that point. The letter adds:
Similarly if the LSA is to cease its central marketing activities, tenants must be given a reasonable period to organise effective alternative machinery or they will be at the mercy of a highly volatile and competitive market. Most tenants have no experience of marketing their produce.
That is a telling contribution by the National Farmers Union. Opposition Members agree with the intentions of the Bill, but there are those on the Opposition Benches who have grave misgivings about the European common agricultural policy. A recent article in The Sunday Times shows that the policy will not endure and that it will have to change.
If there is a failing in British agriculture, it is that there has not been enough co-operation. A comparison with the marketing of Danish bacon reveals the need for greater cooperation in the marketing of our produce. The amendment shows the difficulties in which tenants of the Land Settlement Association will be placed.
It is incumbent upon the Government to give the House an assurance, because it may be that the Bill will go through without amendment. My hon. Friend has quoted from a number of letters, and I could also quote some letters to the Minister. There are people in the LSA who are not looking forward to this Christmas. Let us put their minds at rest and let them enjoy this Christmas by giving assurances that they have not yet had.
It is a pleasure to follow the hon. Member for Aberdare (Mr. Evans) who always speaks with force on whatever subject he is presenting to the House. It is particularly appropriate that a Welshman should contribute to the debate because many of the original tenants of the LSAs were Welshmen, men who were made redundant in the mines after the war and were resettled. In my constituency in the LSAs of Siddlesham and Batchmere there are still a few Welsh names.
I had not intended to speak, but the amendment gives us a welcome opportunity to share some of the concern that the hon. Member for Harlow (Mr. Newens) expressed about timing, although I shall take a different and rather more welcoming attitude towards the thrust of what the Government are proposing to do. I take this opportunity of welcoming the decision to allow tenants to buy their holdings and to take on responsibility for their marketing. In my constituency this has been broadly welcomed, although many of my tenants are also concerned about the detailed aspects of financing and timing.
Does the hon. Gentleman agree that the conditions that apply on the particular estate with which he is concerned are not necessarily the same as those that apply on the other nine estates, and that some of the feelings that he has found among his tenants exist in much greater measure elsewhere?
I am prepared to concede that, and I was going on to say it, because it is the success of many of the tenants of LSAs in my constituency that has led not only to their enthusiasm about the effective privatisation of the LSAs but also to their feeling that they would rather go it alone than become part of some national private cooperative.
Although the tenants at Siddlesham are considering the possibility of forming a company in which they would have a share that would take over the assets and the marketing, they nevertheless wish at this stage to keep open the possibility that they will acquire their own holdings and become private businessmen rather than part of the private national co-operative. I can understand the reason why tenants elsewhere have a rather different view, but the hon. Gentleman will understand that I have to represent the interests of my constituents and their future and interests as they see them.
However, there may be some logistical problems in complying with the timetable requirement of the end of March. While I would not demand that the date be put forward, I hope that my hon. Friend can give an assurance tonight that a degree of flexibility will be shown. I think my hon. Friend would be the first to admit that it is in the interest of neither the Government nor the tenants for the small tenants in the horticulture sector to have their future undermined in such a way as will lessen the market value of the holdings that the Government are hoping to sell. We would not expect the Government to be unreasonable and I am confident that my hon. Friend will be able to show flexibility.
There are a number of associated problems, particularly those of the right to buy for the staff of the LSAs, although this is not the appropriate occasion on which to refer to these problems. With regard to the financial aspect of this arrangement there is a need for the chairman, Mr. Parker, to come forward by the end of this month with detailed options and financial proposals for tenants of the LSAs. They must know as soon as possible where they stand so that they can work out whether they want to take up any of the options.
I also believe that there is a case for Barclays bank especially and the other commercial banks adopting as constructive an attitude as they can. I do not think that too much should be offered in the way of Government guarantees for the future. Having sold to tenants the marketing organisation and their own holdings, the way forward is by means of such preferential financial arrangements that they start off well rather than having a continuing contingent liability to the taxpayer. I should not like guarantees, but I hope that the initial capital and financing arrangements reached in co-operation with this major clearing bank will be as preferential as possible.
Although I do not agree with the substantive nature of the amendment, the hon. Member for Harlow has done the House a service in giving hon. Members an opportunity to express the reasonable concerns of their tenants, and I hope that my hon. Friend will be able to redress some of them.
I thank my hon. Friend the Member for Harlow (Mr. Newens) for raising this topic and for the way in which he moved the amendment. I assure the House that the Opposition support the amendment, especially the general tenor that more time and consideration for the problems facing these tenants over the next few weeks and months is required. At the moment, they are desperately insecure and face a most uncertain future.
I trust that the Minister will be able to lift some of that uncertainty and give tenants some sense of security.
I join hon. Members on both sides of the House in thanking the hon. Member for Harlow (Mr. Newens) for raising this matter. I am aware of the concern that he expressed. It is a concern that has evoked sympathy and understanding from a number of hon. Members. The opportunity to have this short debate has been extremely useful.
As my hon. Friends the Members for Devon, West (Sir P. Mills) and for Chichester (Mr. Nelson) said, it is important to have in mind the basis of the decision to wind up the Land Settlement Association Ltd. There has been general and individual dissatisfaction expressed recently about the work of the LSA. However, among certain individuals and perhaps more on some estates than in others, there is concern about the fundamental decision. I understand that, and I think that we would all be surprised if a decision to wind up a body that had existed for a considerable period did not lead to some concern and anxiety, if not opposition. But, even among those who think that in principle this is the right course to adopt, it puts a question mark over the future. They have been aware of the arrangements in recent years. Now they face a period of uncertainty about the future, even though they support the proposal in principle.
I understand the motives and the feelings expressed by the hon. Member for Harlow. I am aware that both he and the hon. Member for Aberdare (Mr. Evans) have received a number of genuine representations and expressions of view, and I am sensitive to the points of view that they have put forward.
We have to go back to the basis for the decision. Given the dissatisfaction that my right hon. Friend explained in reply to my hon. Friend the Member for Chichester earlier this month, the decision taken about the future of the LSA and its estates was not reached lightly. It was taken after very careful consideration and study by and discussion with the new chairman of the association, Mr. Parker.
I am grateful to those of my hon. Friends who support the decision. Having made it, we have to decide the best way to carry it out. There is no desire to carry it out in an insensitive, ineffective or inefficient manner. In winding up the Land Settlement Association we want to ensure that proper consideration is shown to those people who are anxious about their livelihoods. I assure the hon. Member for Harlow that we looked at the timetable for carrying out this measure to see whether it would be better done in the short or long term. For reasons that I shall explain, we decided that it would be better if it were carried out in the short term.
I recognise that a timetable with a date of 1 April 1983 is demanding. We want to carry out this winding up in a way that is satisfactory not only to the Government but to all interested parties. We are talking not just of the tenants of the estates but the staff of the Land Settlement Association itself. The timetable that we have put forward was recommended by the chairman of the Land Settlement Association. He is closest to it, having studied the background, and it is significant that he should have made that recommendation.
It is our view that the tenants' best interests would not necessarily be served by prolonging the Government's involvement longer than absolutely necessary. A number of practical matters worried us. I assure the hon. Member for Harlow that there was nothing dogmatic or prejudiced in our decision. It was taken reasonably and sensibly. We felt that if the deadline were extended until autumn of next year, the period for bringing the transitional arrangements into effect would coincide with the busiest time of the year for the tenants and others involved in the estates. It would be during the growing season when marketing is most important. There are other considerations. Within the next two or three months there will be much more opportunity to consult more widely and take the views of the different estates and bring the new arrangements into effect. Those practical considerations persuaded us towards the shorter timetable.
If we manage to put forward satisfactory alternative marketing arrangements after discussions with the tenants and the LSA, we can try to put them into operation before the start of the marketing season, and the tenants will be certain of what is happening. Otherwise they will have to go through the marketing season and face uncertainty at the end as to their relationships with customers, which will be different later. Our view is that on balance it would be better to have a shorter rather than a longer timetable. We did not reach that decision hurriedly or inadvisedly, but on the recommendation of the chairman of the LSA. Having taken that decision, we are extremely anxious to help growers in every possible way to prepare the new arrangements during the next few months.
We have asked the LSA staff to work urgently with growers, and we have asked the central council—although by the end of this period it may be Food from Britain—to be closely involved in any talks and discussions on the formation of new co-operatives. Given the continuing and positive role of the central council and its successor, I am sure that we shall see as much activity as is possible and necessary.
I hope that in the next three months growers will be able to make alternative arrangements to market their produce effectively, both in the future and on the time scale that we have determined. On the information available to me, I believe that that will be possible. I hope that we can stick to the timetable that has been set. We do not wish to continue the uncertainty for longer than necessary. However, there is always uncertainty in transitional arrangements. Having spoken to those directly involved both in the LSA and the central council, we believe that it should be possible to introduce the new arrangements within that period.
There have been discussions between officials in my Department and various representatives of the estates direct with the LSA, but given the strength of the feelings expressed tonight we shall obviously look afresh at any problems that may arise. I shall report to my right hon. Friend the strength of feeling that has been expressed, which I know has been genuine and sincere and stated on behalf of the people concerned.
Quite fairly, the hon. Member for Harlow has not attempted to debate the principle of the decision. He is merely concerned that the decision, once taken, should be carried out in the best and most sensible way possible.
And in the most humane way possible. Our objective is exactly the same. We may disagree over the timetable, but at present we see no reason for changing it. I shall ponder on what has been said and on whatever further discussions take place. I hope that this can be done by the beginning of April, because it will have certain advantages and will remove uncertainty.
We want to ensure that this decision is carried out in a satisfactory and effective way so that work on these estates is not disrupted. It is in that spirit that I have tried to respond constructively to a constructive speech from the hon. Member for Harlow.
I am grateful to the Minister for what he said about the usefulness of this debate, but I am disappointed with his reply.
As he rightly said, although I am opposed to the idea of selling the smallholdings to the tenants, because I believe that it will prevent new people from becoming small farmers in the way that they did in the past, I did not make that point strongly on this occasion because I am particularly concerned about improved marketing arrangements and we are discussing a Bill which deals with marketing. The time scale that has been set by the Minister militates against the objectives of the Bill. The date fixed, in the opinion of many of the tenants, does not give sufficient time to enable them to make the necessary adjustments. In those circumstances, I should have thought that the least that the Minister could have promised was that he would be prepared to extend the deadline. I ask him again: is he prepared to extend the deadline, or to have consultations with a view to extending it?
The Minister said that extension would not help because the growers would be busy later in the year. I can only tell him that there will be no point in the growers being busy unless they have the marketing arrangements that are necessary to dispose of their produce at a profit when it is actually being produced. If the necessary steps are not taken now, the growers will not be busy, because there will be no point in their being busy.
Furthermore, if the bank does not provide the guarantees which are necessary, some of the growers may be pushed out of business before the autumn comes. The hon. Member for Chichester (Mr. Nelson) rightly said that many of his growers have been successful, but I hope that the Minister will recognise that growers in other parts of the country—for example, in Chawston and Potton—are heavily burdened with debts and need an extension of time.
Is the hon. Gentleman saying that the central council cannot work quickly? I assure him that, in the case of a recent problem in Devon, the council worked quickly and effectively in helping with the marketing and assisting a company. I am certain that it will do the same for those growers.
I am sure that the central council can work quickly, and I have praised its work in the past. However, I am worried that some of the growers may not get the necessary capital backing that they need to form the new co-operatives which are necessary in the brief time that is available. It is true that the growers who are represented by the hon. Member for Chichester may be in a position to go ahead, but in other parts of the country they cannot do so.
Perhaps the Minister will address himself to the specific matter of the withdrawal of the Government guarantees to the loans from Barclays bank. If Barclays bank insists on calling in those loans, the growers will be placed in an impossible position.
The hon. Gentleman asked me a specific question to which I did not reply. As I understand it, these Barclays bank loans are normal commercial transactions. In fact, the Ministry has not been directly involved in them, and never has been. I shall certainly look further into the matter, although it is not absolutely pertinent to the subject of marketing.
I thank the Minister for saying that he will look into the matter further. However, as I understand it, the Ministry has guaranteed some of the loans. I think that there is no doubt about it. I see the hon. Member for Chichester nodding in agreement. In these circumstances, the withdrawal of the guarantee is very damaging. When I moved the amendment, I quoted a statement which came from the meeting between the growers and the representatives of the Ministry on this very point. Therefore, I hope that he will consider the matter seriously.
I am surprised that the Minister said that the date chosen is that recommended by the chairman of the LSA. I do not know the chairman of the LSA, but I am rather surprised that he should have recommended that date. However, I can say with some authority that, whatever the chairman or anyone else may have recommended, that date is strongly opposed by many growers who believe that it is unworkable. Therefore, I appeal seriously to the Minister to give some better guarantee and promise that he will look into the possibility of extending the deadline. As far as I can see, no hon. Member can gain anything from imposing a deadline which drives men, some of whom have spent their lives in building up a business, into bankruptcy. No one wants to see that happen.
We all claim, and I claim sincerely, to speak for small business men. In those circumstances, it would be utterly wrong for hon. Members who are not personally involved to discard the pleas which have been made. I shall send the letters I have received from growers to the Minister and I assure him that they have not been concocted by people who are just making a political case. Many of the letters express points of view which I would not wholly agree with, but they make strongly the point that the deadline must be extended.
In those circumstances, I hope that the Minister can offer some hope to a group of deserving people who have worked hard. If the Minister is able to give more solid guarantees than he has to date, I shall not need to press the amendment to a vote.
I believe that the timetable that we have chosen is correct. We do not want any of the problems or difficulties which the hon. Member for Harlow (Mr. Newens) has described and I do not believe that the timetable that we have chosen will create such difficulties. Moreover, I have said that I shall consider what has been said tonight. I cannot go further than that.
I am disappointed if the hon. Gentleman cannot accept my assurances, particularly as I have never questioned the integrity of the letters; I accept them and their strength of feeling. I shall consider what the hon. Gentleman has said, and if we cannot achieve our objectives we shall reconsider the matter. As the hon. Gentleman has questioned the timetable, I wish to confirm that it has been recommended to us by the chairman of the LSA.