Like all hon. Members who have spoken in the debate, I have a constituency interest in the beef industry. All hon. Members who have taken part in the debate have expressed a strong feeling for, and genuine concern about, the future of this important industry. The hon. Member for Dumfries (Sir H. Monro) quoted from the speech by Ian Grant, the president of the National Farmers Union of Scotland at its annual general meeting in Inverness on 12 March. The-hon. Gentleman omitted to quote the interesting passage in which Mr. Grant described the Government's present position as
A botched up incoherent and chaotic set of policy decisions on the Commission's December package proposals.
There are strong feelings in many unlikely areas. The Government ought to respond to the clear and legitimate concern felt by many about the future of this important industry. I welcome the opportunity to consider the serious problems that face the beef industry. I urge the Minister to take steps to protect this important and strategic industry now in its time of need. Many marginal agricultural areas in the north and west and in the uplands are heavily dependent upon the beef sector. Beef accounts for 25 per cent. of Scottish agricultural output. In many cases that beef is produced on land that is suited only to grazing enterprises, in areas that are most vulnerable to economic change.
The Government have a duty to protect that sector of industry in such areas. Long-term policies have to be deployed in an industry of this nature, where it takes years to build up a breeding herd. While it is easy for farmers in an immediate financial crisis to cull some of their breeding cows, it can take a very long time for the industry to replace that capacity. The beef herd has declined every year since the Government came to power. Since 1985 the specialist beef herd in Scotland has declined by one fifth, and production fell by a further 10 per cent. last year, and no wonder, because the real returns for beef production are now, on average, £14 a head less than they were in 1985.
The background to this issue is not very encouraging. The December package—of which the Minister of State has been so proud in his recent statements — could actually cut the basic level of market support by up to 13 per cent. from 6 April. That is disturbing, because many of our beef farmers are already heavily in debt and there is no sign of an immediate let up for them.
I acknowledge that the Minister has succeeded in retaining the beef variable premium. Sadly, farmers in other parts of Europe are about to get a new rearing premium that will further distort the competitive position of our producers. The position of the British beef sector will be further eroded unless urgent action is taken. Indeed, the National Farmers Union of Scotland has expressed the fear that £50 or even £60 a head could come off the value of beef cattle in the coming months. That is a disturbing set of circumstances.
The preferential position of Irish producers in our market is likely to be enhanced by certain aspects of the Minister's December package. We know that there has been a flood of Irish imports for some months, in addition to the beef that is coming on to the market as a result of dairy cows being taken out of production and culled as a result of cuts and milk quotas. These circumstances are playing havoc with British beef producers.
The Minister said that he was excited about having obtained this package agreement in December, but, sadly, he failed to tie up some very important loose ends that should have been included. On 17 December he said:
The package helps very considerably. First, there is more than 400 million ecu put aside to get further exports of beef as the cows come on to the market. That will reduce the number of cows in the market."—[Official Report, 17 December 1986; Vol. 107, c. 1217.]
This point was raised by the hon. Member for Brecon and Radnor (Mr. Livsey), who quoted the interesting comments from Agra Europe, which were published last week, suggesting that that 435 million ecu, which the Minister held up as being available to soften the blow and to protect the beef industry from the knock-on effect of all those dairy cows being culled, may have been a figment of his imagination. The hon. Member for Brecon and Radnor quoted what the president of the National Farmers Union, Simon Gourlay, had to say about that one.
Agra Europe went on to say:
Other items of cash for additional export support that were promised in the package also seem to be in doubt … misinformation … followed publication of the December
package pointing out that it was deceitful to say that the 435 ecu was there when it wasn't … What is becoming clear is that the negotiations of the December package were so complex and so lengthy that there is a marked lack of clarity over what was actually agreed and what were merely items for discussion.
The Minister would do us and the beef industry a favour if he would take the opportunity of this debate to say whether those funds are available to deal with this difficult position. He has a bit of explaining to do.
At the moment, the Minister has on his hands a genuine crisis in the beef sector. This crisis in the market for beef could spell ruin for some producers. The Minister was rash enough to promise specific action to alleviate that situation, and he seems to have been found wanting on this occasion. I hope that when he winds up this debate he will resolve the doubt that has been raised on many people's minds.
I hope that the Minister will accept that the Government have a duty to protect the competitive position of this extremely important sector of British agriculture. The Government should deploy all the mechanisms that they have at their disposal to support the industry in these circumstances. The Minister should use national aids or other measures that may be permitted under European Community agreements, including the suckler cow premium, headage payments, hill livestock compensatory allowances and any other mechanisms that are available to deal with this crisis.
The green pound has already been referred to. I recognise that the present problem may have more to do with the vagaries of the Irish green punt than with the valuation of the United Kingdom green pound, but British agriculture and rural Britain are entitled to expect the Government to take all appropriate action to protect them from any unfair discrimination. That appears now to require a further significant devaluation of the green pound.
On the long-term prospects for the beef industry, I am convinced that the beef and sheep sectors deserve a secure future. Lean beef and lean lamb are healthy foods, produced by an extensive farming system that has an excellent record on animal welfare. If the quality of the product and the price to the consumer are right, there could be scope for a significant increase in the consumption of these products in the future, and that in turn could lead to an increase in the area of grazing land on farms in Britain, to the promotion of a return to mixed farming and to a reduction of cereal surpluses. We must not get carried away. We already have significant, substantial and costly surpluses in intervention stocks.
We wish the Meat and Livestock Commission well in its efforts to improve the presentation and marketing of red meat, and the industry must co-operate in producing quality cattle for those purposes. The MLC should get all possible assistance from the Government in promoting the market for beef. Above all, to achieve that objective, we must get the price of beef right. The beef variable premium is part of the answer, but not the whole one. Our objective in Government, as the Minister well knows because I think that he has had an opportunity to study the Labour party's Green Paper on the future of the agriculture industry, will be to seek to repatriate national aspects of the common agricultural policy, and that must include measures to help our own people enjoy more red meat, which would be good for consumers and for the beef industry. We must press the Government to keep their promises to help the beef sector through the current crisis. That is vital if we are to retain an adequate scale of breeding herd in order to provide for, one hopes, expanding markets for beef in the future.