[Relevant documents: European Community Documents Nos. 4844/87, CAP Price Proposals 1987–88, ADD 1 + COR 2, ADD 2, and ADD 3 + COR 1, 4224/87, Situation in the Agricultural Markets in 1986, 4446/87, Milk Sector Reforms, 4236/87, Disposal of Intervention Butter, 5046/87, Disposal of Intervention Butter (Court of Auditors Report), 4537/87, Intervention arrangements for butter and skimmed milk powder and the Ministry of Agriculture, Fisheries and Food's two un-numbered explanatory memoranda on national aid to French milk producers are relevant.]
The main documents that are listed as relevant to our debate today are those that contain the proposals of the European Commission for changes in farm support prices and mechanisms for 1987–88. It is appropriate that the House should consider them today, since the negotiations upon them will commence in earnest in Luxembourg on Monday.
These proposals, like all other decisions on farm policy, have to be considered against a wider background; indeed, a worldwide one. The problems that face farming in Europe also characterise farming in other parts of the world. The supply of most major products exceeds demand — a situation that results in surplus stocks, low world prices and high expenditure on support measures. Farmers outside as well as inside the European Community are having to adjust. In countries such as Australia and New Zealand, where world prices feed through directly in farmers' returns, this adjustment is sharp and painful. It is not surprising that agriculture has been singled out as a major topic for the new round of GATT negotiations that were agreed last year in Punta del Este.
It was against that background that the Government responded to demands for a strategy for United Kingdom farming and for the rural economy generally. As the House knows, on 10 March we published a number of documents dealing with different aspects of rural policy. In the document "Farming UK" we have set out our view of the many pressures for change which face the farming industry at the present time, and the way in which the industry as a whole must adapt to this situation.
The emphasis can no longer be on expanding production. The level of production in Europe must therefore be brought back closer to the level of consumption. Therefore, we have also to look at alternative uses for land. At the same time, there must be more attention to the needs of the market and to the demands of the environment. The document explains the Government's programme for assisting the industry to move in these directions, and I shall have more to say about that shortly.
Does my right hon. Friend agree that the fact that we can grow increasingly more of our food needs, particularly new hybrids, on a lower acreage, should be seen not as summoning a period of crisis for the farming industry but rather as a period of opportunity, particularly for conservation and opening up woodlands to public access? Does he think that we should increase grants for broadleafed trees and be even more generous than the Government have so far proposed?
We have made available a large amount of new money to support alternative land uses. We must see how that scheme works out before we start thinking of making any changes. With regard to my hon. Friends first point, I am aware, of course, that there are many exciting new hybrid varieties coming along, some of which have been bred in a distinguished way in my hon. Friend's constituency, which will make changes in future. The one thing that agriculture must not do is to get Luddite and believe that it can set aside new developments. If it does that, undoubtedly we will find that the competitive edge is taken by other countries and other farmers.
So far as the common agricultural policy itself is concerned, the document set out the principles underlying the approach that the Governmnt have taken and will continue to take. First, we have to reduce costs and tackle surpluses, by bringing supply and demand in the Community as a whole into better balance. The principal instrument must be price policy, but this should be supplemented by other appropriate measures. Secondly, market forces must play a greater role in determining production. The role of intervention has to be correspondingly reduced. Thirdly, there must be evenhanded and fair treatment between member states, between the different regions of the United Kingdom and between farmers, traders, the food industry and consumers. These principles will guide the Government in the negotiations that are about to start in earnest, and it is in the light of them that we should consider the Commission's proposals.
With certain important exceptions, I believe that the Commission is on the right track. It has to start, of course, from the serious budgetary situation that confronts the Community today. Four main themes run through its proposals : first, the continuation of a tough price policy, involving a freeze on the prices of most products and price cuts for others; secondly, some further substantial moves to limit intervention buying and restore it to its proper role as a safety net in the market; thirdly, the extension and strengthening of the concept of guarantee thresholds, whereby the full level of price support is linked to a specified quantum of output; and, fourthly, changes in the complex green money system.
While I would have preferred the Commission to go further in a number of respects than it has done, its basic approach is the right one and those four points are those that should be addressed.
In one respect we are in an unusual situation in these negotiations, in that the Community has only recently, in December, taken major decisions on milk and beef, which will apply for the 1987–88 marketing year and indeed beyond. As the House will recall, after very long negotiations, decisions of principle were reached on these two commodities under the British presidency in December, and the detailed implementation of those decisions was settled this year in the initial meetings of the Council under the succeeding Belgian presidency.
The Select Committee has drawn the attention of the House to the regulations implementing the decisions on milk and they are also listed as relevant to the debate. For both milk and beef the support provided through the intervention system was, quite rightly, reduced. I remind the House that the variable premium arrangements for beef, so important to the United Kingdom producers, were maintained and safeguarded for two years. That is the longest run for this system that we have ever succeeded in negotiating.
While recognising the valuable contribution to the British beef sector that my right hon. Friend has made by securing that commitment, may I ask him what progress has been made towards encouraging other member states to come round to the same line of thought, so that the system of getting beef down people's throats rather than putting it into intervention may continue?
We made a move forward in the December negotiation, in that although some countries were strongly opposed to it we established a new premium for beef. It is a weaker one than the one that we enjoy, but at least it means that the other members of the Community are moving over to the premium philosophy rather than sticking to the philosophy of intervention that has governed the beef sector for many years. We are making progress there. I know my hon. Friend agrees that we are far better off with our beef variable premium system than we would be if we embraced the new Community premium arrangement.
This year's price-fixing negotiation will be the first for years in which the United Kingdom has not had to fight off opposition to the beef variable premium. However, I am well aware of the current concerns of beef producers. The addition of cull cow beef to the market could cause problems in the future. This matter was mentioned at Question Time. However, recent beef prices have been only 1 per cent. or so below last year's prices. I shall continue to watch this market very carefully.
The variable premium arrangement for beef is similar to the variable premium that we have for sheepmeat. The hon. Gentleman knows that, and also knows that the variable premium for sheepmeat is not practised in other countries of the Community. I think that France has expressed a growing interest in moving towards the system that we have in the United Kingdom for sheepmeat. That is a helpful move in the right direction.
The main feature of the milk decisions was. of course, the cut of 9·5 per cent. in Community output, to be achieved over two years mainly through quota cuts and suspensions, but with compensation. I am glad that the flexibility provided through the formula B arrangements and regional transfers, which the Commission originally proposed to abolish, were retained. That was a big bonus for us. This flexibility is of special benefit to the United Kingdom. Finally, the Council endorsed a Commission programme for the disposal of intervention stocks, with reimbursement to member states deferred until the period 1989 to 1993. Given that the decisions on milk quotas will prevent the stocks from building up again, these exceptional financing arrangements were justified.
In the light of the major decisions taken in December, the Commission's price fixing proposals contain little new on milk and beef. However, one proposal that it makes in this area—to end intervention for salted butter—is one that I shall oppose. The market demand in the United Kingdom and Ireland is essentially for salted butter, and it would make no sense if butter producers in these two countries had to make a different type of butter simply to put it into intervention. The Commission rightly picks on cereals as a sector calling for major changes.
Does my right hon. Friend agree that there are certain problems about the manner in which the French have managed to secure agreement in the Council of Ministers for national aids to France's own farmers? Those aids will enable them to receive social security payments when they have a litreage of, I think, 60,000 a year or less. Are similar arrangements proposed to assist small and medium-sized dairy farmers in the United Kingdom when they are in similar circumstances?
The Council of Ministers discussed this arrangement. It was originally proposed specifically to help smaller farmers, most of whom expected to retire shortly. After discussion the Council agreed that it would allow the arrangement. I think that my hon. Friend has had this question answered before. It was with certain mixed feelings, and in the interests of much wider and more important settlements, that we agreed to the arrangement.
As I have said, the cereals sector calls for major changes. It is crucially important, and the House should note carefully, that the Commission has estimated that unless firm action is taken, stocks of cereals in the Community could reach a disastrous 100 million tonnes by 1993. The Commission's proposals rightly focus not just on the support prices themselves, but on intervention arrangements. Intervention would be available for only four months in the latter part of the crop year, and the monthly increases would be applied to the price only in the last three of those months. This is the right approach. We have always said that intervention should be a last resort and that it should not become a market option in its own right.
On prices, the Commission proposes to cut the feed grain price by 2·5 per cent. and thus widen the differential between bread wheat and feed grain to 7·5 per cent. This is realistic and is in line with what the market would produce. Lower feed grain prices benefit livestock producers and make our exports more competitive. The record United Kingdom exports of grain this season, which will total about 10 million tonnes, have undoubtedly been helped by the lower feed grain prices agreed last year.
This is a tough package of measures. It adds up to an appreciable cut in effective support and I do not expect grain farmers to welcome it. However, the cereals sector must be tackled seriously in view of the perils ahead, and I believe that this is essentially the right way in which to do so.
As I have said before, action on the support level itself needs to be accompanied by additional measures. The House is aware that I advocated last year a cereals land diversion scheme, involving incentives to farmers to take land out of the crop. My intention was to stimulate discussion, and that was indeed the effect. I am glad to see that the National Farmers Union now goes along with the idea of a voluntary approach. Key elements of my ideas were taken up in the socio-structural measure, which again was agreed in principle under the British presidency and put into detailed legislative form under my successor.
Under this measure, member states will be obliged to come forward with national schemes to encourage farmers to "extensify" the production of certain commodities, including cereals, and also to encourage conversion from surplus to non-surplus production. Methods of intensifying production can include leaving land unused, and the concept is thus very similar to the one that I put forward last year.
We shall need to see how far the new measure will be applied uniformly in all member states of the Community and whether its effectiveness can be demonstrated. If so, it will be a useful step towards the policy that I have been advocating. My Department will, in consultation with the interests concerned, work out in detail what needs to be done to implement the decision in the United Kingdom.
Another important and expensive idea, particularly following the enlargement of the Community, relates to oil and fats. Here I cannot approve the Commission's proposals as they stand. They rightly involve reductions in support, achieved essentially through strengthening and extending the guarantee threshold system. However, the Commission has chosen to link this with a proposal for a consumer tax, disguised under the title of an "edible oil price stabilisation scheme", and I am thoroughly opposed to that. It is no proper part of CAP reform to provide extra funding through a tax on consumers, particularly the least prosperous consumers. Moreover, it would damage the Community's trading relations with a large number of countries, including some of the poorest. It would, in particular, be folly for the Community to provoke a new quarrel over agriculture with the United States so soon after settling the last.
My right hon. Friend will have noted earlier the unanimous support of the House for his stance. However, does he believe that our colleagues in the Community understand the dramatic adverse impact that the measure would have on Third-world countries, especially Malaysia, Indonesia and other countries in south-east Asia?
I am certain that it would have that effect. I visited Malaysia last year, and my right hon. Friend the Minister of State has recently returned from the Cameroons. We have both come firmly to that conclusion. and it strengthens our view. I am not alone within the Community in my opposition to this part of the Commission's proposal, and I hope that the Commission will be persuaded to think again and withdraw it. In any event, I shall continue to oppose it firmly.
The hon. Member for Northampton, North (Mr. Morris) asked the Minister what efforts had been made to acquaint the EEC with the effect of the proposal on the Third world. When the Minister met the Select Committee on European Legislation and sent a note to the Committee, he agreed that the Commission's proposals could involve an increase in margarine prices of 15 to 30 per cent., or possibly more. Has he communicated that estimate to the Commission to reinforce his comments, which I am sure have the backing of the whole House?
I believe that the Commission is fully aware of the background figures, and the point will no doubt arise again in our discussions next week.
Finally, on specific commodities, I should draw attention to the revival of the Commission's 1986 proposal to limit payment of the annual ewe premium to 1,000 ewes per farm in the less-favoured areas, and to 500 elsewhere. This is obviously contrary to the principles to which I have already referred. I opposed it successfully last year, and we shall do so again this year.
Turning to the green currency system, the question at issue is the common price level: that is, the level towards which divergent national prices should in principle be aligned. In 1984 it was tied to the strongest currency, and it has in practice been dragged up by the rising strength of the deutschmark. To the extent that countries have taken advantage of this upward movement to raise their own national prices, I believe that the change has been inflationary, and the Commission seems to agree. Its idea is to prevent price inflation in the future by requiring offsetting reductions in common prices in the two years after each realignment of the EMS.
The effect on support prices in negative MCA countries such as the United Kingdom would be neutral, bat in countries such as Germany, national prices would be reduced. That proposal is on the right lines. The question is whether the Commission might have gone further and proposed to abolish the link with the deutschmark altogether.
The Commission has made a number of proposals for the devaluations of various member states' green rates. As I believe the House is aware, it has proposed a 4 per cent. devaluation of the green pound. Given the position in which we find ourselves and the problems of our industry —I am thinking especially of the beef sector — I shall make it clear to the Commission that we shall want to improve on that figure. I shall certainly expect to secure a bigger change than has France or the Republic of Ireland, which have smaller MCAs than we have.
The Commission's proposals, as I have said, are designed to respond to the Community's budgetary as well as to its market position. The Commission estimates that its proposals, taken together, would save 1,300 million ecu in 1987 and 3,600 million in 1988. But 500 million this year and 2,100 million next year would come from the proposed oils and fats tax. Therefore, the savings must be measured against the huge financial problem currently facing the Community.
The Commission estimates that, disregarding its proposals, the available resources fall short of what is needed to finance the CAP in 1987 by nearly 4,000 million ecu. It is therefore very important that the savings proposed by the Commission, other than those arising from the oils and fats tax, are secured. Indeed, the Government believe it essential that additional savings are found, either during the price fixing itself or subsequently, to avoid major difficulties arising later in the year. The 1987 budget must be balanced. There is no question of the Government condoning a breach of the 1·4 per cent. VAT ceiling.
This then, is the Government's approach to the Commission's proposals. While the CAP is much the biggest single influence on our farming industry, full weight must also be given to the action that we can take on a national basis. As I have said, our document "Farming UK" looks at the initiatives that the Government have already taken in the countryside and that we shall be taking in the future. Those initiatives include first, the new farm woodland scheme, on which we have issued a separate consultation document as a prelude to legislation. The objectives of the new scheme are various: the diversion of land from agriculture; the improvement of landscape, wildlife habitats, recreation and even tourism; support for farm incomes and employment; and, of course, timber production, particularly if farmers can be encouraged to adopt the methods that are necessary for high quality timber production. I am glad to say that the scheme has already been welcomed by a range of interests.
When will my right hon. Friend publish further details of the various grants? We have been given the outlines of the various schemes, but when will we be given the nitty-gritty?
I said a moment ago that we had already issued a consultation document on the new farm woodland scheme. I hope that diversification will take place as soon as possible, in view of the urgent need to diversify.
Secondly, I envisage further expansion of traditional forestry, particularly on better land. That will also help with surpluses and rural employment. Thirdly, we aim to double the resources that are committed to environmentally sensitive areas. Uptake in the existing areas has got off to a promising start. In future, as a result of the socio-structural measures, the expenditure will attract a Community contribution. We shall be designating new areas, and I hope to be able to announce these within the next two months.
Fourthly, there is our scheme to help farm diversification, including new assistance for marketing the products of diversified businesses. A consultation paper will appear shortly and we shall be inviting comments on the scope and coverage of the new scheme. The sort of activities that we should like to grant-aid are facilities for visitors on farms, the processing of farm products and recreational and amenity facilities.
My right hon. Friend has been running ahead rather. If there are to be afforestation schemes, will he consider controlling those schemes so that the tourist characteristics of our country are not lost? Will he also suggest to his right hon. Friend the Chancellor of the Exchequer that special grants should be given for doing up redundant steadings and farm buildings, to be used for small business purposes and as dwellings? Although all these measures are good, does my right hon. Friend not appreciate that unless we solve farming finance in this country, particularly in Scotland, by examining the square root of the 4 per cent. devaluation of the green pound—[HON. MEMBERS: "The square."] I apologise; unless we examine the square of the 4 per cent. we shall come nowhere near the real figure.
I think that every farmer in the country would have a heart attack if he heard my hon. and learned Friend refer to the square root of 4 per cent. I note what he said about the controlled expansion of woodlands. Indeed, that point is very much in my mind. I agree that diversification provides a major opportunity to do up old buildings. My right hon. Friend the Secretary of State for the Environment has provided a great deal of planning encouragement for this purpose. I am unable to answer questions about Scotland, but I presume that the same applies to Scotland. If my hon. and learned Friend looks at the papers that the Government published in March, he will see that they contain a number of references to the opportunities that we envisage for redundant farm buildings.
Finally, we plan to place more emphasis in our research and development and advisory programmes on novel crops and livestock — anything from United Kingdom production of cashmere wool to improving production techniques for lupins and sunflower seeds. Again, this initiative could be of interest in a Community context because of the aid scheme for conversion to non-surplus crops that is to be introduced as a result of the socio-structures package.
This programme is designed to encourage farmers to adapt their output to the changing pattern of demand; to divert their land to products that are not in surplus, including trees; to diversify their businesses to make full use of their land and buildings and the skill and expertise of farm and family labour; and in some areas to farm their land less intensively. Overall, it provides voluntary options for those farmers who are looking for additional enterprises.
My right hon. Friend knows that there is a degree of worry that foodstuffs, which at present are not in surplus, will come into surplus if there is a flight from beef. Does he have any proposals to prevent a flight from beef into lamb, which would result in a surplus of lamb?
I understand the problem to which my hon. Friend refers, and I remind him of one area in which I am trying to take his point into account. In the proposals to divert land use from the production of cereals, we have made it clear that we do not intend to provide assistance to anyone who moves out of cereals into grass, because that would be patently unfair to the sheep producers to whom my hon. Friend has just referred.
The common purpose underlying all my inititatives, and those announced by my right hon. Friend the Secretary of State for the Environment, is a healthy rural economy based on an enterprising, adaptable and competitive agriculture and the enhancement of our attractive and incomparable rural environment. I am sure that the House will want to endorse that theme.
Together with CAP reform, these measures are inseparable elements of our overall approach to provide a framework in which enterprise and initiative —qualities that characterise our industry — can be rewarded and in which the rural economy and the environment can be enhanced.
I should be very grateful if my right hon. Friend would refer to what he believes will be the impact of these proposals on consumer prices. He has not mentioned that element. It seems to me that the result of these arrangements will be further increases in the shop price of commodities that are in surplus. Will he tell me whether I am right, or wrong?
My hon. Friend is right when he says that some of these proposals would have a considerable influence on the cost of food. That is one reason why we are implacably opposed to the one item that has the biggest effect on the cost of food—the oils and fats tax. The House ought to recall the Government's record since we came to power. Food prices have risen only at the rate of 6 per cent. a year since 1979, compared with over 16 per cent. a year when the Labour party was in power.
This year's negotiations on common prices will be no easier than in the past. Some member states have already demonstrated their hostility to the proposals. I cannot say when agreement will be reached, but I am determined that the measures agreed must be effective in taking forward the battle against surpluses and their associated astronomic costs; and that they must do so in a way that does not discriminate against the United Kingdom. This is the approach that the Government have consistently adopted, and will continue to adopt, in the knowledge that we are succeeding, and will continue to succeed, in safeguarding the agriculture industry's place as the provider of food for the nation and the cornerstone of the rural economy.
This debate is about more than the documents that we are strictly considering, and certainly more than the price review proposals. To concentrate on those alone would be short-sighted because at this stage it is impossible to forecast how negotiations will turn out. All that one can say with confidence is that they will be protracted and tedious and, if in nothing else, we are united in our sympathy for the Minister, who will have to undergo those protracted and tedious negotiations.
On the three items of concern in the price negotiations, the Opposition echo the criticisms made by the Minister of Agriculture, Fisheries and Food, and the Commission should know that he carries the views of a united House when he negotiates on the three matters that have been mentioned.
On the issue of the oils and fats tax, it is novel to me to discover that, because one is unable to sell one product, one does not drop the price of that product in order to sell it, but raises the price of its competitor product. That is a novel economic doctrine that deserves to be more widely understood than it is. It will raise the United Kingdom food bill by about £300 million per annum. That needs to be stressed time and again. It will raise the price of some of the cooking oils that are available to the housewife by up to 90 per cent. If that were to be forced through, it would be a retrograde step and a source of great hardship and enmity towards the idea of the CAP.
The annual ewe premium, which it is proposed should be paid annually on the first 500 ewes in a holding and on the first 1,000 in less favoured areas, clearly discriminates against the British farming system and must be opposed. So, too, must be the suspension of intervention for salted butter. These are not party political issues; they are matters in which the United Kingdom appears to have been singled out for discriminatory treatment and they must be whole-heartedly opposed.
The debate gives us an opportunity that is rare in the House to debate, in as general terms as you, Mr. Deputy Speaker, will allow, the melancholy story of how far the Council of Ministers has progressed in its task of reimposing control on the common agricultural policy, and how far it still has to go. The answers to those questions are respectively, "nowhere", and "a long way". During our short recess, lamentations have issued forth from the Commission about the imminent bankruptcy of the EEC— yet again. I say that because it is now an almost annual refrain. I believe that many people have ceased to take it seriously for that reason. We were told that the EEC agriculture budget was going to overrun by £3 billion this year, but M. Delors has now asked for a £3·5 billion extra subvention to keep the Community from going bankrupt.
That is quite the wrong way to deal with the matter. We are making a £400 million loan to the Community for butter on advantageous terms and making a further £600 million subvention in the form of loans, so we are being asked to lend the Community £1 billion in the near future to prevent it from going bankrupt. Budgetary control, not increased income, is needed.
The great paradox of the CAP is that, while it costs us more and more, it has proved inadequate to maintain farm incomes in the long run. At Question Time, figures on that were quoted which I believe were generally accepted. Perhaps no such system could work, but I reflect on the fact that, from time to time, the Government talk about others throwing money at problems. There is a real danger in the CAP that many members of the Council of Ministers believe in throwing money at this problem in the hope that that will somehow solve it.
We all agree with the hon. Gentleman that we do not like the prospect of an oil tax. If the EEC is right about the shortfall that will occur if that tax is rejected by all the countries concerned, what alternative would the hon. Gentleman propose to make up the shortfall?
The issue is a serious one. Obviously, the shortfall is being partly disguised. I hope that the hon. Gentleman is not falling into the trap of saying that we must pay an oil and fats tax to diguise the harshness of the position. That makes no sense, either in dietary or economic terms. Perhaps this does not reassure the hon. Gentleman, but the answer is that, with more immediacy and clarity than the Commission and the Council of Ministers have yet managed, we must tackle the problem of overspending and over-production. We can readily get a faultless analysis of the position year after year. We have the common agricultural policy review, which analyses what has gone wrong and why we are overspending, but the solutions offered are limp and meaningless. We must be conscious of that.
We must also be conscious of the sensitivity of food to price movements. Food is peculiarly sensitive to price increases — especially fresh food. We must take into account not only the effect of the price review, but the latest Euromania to issue forth from Brussels, which has been widely quoted—the insistence of the Commission, under the aegis of Lord Cockfield, that VAT be imposed on food. If that happens, and VAT is levied at the full 15 per cent., about £3·2 billion a year would be raised. That would be the extra bill for food in this country. Even if it were charged at a concessionary rate, the addition to the cost of food would still be enormous and its effect would be considerable. Such a tax would be truly regressive, in the sense that poorer families spend a higher proportion of their income on food than do the more well off. Therefore, the tax will bear hardest on the poor in our community, further erode the markets for fresh foods and destroy the hope that people in this country might be encouraged to eat more healthily and in accordance with their own preferences, rather than being penalised by price and forced to adopt a less salubrious diet.
I have been listening carefully to the hon. Gentleman's speech. Will he be explicit about what Labour party policy is on redressing the budgetary problem to which my hon. Friend the hon. Member for Dorset, North (Mr. Baker) drew his attention?
The hon. Gentleman must be the only one not to have listened to the Minister in the last couple of months, and must therefore be unaware of the documents that I and my colleagues on the Opposition Front Bench have issued on the subject of agriculture. I should be happy to make an exception to my charging rule in this case and supply him with a free copy——
Without being immodest, I am the only best-selling author who gets nearer to bankruptcy the more copies he gives to people. I am not too keen on being a general provider of goodies, but if the hon. Gentleman will do me the kindness of examining the argument that is set out carefully and in detail in our document, he will see that we must bring production and consumption into line——
We believe that that should be done by quotas imposed over the whole range of the regime. The hon. Member for Torridge and Devon, West (Sir P. Mills) need not be surprised. He knows my document and he knows of the proposals —[interruption.] I understand the hon. Gentleman to say that he cannot read. Perhaps illiteracy is no part of membership of the House. I cannot possibly afford to provide him with an illustrated copy of the document.
I wish to deal with the question of the effect of VAT upon food. I believe that the Minister was less than reassuring when he said that the Treasury will need to study the proposal carefully. That is not what we want. In the light of the horrendous effects on the population, we want a categorical assurance that the Government will oppose the imposition of VAT upon food in the interests of producers as well as of consumers. [HON. MEMBERS: "He said that."] He did not say that about VAT. With respect to the hon. Member for Hereford (Mr. Shepherd), whose hearing is obviously defective this afternoon, the Minister did not mention the subject of VAT on food. I will happily give way to the Minister if he will say that we oppose the imposition of VAT on food and will continue to do so. I invite the Minister to speak.
What is undeniable and undenied is that we are unable to consume what is being produced. Surpluses, although varying according to climatic conditions — it was not only salesmanship but the Spanish drought that helped our grain sales this summer—are rising inexorably. The problem of how to avoid that is what the CAP debate is all about.
I shall deal with two of the short-term palliatives that have been tried this year in just one of the regimes — dairy products. First, we had the food aid for the needy scheme. Although we were all glad to see that the amounts distributed were disposed of and that people benefited from them, the figures are not quite as good as stated. To begin with, there are three commodities available that we did not distribute at all: olive oil, which is perhaps understandable; sugar, on the basis that there was no demand; and cereals. The United Kingdom was the only country not to distribute any cereals. In milk and cheese the United Kingdom was third in the list of countries according to the amount of distribution. In butter and beef we distributed the most. I again pay tribute to the charities that worked so hard.
However, basic flaws in the scheme are apparent. Indeed, in fairness to the Minister of State, they were apparent from the inception of the scheme, as he mentioned. For example, we do not know how many people benefited from the scheme and what proportion of those eligible actually received the goods to which they were entitled. We do not know where distribution took place properly and where it did not. However, I am sure that what the charities most regret—this comes back to the point we were making during Question Time—is the lack of notice. That meant that the charities had to expend more money on administration. That money could have been used better in fulfilling their normal primary purposes. What has been forgotten is that many of the charities have a lot of useful work to do other than the distribution of food aid, and by charging them for the outward distribution of the food that primary purpose has been inhibited.
Most misleading of all has been the Ministry's propaganda. It has combined an unwillingness to accept what went wrong with an exaggeration of the British effort. Let me repeat, so that the Minister of State can either confirm or deny this in his reply, that whether one takes as a measure of performance overall tonnage distributed, per capita or overall coverage of products, the United Kingdom was not the top country according to distribution. The Minister and I have had an exchange of correspondence and views about this in the past, and I would be grateful for his views now.
However, in essence I believe that the scheme was a stalking horse for a much larger scheme whereby 181,500 tonnes of butter has just been disposed of to Russia. That butter had already been bought into intervention at 49p per 250g pack. Its sale price to Russia is 3·3p per pack—7 per cent. of the intervention price. I believe that the total cost of recent schemes will be about £650 million — far larger than the distribution scheme. The only justification for that would be if dairy production were now according to the quota. However, as we heard recently, United Kingdom production has again exceeded the quota to the extent of £19 million. I am sure that if that is the case here, it will be the case elsewhere in the Community.
In any event, as I understand it, there will have to be quota cuts in 1987–88 to the extent of 6·2 per cent. That is made up of the agreed 4 per cent. plus 1·9 per cent. because of the failure of the milk outgoers scheme and a further 0·3 per cent. transferred to Northern Ireland. In fact, the outgoers scheme was a resounding failure in that the United Kingdom managed to acquire only 11 per cent. of what was required.
The difficulties of adjusting to the ever-changing targets have led to complaints from the National Farmers Union and others. The new national scheme is at the same payment per litre, and only the ability to surrender part of the quota is different from the European scheme. I have to ask whether the Government are confident that that scheme will succeed where the previous scheme failed. If the amended outgoers scheme is as unsuccessful as the last, what will happen? I must reiterate that, while that is going on, farm workers are losing their jobs in the dairy sector in greater numbers than elsewhere in agriculture, as are creamery workers, and there are no special terms for their structural displacement. The Select Committee on Agriculture issued a report in which it made recommendations and focused on that problem. I hope that the Government can tell us today that they have a positive response on that issue.
The Minister mentioned the beef sector. There was an agreement in December, but, as a result of the dairy cuts, increased cow culls — estimated at something over 1 million cows in Europe as a whole—threaten the welfare of the beef sector. We were told that 435 million ecu was available to dispose of the beef, but subsequent events have cast doubt on that matter leading to the Minister's letter last week in which he said—I understand this to be the correct position — that if the beef sector was badly affected he would "press hard" for correction of it. I welcome that statement of intent, but it is not what the farmers were promised. They were promised that it was already budgeted for. I believe that the Minister ought to confirm that it is now in the budget, despite what the Minister of State said about looking carefully through the accounts so that we can spot somewhere a figure attributable to that. We want to know that money, not just good will, has been set aside for the difficulties that will face the beef sector in the near future.
If we are to tackle the expense and the surpluses of the CAP, we have to be willing to have a policy. I believe that the Government simply do not possess one. I have said that we have set out our views. We have set them out with a clarity and candour that will impress everybody, except the hon. Member for Torridge and Devon, West, who confesses his inability to read documents of that length.
He may be able to reckon, but he will have to read in order to reckon.
I want to try to find out from the Government what their policy is for that reform. I have heard many vague statements from the Minister this afternoon about pricing being part of the policy. It used to be all the policy, but they have lost confidence in that as a sign of reform in agriculture policy.
Set-aside has been mentioned, but I do not know whether, in the Minister's vocabulary, set-aside is an elastic definition of extensive farming. We have been hearing from the Minister about the Government's set-aside scheme for many months, but I have never heard any of the details. I have never heard how much land is to be set aside, what is intended in Britain and where the land will be. How much cereal land needs to be set aside? What sum per hectare or acre will be paid to the farmers? Will we have a national as well as a Community scheme and, most important, when, O Lord, when will the scheme start? We have heard that the Commission will bring forward proposals when every nation has drawn up its own scheme.
I have been chided by the hon. Member for Dorset, North (Mr. Baker) about what happens in the here and now, but we have to start somewhere. Given the rate at which the Commission and. the Council of Ministers proceed, they will be endlessly weighing the pros and cons, and will never start a scheme that will lead to a reduction in production. The time for vague expressions of good will is past. Unless the policy is reasonably well formulated at this stage, there will be an unacceptable delay during which further surpluses will pile up before any sort of policy is implemented.
It may be alleged that I have forgotten the alternative land use in the rural economy package. That is not true. I regard ALURE as the most over-rated gimmick that even this Government have attempted to foist upon an unsuspecting public. The whole glossy packet is largely descriptive of what is available in the United Kingdom — plus some pretty pictures. As my hon. Friend the Member for East Lothian (Mr. Home Robertson) said, in the case of Scotland most of the pictures are of his constituency— [HON. MEMBERS: "Mostly of his farm."] Even the document "Farming UK" is descriptive, with exception of half a dozen pages at the end. Of all the proposals, only two were not settled and accepted Government policy before the issue of the document. The first was the farm woodland scheme. Even put at its most optimistic, I believe that it would have done little to transform the situation on cereal land, as we thought it would, or on the hills, as the Minister later explained it was designed to do.
At Question Time we pressed the Government on the detailed costing of the £10 million scheme. The Minister has said that £10 million per annum will be available by the third year. But how much of that is new money and how much of it is involved in acreage payments? With the permission of the Minister's private office, I have consulted his Ministry, and I understand that £8 million of the £10 million consists of planning grant already available and administration costs. Of the £10 million, only £2 million represents acreage payments in respect of forestry. If that is so, the sum is miniscule and derisory, and simply does not measure up to the scale of the problem. I want the Minister to answer that point at the end of the debate.
I shall ask again a question that the Government have sedulously avoided answering—whether the removal of MAFF consent to house building on agricultural land will make planning consent easier to obtain. If, as the Secretary of State for the Environment has said, it will not, what is the point of the measure? What is the point of changing the direction of guidance? The point is that it will increase the sprawl of luxury homes in areas where there is already pressure on amenity and agricultural land.
All in all, the Government's position on agriculture is increasingly not so much negative as responsive: "We wait for things to happen so that we can say, 'No. That will affect British interests'." As my hon. Friend the Member for East Lothian said, one country or another will say no to each of the price proposals. The chance should be seized by the whole Council of Ministers to work positively for the reduction of surplus production and of the expenditure of vast sums to support production that we can neither consume nor store.
The Government by their inaction, have forfeited the confidence of farmers. Their prices policy, particularly as pursued by Lord Cockfield, will offend consumers even more. Above all, it is time that Ministers met genuine concern with action and practical help rather than with overblown rhetoric and adolescent debating.
I have a smile on my face because of the last sentence of the hon. Member for Pontypridd (Mr. John). After all, we have heard much rhetoric and hot air from the Opposition over the years.
I am grateful for this opportunity to speak in what, sadly for me, may be my last debate on agriculture. I have had the privilege of speaking in every agriculture debate over the last 23 years, and, my word, I have seen Ministers come and go. I have seen big ones, thin ones, fat ones, and stupid ones, most of whom were on the Opposition Benches. I have certainly seen problems small and large. I remember coming on to the political scene when a Conservative Minister of Agriculture sought to introduce standard quantities. I remember the row that we had in the west country. I could go through year by year stating the problems that British agriculture has had.
I say sincerely to my right hon. Friend that I do not think that any previous Minister had to face problems similar to those with which he has had to deal. The poor man has been squeezed by the Treasury, farmers and Brussels. We have never had surpluses and my right hon. Friend has had an unbelievably difficult task. Although not many people seem to realise it, his efforts have been immense.
As I survey the agricultural scene, I can well understand the concern and annoyance of farmers, given all that they have been asked to do and all that they have done. Over the years they have made fantastic efforts to carry out the wishes of various Ministers of Agriculture. It is heartbreaking for them to have to go into reverse, but reverse, I am afraid it has to be. The only point is that, if we are to go into reverse, it must be done fairly throughout the Community, which it is not the case at the moment. I had hoped that the Opposition would address themselves to that problem in the way that Conservative Members have been doing, with representations not only to the Minister, but to the Prime Minister and others. In going into reverse, we must have parity and fairness throughout the Community, which we do not have at present.
We must be careful not to make matters worse. That is my criticism of the Opposition and of the press, particularly my own paper in the south-west of England, which is all gloom and doom. It never gets the balance right or highlights things that have gone right and are going right for British agriculture. Farmers do not want to hear gloom and doom all the time. There are bright spots. Some farmers are doing reasonably well, and I shall refer to that aspect in a moment, but they need encouragement from the Opposition and the press, and useful suggestions to help them with diversification and better marketing and to obtain a larger share of the home market. All the time the Opposition and the press reveal negative attitudes. It is sickening.
I do not need the hon. Gentleman to tell me at second hand what agriculture wants. I meet members of the National Farmers Union in county and district branches. I hope the hon. Gentleman accepts that, although they may not agree with everything that I say about the matter, they applaud the fact that someone is putting forward some ideas. Agriculture has been afflicted by uncertainty.
Strange though it may seem, I do not disagree with the hon. Gentleman. Agriculture is a business of uncertainty, but that is the problem of being in the farming community. My right hon. Friend the Minister of Agriculture, Fisheries and Food has to deal with that difficulty all the time.
I am not saying that all is right in agriculture. In my constituency, 14 or 15 per cent. of the population are farmers, and I know only too well what is happening and what my pocket says. There are difficulties, but there are pluses. Any dairy farmer with a reasonable quota knows that he has done quite well under the quota system. The margin over costs has been as good as ever, but we must address our minds to the difficulties as well. Farmers are receiving a better than expected price for grain. That is one off, but it has been helpful during the past year. However, I am not sure that my right hon. Friend is correct about the price proposals. The cereal position this year could be serious, especially if a lot has to he put into intervention. The beef industry is in serious difficulties, and obviously that is a minus. The problem will he made even more difficult by the influx of cow beef on to the market. I hope that special measures will be made while we get rid of the cow beef and that the price of clean beef will not suffer too much.
For some time sheep farmers have been on a good wicket. This year, the new lambs that are coming on in the south-west of England are fetching high prices. I agree with my right hon. Friend that we cannot accept the Community's proposals to limit a flock to 500 ewes. That would be wrong and unfair, but I must warn farmers that, however much they wish to find alternative crops and production, it would be foolish to continue adding more and more ewes to flocks. If farmers do that, they will spoil the market. I understand that the president of the NFU and others are listening to this debate. I hope that they will urge farmers not to overdo it. While travelling the country, I have never seen so many ewes and lambs. That is fine —we want the freedom to increase our export market—but we should not overdo it. We must not spoil the good market.
I should like to refer to the main thrust that the Government should take in Europe. I wholeheartedly support the desire of my right hon. Friend to save agriculture from the complete collapse of agricultural support. I believe that, despite what some people say, there is a real danger. One need only look at the amount of support that British agriculture gets from Europe to see how much we depend upon it. We must take practical steps to limit that expenditure or, I am afraid, the dairy farmer who now relies on £90 a year per cow from public funds will be in difficulty. I hope that the Government's thrust will be to maintain the common agricultural policy. The CAP must be modified and changed, and expenditure must be cut, but it would be a sad day for British agriculture if it lost the support that it gets from the Community as a whole
The Opposition will not get away with anything from me in perhaps my last speech on agriculture. I go around the country talking to farmers and, with great respect to the hon. Member for Pontypridd, have done so for many more years than he has. One of the most dishonest actions by not only the Socialists but the Liberals and Social Democrats is to put forward to the farmers policies which they say they can introduce. They have not learnt the lesson that it is not just a matter of the Minister of Agriculture, Fisheries and Food going to Brussels and achieving changes. Twelve Ministers have to decide on a policy.
What is the use of getting up at a farmers' meeting and saying, as the alliance does, "We can do this for you, the small farmers"? The Opposition know that that is dishonest. It is wrong. When the election is held, they must be much more responsible in what they say to farmers, bearing in mind that one must convince not only Community Ministers in Brussels but the Treasury back home. Some of us who have been Ministers know only too well——
Just a moment. I am in full flight and enjoying it.
Decisions involve not just Ministers in Brussels, but the Treasury. Those who have been Ministers know that it is difficult to convince the Treasury, whether it is Socialist or Conservative, to give the support that one wants. I have lost my train of thought, so I give way to the hon. Member for Wentworth (Mr. Hardy).
I was reluctant to intervene in what is perhaps the hon. Gentleman's valedictory contribution to agriculture debates, but perhaps my intervention will allow him to collect his thoughts so that his flow can continue unabated. Does the hon. Gentleman accept that, if the Labour party were in government and were to implement the policies that my hon. Friend the Member for Pontypridd (Mr. John) has presented out of his own pocket, that would be a much more responsible contribution than that to which he referred by the alliance? Does the hon. Gentleman accept that if the Conservative party were in opposition at the present time farmers in Britain, encouraged and perhaps joined by many Conservative Members, would probably be marching down Whitehall and demonstrating with tractors around Parliament square, to the jubilation and encouragement of the Conservative party?
I probably cannot always read as well as I should like, but I can hear and understand what the hon. Gentleman is saying. It is no good having Opposition policies that cannot be put into practice in Europe. I agree with the hon. Gentleman about the Liberals. They are even more dishonest and disastrous for the farming community. Any farmer who votes for the alliance in the election wants his head seen to. Who wants a two-tier price system? Who wants a land tax? There are enough burdens without that. I know that the alliance has now dropped the agricultural rating idea, but the land tax proposals still exist. A two-tier price system for British agriculture would be disastrous.
I respect the hon. Gentleman enormously. He has made a major contribution to agriculture while he has been a Member, and I wish him the best in his retirement, but today, being his final fling, he is trying to brainwash British agriculture into thinking that farmers are so well off that there is no need for them to worry or look ahead. Can the hon. Gentleman explain why, over the past four years, the net income of Welsh farmers has dropped by 34 per cent. and the net income of United Kingdom farmers has dropped by 21 per cent? Will the hon. Gentleman give that explanation instead of trying to brainwash the public?
I assure the hon. Gentleman that I have certainly never tried to whitewash or brainwash the farmers. I thank the hon. Gentleman for his compliments. I have made it clear that there are serious and difficult problems in agriculture. People are being hurt and incomes have dropped, but there is a balance of good and bad. British agriculture is not helped by gloom and doom. Farmers need encouragement, help and aid in effecting the necessary changes.
I deal next with the green pound. The present position is intolerable and we must do something about it. I suggest that it must be at least 12 per cent. to get the right measure of balance. We cannot continue to allow German and Irish beef to come into this country and destroy our fine meat industry, let alone our meat plants. I beg my right hon. Friend to get down to business in Brussels and see that we get at least 12 per cent. I do not want to sec any of the other countries leapfrogging ahead, because if they do we will need more than 12 per cent.
If this speech by my good friend and neighbour, the hon. Member for Torridge and Devon, West (Sir P. Mills) is to be his last, it is one that I shall regret hearing on that ground alone. He has always been a fount of information. Many of us who seek not to retire might have to learn more about agriculture when his shadow is not cast across the west country. I take his point about 12 per cent., although 15 per cent. might be a nicer figure. Does he agree that we should avoid this problem by joining the European monetary system?
No. Much as I like and admire and wish to help my hon. Friend the Member for Devon, North (Mr. Speller), I cannot assist him on his last point. I agree that the European green pound is the key to many of our problems, not only in beef, but in cereals and other commodities. I wish the Minister well as he battles for that in Brussels. I hope he will not forget that aid needs to be increased for the suckler cow herd. In three or four years, when the cows have been slaughtered from the dairy herd, there may be a shortage of beef. We therefore must encourage the suckler herd at present.
I close by quoting from a letter that my right hon. Friend wrote to many of us on this side of the House, which highlights that mood:
I could say much more but, in summary, I recognise these are hard times for farming. A cut-back is not pleasant or easy to accept. The answer lies not in wooly schemes nor open hostility by some parties but in realistic and fair policies such as devaluation of the Green Pound, increase in suckler cow subsidy and "set aside" with, of course, price restraint.
There must be market discipline within the framework of CAP but there are also new opportunities in our food markets and diversifying activities. The future can be better and it must be better if we work towards these aims.
I say amen to that.
I believe that it is almost unprecedented for the Minister to postpone the annual debate on the price proposals of the European Commission until after the negotiations have begun. I suspect that the Minister intended, by this extraordinary delay, to avoid having to come to the House and openly admit to the emptiness of his strategy for agriculture. By this device he may have hoped to elicit some understanding that, being in the middle of negotiations, he would not have to reveal his negotiating objectives and consequently be taken to task for the misdirection of agricultural policy by this Government for which he has been responsible.
The Minister has, however, held this pivotal office for almost four years. His helmsmanship, therefore, has to be judged not merely by his technical appraisal of the proposals on the table in Brussels today but by his record of steering the industry, apparently without the use of navigational aids, dangerously close to the rocks.
His inheritance was a buoyant and innovatory industry with confidence to invest in its future. Our recent membership of the European Community was seen as providing the opportunity to boost domestic production of food to meet out needs and to enter new foreign markets. The Minister's legacy is an agriculture industry that is deeply in debt, with more than twice the indebtedness that he inherited, with a sharply falling trend in real incomes, and fearful of the future.
The most notable omission from the Minister's speech this afternoon was any reference to farm incomes. He gave no impression that farm incomes would play any part whatever in his determinations in the negotiations that he is embarking upon again next week. The consequences of his mismanagement are felt not only by the rural economy — although agriculture, after North sea oil, is our largest primary industry; related agribusinesses, many located in towns with high unemployment, are also suffering under the Minister's lash.
Only last week Massey Ferguson in Coventry had to declare about 900 redundancies. Throughout the country agricultural contractors, distributors and suppliers are cutting back as farming spending is sharply reduced — last year by 18 per cent. on building and works and 10 per cent. on plant, machinery and vehicles. The alliance parties fully recognise the need—on which the Minister lingered—for new directions in the management of the common agricultural policy.
Does the hon. Gentleman accept that the leader of the SDP, the right hon. Member for Plymouth, Devonport (Dr. Owen), made a speech on 6 January which was described by the president of the National Farmers Union as setting out a policy that would annihilate United Kingdom farming, and a few days later said that it would "rip us apart"? Against that background, how can the hon. Member sustain the nonsense that he has just spoken?
I intend to deal with the policies of the alliance parties. It was probably foolish of me to give way to the hon. Member.
The Minister of Agriculture, unique in the history of his Department, has been subjected to a motion of no confidence by the National Farmers Union. I have gone through the entire history of this Department, which was started by a former Member of Parliament from my constituency, Sir John Sinclair of Ulbster, who was the president of the Board of Agriculture back in the 18th century. I do not believe there has been a more unpopular Minister than the present one, or with greater justification.
I was speaking of the success of our farmers in increasing output by introducing new techniques and breeds, coupled with worldwide development of indigenous farming to supply local markets, and suggesting that this had challenged the assumptions of the architects of the common agricultural policy.
It is ironic that only yesterday was announced the Queen's award for industry to the Plant Breeding Institute in Cambridge for the production and development of Avalon and Mercia strains of wheat. But these very successes are contributing to the strains that the market feels and that farmers must face. It is our criticism of the Government and of the Minister that there is no British stamp upon the thinking of the European Community about how to tackle these problems. Rather, the Minister reacts to the muscle of others, sometimes with total unpreparedness—as, for example, in 1984 when the milk quota schemes were introduced. The Minister's usual reaction is flabby ineffectualness. That was demonstrated last summer with the introduction of the cereal co-responsibility levy arrangements.
The right hon. Gentleman likes to portray himself, as he did this afternoon, as the voice of sanity stoutly defending economic reason and British farming interests. The reality is different. His discredited policy of across-the-board price restraint has systematically alienated all his European ministerial colleagues. It has not deflected the Council of Ministers from damaging and discriminatory ad hoc measures to curb production, such as the package which the right hon. Gentleman brought forward in December, which had such a grave impact on the beef sector. Every time it is the British farmer who loses out under the right hon. Gentleman's stewardship.
Of all the countries in the European Community, the United Kingdom has suffered the largest real fall in farming income since the Government came to office. The alliance recognises the need to change support measures, but it is too much to ask of it and of the country to accept that British farmers must bear the brunt of the changes. Article 39 of the treaty of Rome sets out as the first objective of the common agricultural policy the requirement that it should achieve a fair standard of living for farmers, but that is no longer being secured and there is no evidence that the Minister regards it as a factor to be given weight in the annual price negotiations.
The alliance proposes that the Community should work towards a new price support system for commodities in surplus or close to surplus. The Minister knows and the industry knows that it is the open-endedness of the present system which has caused budgetary problems. Across-the-board price restraint acts as a positive incentive to produce the last bushel of corn from the last hectare of land. Instead, the alliance is proposing a two-tier price system. This would provide that the Community should limit the right to support to the quantities required to meet demand. I noticed that the Minister, when he was referring to the principles being advanced by the Commission, almost with sleight of hand mentioned that as the third principle to which he gave his support. Let him not come before the House and country again and pretend that what the alliance is proposing is unique or uniquely damaging to Britain's interest, when he, by his own words this afternoon, gave the principle his support.
The hon. Gentleman is proceeding in his usual stumbling way and I am not clear to what part of my speech he is referring. I guess that he might be referring to the part of it where I referred to guaranteed thresholds. There is a great difference between that policy and the disastrous one that the leader of his party, the right hon. Member for Plymouth, Devonport (Dr. Owen), and of the alliance is proposing. His party's proposal discriminates against some farmers and not others, and principally farmers in the United Kingdom, and the guaranteed threshold arrangement operates on all farmers equally. Surely the guaranteed threshold system is a good one for that reason, just as the policy of the right hon. Member for Devonport is a wholly bad one.
The Minister can draw a distinction only by misrepresenting the nature and detail of the proposals that the alliance is advocating. He and his sidekick, the Minister of State, have attempted consistently to mislead the farming community on this issue. No doubt we shall have the opportunity of hearing the Minister of State doing that again when he replies. The right hon. Gentleman is a specialist in misrepresentation.
On a point of order, Mr. Deputy Speaker. Is it not the custom of the House that when an hon. Member attacks another Member personally he gives way if' the Member whom he has attacked wishes to intervene?
On a point of order, Mr. Deputy Speaker. Is the word "sidekick" a parliamentary expression? The hon. Member for Caithness and Sutherland (Mr. Maclennan) described my right hon. Friend the Minister of State, Ministry of Agriculture, Fisheries and Food as a sidekick and I should like to know whether that is a parliamentary expression.
The Minister of State has refused to give way to me on three previous occasions when he has replied to debates on agriculture which I have initiated or in which I have intervened. I have no intention, therefore, of giving way to him this afternoon at any stage in the debate.
The two-tier pricing system that the alliance is advancing would ensure that each member country was allotted a share in the total quantum of support that is related fairly to its farmers' contribution to the Community's production needs. It would then be for each member country to distribute that support among its own producers in a manner that: ensured that the different structural circumstances of farming in each member country were taken into account.
In Britain, for example, 11 per cent. of the cereal growers produce 51 per cent. of cereal output. It is not reasonable that the support system should support the entire output of that 11 per cent. It is reasonable that the broadest backs should bear a fair share of the burden of scaling down surplus production.
The Minister says that, but he has been seeking consistently to misrepresent the alliance's policy and I am going to get it on the record so that he cannot do so again.
As I have said, it is reasonable that the broadest backs should bear a fair share of the burden of scaling down surplus production. The few large-scale producers — I have no doubt that they are highly efficient—would not be penalised by a super-levy, unlike the large-scale dairy producers under the Government's arrangements, on the proportion of their output that was unsupported. They could compete without support to dispose of that surplus in the market place.
What is the Government's alternative? They say that they support a set-aside scheme, but I share the scepticism expressed by the hon. Member for Pontypridd (Mr. John), the Labour party's spokesman, about that. There is little evidence in the Commission's proposals that the Government's thinking has found any favour, and certainly not on a scale that would make the slightest impact on surpluses within the Community. There is even less evidence that any Chancellor of the Exchequer would for long be prepared to countenance a system which paid farmers both to produce and not to produce. I know how the Minister has failed to obtain from the present Chancellor of the Exchequer the resources needed to sustain the industry, but I understand that to ask him to do that would be to ask the impossible. It appears that the Minister's ideas on set-aside have been stillborn.
What are the Commission's proposals? Many of them seem unwise and damaging to British interests both in conception and in detail. The proposal to retain the co-responsibility levy on cereals and to extend the principle in respect of A and B sugar is misguided. The restriction on intervention for cereals for a period between February and May will damage market stability but not curb output. The proposal to eliminate salted butter intervention would be especially hostile to British interests. The Minister has the support of the House in opposing those proposals.
Another proposal that is discriminatory against Britain is the proposed reduction of support for single zero rape. Likewise, the Minister's opposition to the proposed restrictions on the payment of the annual ewe premium to the first 500 ewes, or to 1,000 in less favoured areas, enjoys the support of the House.
Among the other nonsenses which the right hon. Gentleman is right to seek to stop is the so-called oils and fat stabilisation measures. As this has been adequately dealt with, I need not say more than that the alliance fully supports him on that point.
What has to be asked, and what I think the Minister might address himself to in replying to the debate, is how it is that so many measures patently discriminatory against British interests reach the negotiating table. Is it another example of how little weight the Minister carries in Brussels that time and again proposals against which he has set his face reappear?
One of the most worrying effects of the Government's makeshift approach to surplus production is the knock-on effect of measures taken to deal with one problem upon the production of other commodities. In the debate which the alliance initiated in this House on 24 March on the crisis in the beef industry we pointed to the damage which the Minister had done both to the beef industry and to milk by the further quota restrictions, recently increased by a further 6 per cent., with the consequential cow cullings in January and February up by 27 per cent., without making additional funds available for storage and export aids.
We have heard nothing today from the Minister about the additional resources which he intimated earlier, misleadingly, were available, beyond the fact that he intends to keep an eye on the market. One scarcely looks for less from a Minister of Agriculture, but it will not offer much comfort to the industry. The problem remains acute and he has done nothing about it. So also does the need to tackle the gross distortion caused by the unfair advantage enjoyed by Irish beef producers in our markets. They seem consistently to get a better deal from their Minister.
There is a further risk of a damaging knock-on effect flowing from the proposal sharply to cut our cereal price support, which is of particular concern to those raising store livestock in the hills and uplands. It is possible that cereal growers will tend to switch to sheep breeding on the low ground — a tendency already discernible and to which the hon. Member for Torridge and Devon, West (Sir P. Mills) referred. The Government must seek to safeguard the hills and uplands by securing increased headage payments and possibly taking direct measures of a quantitatively restrictive kind to ensure that this danger for those who have no option to switch to other forms of production is avoided. I must also reiterate the alliance view that the clawback arrangements on the export of livestock, particularly in the light of the new European premium scheme, are discriminatory and should be terminated.
On milk, the impact of the December package will be severe and will be exacerbated by the February proposals for butter and retention of the co-responsibility levy. It is time for the Government to recognise how badly disadvantaged were British producers by their acquiescence in the choice of the base year 1981 to determine national quotas. During the years for which the Minister has had responsibility, United Kingdom milk production will have fallen by nearly 15 per cent., and it now stands at a mere 80 per cent. of our own market requirements. That is scarcely a triumph of negotiating skill.
Nor have the moves with which the Minister has agreed done anything to secure the objective of the Community to produce commodities in areas most suited to their production. Individual dairy farmers should receive improved compensation for quota cuts by a topping up of the payment by 1·6p per litre to the maximum permitted amount for the current year; and those who lose their jobs in the industry should receive appropriate redundancy payments with Community finance. The further 1 per cent. cut in reduction required of milk producers should be secured by an improved and more generous outgoers' scheme to ensure that the cut is voluntarily achieved. Dairy farmers have been appalled by the Minister's supine acceptance of the Commission's proposals to limit the leasing of milk quota. It is his duty to secure a transfer scheme which is flexible and fair to all producers, tenants and owner-occupiers alike.
In reviewing the Commission's price proposals, I have left to the last the single most important requirement of the Minister, and that is to secure devaluation of the green pound of certainly not less than three times that proposed by the European Commission. His tactics on this have been peculiar, to say the least. His Parliamentary Secretary, who has not been present during the debate today—[Interruption.] I am delighted that he is here. I beg the hon. Member's pardon; I mistook him for the Chief Whip.
I hope that the hon. Member, in his speech in Exeter on 12 March, let the cat out of the bag when he said that a 16 per cent. devaluation of the green pound was of the order that the Government were seeking. Certainly it would not be out of line with what is required. The current tax on exports and and subsidies on imports of around 20 per cent. are deeply damaging to British agriculture and a discrimination against British farmers which is simply intolerable.
This debate, unusually, has linked the price-fixing proposals to wider issues of domestic agriculture policy, some of them raised by the spate of glossy brochures produced by the Government a short time ago, collectively known by the mistaken title of "ALURE". Unfortunately, viewed in the round, those proposals are tantalisingly insubstantial. They are based upon the sensible acknowledgment that traditional agriculture requires less land to produce the food we need. This perception, however, is not translated into practical policies which will have any material impact upon the rural scene. Their announcement was accompanied by the issuance of a maladroit circular——
I am sorry. I have taken rather longer than I intended because of the number of occasions on which I have already given way and I hope that the hon. Member will forgive me if I do not give way again.
The Government issued a maldroit circular from the Department of the Environment withdrawing the previous presumption against the development of grade 3 agricultural land, which, however, offered no Government guidance for land use in the countryside. The belief in a market free-for-all in land fostered by the Secretary of State for the Environment lies uneasily with the Minister's own expressed concern to assist diversification of agricultural enterprises. It is particularly alarming to tenant farmers who may, as a result of the grant of planning permission for industrial use, find themselves served by the landowner with an incontestable notice to quit. This muddled measure will neither protect the environment nor assist the farming industry, and the document should be withdrawn for further consideration.
The best way to measure the ALURE proposals is to observe the modest commitment of resources which the Minister has promised: some £25 million per annum drawn from his existing agricultural budget. That should be set against the sharp reduction in expenditure, actual and planned, on structural measures for agriculture which the Minister has already effected. Since he took office in 1983 the total annual expenditure on structural measures of his own Department—and I leave out of account the parallel measures in Scotland—has been cut from £147 million per annum to £77 million per annum, a cut of 47 per cent.
Indeed, almost the only ripple of interest which the Minister's new proposals have stimulated has been in respect of the proposed farm woodland scheme. The alliance welcomes the expressed aim of the scheme to divert land from agricultural production to enhance the landscape, to support farm income and rural employment and to encourage greater interest in timber production from farms. But the Minister's own targets for trees have not been met. In 1980 we had a target of 30,000 hectares per annum; now we actually have 23,000 hectares per annum; and there is no money coming forward to suggest that even the old target will be met, never mind the new target of 33,000.
Unfortunately, the basis for annual payments under the scheme suggested is entirely wrong, particularly in its treatment of land other than that categorised as especially disadvantaged or advantaged, with apparently little regard being paid to the amount of profit being forgone by farmers. Equally, the rate of annual payment seems wholly unattractive in that the range of payments proposed is between £125 and £30 per hectare per annum. That is the sort of money that is being offered to farmers in environmentally sensitive areas to continue their own present practices.
Whatever system the Government propose to adopt, the savings in agricultural support payments that would flow from an extensive woodland scheme of that kind which cut the cost of storage and disposal of surpluses would allow significantly higher payments to he made to growers, and that should be considered. As the proposals stand, they will make little, if any, impact on the elimination of surpluses and will certainly have no impact unless the scheme is directed towards the afforestation of some of the more productive land.
I must make one Scottish point. Under the terms of the published proposals, crofters would be wholly excluded from the scheme because trees planted on tenanted land, including trees planted on crofts and crofter common grazings, belong to the landlord and not to the tenant.
The ALURE scheme is ill thought out. It is simply a bit of dressing to seek to divert attention from the emptiness of the Government's policy for land use and development of the rural economy, and from the damage that the Minister has consistently wrought throughout his tenure of office. His speech today showed that he has not taken the measure of the crisis that is facing the industry, over whose burdens he presides.
The leader in the April edition of the official journal of the National Farmers Union of Scotland referred to the farm industry's "battle for survival". The Minister appeared to be scarcely aware that a battle was going on, never mind engaging himself, as the leader of the industry, in seeking to ensure that that battle is won. Farming need not wait too long. It is clear that an election is now in the offing, and the alliance is ready and prepared to take up the challenge.
The hon. Member for Caithness and Sutherland (Mr. Maclennan) must have got out of bed on the wrong side this morning. Even when he seemed able to support what the Government are doing, he seemed unable to do so with any grace. That is uncharacteristic of him and I am sorry to have heard it.
However, I heard a little more about the alliance's two-tier policy that seems to be in existence, even if in a somewhat changed form. No doubt there is one tier for the Liberals and one for the SDP.
I want to say a few things about the EEC proposals. It is not trivial to say that if I drop them on your toes, Mr. Deputy Speaker, you would be right to complain. Cannot the EEC, or whoever is responsible for producing the English translation, produce the proposals in a form that we can more readily assimilate? The proposals form a considerable bundle and are extremely difficult to interpret.
I should like to express my support for all that my right hon. Friend the Minister of Agriculture, Fisheries and Food has done in the negotiations. He is aiming at the right objectives and trying to achieve the targets that we all wish to achieve, although he cannot expect, and does not always receive, the success that he should. The churlishness expressed by the hon. Member for Caithness and Sutherland will neither encourage our agriculture nor help my right hon. Friend to get a better deal in Europe. I hope that he will continue his strong approach to obtaining a green pound devaluation such as has been mentioned, and for which there is unanimous support. I hope also that he will try to do more to obtain the leasing of quotas, which I understand his Ministry has rejected and has informed the Milk Marketing Board that the EEC cannot support it. However, it has some potential use and I hope that he will continue to explore it in his negotiations.
I should like to make two general points about agriculture. The first relates to selling. For many years producers have produced, but not many of them in agriculture have had to sell their products. Extraordinarily, by comparison with other industries, fewer of those engaged in agriculture have exercised any influence over their own market place. Perhaps that, is why those who produce and sell have not been seen as part of one process. The CAP has encouraged over-production, partly because of the divorce of production from selling.
The Food from Britain campaign is a small start, but as yet it has not made nearly enough impact. I should like to draw two examples to the attention of my right hon. Friend. The first is the sale of 76,000 tonnes of New Zealand butter. As the Minister of State, my right hon. Friend for Suffolk, Coastal (Mr. Gummer) has stated, New Zealand has no right to sell that butter. I am glad to see my right hon. Friend in his place but sorry to see that he is injured. I trust that it did not happen in any negotiations. I suspect that it was probably in one of the debates of the General Synod. We must do everything that we can to stop him enjoying any laughter, or he may do himself more injury. He made the point that New Zealand exporters have no right to sell butter here; they have an opportunity to do so, but no one is obliged to buy. However, they do.
Paragraph 15 of the report that has just been produced by the Agriculture Select Committee states that the United Kingdom dairy trade would serve our farmers better if it learnt to market its products as well as the Dutch, Danish or New Zealand exporters.
The second example of salesmanship that I wish to draw to the attention of my right hon. Friend is the sale of meat in the United Kingdom. During the past 20 years, although the overall consumption of meat has stood still in the United Kingdom, in the EEC as a whole meat consumption has increased by 37 per cent. At the same time, in the United Kingdom there has been a threefold increase in the consumption of poultry and a 13 per cent. decline in the consumption of other meats on a per capita basis.
Therefore, I suggest that a good job is not being done in the promotion and sale of meat in the United Kingdom. I draw my right hon. Friend's attention to the fact that poultry, which is clearly being successfully promoted, is handled by private companies, whereas beef, lamb and pigmeat promotion is handled by the Meat and Livestock Commission. The M LC is not accountable to its producers, and a number of producers are not satisfied with its performance. I have no doubt that it needs more time to achieve more, and I also have no doubt that its resources are limited.
Two points must be addressed right now. First, the case must be made for meat as against other foods. It is extraordinary that people can sell sweets and confectionery in Britain, which must, on health grounds, compare unfavourably with meat, and that they can get away with selling those goods as though they were somehow healthy or good for us. Secondly, we must consider splitting up the activities of the Meat and Livestock Commission so that pig producers especially can more closely control the promotion of pigmeat. Other sectors of the meat industry could do the same.
My second general point relates to timber and to the case for an extended forestry industry. Sometimes the environmentalists, of whom I count myself one, seem to forget that the ancient woodlands that we wish to preserve once covered most of Britain. Undoubtedly, our lower-lying land could take more trees, and the need for diversification by farmers can encourage the creation of new woodlands. The Government are right to encourage that in the face of the EEC surpluses.
The conservation aspects can be respected, but there must be a balance. The owner of one estate in my constituency is fond of telling me the story of a piece of ground that he took members of one august and respected conservation body to see 20 years ago when it was an arable field. He said, "You will be pleased to know that I am going to plant trees in this field because they will improve the look of the countryside. I am going into the timber industry." They replied, "You must not do that. If you do, it will spoil the look of the down, the lie of the countryside will be affected injuriously and it will not look so pretty." Nevertheless, he went ahead; and 20 years later he took another group from the same body devoted to rural England, of which I am a member, and said, "This wood has been planted for 20 years. You will be pleased to know that I propose to cut it down and restore the land to arable farming." He expected a chorus of huzzas, but they said, "You must not do that. If you do, you will destroy the way the landscape folds and the beautiful scenery. We hope you will not do that." Naturally he did. and the land is now in its former state.
Well designed and managed forestry enhances conservation, not the reverse. We have too many unthinned plantations which are fit only for pulp and we have old-fashioned block plantations which will remain for many years as a reproach to our post-war foresters. The Forestry Commission has not always set the best example in caring for its woods, perhaps for short-term, financial, Government-imposed reasons.
Forestry is a long business. In the United Kingdom the accent should be on first-class timber production, not on the production of wood for pulp. That inevitably means an emphasis on softwood timber. We cannot afford to overdo hardwoods for environmental reasons. Properly spaced trees and a good mix of hard and softwoods, by which I mean up to 75 per cent. of softwoods. which is certainly more than is set out in the consultative document, coupled with sensible thinning policies, can produce a good ecological background, bluebells galore and a viable business.
I welcome the farm woodland scheme and shall comment on it, albeit two days after the end of the consultative period. I favour the first basis for the annual payment as it is administratively simpler and fairer nationally. I do not believe that an annual payment of £125 per hectare will encourage farmers to make what is for many of them a radical change of business, even if they understand, which not many of them do, that that sum is on top of existing grants. The minimum 3 hectare area per holding should be lowered and the 1 hectare per individual block of woodland should also be reduced. The proportion of broadleaves proposed could be reduced to 25 per cent. in lowland areas.
It is essential that good advice is available for farmers if they are to make the change that the Government are trying to encourage them to make. Clearly, the Forestry Commission is the body to monitor the schemes and the conditions imposed. If necessary, assistance in the form of advice should he provided as part of the scheme. I hope that sporting and leisure uses of woodland, which are important and greatly under-appreciated in towns and certainly in this House, will also be encouraged.
I welcome the woodland scheme and the initiatives that my right hon. Friend the Minister is taking to lead our farmers to make changes which, as my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills) eloquently said, must be made if in future we are to have a viable, strong agriculture.
British agriculture faces its present problems because of our membership of the Common Market. The interests of the British people, including farmers, have been sold to unaccountable, predatory multinationals.
I am sorry that the hon. Member for Torridge and Devon, West (Sir P. Mills) has left the Chamber. He accused the Labour party of making promises that we could not deliver. That is because, as he rightly pointed out, we are only one country out of 12 in the Common Market. That, indeed, is the nub of the problem. We are no longer in control of our agriculture.
When the hon. Member for Caithness and Sutherland (Mr. Maclennan) was a member of the Labour party, he defied a three-line Whip and voted to join the Common Market, and now he complains of the problems that we face as a result. It is a little late in the day for that.
We all know that the EEC is hugely expensive. In practice, enslavement to the free market dogma has meant enslavement to multinationals and anarchy in food production. The result has been huge piles of unused food that must be stored. Half the entire EEC budget goes on the storage and disposal of unused food. Recently, the Minister told the National Farmers Union that the EEC now faced a prospective overspend of £2,500 million, almost entirely because of the CAP. Those mountains of food are obscene while people in the Third world go hungry and while the price of food here is too high and many British people do not have an adequate diet. Butter and cheese were easily given away to our pensioners because they needed it.
Despite producing more grain than is used, United Kingdom agriculture is in the ludicrous position of not producing enough food even for the British population. It is 60 per cent. sufficient in total and 80 per cent. sufficient in indigenous-type products. The Minister kept referring to the surpluses in the Community, and I agree with him that we are not producing the surpluses. As I have just pointed out, we are not even self-sufficient. In 1985 we imported food worth £9,762 million. Half our lamb and a third of our bacon came from the other side of the globe, and masses of vegetables and even potatoes were imported. All those imports represent lost British jobs.
Meanwhile, the multinationals have gained immense power, supplying seeds, chemicals, machinery and fertilizers and processing final products. They are increasingly able to dictate terms, and farmers and farm workers are completely surrounded by them. With land ownership speculation and machinery contracting business growing, how much longer will it be before all farmers and farm workers become direct wage labourers for Shell and ICI?
I would describe the Government's proposals, which have been called ALURE, as luring farmers to the death of agriculture. The Tories have made a mess of agriculture, and they know it, and the farmers know it. This represents the end of the consensus of previous Governments of supporting capitalist agriculture through training, tax concessions, subsidies, advice and research and development. The Government have used the lie of surpluses to slash support. I do not accept that British agriculture is in surplus. Our advisory services have been cut by 41 per cent. this year. I believe that the sale of the Plant Breeding Institute and of the National Seeds Development Organisation is imminent, despite the fact that last year the NSEO made a profit of more than £4 million. The Welsh Plant Breeding Station has been devastated. These functions do not disappear, and I believe that ICI is most likely to buy the Plant Breeding Institute and the National Seeds Development Organisation as a package. Who else supplies advice? It is provided by ICI, Shell and others. Did I hear someone say "unbiased"? Never. One way or another, these institutions can distort agriculture.
Workers in research and development realise that their independence is being destroyed for the sake of the multinationals, and they quite rightly condemn the sell-off. However, the crucial point is that the farmers are aware of that as well. That must be the central weakness for the Government. The farmers censured the Minister because they recognised that they had been knifed in the back. They want their independent advice, training and other support services to continue to be free, and I agree with that. Because of record farm debts many small farmers will go out of business, but the multinationals are making record profits.
Farm workers continue to exist on low pay, with 12,000 receiving family income supplement. This means that their wages are below the poverty line despite the fact that 21 per cent. of farmers who employ labour are still doing very well. The low pay of farm workers represents a subsidy to agriculture and food production, on the backs of farm workers.
In 1985 there were 157,000 full-time farm workers, according to Ministry of Agriculture figures. They received £40 a week less than the average earnings of industrial workers for a longer working week. If we multiply that £40 a week by 52 weeks for the 157,000 farm workers, the total is £326 million. That is the measure of exploitation of farm workers. The figure also represents the level of subsidy to the industry that their low earnings reflects. I am referring only to permanent full-lime workers. If that sum of money was injected into the rural economy via farm worker's pay packets, what a difference that would make to improving the standards of the community in rural areas, not to mention the great importance that that would have by improving the standard of living of farm workers and their families, which, on the basis of their first-rate production record, they so richly deserve.
Working conditions and safety are as vital to farm workers as they are to other workers, but those factors have been very much eroded under this Government. Allowing for the fact that there are fewer farm workers now than in 1979, the accident rate in the industry has become worse. When it comes to fatal accidents, only the construction industry is more dangerous than agriculture. The figure in that respect were confirmed by one of Her Majesty's inspectors this morning on the radio.
I want to consider the environment, which is something in which I am very interested. I believe that capitalism places no value on the environment. The environment is there only for exploitation. Current legislation is much too weak to protect our environment. Masses of natural land, habitats and environment have already been destroyed. Chemicals pollute our environment, and of course Shell and ICI are primarily chemical companies. Will they develop new varieties of crops to reduce chemical use? Of course not. They are very aware of the green lobby. and one reason why they buy up seed companies and breeding interests is to oppose any move away from chemicals. Selling off the major state plant breeding interest means that there will be no alternative.
Taking land out of production will increase the intensity of production on the remaining land. The United States' experience demonstrates that. That means that more fertilisers will be used. There will be more soil erosion and more damage to wild life, including birds. All sites of special scientific interest should be controlled by the Nature Conservancy Council as a minumum requirement.
As a Socialist, I want land to be publicly owned. I believe that that is the only safe way to protect sites of special scientific interest. Only when land is publicly owned will we give the right weight to environmental concerns and less to making profits. Removing planning controls from grade 3 land—and perhaps grade 2 land —would put more pressure on SSSIs. That would give private owners of land a great opportunity to speculate and make profit on land. In the process, I believe that that would seriously damage our beautiful rural areas. Only through the public ownership of land can we look after land properly, stop exploiting it, and protect the environment and the great beauty of our rural areas.
I believe that we must move as quickly as possible to low-intensity farming, because that would be more labour-intensive and would create jobs which we so urgently need in rural areas and elsewhere. It would also be more environmentally sound. We must now begin to phase out chemical farming by beginning to use pesticides that are more selective and do not have such a blanket cover. Many of the insects that are killed are not only harmless, but very useful. In most cases farm woodland schemes—which I welcome—will not endanger SSSIs. However, there will be occasions when sites will need protection from such schemes. The racket in private forestry must be stopped. It is damaging our environment and means that rich people are using forestry to rake in public money and avoid paying tax.
Land is our most important asset, next to people. It provides our food through the labour of our people. We must think in terms of better, more nutritious and cheaper food which we could, in many cases, buy on the world market if we were not in the Common Market. However, we do not want cheaper food at the expense of our agriculture, which we must still support so that in future farm workers, as well as farmers and the rural community as a whole, will have a good standard of living, without damaging our environment and heritage.
The land is honest. It will return to us what we put into it. We must stop exploiting it. Exploitation will stop only when land is publicly owned and used for the benefit of the majority, not for the profit of a few.
Although I cannot accept much of what the hon. Member for Sheffield, Brightside (Miss Maynard) said, it is only fair to pay tribute to her enormous work in the House in championing the cause of farm workers in the years that she has been a Member of Parliament. I understand that she is to retire from the House at the next election. We wish her all the very best in whatever she does after the election.
It would probably only be fair of me to declare an interest in this debate as I am a farmer in the south-west of Scotland. It is a wet and cold area. I was also unfortunately one of those caught by the quotas in 1983 having spent a great deal of money investing in the dairy industry and then receiving a very small quota. I understand the traumas suffered by many farmers in Britain over the past few years. My hon. Friend the Member for Torridge and Devon, West (Sir P. Mills) said that as he drove through the countryside he could see that sheep numbers were increasing. The great problem is where to go if one gives up dairying. In many cases, it is into sheep farming.
I listened to all that my right hon. Friend the Secretary of State said and I thank him for all the help that agriculture has had over the past few years. He has the support of the Scottish National Farmers Union. Listening to the hon. Member for Caithness and Sutherland (Mr. Maclennan), I began to think that I lived in a different country. My right hon. Friend has done much over the past few years to try to find some balance in the difficult situation caused by the horrendous costs of the CAP and trying to keep agriculture alive. That is the problem that he faces in Europe because the price proposals reflect the problems of that great expenditure and the need to control it, while at the same time ensuring that we have a viable industry and that the leak is plugged in the agricultural decline.
All Europe is suffering from the problem of surpluses. It has already been said that we must have equality for all in solving the problems. If we start down the roads of national aids or green pound disadvantages, there will be distortions and unfairnesses which, at the end of the day, will help nobody and we shall become more and more nationalistic in our outlook and less and less European.
I do not want to sound all doom and gloom, but, if we are honest, we must admit that we have an industry which is over-borrowed and over-capitalised. In the old days, it was simple: one bought one's way out of that problem by increasing production to pay for increased costs. With the quota systems that we have now and the present state of agriculture, that is no longer possible. The real problem nowadays is to keep agriculture viable, and the acreages of viable units is going up and up.
My right hon. Friend may say that signs are not as bad as I make out, but one must look carefully at the indicators, certainly in the south-west of Scotland. Bank lending is quietly creeping up in agriculture and, sadly, land values are creeping down, putting enormous pressure on farmers. Over the past two years, there has been little capital investment because there have simply not been the profits to reinvest.
The crisis is just below the surface. My right hon. Friend's real task is, with the other 11 Ministers, to try to solve the problem of our horrendous expenditure while at the same time keeping our agriculture viable. Scottish farmers accept that the Community must sort that out because no national Government can do it on their own.
The real problem is that when a large industry goes into liquidation it hits the headlines and one reads about it, but farms are different. There is no major upheaval. The farm simply goes into liquidation. There is a quiet farm sale and yet another dispersal sale has come and gone. Who are buying the farms that come up for sale? In the west of Scotland it is the Irish. They are buying three good acres for every one that they sell in Ireland or 10 poor acres for every good acre that they sell in Ireland. They are doing very nicely thank you because of the green pound distortion that has been mentioned so often in the Chamber today. We really must have the major change that everybody has been suggesting. We must have a major adjustment to correct the distortion. Moreover, many Irish farmers have quotas that are not nearly so severe as in the rest of Britain and many are still expanding.
Another indicator in south-west Scotland over the past three or four summers is summer grass lets. Many farmers who went out of stock rearing because of quotas thought that that was one way of obtaining an income without increasing the glut in other sectors. Four years ago we had an average price of £130 an acre. Last year that was down to £80 an acre and at the end of last week it was down to £60 an acre. There are two reasons for that. The first is that too many farmers are letting their fields rather than stocking them themselves. The second is the loss of confidence in the future by cattle dealers who are waiting to see what will happen to the green pound. They will not take on grass lets until they see that they have a reasonable chance of competing on equal terms in beef with other nations.
The EEC negotiations are vital not just for agriculture, but for the rural economy because rural life depends on strong agriculture. Engineers, blacksmiths, stock-dealers, feed-merchants and the village shop, school and post office depend on strong agriculture. If agriculture declines, the rural economy will decline with it. That is why we welcome the Government's proposals and what they are trying to do towards setting up a rural policy.
The tragedy is that common sense does not prevail in other EEC countries. They are blind to the reality of the mountains of excess food in store and the horrendous costs of storing them. If only a percentage of what it is costing to store those foods could be put into the sharp end of agriculture, many of the problems simply would not be there. Agriculture in other EEC countries has the political clout. They have the vital agricultural vote of 27 or 30 per cent. compared with 3 or 4 per cent. in Britain and their farmers say no cuts in any circumstances.
If we could only cut the amount of food in store — much of what is there could even be dumped to cut expenditure — the money that was saved could be put back into agriculture and we could quickly sort out some of the problems. The only answer is not to produce the excess in the first place, even if that means social subsidies on many of our farms.
The proposals before us are right, despite their toughness, and the industry accepts the position that we have now reached. Unless we have some guidance on the required production and safety margin, and then work within those quotas, we shall see one sector after another hit by a crisis as farmers leap from one sector to another. Outgoing diary farmers will go to beef, sheep, or cereals if possible. That will only put more and more pressure on those sectors.
As others have said, I hope that we are not seeing sheep quotas by the back door. The EEC suggestion that we should have a sheep premium only on the first 500 lowland flocks or 1,000 in the less favoured areas would be disastrous in Scotland. How many farms would such proposals affect in the other 11 EEC nations? They would certainly have a dramatic effect in the United Kingdom.
I hope that when my right hon. Friend the Minister of State replies he will comment on a letter that I received today from a farmer who said:
a more sensible approach would surely be to base Premium payments on the number of sheep per holding related to Standard Man Hours.
We must protect the sheep sector, or it will suffer what has already happened to the dairy sector.
I want to put two specific points to my right hon. Friend. First, there are a number of islands on the west coast of Scotland with a dairy industry and they are extremely close to becoming unviable because quotas are limiting the amount of milk that they can produce for the dairy factories on the islands. I sincerely hope that some specific help can be given to such areas if the quotas of farmers on those islands reaches the point where the dairy was no longer viable.
Secondly, when can we hope to see some harmonisation of veterinary standards in the Community? There are five health tests before cattle can be exported to Europe—brucellosis, TB, official brucellosis-free, enzootic bovine lencosis and infectious bovine rhinotracheitis. Cattle can be well inside the British standard limits yet fail the European tests, denying export to mainland Europe of our stud cattle. Yet our tests let in animals from Europe. I have the feeling that that is more for political than for health reasons. That is denying farmers an export potential in stud stock as an extra source of income in Britain.
To sum up, the industry needs a long-term plan and the Government are trying to give it. The industry needs income to sustain it and I hope that we shall see some help in that area. Every possible new source of income must be tried in agricultural and rural areas. Above all, our agriculture must be allowed to compete on equal terms with its European counterparts, and not against the background of state subsidies or green pound variations. Only in that way can it survive. Given that, even with the negative price review which we simply must have this year, the industry can survive. My right hon. Friend the Minister should be fully supported in what he is trying to do to bring reality back to agriculture in Europe.
I begin my remarks with an apology to the Minister and my hon. Friend the Member for Pontypridd (Mr. John), because I shall not be present for the winding-up speeches. I have an important constituency engagement.
I echo the tribute paid by the hon. Member for Cunninghame, North (Mr. Corrie) to my hon. Friend the Member for Sheffield, Brightside (Miss Maynard). My hon. Friend has served her constituents and the causes in which she believes extremely well. She has always spoken in the House from experience and on the basis of principle. Whatever one may have thought—there have obviously been disagreements about the principles involved—she has done herself, her constituents and the causes in which she believes a great service. The House should pay attention to that fact.
The House is at one with the Minister in calling the price proposals tough. We have had, with one exception, a fairly even-tempered debate. This is because the debate takes place in the middle of the price negotiations. Indeed, they have not yet properly got under-way. That is always the way under the CAP. We must have a debate so that hon. Members can advise the Minister on their feelings about the Commission's proposals. The difficulty is that, under the system in the Community, once the Minister is launched on his way—there are all sorts of compromises and meetings and he reports back to the House from time to time — after the debate there is no longer an opportunity to form a collective view until we are eventually faced with the final proposals.
As the House will be well aware, the old adage about their being many a slip 'twixt cup and lip applies particularly to the agricultural price process in the Common Market. There is many a slip 'twixt Commission proposals and the outcome that Agriculture Ministers finally agree. Indeed, we might have a rather different debate if we were debating what Agriculture Ministers will agree in a month or two. Hopefully it will be in a month or two, but it may take longer than that.
I echo the sentiments of the hon. Member for Cunninghame, North on the green currency issue, although I take a rather different view. Certainly there are distortions as a result of the agrimonetary system, which has become more and more complex. I do not know whether the Ministers understand it. It is difficult for anyone who is not right in the middle of it to understand the technicalities of calculating coefficients, making comparisons and so on. Even Agra Europe, which has been around for the 30-odd years of the Common Market and has been specialising in agriculture, finds some difficulty in assessing what the actual impact of the Commission's proposals will be, let alone the impact of any modifications made by Ministers.
I wonder whether there is a case for using a computer, in Berleymont in Brussels, as I know the Americans and others do, in the trade negotiations under GATT to assess every proposal and the likely direct and indirect implications in a complicated series of calculations.
My worry about the proposals that the Commission has put forward is not that they will not go through—they may or may not go through; they will certainly be modified — but that the Commission has made some proposals on the agrimonetary front. I refer to previous speeches that I have made in agriculture and budgetary debates on Common Market matters. The impact of those proposals is likely to undermine the impact of the price proposal, which the Minister rightly described as tough, but they are price proposals in ecu terms, not in national currency terms. That is what farmers are paid. They are not paid in ecu; that are paid in pounds, francs and so on.
I understand that under the Commission's proposals, when there is a price freeze, six member countries, including ourselves, will be able to take advantage of the green currency devaluations, which, in effect, will help farmers who will not necessarily suffer the impact of the price freeze. A national Parliament—certainly national Ministers —can say that that is very good because we are doing the best for our farmers, but from a CAP point of view we are undermining the impact that the Commission is trying to create in the first place by having price freeze proposals in ecu terms, which, unfortunately, cannot be translated into national terms without the sort of distortions that have been mentioned.
Does the hon. Gentleman say that he approves of Eire being able to send huge quantities of beef here for the purely artificial reason that the green pound is distorted? That is not to do with the total volume of beef produced; it is to do with where it is fair to produce it.
I agree with the hon. Gentleman. He made my point for me. Indeed, the point was made also by the hon. Member for Cunninghame, North. The system is now so distorted that the impact of doing something in one area of the agrimonetary front can distort things in other areas. One must compensate for it in some other way. The whole system is a complicated financial and arithmetical mess.
The real problem that the Commission is trying to face it that of getting price cuts in countries, such as Germany, that have strong currencies and are big cereal producers. Until that problem is resolved we shall only halfheartedly tackle the problem of the growing cereal surpluses, of which the Minister was right to remind us, that are likely to occur in the next few years.
There is obviously general agreement in the House on the oil and fats tax. The Minister rightly said in his opening remarks — I do not wish to misquote him; this is the implication of what he said—that this could re-open a major trade dispute with the United States of America. Fortunately, by the skin of our teeth, countries on both sides of the Atlantic survived what might have been a disastrous trade confrontation on the business of cereals going to Spain and Portugal early this year following their entry into the Common Market. It would be not only imprudent but absolutely ludicrous of the Commission and, indeed, of the Council of Agriculture Ministers to provoke another conflict.
It would indeed be a provoked conflict, since the United States has not done anything to justify what the Commission is proposing. I do not avoid the point that some Third-world countries are affected as well, but the big impact will be on the United States of America. I know that the Minister is well seized of the feelings in the House and, probably, of the country as a whole, and that he will persist in his opposition to the proposed tax.
Cereal intervention restrictions, which I think will apply for five months of the year — from February to June — which we support and which obviously seem to be a good idea generally, seem to be fairly widely opposed in the Community. We seem to be, if not on our own, almost on our own in opposing them. I hope that the Ministers who go to the Council will be able, by using logical and rational arguments, to drum-up rather more support — not to the stage of blocking minorities or anything like that because we have a power of national veto — so that something will be done to try to ensure that the Commission's proposals are put into effect. That will certainly help on the cereals issue.
I do not wish to be unkind to our Minister, but I shall quote from Agra Europe of 27 March, commenting on the progress — there was little at that stage — of the price negotiations. Under the headline "Ministers' irresponsible attitudes", it stated:
The attitude of the ministers
— that is the Agriculture Ministers of the Economic Community—
demonstrates a considerable degree of irresponsibility and an almost complete contempt for the non-agricultural section of society which has to foot the bill for their inability to take unpleasant decisions. Indeed, this year's succession of events — or rather non-events — demonstrates clearly, if such demonstration were ever needed, that the only concern of agriculture ministers is with the agricultural interests and not with the general public good.
I do not necessarily think that that applies universally to our Ministers, but it applies to a considerale number of Ministers in the Economic Community, who, unlike our Ministers of Agriculture, are not also Ministers of Food, with an interest in protecting the consumer. They are mostly other Agriculture Ministers and dismiss the consumer interest for what it is worth, because their interest is solely that of their domestic farmers.
I refer briefly to the impact of what has been proposed in the Budget and the general Budget situation, although, or course, this is not a Budget debate. I was horrified at the Minister's latest estimate from the Commission of the deficit in 1987. It is nearly 4 billion ecu. It was about 3·2 billion ecu. It seems to have gone up in the past month or two. In addition to that deficit, there is also a hidden deficit of 3·2 billion ecu. That is almost as much as that which, fortunately, was pushed to one side — I say "fortunately" because it was fortunate from the point of view of the 1987 budget—by the subterfuge of allowing national bodies to engage in butter dumping and to pay for it themselves on the basis that they would he recompensed in a few years. Agra Europe calls it "borrowing", but by any other name it is a loan from national Governments to the Community. Loans are illegal under Community rules and regulations and the basic treaties and, therefore, one has to resort to increasing numbers of expedients to try to keep the situation going even though one is not righting it from one year to another.
The Common Market is very good at blaming other people for its own deficiencies. One has some sympathy for Agriculture Ministers because the fall in the value of the dollar has obviously added considerably, even since last year, to the cost of the common agricultural policy. I believe that the figure last month was about 1·2 billion ecu of the 4 billion that we are talking about, plus the 3·2 billion. That is a considerable proportion. In addition, the Community is its own worst enemy in terms of currency fluctuations both within and outside the European monetary system. We cannot blame the rest of the world for currency fluctuations in a trading bloc. We must sort it out between ourselves, and we are not doing that.
The fall in world prices, which technically might seem to be a matter outwith the control of the Commission and Agriculture Ministers, is affected greatly by the Community because it is the biggest, or the world's second biggest, exporter of agricultural commodities. If, as the United States is doing, it is dumping commodities on world markets at well below the cost of production, agricultural prices are bound to be depressed. There is no point in blaming the decline in world agricultural prices on the increased cost of the policy, because it is the policy that is to blame in the first place. We do not have a balanced budget. All that we have are evasions and subterfuges. I stress that that is the responsibility, not of Agriculture Ministers, but of Finance Ministers and Heads of State, who should take a grip on the whole thing but have not yet done so.
My last two comments are about matters raised by my hon. Friend the Menber for Pontypridd. The first is about VAT on food, on which I echo my hon. Friend's remarks. I know that it is said on behalf of the Prime Minister and, I think, on behalf of the Chancellor of the Exchequer, that the Government have no intention of introducing VAT on food. One accepts that. The Minister of Agriculture, Fisheries and Food may not have said it, but I read in a fairly reputable newspaper recently that that is the case. Those words are not really necessary, because one never thought that even this Government had any intention of introducing VAT on food.
The key question about VAT on food is whether under pressure from the European Court or the Commission in the horse trading that goes on in Brussels over various issues, not merely about agriculture, but about other things, as part of the package of measures leading to the single European market to be created in 1992 our Government will be forced against their will to put VAT on food. I hope that I heard my hon. Friend the Member for Pontypridd correctly. I am not sure whether the hon. Member for Caithness and Sutherland (Mr. Maclennan) alluded to this, but it is an issue that will arise in the coming general election. It is not merely that one has no intention of putting VAT on food, but that one will on behalf of one's party if it gets into government resist the imposition of VAT on food. That is an important statement and I hope that all political parties in Britain Will be prepared to make it. We shall have to wait and see.
The final matter with which I want to deal is food handouts to the needy, the pensioners in particular. Speaking about conditions locally, and also from what I hear from other hon. Members, the distribution did not always go terribly well, and that is putting it mildly. In case I might be accused in the approach to a general election of political bias, I shall quote from a circular issued by my branch of Age Concern, which was one of the two charities in Walthamstow involved in the distribution of food. The other was the Salvation Army. Age Concern is completely non-political and its circular says:
Distribution of butter in Waltham Forest"—
that is my London borough—
has been a fiasco, and we aren't the only part of London or Britain to say so. Information was late, co-ordination lacking, orders cancelled because suppliers couldn't supply, telephones were rung and most of all tempers were frayed on all sides. No-one has benefited, and few people have got any butter.
That may be a slight exaggeration because obviously some people did get butter.
The circular goes on:
The goodwill and benevolence of voluntary organisations, including Age Concern, has been exploited—all we've got out of the butter mountain is headaches. No extra money has been given to groups like us for the costs of distributing at a local level, and so far it has cost us almost £100 in postage, telephone calls, copying and envelopes. And that's not counting all our normal work that hasn't been done.
That is a small local branch of Age Concern. The circular then talks about the lack of planning and distribution and the abuse that has been heaped on a voluntary body, by many angry pensioners who were not able to obtain supplies, or who, by the time they got to know about them, found that they had all gone.
The circular ends on a positive note and, with the best will in the world, I draw it to the attention of the Minister. It says:
If there is a next time, the government must ensure:
I pass on those thoughts in case we should ever be saddled with such a scheme again. These are really palliatives, because the butter and cereal mountains remain and there is no substitute for thoroughgoing changes—I shall not say reforms — in the structure and principles of the common agricultural policy.
One of the few good signs in the Commission's proposals is that we are asked to think about the future and not just about the immediate impact of price cuts and freezes, because there is a reference to possible direct income subsidies to farmers. I know that that is a vague idea that is floating around, but the fact that the Commission has mentioned it at this stage is interesting. One hopes that in due course Ministers will be able to give the House rather more information about what is intended. I know that at the moment there is very little flesh on the bones, but it could conceivably be a step in the right direction. However, there is a very long way to go.
I shall be brief because many hon. Members wish to take part in this important debate. I have already said that since New Zealand has abrogated her obligations in defence, I see no reason why Britain should continue to admit New Zealand dairy produce to the United Kingdom market. It causes great damage to British agriculture and to the finances of the Community. The point about a 16 per cent. devaluation of the green pound needs to be reiterated. We should insist on that because there is no great merit in going half way. Some of my farmers have had a profit of only £17 a heifer after keeping them for more than a year. We must get that figure substantially increased.
It is vital to restore confidence in the ability to rent or lease milk quota on an annual basis. Many people planned on what was the reality but there is now chaos because doubt has been cast on the reality. I ask my right hon. Friend to do everything in his power to sort this out with the Community.
An important matter has not yet been raised, and it has to do with pigs. There is a hazard to pigs in Britain from classical swine fever which is endemic in Holland and West Germany, and which is eliminated only by very prolonged cooking. Moreover, some member states import infected pigs from Holland and West Germany and then process the pigmeat so that it reaches Britain from countries in which the disease was not originally endemic. This is widely known because every pig producer is told to make sure that no waste pork products from his own family's consumption find their way into his pig feed.
There is no way of stopping holiday visitors or others casting away ham sandwiches with undercooked ham in them, or from throwing away bits of pork pie and other such produce. On genuine, and not spurious, health grounds, we need to ban the import into the United Kingdom of pork products that have not been cooked for a very long time. That means cutting out all bacon, ham and sausages. We must do that before we are faced with the disaster of classical swine fever sweeping through our pig herds.
On the question of transferring milk quota from Great Britain to Northern Ireland, may I ask whichever one of my right hon. Friends will be winding up the debate why the under-quota in one part of the United Kingdom cannot be offset against the over-quota in another part?
Those are the principal points that I wish to make. I could make many others, but I know that many of my colleagues are waiting to catch your eye, Mr. Deputy Speaker.
I shall not follow the line of the hon. Member for Tiverton (Mr. Maxwell-Hyslop), apart from deprecating his "guns or butter" remark about New Zealand. However, I shall follow what was said by my hon. Friend the Member for Walthamstow (Mr. Deakins) about the distribution of products in his constituency, arising from the Community system, to the elderly and those on welfare benefits. His experience is echoed everywhere.
If the Community is to come up with such schemes, which are not really social policy schemes but disposal schemes, they should be effective through the network of social distribution that normally applies. I think that most of the voluntary sector felt that the scheme was an imposition on their role, and that distribution on a mass scale was not the sphere of social policy to which voluntary organisations are geared. Departments and Ministers in the Community should think again when they bring forward such proposals.
The main part of what I want to say concerns direct income aids. First, however, let me join in the tributes paid to the hon. Member for Sheffield, Brightside (Miss Maynard). Although I do not necessarily agree with her application of Socialist principles to agriculture when she demands immediate public land ownership, her fresh approach has always ensured a major and distinctive contribution. We shall miss her terribly from our agriculture debates, particularly on this side of the House.
As I keep reminding the House, I live in and represent most of the Snowdonia national park. I put that on record in the hope that I shall continue to do so. It is an area with a distinctive landscape, and also with distinctive agricultural production. The rural economy of Wales is based largely on livestock production, and areas such as Snowdonia have little alternative because of the nature of the terrain, the soil and the climate.
In 1986, the total value of Welsh farm output was £730 million, to which the dairy and beef sectors contributed over 60 per cent. That shows the key importance of those sectors in our economy. Any decisions taken at Community level in Brussels about those sectors will have a particularly strong impact on the agricultural economy in Wales.
Many farmers in Wales look with envy at the direct representation that the Republic of Ireland has always had as a member of the EEC, and see the force of the arguments put forward by some of us for a stronger Welsh presence in Brussels—including occasional visits by the Secretary of State for Wales, who has never been in Brussels as the Agriculture Minister. He will leave office as the longest-serving and most interventionist holder of that office without once having intervened in the agricultural negotiations affecting Britain. There is no reason why Welsh Office Ministers, as Agriculture Ministers in their own right, should not speak on behalf of the United Kingdom in the Community in the same way as Scottish Ministers. I do not expect the English Minister of State to respond to that point, but I put it on record as my tribute to the retiring Secretary of State.
I stressed the importance of the dairy and livestock sectors in Wales. Let me demonstrate the extent of the crisis by quoting from a survey undertaken by the Welsh Office Agriculture Department, which showed that in 1985–86
one fifth of farm businesses made no income at all and almost half of the businesses in the survey earned substantially less than the wages of a general farm worker.
There is also a massive level of indebtedness, especially among marginal farmers, to the banks. Added to that, there are crises such as the one that recently overtook the lamb processing sector with the collapse of Welsh quality lamb production. The major losses sustained by Welsh sheep farmers came on top of the losses sustained as a result of the Chernobyl disaster. Although the Government have at last devised a compensation scheme that comes somewhat closer to meeting the need, they took a very long time to do so.
An examination of the various sectors of the Welsh farm economy shows clearly the undesirability of repeating the disastrous effects of imposed milk quotas in any future reductions in production. That is why it is essential that any quota scheme should be voluntary, that the outgoers scheme should be made more attractive and that compensation for quota cuts should always be available as early as possible in the milk year.
We are also very concerned about the effects of the settlement announced in December involving extra cow slaughterings arising from milk quota cuts, on top of the lower level of price support for beef. Those effects are maximised in the livestock sector, and there is a knock-on effect through the system up to the store cattle production with which I am familiar in the hill areas of Snowdonia. That is why we need a substantial rise in the suckler cow premium, and to ensure that we do not see the major reductions in producers' returns that have been estimated by the National Farmers Union and others as being up to £60 per animal.
In the sheep sector, we must ensure—as other hon. Members have pointed out—that there is no transfer of productive resources from one sector to another. We heard earlier today about increased numbers of ewes and lambs in the south-east and south-west of England. That is very worrying for those of us who represent hill areas, where the main source of livelihood is from sheepmeat, and where there is no opportunity of diversifying into any other form of production. It is essential that we should consider either regional quotas, or at least some disincentive for areas not adapted to or suitable for sheep farming to take it up as quotas drive them out of other forms of production.
As we look to the longer term, we note the serious warnings about the future of agriculture, particularly in hill areas. One such warning has been quoted in the Farmers Guardianof 11 April. It quotes Professor John Marsh of Reading university, who is involved with the land utilisation group of the Agriculture Economic Development Committee, as saying:
It might in future be better to steer hill farmers into non-farming activities rather than continue to support them at ever increasing cost".
Professor Marsh went on to talk about the contents of the land utilisation group's report, due to be published in May or June. It forecasts a likely fall of 18 per cent. in cereal acreage, and therefore a decline in livestock numbers over the next 10 years. That, said Professor Marsh,
would have a 'shunting' effect on other areas of production such as the hills."
Those are the kind of serious long-term warnings being given, not only by leading long-term academics. In this morning's Western Mail, the county planning officer for Dyfed, Mr. David Bown, described the Welsh countryside as being turned into a "hillbilly" countryside,
littered with abandoned agricultural machinery, broken fences and walls, together with unkempt fields and woodlands neglected by poverty stricken farmers under severe economic pressure".
That was his view of the effects on the countryside of harmful reductions in the standard of living and the incomes of Welsh farmers. His fear is that income reductions as a result of price squeezes are not met with forms of income support that will retain the livelihood of people in the countryside. It is to that point that I wish to turn for the main part of my remarks. I shall try to be brief. That is my practice, and I wish other hon. Members would follow it.
The effect of reducing the level of income through the price squeeze and not substituting by other means is what most concerns us as we look to the future of the countryside. That is why I welcome in principle the income aid proposals that were published by the Commission on 14 April. We are referring to a very small area—only 360 million acres a year for the next five years. This expenditure will probably be concentrated on the more severely depressed regions of the Community. From an earlier assessment of the proposals, it is not clear to me whether money will be available for those parts of Wales that I have described.
The proposals represent recognition by the Commission of the fact that the price squeeze effects of the CAP cuts can adversely affect certain regions and types of farming and there is a need for equity. The proposals have been welcomed in principle both by the Farmers Union of Wales and by the National Farmers Union. Mr. Maurice Trumper of the Welsh NFU has made the point that the proposals for direct income aid are no substitute for an effective commodity price support system, but he says that if they are well designed and adequately funded they could provide a useful supplement.
In that context, I ask the Government to look seriously at the proposals for direct income support through the pursuit of conservation policies that have been put to them recently by the Association of National Park Officers. The association stresses the harsh environment for agriculture in the national parks and says that changes at European level have a direct effect, because of the dependency on livestock and the marginal nature, in income terms, of the farming that takes place there. It proposes that the Departments that have responsibility for the national parks—the Ministry of Agriculture, Fisheries and Food, the Welsh Office and the Department of the Environment—should try to encourage farmers to perform what the association describes as
the dual role of food producers and environmental managers.
The association stresses that farmers' conservation activities should not lead to the loss of income gained from food production. However, it believes that a positive approach to conservation should be adopted, the reward being pride in a job well done. The concern is that, if the price reduction policies of the Community have a negative effect on the livestock sector, the environment of the countryside and the pattern of the landscape will suffer as much from the artificially induced drop in support as, some conservationists have argued, it has suffered from over-development, over-fanning and far too intensive stocking.
The Departments that have responsibility for agriculture should consider the introduction of positive policies. They have already started to do so. The Agriculture Act 1986 introduced the environmentally sensitive areas concept. We need to develop it much further. Conservation of the landscape of national parks should be regarded as a positive part of agricultural policy.
Landscape is not a crop, as is a particular food crop, but our agricultural policy should recognise the importance of the environment. Therefore, the Departments with responsibility for agriculture should look to the maintenance of landscape features and to the creation of new features. They should also look to the maintenance and use of traditional buildings and take into account all the diversification aspects that have been referred to by the Departments in the alternative land use in the rural economy programme and in its Scottish and Welsh equivalents. They represent a broad approach to the conservation of the landscape, the environment and the population of the national parks.
Agricultural policies should be used to bring about that result. It would require review and reform of the hill livestock compensatory allowances. It would also require an approach that combined environmental conservation with a lower level of food production. The impact of such changes on farming would have to be assessed in a most sensitive way. It would also require a regional and local approach to the kind of agricultural policy that we do not yet enjoy in the United Kingdom.
Within the framework of the European proposals for direct income aid there is an opportunity for the United Kingdom Government to take an initiative that would combine conservation and agricultural purposes. This is the European Year of the Environment. I hope that the Departments will respond to it.
Every hon. Member who is interested in agriculture will be very sad about the fact that we shall not hear my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills) speak in future agriculture debates, but we shall of course be hearing again from my right hon. Friend the Minister of Agriculture, Fisheries and Food. We all agree that he has had a very difficult task. My husband always says that it is like inheriting a brewery when the beer has run out. There is no doubt that my right hon. Friend fights very hard to get a fair deal for our farmers.
I was relieved to hear my right hon. Friend reaffirm yet again this afternoon that he will not tolerate unfair discrimination against British farmers by the introduction of a two-tier price system, as was suggested by the Commission and enthusiastically but unwisely welcomed by the leaders of the alliance in January and repeated in various guises by the alliance at intervals since then.
It is not always appreciated in this country that the person we think of as a small farmer would be a large farmer in EEC terms, since their farms are only a third to a fifth the size of ours. Therefore, most of their farms would benefit substantially from two-tier pricing, while only about one in 10 of our smallest farms in such places as the Welsh mountains would benefit. That is probably where the policy came from. All other farmers would lose a great deal. That does not seem to matter to the right hon. Member for Plymouth, Devonport (Dr. Owen), but it certainly horrifies the farmers and the NFU.
I hope that my right hon. Friend will continue successfully to resist these highly discriminatory proposals. My farmers are becoming increasingly restive about the continuing import of 76,000 tonnes of New Zealand butter. In the past I supported this policy. I do so no longer. We promised to continue these imports when first we joined the EEC, but for a limited period only. That period has long since gone, as has the justification for the policy. We should no longer allow New Zealand to send us butter. Instead, we should allow our farmers to have the benefit of increased quota. There can be no doubt that the measure that would do more than any other to improve the financial position of all our farmers would be an adjustment of the green pound.
The December devaluation, although very welcome, was only a drop in the ocean. We cannot tolerate a system whereby the Germans and the Irish can flood our market with beef because of the advantage of the artificial rate of the green pound. The Commission's proposal of a 4 per cent. devaluation is inadequate. We must press for 16 per cent. to give all our farmers a fair return on all their products.
I know that my right hon. Friend has fought hard to retain our excellent sheepmeat regime. It is crucial in my part of the world. I was glad to hear him say again today that he will keep up this fight. Beef is going through a very bad time. The beef variable premium must be retained at a fair rate. There are signs that other EEC countries are beginning to realise the advantages of this scheme, which puts meat into ovens instead of into intervention. I hope that my right hon. Friend will continue to press this policy on his EEC colleagues and that he will get them behind him so that we are all pulling in the same direction. Because of the present heavy cow culling, there will be a great shortage of beef in three or four years, so an increase in the suckler cow premium is necessary. That would greatly help the smaller farmers.
One matter that is causing my farmers considerable concern is the suggestion that VAT should be applied to food. That would inevitably reduce consumption and cause hardship for poor families. I hope that my right hon. Friend will very strongly resist that suggestion. When farmers are having a difficult time and are still facing many problems, it seems to me to be quite unnecessary to annoy them by charging them for such services as inspections. which previously have been provided free. I hope that he will reconsider this policy as our economy continues to expand and the Treasury grip relaxes. My right hon. Friend the Minister has a tough battle ahead of him, and I wish him every success in it.
I followed the speech of the hon. Member for Lancaster (Mrs. Kellett-Bowman) with interest. I have never agreed with her before, but I agree with her point about charges for inspection to farmers, especially where it is hoped to persuade farmers to make a contribution to conservation. That charge seems to me to be unwise and distasteful.
I am not sure that I agree with the hon. Lady about New Zealand butter. I cannot recall the precise date of the agreement to which she referred. As a trading nation, it might pay us to examine our trading balance with New Zealand to determine whether it is healthy. Perhaps we should not imperil the manufactured goods that we may and should export to that country, as they may lead to more employment. Perhaps we should examine the less satisfactory trading balances between ourselves and certain member states of the EEC more closely than the hon. Lady would like. At least she recognised that British agriculture is in a grave situation.
When I intervened in the speech of the hon. Member for Torridge and Devon, West (Sir P. Mills) — should there be another agriculture debate after June, it is to be hoped that he will be able to make a second valedictory utterance — I reminded him that if a Labour Government had been in power in the present circumstances of British agriculture he perhaps, and certainly some of his colleagues, would have led the parade of tractors and bewildered beasts being driven by angry farmers around Parliament Square and down Whitehall.
Hon. Members will not deny that farmers demonstrated with far more heat and for far less reason when Labour was in power than they do today, with all the difficulties that they face. For example, 9,000 jobs have disappeared from British agriculture in the past 12 months; the level of investment in farming is lower than it has been for generations; and farm incomes are now way below their level when the Labour Government were in office, or even when the Conservative Government who took us into the Common Market were in power. So there is genuine cause for concern.
I am amazed that, even given the natural inclination of many farmers not to rock the Conservative boat, they have not been more angry in their comments and positive in their actions. The Minister of Agriculture alone was singled out for criticism at the National Farmers Union conference. The farmers did not try to blame the rest of the Government. The right hon. Gentleman's shoulders had to be broad enough to bear the whole of the encomium that they lavished upon him. We, however, are complaining about the whole Government, not merely Ministers in the Department. That Department does not enjoy great esteem, and I shall come in a moment to my reasons for saying that.
I do not believe that the Government should rely as excessively as their dogma might persuade them to do on the pricing mechanism; nor should they rely on the advice that they are receiving from the hon. Member for Lancaster about the green pound. We need to be more searching about the policies of the Government and the alliance on this matter. The Government seem likely in the end to agree on a level of change in green pound values that would not satisfy the hon. Lady; nor would it satisfy the hon. Member for Caithness and Sutherland (Mr. Maclennan), who might wish to see a much greater change in green pound levels than the hon. Member for Lancaster. They will, of course, be very reluctant to explain to the voters what the consequences of their political commitment might be. Alliance policies would increase British food prices by well over 10 per cent., and possibly more than 15 per cent. —especially if their apparent espousal of the cause of applying VAT to food is realised. That is a logical deduction to make.
I am glad to note that the hon. Member for Brecon and Radnor (Mr. Livsey) is confirming that his side of the alliance is almost passionately opposed to the application of VAT to food. I rather think that hon. Members in the other half of the alliance are by no means so firm in their commitment. It is a pity that the hon. Member for Caithness and Sutherland is not here, because I suspect that when members of his party talk to farmers they will be in favour of the green pound changes at the maximum possible level, and when they talk to consumers they will stress their passionate concern to keep down the price of food.
I believe that the Minister has a responsibility to maintain the price of food at the lowest possible level, partly because people have to eat, partly because many people are less able to afford it if food prices rise, and partly because food needs to be consumed rather than put into storage, which costs a fortune. The alliance cannot have it both ways. It is time we heard clearly from the alliance where it stands in regard to food prices.
We shall keep at them. At present, there is no Social Democratic party candidate in my constituency, but when one is appointed I trust that he will answer the questions that will immediately be presented to him about what his policies mean for food prices for the people that I and other hon. Members represent in south Yorkshire.
I am certain that we shall receive an answer. Whether the answer it will give in my constituency is the same as the one that it will give in that of the hon. Gentleman, is open to question.
I do not want the Government to think that they rest free from my criticism. They have let Britain down badly. We have borne an unfair share of the cuts in production that have already been experienced in the Community. It is outrageous that we should have experienced the scale of reduction of milk production that has taken place. There are likely to be further unnecessary and unfair cuts in that area. The dairy industry reminds me that a cut in quota of 8 per cent. would mean an effective reduction of 9·5 per cent., which suggests that the Ministry should reconsider the position, especially in view of the fact that we are importing one fifth of our dairy requirements.
If there is any logic in European agricultural policy, it should be to encourage specialisation. We should not try to grow tomatoes out of doors on a commercial scale because our climate is not suitable for it. However, our climate is suitable and our skills are relevant to the idea that Britain and Ireland should be the leading countries in grassland production. That is a logical development if Europe is to have any sense, although I sometimes doubt whether it ever will.
The hon. 'Gentleman must ask himself whether the views that he is advancing would be acceptable in Europe. One can say what one likes, but one has to obtain agreement from 12 Ministers of Agriculture.
Much depends on the skill, persuasiveness and dedication of the Ministers who are engaged in the negotiations. The hon. Gentleman may have been slightly more persuasive than his hon. Friends on the occasions when he stood in for the Minister in negotiations. For a while I acted as chairman of the Agricultural Committee of the Council of Europe. I secured unanimous approval for a report on food supply in western Europe, and suggested that some of the money that was currently used to store food could intelligently be devoted to the promotion of food consumption. I employed a German economist of some merit for the scheme, and I suggested funding a pioneer pilot project of daily milk deliveries in certain conurbations in West Germany, the Netherlands and one or two other member states of the Council of Europe.
That was approved unanimously by the European Assembly, hut, in my view, there are too many interests involved in storage to let an intelligent proposal of that kind get off the ground because it would have led to increased consumption. A daily delivery system is the reason why our milk consumption per capita is higher than that in Europe. Of course, intelligent proposals like that do not always prosper, but those who run storage systems or who own or rent hangers prosper.
The Minister may recall — certainly the Under-Secretary will recall — that late last year I raised in an agriculture debate the scandalous revelations of a gentleman who confessed on a Central television programme the most grave, criminal improprieties with regard to the storage of food. I did not press the matter further because I believed that, given the open admission of culpability, there would be a prosecution and that it would be inappropriate for the matter to be pressed in the House if it was to go, as it ought to go, to the courts.
I do not know whether there has been any prosecution or whether any prosecution is pending, but it is about time that the Government demonstrated to those in Britain who get involved in the criminal aspects of this matter that they cannot get away with it. I am advised that certain criminal practices are fairly widespread in parts of Europe. Therefore, it might be appropriate for this country to give a lead to ensure that the standards which should prevail with regard to the costly storage of food are maintained at a high level here and at a high level on the Continent as well.
I hope that the Minister will comment on that matter. As I said, I do not want to press it further if legal action is being taken. Because the Minister knows about the television programme, he will understand, given the admission of guilt on such an astonishing scale, that a prosecution is absolutely necessary. I am not prepared to accept that there can be no pursuit of justice in this matter simply because, ludicrously, the Official Secrets Act is extended to cover every aspect of food storage. That is monstrous and unacceptable.
My main purpose in speaking is to raise two matters. I shall be brief because I have not touched on either of them yet. The first refers to a matter raised by my hon. Friend the Member for Walthamstow (Mr. Deakins). I am full of admiration for those charities which were involved in the distribution of food. Therefore, I think it entirely inappropriate that those charities should have to bear considerable expenditure in order to pursue the distribution. It seems ludicrous that the Community—it is the Community and not the Government, although the Government might have supported the Community's requirement — should expect that the whole of this distribution should be the responsibility of the voluntary organisations.
In many parts of the country it would have been helpful if social services departments had worked in partnership with the voluntary bodies. It would have meant that the distribution perhaps would have been more equitable. It would have meant that perhaps more of the stocks of food would have been distributed, which was supposed to be the purpose, and it would be reasonable to suggest that, if there is to be a further exercise, some material support is given to the voluntary bodies, perhaps with the cooperation of local authorities, to make sure that those who qualify for the free food actually get it.
One other plea I make is that, if in the future there is to be a free distribution of food to the old and the needy, it should be distributed in reasonable weather. In my area old people had to queue up, sometimes for very long periods, on a bitterly cold day. That does not seem to me to be particularly sensible, and I hope that we shall wait until the season is more temperate so that we do not cause old people hypothermia.
The House will know that I am particularly interested in conservation. I trust that the Minister will allow me to make one or two references to the document "Farming and Rural Enterprise". Conservation bodies generally were rather receptive to the amendments to directive 797/85. The broad strategy seemed to be acceptable and wise, but there are a number of matters in that document which cause concern. One concerns forestry. I believe that we are getting our forestry policy wrong. I have suggested that too much of it is being concentrated solely on the cheapest land. That land, which is the target for forestry today, is the very land we need to safeguard for conservation purposes. We ought to be taking land out of agricultural production, and nothing would be more appropriate than taking out of production or safeguarding from production the important areas of moors, heath and similar wetlands that are still in danger. It is ludicrous that valuable sites of importance to the natural heritage should be at risk when we have a sensible opportunity to increase the area which could be of real importance.
A little while ago the Council of Europe had a conference on the environment and employment. We could assist rural employment by ensuring that higher priority is afforded to conservation. Therefore, I suggest that we need to reappraise the whole matter, that the Ministry ought to engage in consultations with the conservation bodies to clarify some of the questions that arise from the document the Government have issued, and that discussion on the future of forestry must be high on that list. It seems to me that the Government are neglecting future policy in regard to broadleaved woodlands.
We also need clarification from the Government on the question of planning and agricultural land. The Minister will be aware that there is serious unease about this matter. It will be helpful to the conservation bodies, which traditionally keep out of party politics, if the outstanding anxieties are resolved at an early stage. There is a real suspicion that there are Conservative Members whose particular concern with agricultural land is to see how much money they can make out of it regardless of the effect on the environment or the national interest. It is important to remove that anxiety.
I wish to make two other points. The Government are supposed to be making further designations in regard to environmentally sensitive areas. I welcome the steps that have been taken, but we need to know when the list of sites will be announced. The conservation bodies also want to know whether the highest priority will be given to those sites which are currently at serious risk — sites where wildlife populations, which depend heavily upon the maintenance of traditional farming methods, are under threat. If the Government rely predominantly on the price mechanism, there is a real risk that a number of farmers will run in order to stand still. They will seek to make up their income deficiencies not by looking for grants for conservation policy, by selling land for development or by seeking to establish woodlands, whether traditional or not, but by further intensification of agricultural methods. That in itself could be dangerous, so we need some clarity to be offered to the House, the country and certainly to the conservation bodies at an early stage.
I trust that we shall have that reassurance because. if not, the anger which is felt by the farming community and which is likely to increase between now and the general election, whenever it is held, will be an anger which will generate in the conservation organisations and within the environment lobbies. They will see the Government as having turned down an opportunity which could be broadly welcomed, in which we serve the cause of intelligent agricultural policy and in which we make a substantial contribution to the environment. I trust that that opportunity will not be forfeited. If it is, the Government's popularity will ebb a great deal more quickly than they suspect.
I shall take up some of the environmental points made by the hon. Member for Wentworth (Mr. Hardy) in a few moments.
This debate allows Conservative Members to reflect the concerns felt in their local rural communities at the immense policy changes that have been taking place in recent years. I say straight away that my right hon. Friend the Minister of Agriculture, Fisheries and Food has had the worst job in the Cabinet because he has had the unenviable responsibility of being left without a cushion when the music finally stopped in the game of EEC musical bumps.
For over five years I sat on the Opposition Benches more or less where the hon. Member for Wentworth is now sitting and I listened to Lord Peart and the right hon. Member for Lewisham, Deptford (Mr. Silkin) announce expansionist White Papers on agriculture; indeed, they were pressed by the Conservative Opposition Front Bench to go further and faster in encouraging growth in domestic agricultural production and import savings. From the Conservative Front Bench in Government my right hon. Friend the Member for Worcester (Mr. Walker) spoke in precisely the same vein.
The responsibility for the political lead given to our farmers to produce more lies not in the fields or farmhouses of Britain or at the headquarters of the National Farmers Union, but with all parties in the House and with Brussels, where successive Labour and Conservative Ministers, with all-party support, went to EEC meetings between 1973 and 1983 advocating expansionist policies and receiving enthusiastic responses from other EEC countries.
The fault is not in our stars but in ourselves, and we have the responsibility to sort it out, in a way which will not hobble one of our most efficient and productive industries or damage the very heart of rural Britain, to which the Conservative party is committed and from which it draws so much of its strength.
No one disputes that surpluses represent a grave problem. The Public Accounts Committee, on which I serve, was told last month that the net storage cost to the United Kingdom Exchequer of stocks in intervention in 1986 was £66 million, and that the notional value of the stocks was £1,100 million. Equally, it is worth remembering the Bible story of Joseph in Egypt and the seven years of plenty and seven years of famine. Stocks are not all valueless, as the recent sales to Spain have shown. The Milk Marketing Board tells us that we are moving into the unhappy position of being only 80 per cent. self-sufficient in milk products in 1988–89. We are thus faced with the prospect of importing other EEC countries' dairy surpluses to meet our own demands.
There is no justification for the present level of the green pound, which urgently needs drastic adjustment. The co-responsibility levy for milk has no rational purpose in a regime of quotas and outgoer payments, We need clear indications whether EEC funds are really available to sustain the beef market from the cull cow threat, and, if so, how they are to be disbursed. New quota figures for milk will be reaching farmers next month. They will need clear answers to their problems. We will need to improve the compensation for quota cuts by topping up and I see no reason why the 27·5p per litre compensation for the next 1 per cent. cut should be staggered over seven years. The producers are experiencing the problem now. For example, they have to pay dairy inspection charges now; those payments will not be staggered over seven years.
I know that the Government will not underestimate the concern felt by Britain's milk and beef producers, who do not dispute the need for surpluses to be tackled. They have to come to terms with the quota system. However, farmers insist that their vital and productive industry needs both proper transitional support to get it through the necessary changes and equal treatment with other EEC countries. That is why action on the green pound and the level of compensation for outgoers is needed. A 4 per cent. change in the green pound rate is clearly completely inadequate to deal with the dislocation in the industry.
The thrust of Government policy document, "Farming and Rural Enterprise", which appeared last March, was a commendable attempt to tackle the central issue from which we have previously tended to shy away—if the return available to farmers for their product falls, whether through direct price cuts or tougher intervention standards, how are they to maintain their family incomes? They cannot be expected to say, "Thank you. We will make do with less." They will produce more to obtain the same money or seek solutions such as fallowing land through set-aside if there is proper compensation from the EEC, or reduce their fertiliser content.
The documents rightly point out that there are other options. I hope, however, that they will he seen basically as agricultural options because it should be no part of Conservative agricultural policy to take vast amounts of land permanently out of rural use and cover it with concrete. To return to Joseph in Egypt, we may need that land for crops again, and perhaps not in the far distant future. Acceptable options would include other non-surplus crops, set-aside fallowing, and certainly trees and hedgerows. Organic farming, too, is increasingly popular with consumers. But concrete is not acceptable unless the land has been officially designated for housing in the county structure plan.
Fortunately, Environment Ministers have jumped on some of the wilder assertions in the media and elsewhere that developers could now cover the countryside with houses. That was never even remotely true as was widely understood at the time by the housebuilding industry, which was never under any illusions that the planning system was being dismantled. But there was an awful lot of unnecessary heartache before that was accepted by those who are not specialists in such matters.
Real villages need working farms, pursuing agricultural activities. They also need other work, which is why I am glad that the emphasis has been placed on converting redundant agricultural buildings for local industrial use.
Yes; I agree with my hon. Friend.
I am sure that most of us are enthusiastic about the work done by the Council for Small Industries in Rural Areas, but let us not close our eyes to the possible environmental problems. We have all heard ludicrous stories of planning permissions being refused for one-man village blacksmith operations. Equally, we all know that operations involving metal bashing can bring in their wake noise and heavy traffic to minor village roads, especially if the business is successful and expands. One delivery trailer and tractor a week can become one or two juggernauts a day.
The problems need to be thought through, and attention given to noise control, vehicle access and hours of working if planning permission is being given for the conversion of premises in villages. There are plenty of disused barns outside villages, which can be of immense help in that regard. Projects involving them need special attention and encouragement.
We should look again urgently at the imposition of VAT on such conversion operations. I moved an amendment to the 1984 Finance Bill to maintain zero rating for conversions of such disused barns. The Government accepted the spirit of the amendment but restricted the concession to listed buildings. That has been helpful for heritage properties but the new circumstances demand every encouragement for rural conversions to industrial or, indeed, residential use, and it may be appropriate to return to the matter if the Committee stage arrangements for this year's Finance Bill and the rules of order will allow it.
We have set ourselves the task of turning round the vast tanker of agricultural production. Nearly all of us set it going in one direction and we cannot now seek to turn it round the other way and simply tell the farming community, which is in the wash of the tanker, "Sorry, you will all get soaked or sink. That is the way it is." In our hands lie the stability and viability of the very core of rural Britain, which has developed and changed over centuries and is the envy of many other nations and millions of visitors to our shores.
My right hon. Friends have an awesome responsibility laid upon them to carry with them the farming community in this difficult task. I know that they are working hard to try to discharge it, but there is much to be done and we wish them well.
We started today's debate in the presence of a whole complement of MAFF Ministers, a Minister from the Scottish Office and even the Secretary of State for Wales. When Welsh Members write to Agriculture Ministers in Whitehall their letters are soon sent down the road to the Welsh Office or to Cardiff because, in agricultural matters, Wales is devolved. Those of us who support a Welsh Assembly feel that that would be the ultimate answer, but at the moment we have to put up with what we have.
When we write to the Secretary of State for Wales he appears to accept some responsibility for Welsh agriculture, but seems reluctant to involve himself in discussions at European level on behalf of Wales. Throughout Wales there has been a consistent sense of letdown because the Secretary of State for Wales refuses to act on the farmers' behalf. We look across the Irish sea and notice the great advantages that the Irish negotiators are able to bring to that country, yet Wales, with the same topography, weather, problems and agricultural complexes, is not adequately represented. Agriculture is never discussed on the Floor of the House from a Welsh point of view, yet Welsh agriculture has its special place in the economy of Wales. We hear arguments on the Floor of the House about rate support grant, but if we want to discuss agriculture in Wales we must discuss it in the Welsh Grand Committee.
I hope that hon. Members will excuse me if I tend to concentrate on Welsh agriculture, because I feel, in direct contrast to the hon. Member for Rutland and Melton (Mr. Latham), that Welsh farmers have not come to grips with quotas. There is still a great divide between Welsh farmers and the implementation of quotas. That divide does not end at the farmyard or the farm gate. We know from the research work of the university of Aberystwyth that, since the introduction of quotas in 1984, 1,700 jobs have been lost to the rural economy in west Wales. It is estimated that if the quotas for 1987–88 and 1988–89 are further carried through there will be further job losses of 1,300 people in that part of Wales. We are not talking about areas with unemployment of 7, 8 or even 12 per cent. Ministers know that the unemployment rates in some of the travel-to-work areas in the valleys of south-west Wales are 24 and 25 per cent. Some of those areas are represented at Westminster by the Secretary of State for Wales.
Welsh grassland farmers feel that the Community measures have taken insufficient regard of the nature and the future of local farming enterprises. These measures are being foisted on an industry that cannot cope with instant management decisions, and an industry within which conditions of work and practice cannot adapt overnight without an unacceptable lowering of activity. That lowering of activity means not only farmers going to the wall but creameries being closed. There are far too many outright casualties in these parts of south-west Wales. Sixty per cent. of the total value of Welsh farm output is contributed to by the dairy and beef sectors, yet those two sectors were almost singled out for attention, which would have caused further aggravation to a barely viable industry.
Overall, 1986 resulted in better all-round increases in income, but they were achieved against the background of the previous year, when 20 per cent. of farmers had no income at all and nearly half the farmers earned less than the average of farm workers, and we all know what relatively poor remuneration they receive. Since 1983–84, the overall trend has been downward. Bank indebtedness continues to mount, with borrowing having doubled in the past five years. Nowhere is this trend more dangerously reflected than in the continuing fall in the amount of plant, machinery and vehicle investment. That is certain proof of a continuing lack of confidence.
An over-valued green currency has made British agriculture a very poor competitor. The 6 per cent. change from the beginning of this year was specifically meant to deal with the Irish Republic's beef imports, which were so critically undermining our domestic market. That move was certainly not enough and its beneficial effect was blatantly transient. We now have accurate evidence of the losses sustained from the cuts following the previous restraints introduced in 1984 on milk production. They go far wider and deeper than the farmyard and the farm gate. With the milk sector forming some 37 per cent. of Welsh agricultural output, further cuts will mean further closures and more redundancies in para-farming industries, such as cattle-feed mills, and in all rural service industries.
Welsh farmers are adamant that, although the current package of measures is meant to curb over-production in farming in Germany or France, it is having serious effects on south-west Wales, and the Government should be giving far more sympathetic protection through national domestic intervention. Keeping the variable beef premium scheme virtually unchanged until the end of 1988 is gratifying, but the sector cannot be treated in absolute isolation, for there are bound to be knock-on effects from the imposed fall in dairy production. The 10 to 13 per cent. cut in beef intervention prices could be balanced by a far better stickler cow allowance than hitherto.
Dairy farmers at least thought that they knew what to expect for the coming two years, but the voluntary outgoers scheme has been shown to have failed miserably. The unattractiveness of conditions was clearly predictable to all. If this was a realistic gesture to make people leave dairy farming, at least part of the overall seven-year payment should have been made available, perhaps in the first or the second year. Money would then have been available so that people who wanted to diversify had the money to go into some form of other agricultural activity.
Small farms should have the first 200,000 litres exempt from the scheme. Those farms are the backbone of a viable rural economy. Incidentally, they contribute relatively little to the total volume of production. Despite deep reservations about income aids, that change would give valid socio-economic assistance, greatly assisting efforts as diversification and environmental protection. With profitability in the beef sector precariously low, cuts in the dairy herd result in the greater market availability of byproduct beef from that source eroding profits even further. The United Kingdom Government are continually reluctant to support measures to make it a practicable proposition to give up milk production. Such inducements are preferable to forcing farmers out of business, leaving a trail of tragic circumstances which are becoming prevalent nationwide.
The Governments of certain member states unhesitatingly set about amelioriating Community-imposed policies that adversely affected their local agriculture. They did so through packages of internal national measures, without considering that their impact was grossly disproportionate and discriminately unfair to other member states. It appears that the Brussels bureaucrats have long forgotten the terms of article 39; that one of the prime objectives of the CAP is to ensure a fair standard of living for all agricultural activity. They have obviously forgotten that, or how else could the present deleterious position be allowed to continue?
There is a need for a policy to meet the needs of our domestic market, but we know now that we are only 80 per cent. self-sufficent in milk products. Therefore, our domestic market is becoming an even greater target for imports from other member states. I appeal to the Minister to realise that grassland farming needs two essential elements — support and stability. At present, the Government are not providing either adequately.
The hon. Member for Carmarthen (Dr. Thomas) described the problems of Welsh farmers, but he omitted to mention the major problems of new potato production in Pembrokeshire.
This is a debate of major importance. The rural economy of this country is tied indestructibly to the fortunes of the agriculture industry and the success of farmers in general, and it is essential to the well-being of the nation. The real tragedy is that if our steel production, the motor industry and engineering had attained the increase in productivity achieved by the British farmer, Britain's world competitive position would make the Japanese or the Americans look like poor industrial relations. The further tragedy is that this greater productivity on farms has created grave difficulties, massive overproduction and surpluses that beset Britain and Europe today.
I pay tribute to my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills), who has given his life to agriculture and practical farming, being himself a farmer. He became a successful Agriculture Minister and also served as a Minister in Northern Ireland, where he is well remembered.
For the last eight years he has been chairman of the Conservative Agriculture Committee. My hon. Friend—and friend he is—is retiring at the next election, so we may have heard his last speech in this House on agriculture. I hope, however, that we can hear him outside this place. My advice to somebody on the Front Bench is that we might hear of him in another place when the time — not too far distant — duly arrives. He has won the trust and respect of hon. Members on both sides of the House with his sincere practice to the CPA — and I mean the CPA not the CAP. His achievements as a Member of Parliament have been massively successful—successes that any of us would be glad to have when we leave this Chamber.
The CAP and the green pound must be seen in two lights. We must understand what the Minister has achieved. In December the United Kingdom secured a devaluation of 6 per cent. for beef and 3·2 per cent. for sheepmeat. We secured a devaluation of 3 per cent. for livestock and 1·5 per cent. for arable products in the 1986 price fixing round. The combination of these devaluations adds £210 million to producer returns in a full year. However much we may be critical of other things, that is not to be sneezed at and it is of importance.
On the other hand, many sectors of British agriculture are being undermined by the competitive advantage given to producers in other EEC member states by the United Kingdom green pound gaps, which currently give rise to taxes on exports and subsidies on imports which may amount to 20 per cent. in certain areas. The Commission's proposal of a 4 per cent. reduction in the United Kingdom monetary compensation amounts appears to ignore the severe problems that are now facing our agriculture. Farming income in this country has fallen sharply — probably more sharply than any other EEC country in the period from 1978 to 1979.
A substantial across-the-board devaluation is necessary if discrimination against United Kingdom farmers is to be ended. On the other hand, I am conscious that sterling's depreciation over the past year has meant that our farm support prices, if they are converted into the currencies of other member states, have fallen significantly since 1985, when for a period they were the highest in the Community. In sterling terms the position is very different. The support prices that are actually available to farmers have not fallen. Indeed, they have risen over the past year as a result of green pound devaluation.
The monetary gap between the green pound and market rates of exchange remains significant, and I believe that we ought to set our minds to curing it. Much of this gap has developed since green pound rates were reviewed in the 1986 price fixing. At that time we acted successfully, but the consequences of devaluation made in mid-year by France and Ireland have had other effects.
Green rate changes should be made at the time of price fixing, when the effects of those changes on farm support prices and domestic inflation and on Community and public expenditure can be fully considered. Since the 1960s I have taken the view that the green pound structure was wrong and artificial and was bound to bring about dissatisfaction and unfairness and problems in agriculture. I have always held the view that prices should be down to the parity of individual exchange rates of currencies within the Community. I claim that this should go hand in hand with Britain's entry into the European monetary system.
We must get down to a parity position. At times the green pound exchange rate will be beneficial to farmers, but there will be greater periods when it will prove to be a major disadvantage to Britain. If parity is not to occur this year—and it is most unlikely that it will—we have to say to the Minister that devaluation must be in the area of 15 or 16 per cent. It will not be acceptable if the Minister returns with a devaluation that, at a minimum, is not in double figures. I am sorry to talk in those terms, but it is essential that the Minister should go back to the negotiations in Brussels knowing the strength of feeling of farmers in general and this Parliament in particular on this matter.
Action on prices alone to control surplus production and the costs of the guaranteed section of the common agricultural policy will bring a degree of hardship to agriculture. We cannot escape that. It would be wrong of any Member of this House to attempt to pull the wool over the eyes of British farmers. We cannot be two-faced about this matter. It is no use complaining about the Irish and the French, when we wish to send our products into France. We have to realise that we are in the Common Market and that we cannot be beneficiaries to all sides in a proper marketing structure.
If surpluses are to be contained, it will be necessary to reduce the intensity of production on some land and to take other land out of agriculture. These changes could be encouraged under the guidance section of the common agricultural policy. I believe that to date far too little attention has been paid in the United Kingdom to the guidance section and to its use to encourage changes in land use. The decision taken by the Council of Ministers at its meeting of 2 and 3 March to adopt a socio-structural package that included proposals for extensification of production was a step in the right direction, but progress has been extemeley slow. Unless the proposals are implemented soon, they will come too late to have any impact on the 1988 harvest.
I have a specific and perhaps involved question about the outgoers scheme, which is designed to reduce the national milk quota by 2 per cent. Participants in the scheme will receive a payment of 27·5p per litre that will be spread in equal proportions over seven years. I and most hon. Members who are concerned with agriculture wish to see the scheme work because it is more attractive than open market private sales as part of it relates to price and part to taxation.
Is it correct that the successful applicant under the scheme can choose the system of payment that he wishes to follow and that this in turn determines the taxation arrangement which applies, or is it correct that outgoers may apply either for compensation for loss of profits for the seven years immediately after ceasing to produce milk or for the surrender of the milk quota? I believe that payments in respect of the loss of profits are liable to tax as income in each year whereas payments in respect of the surrender of quotas are liable to capital gains. It is important that these mechanisms are understood because that understanding will make a quite significant difference to the way in which judgments are made by those in the farming community. I hope that my question will be answered when my right hon. Friend the Minister of State replies.
I congratulate my right hon. Friend the Minister of Agriculture, Fisheries and Food on making it plain that in the current negotiations he is seeking to ensure that there are fair shares for all those who are involved in the problems that British agriculture is having to suffer. My right hon. Friend wishes to ensure that the burden is shared by all members of the Community, not only by Great Britain, which may have seemed to be the position in the past.
My right hon. Friend has done a remarkably fine job in representing Britain at the EEC. Few Ministers of Agriculture, Fisheries and Food have had as much practical experience of farming as my right hon. Friend, and none has had more knowledge of agriculture. I know how much he must wish it were not necessary to make demands on farmers to cut production. If any man wants to see an expansion of production, it is my right hon. Friend. However, if any man is to bring about a reduction in production with knowledge and understanding, my right hon. Friend is that man. More should have realised, especially those in the NFU, that when the PESC review took place in the autumn of 1986, Treasury Ministers were looking for a major reduction in the amount of aid going from the Treasury to the Ministry of Agriculture, Fisheries and Food. However, my right hon. Friend had to concede only the £90 cost for the drug inspection charge. That was an amazing personal achievement for him in resisting the major overtures that were being made by the Treasury. Farmers and the leadership of the NFU should understand that.
If my right hon. Friend were to leave his office, I do not believe that any new Minister—I apologise to my right hon. Friend the Minister of State for expressing this view—would have such a natural understanding of farmers. I do not think that any other person would be able to achieve anything like the respect that my right hon. Friend has been able to achieve. His successor would not be able to turn the views of European Agriculture Ministers as he has done, especially during the six months of his chairmanship during the latter part of 1986. British agriculture should be extremely grateful for the work of the Government, and especially for that of my right hon. Friend the Minister in representing Britain in Europe and the industry in general.
I think that we are in some danger of developing complacency in this debate about the situation confronting our agriculture. The position of many small producers is desperate. Some Members recognise that and have said so and others have failed to acknowledge it. Some producers are at the eleventh hour. The hon. Member for Merionnydd Nant Conwy (Mr. Thomas) mentioned the possibility of hillbilly type farming in Wales. I can tell the House that it is being practised already, and in some measure. It is the only way in which some individuals are making out. That is a sad state of affairs for a great industry.
Agriculture is the United Kingdom's most important industry and food production must remain the most important activity that takes place in the countryside. We shall forget that at our peril. Farm incomes are declining and we are in danger of having two farming nations, with one in which some farmers do very much better than others. The livestock sector has been especially badly hit. There have been some significant bankruptcies of farmers in Wales and others are receiving family income supplement. It is not good enough to have farmers on incomes of £60 or £80 a week when they have to live on that and, in many instances, finance interest payments. There is no alternative employment to be found in many areas. Indeed, alternative employment opportunities have declined in the past two years, especially since the invocation of milk quotas.
The average income of farmers is 40 per cent. lower now—I take the period 1984 to 1986—than during 1973 to 1976. This is extremely serious, because at the same time there is record borrowing within the industry, amounting to about £6 billion. The Community's proposals for structure support and direct income aid need seriously to he considered. These proposals offer possibilities for supporting small farmers, who are now literally on the breadline.
There are particular difficulties in the less-favoured areas, where livestock producers are having a struggle, especially in the beef and sheep sectors. When the members of the Select Committee on Agriculture visited Brussels recently they were informed that this summer there would be a major review of the sheepmeat regime. Many hon. Members have rightly stressed the importance of the regime to British agriculture. We must resist the proposal that there should be cut-offs of 1,000 ewes in less-favoured areas and 500 on the lowlands in the implementation of the ewe premium. These proposals must be thrown out neck and crop, for they would discriminate against British farmers. The sheepmeat regime, the variable premiums and the hill land compensatory allowances that go with it are vital to many livestock areas.
We must also examine the problem of the balance of sheepmeat production between upland and lowland farmers. What are we going to do? What proposals have the Government for ensuring that sheep production remains profitable in the less-favoured areas? What proposals have they for restricting in some way the possible vast expansion of sheep production on the lowlands? With the December agreement proposals, decreases in the milk quota and reductions in beef prices, many farmers on the lowlands, with the cereal sector too coming under pressure, are considering going into sheep farming. There is a real danger that farmers in the less-favoured areas will be hit in one of the few commodities that arc profitable at the present time.
Looking at the December agreement, the 13 per cent. reduction in beef intervention prices will lop off approximately £60 per head on beef animals sold. We see inadequate devaluation of the green pound and refusal by the Government, in another context, to raise hill land compensatory allowances in the current year for beet' production.
I congratulate the Government on retaining the variable premium. It is absolutely essential to keep this. It keeps food prices down. I reject wholly what has been said by an Opposition Member that the alliance is in favour of putting value added tax on food. This is an outrageous suggestion. We are absolutely and totally opposed to that.
Under the December agreement, we are likely to see over the next two years an 8·5 per cent. reduction in milk quotas, and the knock-on effect of that in the dairying areas will be immense. In Wales, the north-west and the south-west this is a reduction which producers are unable to accept, and they must be compensated much more adequately for that loss in milk quota. Certainly we are extremely concerned about this, because many farms will lose their viability. This will mean that more farmers will leave the land and more creameries will close. As has already been said, in Wales alone we are likely to lose a further 1,300 creamery workers as a result.
The Commission's proposal for a 4 per cent. reduction in the green pound is absolutely pathetic in the current state of British agriculture. We must have a 16 per cent. devaluation. This is the best possible way that we can help British farmers. It is calculated that for every 1 per cent. devaluation of the green pound there is an increase in income to British farmers of £30 million. This is an important way in which farm incomes can be boosted at the present time.
I ask the Minister to tell us why it was that his right hon. Friend's predecessor, the right hon. Member for Worcester (Mr. Walker), was able in the first two years of the Conservative Government, from 1979 to 1981, to wipe out the unfair discrimination from green pound distortions to parity. Why is it that his right hon. Friend is unable to do that in 1987 to produce a fair situation for farmers? That question needs to be answered.
In the long term we need to take a much more radical look at the European monetary system. I make a particular plea that Britain should join the European monetary system as soon as possible. We know that this is in the best long-term interests of this country. By joining the EMS we will have a real chance to sort out the distortions that take place in the money markets.
We in the alliance see that as a move towards a unified European currency. One would hope that one day. when the price settlement is made in Brussels, it will be made in European currency units that will apply right across the board to every country in the Community. We shall then know what we are talking about, instead of having to face the horrible distortions of MCAs and calculations of other kinds whose effects are almost impossible to work out. Indeed, in joining the EMS we would see an immediate 2 per cent. reduction in interest rates and a saving of £240 million for British agriculture.
On what evidence does the hon. Gentleman say that interest rates would fall by 2 per cent. if we joined the EMS? Will he tell us exactly why he says that, when the evidence is that it might be that, but that it might also be a rise of 2 per cent.?
The Minister has just admitted that there are two schools of thought on this, and some economists have calculated that there will be a 2 per cent. reduction. All I can say is that this move is supported by the Governor of the Bank of England and most of the right hon. Gentleman's party, except the leadership. I find this an extraordinary state of affairs.
Moving on to ALURE, as has already been said, this is a cosmetic package. The farm woodlands scheme with a grant of £125 per hectare is inadequate to replace the gross margins that are seen in the lowlands, particularly in the cereal sector. The Minister will have to do better than this if he wants to see more land go into woodland. I am particularly concerned about a conflict of interest with regard to environmentally sensitive areas. To quote one example, in the Cambrian mountains environmentally sensitive area there are payments on woodlands of about £30 per hectare. Yet the tax concessions given for forestry and commercial forestry are greater than that and the farm woodlands scheme itself provides more than that. There is a right mix-up in the forestry proposals, and they need to be sorted out rather rapidly.
I was delighted to hear the Minister accept the Commission's concept of guaranteed thresholds. I believe that it is absolutely necessary to accept this, because we then can give worthwhile support for commodities and ensure that farm incomes are adequate, particularly since these proposals are to be administered within the United Kingdom. I see these proposals as identical to those put forward by the alliance at the present time. The important thing is that they will be administered in the individual countries of the Community, will take care of the farm structure in those countries and certainly will not discriminate against British farmers.
I should like to draw the attention of the House to the Treasury influence, which seems to be more and more pernicious with regard to agricultural policy. I believe that the December agreement which was hailed as a triumph, was a triumph for the Treasury, because it meant that the Treasury had its hands on the money very tightly indeed, and agriculture lost out.
The Chancellor said recently that he was looking for big reductions in agricultural subsidies. We would all like to reduce expenditure, but agriculture needs time to adjust, and it is not being given that time. I gather that the Prime Minister has invited the farmers' leaders to a junket at No. 10 next week. It sounds to me as if the Conservative party is becoming extremely alarmed about disaffection within agriculture with a general election coming and that the boat is being pushed out to try to influence the farmers' leaders. They should not be taken in by such moves. Farming is a long-term business. It needs a stategy and it needs support, because it is Britain's greatest industry.
I will begin my remarks, as others have begun theirs, with a tribute to my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills). Ever since I have been in this House he has spoken on agricultural subjects, and I think that those who have listened to him within the House and outside it have always respected his consistency, realism and, above all, truthfulness. Like my hon. Friend the Member for Honiton (Sir P. Emery), I hope that he will be found employment elsewhere in this Palace when he retires from here at the end of this Parliament.
In a few moments I should like to comment on the remarks of the hon. Member for Brecon and Radnor (Mr. Livsey), and to underline the woolliness of the agricultural policy as put forward by the two hon. Members who have spoken from the alliance Benches.
To begin with, I should like to pass on some of the thoughts of my farming constituents and also my own thoughts because, as some hon. Members know, I am involved in agriculture. The anxieties about their futures of some of the farmers in my constituency still persist. Looking at the proposals in their raw state, I can see why. The proposals have been prepared by EEC mandarins with little thought for the national or local consequences. We shall again have to rely on the tenacity and proven ability of my right hon. Friend the Minister of Agriculture, Fisheries and Food when it comes to renegotiating our position in Brussels. Opposition Members may laugh and scoff, but the fact is that in his previous incarnation my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) was persuasive and determined when one or two of us sought to step out of line.
Farmers have now accepted that price pressures are inevitable and they get the drift of my right hon. Friend's thinking. The modest steps that have been taken to help farmers to develop alternative incomes have, in most quarters, been accepted as a modest step in the right direction and as outlining my right hon. Friend's future thinking.
Like other speakers in the debate, I urge steady movement to give our farmers time to adjust because this is a slow moving business. There is no doubt that mainline food production will always be the principal occupation of farmers in this country. Farmers are farmers, and that is how they want to stay. They do not want to be a collection of park keepers, at least those in the Forest of Dean do not.
It is important that we do not lose sight of reality. Those of us who are involved in agriculture know that mother nature is a hard taskmaster and does not perform according to any routine. Nobody denies that surpluses are too large at the moment. However, as I mentioned earlier today, there has been a substantial rundown in grain surpluses in this country. It would be unwise to run them down to nothing. Just as few housewives carry no stocks whatever in their larder, similarly farmers always carry a bit of surplus hay or other livestock fodder in their barns if they possibly can. As a nation that is a judicious thing for us to do.
Food from Britain has heralded new thinking in farming, and I welcome that. There is massive scope for increased sales in our high streets today. The fast service restaurant industry is making huge inroads and selling huge amounts of beef, chicken, potatoes and milk. I do not know whether my right hon. Friend the Minister of State is aware of the fact that the Town and Country Planning (Amendment) Act 1972. which governs planning permission for the opening of more of those establishments, is up for review. At the moment, it substantially inhibits the development of many such establishments. I ask my right hon. Friend to use his influence if possible and to bring it to bear on the Department of the Environment when that Act is reviewed.
I accept that there is a huge cost for storing surpluses. As I have said before, output must be cut. We should divert funds to farmers rather than to storage. Something must be done about that. Set-aside or temporary suspension — call it what one will — may well be the answer in the future. Would it be possible to have a once-and-for-all operation to bring down to reasonable levels the enormous amount of food that we have in our stores at the moment? We shall do what we can to give it away, or to sell it at low prices, but let us get rid of it. If we cannot give it away, why cannot we simply write off the debt and get rid of it, as has been done for other nationalised industries? It may seem unchristian or anti-social to burn it or dump it in the sea, but at least we could end the cost of storage and divert that money to farmers rather than giving it to the people who are running the stores.
As has been said, farming incomes are falling like a stone. We are told to get efficient, and we are. However, all over the country, not only in parts of Wales, many farmers earn less than humble labourers. I wonder how those in Europe square that with the treaty of Rome, which states that all EEC citizens should have a reasonable standard of living. I should be grateful for any way in which my right hon. Friend could bring that to the attention of those who run European affairs. The incomes of farmers in the United Kingdom are falling faster than those of farmers in the EEC.
Turning to the EEC in general, I must pass on to my right hon. Friend the fact that west Gloucestershire farmers were stunned by the imposition of the dairy inspection charge. They thought that it was unfair and seemed uncaring. May we have an assurance from my right hon. Friend that farmers in the United Kingdom are not being unfairly treated? Perhaps he can reassure us that dairy quotas are being implemented in Italy in the same way that they are here, and that German farmers who have over-produced will he liable to pay the super-levy themselves and that it will not be paid by their Government.
May we also have some guidance on the future of quota leasing? For some of the small farmers in my constituency, quota leasing is a lifeline for the viability and future of their farms. If they do not have the cash to buy, they must lease. There is great uncertainty at the moment about whether that will continue. My right hon. Friend will probably remember that in the Select Committee recently I asked him about that and he reassured the Committee that he would do his best to ensure that quota leasing would continue. I hope that he will reassure us on that again this evening.
However, we crave fairness and need to be reassured that other farmers are not being insulated from the EEC's measures by their Governments. The greatest unfairness that we face in the United Kingdom is, as other hon. Members have said, the totally different values of green pound levels between ourselves and other European farmers. I, too, make a plea for the devaluation of the green pound. It would not undermine our competitive position for sales abroad but would put more cash into farmers' pockets.
If it is not asking too much of him, will my right hon. Friend ensure ease of entry for our products into other EEC markets? Recently the Germans have been told that they must open up their market to beers from other countries. Previously that market was totally blocked. On the radio, I recently heard about the impending pasta war in Italy. The Italians have apparently been blocking the entry into Italy of pasta made in other EEC countries. Although it meets EEC standards, apparently it does not come up to Italian standards. Furthermore, I understand that the export of minced beef from this country has been blocked from entry into other countries. Will my right hon. Friend use his influence to open up those markets? I urge him to assure the House that he will take vigorous steps to sweep away those restrictions.
I should now like to refer to the problems facing farmers throughout Gloucestershire as a result of the policies put forward by the so-called alliance.
I see that the hon. Gentleman remembers that Gloucestershire county council passed a resolution to rate agricultural land. With the connivance of the Labour party, the alliance passed that resolution. That seems to be absolutely in line with alliance thinking. The alliance party wants to decentralise all decision making. In fact, the last time that I heard the hon. Member for Caithness and Sutherland (Mr. Maclennan) speak, he discussed having a referendum to decide whether to introduce the community charge in Scotland. Therefore, what happened in Gloucestershire was dead in line with the alliance party's policy on local decision making.
However, what has happened? A directive has come down from the leader of the Social Democratic party advising alliance councillors to back off and say that they will not rate agricultural land. In Gloucestershire there has been a humiliating climbdown by the alliance which now will not rate agricultural land. I am glad that the hon. Member for Caithness and Sutherland has returned to the Chamber because he can confirm whether local decision making is to be alliance policy. How can Gloucestershire farmers be sure that this policy will not be reintroduced?
I can assure Gloucestershire farmers that the alliance has no plans to rate agricultural land. To make the point even clearer, we have already had two apologies from Ministers who suggested that.
That is not the case in Gloucestershire because the councillors want to rate agricultural land and may do so if decision making is decentralised. I do not know whether the whole policy will change——
I think I can help my hon. Friend. Farmers in Gloucestershire can be sure that before any election the alliance will not propose to rate agricultural land. After any election it is the traditional policy of the alliance to return to wanting to rate agricultural land.
I have never apologised. I have only quoted the Liberal document that the policy was a tax on land. That was the policy of the Liberal party.
That is most helpful. The farmers of Gloucestershire have decided that this is wholly destabilising for their future and rather silly. They are not in the least surprised that the alliance parties have decided to star the Minister for silly walks in their party political broadcasts.
It is vital that our agriculture remains viable and that we do not spend money on storage but divert it to our farmers. Will my right hon. Friend confirm that United Kingdom farmers will receive the same treatment as those in other EEC countries, and will he ensure that fairness prevails for United Kingdom farmers in competition and restriction? Furthermore, will he help to open up so far blocked markets and seek to ensure that quota leasing is allowed to continue? Most of all, will he use his best endeavours to ensure a substantial devaluation of the green pound?
The hon. Member for Gloucestershire, West (Mr. Marland) should be careful before entering into political knockabouts as he has just done, because my memory goes back 17 years. At that time he was pledging his undying loyalty to the Welsh mining valley constituency of Bedwellty and telling the residents that he wished to live among us and that he would make an admirable Member of Parliament to represent the coal and steel industries.
I well remember my days in Bedwellty when the hon. Member for Caerphilly (Mr. Davies) used to give me a ferocious time from the front benches at meetings. Obviously, he still seeks to do so and I receive it in the spirit in which it is offered. I never offered to live in Bedwellty because I knew that the right hon. Member for Islwyn (Mr. Kinnock) was doing well. I had two or three supporters in Bedwellty who did not expect me to live with them. However, at the end of the election they said that I had done well and, indeed, I had done reasonably well, because I had cut the majority of the Leader of the Opposition from 22,500 to 22,300.
Some of us felt that the hon. Gentleman won more votes than he deserved.
During the Easter recess I read a book called "Countryside Conflicts", which stated:
The British countryside tries to serve four masters. The public want it to provide adequate food and timber, to he a setting for active and passive recreation, to harbour wildlife and to look inspiringly beautiful. The farmers and foresters want it to be productive and wealth-creating. Developers expect it to be ready for engineering projects and buildings, and politicians want it to meet all of these objectives. The classic British way out is to compromise — to fudge and nudge over almost every hectare. This is no longer possible. The time has come to be clear about priorities and to guide land-use decisions accordingly.
That is a useful summary of the present position. I hope that the present difficulties — I hesitate to call them crises, because last time the Minister chastised me for that — present not only a challenge but an opportunity. I had hoped, but clearly I am to be disappointed, that the Government would take the opportunity to restructure not only our agricultural system but our whole pattern of land use to the great benefit of our natural environment. That opportunity has been missed.
There are two problems: over-production and surplus land, and obviously the two are interrelated. By the year 2000 we shall be faced with the prospect of taking between 3 million and 10 million acres of agricultural land out of production. Clearly, nothing that the Govenment have done during the past 12 months will go any way towards meeting that objective. In 1984, dairy quotas were introduced as one method of restraining production and my hon. Friend the Member for Carmarthen (Dr. Thomas) talked about the impact of that on our Welsh communities. On 10 March 1987 the ALURE proposals were introduced, and today the Minister explained the new European proposals on extensification. Both raise more questions than provide answers in regard to our natural environment.
As other hon. Members wish to speak I shall be brief and put three points to the Minister. First, the Minister of Agriculture, Fisheries and Food, presumably having discussed the ALURE package with his colleagues in the Department of the Environment, suggested that planning authorities would no longer have to give full consideration to the agricultural use of land on which development was proposed. A furore resulted from that and representations were made by Government Back Benchers to the DOE and MAFF. As a result, the proposals were somewhat modified.
I am a little mystified, because if the proposition was intended to remove agricultural land from agricultural production, why are the Government now saying, "There will be no wholescale development"? If the intention was to remove agricultural land from production, surely the Government presumed that large areas of land at present used for agriculture would be granted planning consent for residential, commercial or industrial purposes?
When the Minister replies to the debate I should like him to say what the Government's attitude is to development in the open countryside. Now that the agricultural requirement has been removed, do the Government place equal value on the planning objective of retaining the natural countryside? We hope that they will attempt to impose certain conditions on SSSIs and, indeed, on areas of outstanding natural beauty. I would not dare to suggest that the Government would envisage development there. Will they pay equal regard to areas of countryside which do not have any particular attraction other than that they are unspoilt areas of open countryside?
So far the Government have said that the planning controls will not be massively relaxed, and we are all aware of the impending general election. Will that attitude be reflected by the respective Secretaries of State for Scotland, for Wales and for the Environment when they come to resolve planning applications on appeal? I have a feeling that when the Secretary of State for Wales resolves planning applications for residential development in the open countryside he will have much more regard to his Government's wish to take agricultural land out of production than to the protection of open countryside. That matter causes me considerable anxiety.
My second point relates to the extensification proposals. Clearly, there will, be a requirement to reduce production. We have heard about set-aside already today. My hon. Friend the Member for Pontypridd (Mr. John) took issue with the Minister earlier this afternoon and said that the Minister had spoken about the set-aside proposals, but we have seen no details and we do not know how they will work. The documents refer, as did the Minister, to taking 20 per cent. of land out of production. I hope that the Ministry of Agriculture, Fisheries and Food is not simply relying on fallowing. Some hon. Members who have spoken this afternoon have implied that that cereal land will simply be fallowed.
If that happens, we will cast a marvellous opportunity to one side. If the best that the Government can do in response to this problem of over-production is to declare that hundreds and thousands of acres of potentially productive farmland will he fallowed and presumably sprayed seasonally or periodically with herbicides or pesticides, a marvellous opportunity will be lost. That would be a gross affront, not only to the starving in this world, but to the taxpayers of this country and the conservation lobbies, which would criticise that abuse of our resources.
Will the extensification proposals apply to livestock? Is it intended that intensive beef and milk production will come within those proposals? Will the proposals apply to sheep production? If they do, I shall welcome them. The extensification of the beef, dairy and sheep sectors will have considerable benefits to those areas currently used for such production, but which are also important wildlife habitats. If it means that the concentration of the levels of sheep stocking in the Welsh uplands is reduced, that would be most welcome. I look forward to the Minister's response to those points.
Presumably, Ministers have at the back of their minds an awareness of the benefits that can accrue to wildlife habitat and conservation as a result of extensification programmes. Does the Minister propose to set up any formal or informal consultation with voluntary bodies? Will he consult the Nature Conservancy Council, the county trusts or the Royal Society for the Protection of Birds? There are important questions to ask about consultation. These questions will show whether the Government are serious in their desire to use this present crisis—which we all hope is temporary—to the overall benefit of our natural landscape.
My third point relates to forestry, and my hon. Friend the Member for Wentworth (Mr. Hardy) referred to this. The Government must consider several serious points and questions must be answered. In the 10 March proposals the Government said that they wanted a fairly substantial increase in what they described as "traditional forestry". I hope the Minister realises that there is a very hostile body of opinion against the further development of traditional forestry practices, especially if that is to take place in the threatened areas of Scotland or the upland areas of Wales which provide a unique landscape and wildlife habitat and which have been largely destroyed as a result of development since 1945.
If the objective is to help to reduce agricultural production, is it not self-evident that those planting operations should take place, not in marginal areas or the least productive areas, but "down the hill" in the more productive areas? If the Government accept that case—which I believe they do — what positive proposals will the Minister introduce to ensure that forestry takes place in the more productive areas, not in the least productive areas?
The hon. Gentleman has taken a longstanding interest in afforestation in my constituency. Does he recognise that the economic returns on that forestry are comparable to those in Scandanavia? That forestry offers considerable and valuable employment locally, with the potential for even greater employment. is he aware that the Royal Society for the Protection of Birds recently reported that the damage to the natural habitat was much less than had been feared?
I do not believe that it is appropriate to follow that debate now. I am familiar with the hon. Gentleman's constituency and he is aware that my view differs from his. I gave way to the hon. Gentleman to allow him to put his points on the record. However, I do not want to explore that debate at the moment.
The Government's view is that the bulk of the afforestation will be carried out by the private sector. I have no doubt that the private sector will be driven to these operations on the cheapest land. That land will be the most marginal and the least productive. Operations will be largely financed either through direct Government subsidy or through tax concessions. It is absolutely indefensible, given the problems with afforestation at the moment, that there should be a further growth in afforestation in the least productive areas, when the need is to ensure more afforestation in the more productive areas "further down the hill".
The farm woodland scheme also needs far greater clarification than we have had thus far from the Government. Precisely how will the Government encourage planting in the more productive areas? Will that be a requirement? Will there be incentives or directives if producers are involved? I would be grateful to hear the Minister's observations on that point. I would also he grateful if the Minister could tell us how he proposes to consult. Will he consult the various conservation bodies on the location, design and the species content of those farm woodland schemes? if those schemes are to be of landscape value and of wildlife benefit — which the 10 March proposals state they should be — there must be a very considerable environmental input into the design and location of the schemes. Those are major questions which I hope the Government will address. I hope that some light will be shed on those points today.
There must be a recognition of the resentment, hostility and opposition to traditional forestry practices. There must be a recognition that opportunities are now presented which, if they are grasped, can go a long way towards taking the heat from the forestry argument. I have expressed my observations before to the Minister and his colleagues in the Scottish Office. They are aware of the concern that has been expressed from Opposition Members.
Now is not the time to he partisan. I know that the Minister and his colleagues share the concern expressed on the Opposition Benches about conservation. I know that that concern is genuine. I hope that the economic pressure now being exerted by the latest developments in agricultural policy will go some way towards ensuring that the concern expressed on the Conservative Benches and by Opposition Members is translated into a positive programme to enhance the environmental value of our countryside.
I bring to this debate none of the skills of my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills) or his depth of knowledge of agriculture. However, I bring some of the expertise of the shopkeeper. Agriculture is in a time of change whether we like it or not. As a Member representing a rural constituency, I do not like it. None the less, the change is here. A shopkeeper knows that sooner or later he must put in his shop the things that people are prepared to buy. Having said that, we must not allow to happen the kind of damage to our way of life in the countryside and the rural background that many hon. Members have referred to today. We cannot permit the devastation that has been seen in other parts of the country over the centuries when an industry has suffered change, such as the enclosures in Scotland way back or the changes in the steel and coal industries in more recent years.
I pledge myself completely to support farming with public money. We must say frankly to the public that we will protect the life represented by the smaller family farm. I have far less sympathy for the East Anglian baron, not because he is not an excellent farmer—I know that he is —but I am talking about the small man with the small farm in the small village with the small school, the small chapel and the small church. Those are the things that I, and I trust the party that I represent, are pledged to look after.
We can always obtain easy approbation by saying the nice gentle things. It is equally easy to get a fairly hard look when one speaks of the obvious economic things. For that reason, many hon. Members have perhaps wrapped up the parcel a little too much today.
At this moment agricultural production is surplus to requirements. One Chernobyl, one famine, one plague or one other problem and it would be as vital as ever it was in wartime. That is why we must have a viable and as nearly as possible self-sufficient agriculture within the Community. We can never guarantee that a crisis will never come again. There are sheep and lambs, although not, I am happy to say, in north Devon now, which are still damaged a year after the event at Chernobyl. We must always bear this in mind when the cry goes up that there is so much cheap food in the world, so why should we subsidise our farmers.
My hon. Friend the Member for Gloucestershire, West (Mr. Marland) referred in passing to German beer and import restrictions. I approve greatly of the idea that beer should be pure, without additives. The German argument, which is relevant to agriculture, to hormone implants and all sorts of strange things, is that there is a good market for pure beer, German or otherwise, if it is made straight and without a pharmacopoeia of contents on the label on the package in the shop. Therefore, I was slightly surprised at what my hon. Friend said because it is quality that counts in the end.
My hon. Friend also commented in passing on farmers being farmers, not park keepers. In my constituency I have two prosperous park keepers who are farmers as well. I am not talking about parks and the man with the spiked stick, but about parkland that is an ornament of our countryside. It goes hand-in-hand with the form of extensive agriculture that we saw in years gone by and which, I suspect, we shall seek to encourage in years to come.
I speak as a retailer and shopkeeper, because I am aware that the British public like and will pay to enter parks. The British public will pay the top price for top quality food. It is true that we cannot export our sausage meat and if one looks at its contents one soon finds out why. Yesterday I visited Heal farm, King's Nympton, in my constituency, with my hon. Friend the Minister for Environment, Countryside and Planning. It produces pure meat products without an additive in sight but barely enough even to satisfy one major supermarket, let alone the chain. Here is the demand, and it is a matter not of price but of quality. The person who sells on price alone goes out of business when someone else cuts the price just to take his business. Let us look to quality and purity and encourage what people will pay for. Look to the market place, but always accept the need to maintain the small farm in the rural environment.
In the last year I have travelled by chance on three American airlines. Each one serves for its teatime repast what it calls Devonshire scones and clotted cream. As a Devonian, I hate to admit that they all use the same Cornish cream, but how fascinating it is. Why are we not looking to the world market for products such as clotted cream which American — not British — airlines are serving? I do not press this too much, but it is worth saying that there is a world market place for excellence and that we are barely conscious of it.
Let me talk now of the major matters. It is easy to talk, and I have been gaining some smiles talking, of the minor matters. It is no secret that we are in the Community to stay. In my part of the world, not to stay in the Community — I have no great personal love for it — would remove so many jobs that the whole area would cease to be viable in both industry and agriculture.
An hon. Member spoke of the evils of not being self-sufficient and being over-protective about taking products from elsewhere. If people are to buy our lamb, we must buy something of theirs. We are talking about a market, not a battlefield.
Is it not time that we said that the CAP is, by general acceptance, a mess? No one argues against that. It is a battlefield as we make slightly snide remarks about part-time continental farmers and they make some fairly sharp remarks about some of our practices, and so it goes on. Is it not time that, while remaining in the Community, we thought about national support of agriculture along the lines that we agree nationally? There is little similarity between the highly efficient, full-time intensive farmer in Britain and the perhaps part-time farmer who may well run the garage, or village shop on the other side of the Channel.
It is worth considering that if we go on as we are, the EEC will break up sooner or later under the sheer weight of nonsense over debt, storage and surplus. There are easy jokes about giving the Russians butter for next to nothing. No shopkeeper would ever have gone along with such a system. Bankruptcy would have been the result. However, the state can never be allowed to go bankrupt, and so the nonsense continues.
I have only two more points. The first concerns quality. We must spend money to encourage quality and to find the markets in which we can sell. That is so simple and sensible, yet it is so hard to find money with our high-cost finance. One thing that might alone save our small farm would be some way of getting longer term, lower interest money. In my shop I can vary my prices and change the products in the fairly short term. That is not possible in agriculture and long-term, low-cost finance is probably the key to success. Many a good man has gone out of business because he could not bear the increasing interest debt which had nothing to do with his ability in husbandry.
Health food is often treated as a joke, but it is not. The contents of the fridge at home now are different from contents 10 years ago. I have little milk or butter in my fridge. The ladies of the family have quite different ideas about what is good to eat. Looking at me sideways, it is pretty obvious that I am fond of good Devonshire beef and Yorkshire pudding and other fine things, but public taste has changed, and in agriculture we must accept that. Why do we have to import so many of the herbs — the ordinary, simple herbs such as parsley, mint and borage — which feature in every restaurant meal? Why do we not think a little more about encouraging herb farms, deer and goat farms, goat cheeses and other specialities which other nations seem to specialise in? We could do much more through the Milk Marketing Board. I have always thought that the "marketing" part of that name is more interesting than factual.
Having mentioned lamb, I must mention milk. Of all the petty impositions the dairy inspection charge has to he the pettiest. If we are doing so well economically—and I believe that we are—must we add that last silly straw to our over-burdened dairy industry? A more successful outgoers scheme is our only real hope. It is fair to say that, unless we face the fact that the voluntary scheme has not been a success, we shall go along with little dribs and drabs of more restrictions on the small farmer. The big man can probably get away with it by varying his crops and getting capital, but the small man cannot do this easily.
Three points are important. There must be greater flexibility in the amount of quota that anybody can sell under an outgoers scheme. I do not understand why there has to be a limitation on it. If we interrupt logical trade, we interrupt the economy and make things less sensible. I do not know why payments cannot be made en bloc in one capital sum. Why must they be spread over a period of years? One needs money to reinvest and should be allowed to have it.
If it is to the benefit of the Community as a whole and our nation and the Exchequer in particular, the payment should be tax-free. I should have thought that if ever there was a case for allowing any capital sale to be tax-free, this is it. It would give capital to the farmer who is going out of milk production and enable him, without the problems of roll-over, to get into something else. It would at least give him some leeway. It is little use saying that we will give him so many per cent. over so many years if he needs the money now to invest in his next venture.
People talk about agriculture in terms of doom and gloom. I do not. I believe that we are at a turning point and that there are tremendous opportunities ahead. Many young farmers see this and will enjoy the challenge of the future. We must not tie them in European rope or British red tape.
It is a pleasure to follow my colleague and hon. Friend the Member for Devon, North (Mr. Speller) from across the Tamar, particularly as he paid tribute to Cornish cream. If many farmers in my constituency had had the opportunity to he here today, they would have taken a lot of heart from the Minister's opening speech. Many of the points that he stressed that he would be fighting in the negotiations in Brussels are precisely those that the chairman of the Cornwall National Farmers Union has made in a letter to me and other hon. Members who represent Cornish constituencies, and I am grateful for that.
Reference was made to the report of the Select Committee on Agriculture, of which I am a member. In particular, there was passing reference to the Committee's report on New Zealand butter. Indeed, the subject was raised at Question Time. From remarks made at Question Time and during the debate, the Minister is probably aware that there is a change of mood on the Government Benches about the entry of New Zealand butter. I have come to the conclusion that, as our own farmers are having to face further cuts in quotas, it is only fair, right and equitable that New Zealand imports — not guaranteed sales — should be cut at least to the same proportion. I hope that the Minister will take note of that. The Select Committee's report stated:
We believe that the UK dairy trade would serve our farmers better if it were to learn to market its product as well as the Dutch, Danish or New Zealand exporters, but the heart of the problem is that 90,000 tonnes of butter were produced for intervention alone last year rather than for sale on the commercial market. The system is wrong and must be changed.
It is a tremendous blot on the working of the common agricultural policy that so much butter was produced in this country, not for sale, but to go straight into intervention store. No doubt the Milk Marketing Board can say that that is the way in which the system works and that it pays us to do it, but it is utterly wrong and must be changed. No one in this country can say that we do not contribute to surpluses while that situation goes on. I hope that the system is changed so that the problem is dealt with.
I pay tribute to my right hon. Friends the Minister of Agriculture, Fisheries and Food and the Minister of State for the introduction of environmentally sensitive areas and also for designating West Penwith in my constituency as one of the first of them. I am also grateful for the fact that now that the talks have started on the implementation and working out of the scheme, my right hon. Friends have shown sensible flexibility in dealing with the real points of concern put forward by environmentalists and farmers. There were fears that, because the scheme seemed to be likely to operate, fences would go up. That is contrary to the spirit of the ESA scheme. I am glad to say that my right hon. Friend's have been flexible and that that is no longer a danger.
Will my right hon. Friend the Minister speed up the details of the diversification programme? There is tremendous interest in diversification, particularly the marketing aspects. The Cornwall Marketing Group has great plans for developing the processing of foodstufs in Cornwall so that we get added value. Looking at the details of this scheme would be of great help in achieving that. May we have the details as quickly as possible?
In some respects this is a sad debate. It is sad not only because we are saying farewell to my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills) but because we are also saying farewell to the hon. Member for Sheffield, Brightside (Miss Maynard), who, apart from her other achievements, has been my pair. I hope that she will remember the importance of the rules of succession when she leaves us. It is also sad that the hon. Member for Caithness and Sutherland (Mr. Maclennan) seems actually to believe in the alliance farm policy, which is so manifestly incredible that the president of the National Farmers Union has said that it would annihilate United Kingdom farming; that it would rip it apart.
This is also a sad occasion because, as a result of its distance from the farming industry the Labour party, however interesting some of its thoughts might be on this or that, seems blissfully unaware that its general policy of increasing inflation will drive up farm prices. The Opposition would also increase nationalisation and that would threaten land. They would increase borrowing, which would drive up farm interest rates, and they would rate agricultural land. [Interruption.] Those things so appal farmers that I do not think any farmer in the country will vote for them and I shall be left without a pair.
I should like to pass on some points that were raised with me when recently visiting farms in my constituency. First, sadly, there is a widespread lack of appreciation, not so much of the enormous problems facing my right hon. Friend the Minister of Agriculture, Fisheries and Food in Brussels, such as the cereal surplus, which will have risen from 3·5 million tonnes in 1981 to almost 100 million tonnes in a few years time, as of his substantial achievements. There is the variable beef premium, the lesser fall in the level of beef support compared to West Germany, the 6 per cent. green pound devaluation for beef, and his victory on the co-responsibility levy for cereal producers.
Clearly, we still have a most important public relations job to perform and charging £8·50 for the Farming and Rural Enterprise pack will not help very much, because I cannot afford to send it to my farmers, and they cannot afford to buy it. I hope that my right hon. Friend and his team will get round as many constituencies as possible, because he achieved a signal success when he came to Burton.
Secondly, the most constant message that I received when I went round was the farmers' fear of uncertainty, and particularly the uncertainty for young farmers who want to come into farming and are fearful of doing so. Because of the weather, disease and consumer fickleness farming is always uncertain. When farmers were encouraged to expand milk production and then had the door slammed on them, their confidence was greatly shaken. There is a hope that the lessons painfully learnt from the milk cuts will not need to be relearnt in relation to cereals or pigs or any other area of over-production. The outgoers scheme, for example, has only encouraged milk farmers to buy into quota and to transfer their quota, but a 27p price at the start might have encouraged more of them to go out of production.
Thirdly, the next message that I received was about the apparent unfairness of the operation of the common agricultural policy between member states. There were cuts which seemed to our farmers to be bigger for us than for others. There is a falling of British farm incomes compared to farm incomes in other countries in the Community. We also saw 30 million litres of quota given to the Irish, who produce only 20 per cent. of what we produce. We have seen large subventions to Portugal to produce milk, the production of which we are trying to restrain. Other examples have been mentioned in the debate.
Some of the concern is rather misplaced. It is not unfair that so much Danish bacon or New Zealand butter is sold here. That happens because we do not market our produce attractively enough for the housewife. That is not the Government's fault, it is the industry's fault, and the sooner that it looks to it the better.
My farmers also raised with me points about charges that start with hygiene visits but could go on into other fields of untapped resources that might well gladden the heart of the Chancellor of the Exchequer. These are dairy inspection, artificial insemination flask inspection, Ministry of Agriculture, Fisheries and Food service charges, spray licences, health and safety checks, footpath restoration, pollution control licences, TB licences, and brucellosis licences. My farmers say that all these matters could be the subject of future charges. If my right hon. Friend can reassure me that no further charges are in the pipeline, that will be very reassuring for my constituents.
I have heard about the burdens that are about to be imposed on farmers by the medical recording requirements of the National Office of Animal Health. One of my farms, a managed farm of some 1,200 acreas with 800 head of livestock and 10 employees, has worked out that by the time it has dealt with worming, estromating, warbling, pneumovaccines, and so on, at five minutes per insertion and 7,000 insertions a year, it will use up 50 books, taking 580 hours at five minutes for each entry. That is 2·25 hours a day of a five-day week. I hope that my right hon. Friend will look again at the absurdity of such requirements and will take into account the fact that while elsewhere in industry the Conservative party is reducing the burdens of bureaucracy, we seem to be increasing them for farmers.
My farmers have raised with me the absolute necessity of a devaluation in the green pound. Everyone else has already spoken about that, so I only add my voice.
Farmers are concerned also that the British public should not look upon them as the destroyers of the environment, when precisely the opposite is the case. Hon. Members on both sides of the House who represent farming constituencies should make it clear to our urban constituents at every opportunity just how much is owed to the farming community for its preservation of our rural environment.
Finally, I have noticed precious little disaffection in my constituency from the farming community — much as Opposition Members might desperately pray for such an unlikely occurrence. On the contrary, in 13 years of representing the 300 and more farms in the Burton and Uttoxeter area, I have never seen so many farms that are well stocked, well maintained, well run, bright, cheerful and prosperous-looking. I hope that it will not be long before they are all like that. That is a tribute not only to the energy, dedication and skills of Burton farmers — fortified as they are by Burton beer — but to my right hon. Friend, his predecessor my right hon. Friend the Member for Worcester (Mr. Walker) and the Government farming team for their success in damage limitation in Brussels, their positive achievement and — in an area where there are many farm tenancies — the particular boon in helping tenancies to be passed on to successors within the family.
I have no doubt that, when the election comes, the farmers of Burton—and elsewhere—will remember who their true friends are.
We have heard an intriguing little speechette from the hon. and learned Member for Burton (Mr. Lawrence). I suspect that when the election comes he will want to go to those farmers and say, "I raised the problem of dairy and ADAS charges on your behalf, and you can rely on me." However, the hon. and learned Gentleman quite cheerfully voted for all those charges. Like so many Conservative Members, he wants to have it both ways.
During this debate, we have heard three important and rather sad swan songs. First, my hon. Friend the Member for Carmarthen (Dr. Thomas) has represented his farming constituents assiduously throughout his career here, and he will certainly be missed in the House. I wish him well. As for the hon. Member for Torridge and Devon, West (Sir P. Mills), much has been said about him during the debate. His deep commitment to the farming industry is well known, as is his deep and abiding loyalty to his party and to the Minister — and rightly so. The hon. Gentleman made a characteristic speech today. I should love to have been a fly on the wall yesterday, when I gather that he led a deputation from the Conservative Back-Bench agriculture committee to meet the Prime Minister. I hope that he was a little more forthright then than he has been in this debate.
Finally, I turn to my hon. Friend the Member for Sheffield, Brightside (Miss Maynard), who, sadly, is not with us at the moment. When she leaves the House, the country's farm workers will have lost a powerful advocate in the House. I am sure that we all wish her well for the future.
The farm workers and the farmers of this country have a tremendous record of hard work and commitment to their industry and to the countryside. As this debate ends, many shepherds, whether employees or farmers themselves, will be facing a long night looking after their ewes and lambs, and long before we think of getting up tomorrow morning they will be milking their cows. The dedication that is required by those who work in this industry is probably unparalleled. if private sector investment in the farming industry had been reflected in private sector investment in other British industries, our economy might not be where it is today. The farming industry has responded spectacularly to the incentives that have been provided for it by successive Governments and the European Community, but, for its pains, the industry now faces a grave crisis.
We cannot necessarily blame the industry for responding to incentives. However, we can blame the Government and the European Community for failing to adjust policies in time to avoid the present crisis. The farming industry and the rural areas that depend upon it will have to undertake major changes of course, but we are still waiting for the authorities to address themselves to the relevant questions, let alone take the relevant decisions.
The debate has highlighted the scale of the crisis that faces the industry. Despite last year's recovery from the disaster of 1985, farming incomes are at their second lowest level since the second world war. The average level of farm incomes between 1984 and 1986 was about 40 per cent. down on what it was between 1973 and 1975, much of that period being under a Labour Government. I suspect that the farming industry will recall that over the years Labour Governments have served the industry well. It would do well to compare the Labour party's record with that of the Conservative party.
Against that background, it is not surprising that even more jobs are being lost. Last year, full-time employment on British farms fell by 9,000. That was very serious for the rural economy. The indebtedness of farmers is increasing alarmingly, and investment by farmers is at its lowest level for 30 years. That has a very serious knock-on effect for the ancillary industries in the rural economy.
The paradox is that, while farm incomes are collapsing, the costs of agricultural support are soaring. They now amount to £2·5 billion. Spending by the intervention board for agricultural produce stands at £1·1 billion. The problem is that the common agricultural policy is not working. It is a fabulously expensive device that encourages farmers to produce vast quantities of food, but we then go to great lengths to deter people from eating that food.
As for intervention stocks, the intervention board in Britain is the proud owner of 48,000 tonnes of beef, 275,000 tonnes of butter and skimmed milk powder and 3,806 million tonnes of cereals. Over 4 million tonnes of food are in store, yet the hon. Member for Gloucestershire, West (Mr. Marland) tells us that we should be careful and that we should not run down our stocks too far. There is no fear of that.
It is also worth pointing out that those stocks would have been far greater had there not been such a disastrous harvest last year in Spain. The Minister referred to the fact that by 1993 intervention stocks will probably amount to 100 million tonnes. For too many farmers, intervention has become the market. Farmers have lost sight of the market to which they are meant to be selling and for which they are supposed to be producing. They are producing foodstuffs that go into intervention stores and they cheerfully forget about what happens to them next.
The only way to get rid of those stocks appears to be either to pay the Russians to take it away or to ask the Salvation Army or the Women's Royal Voluntary Service to give it away, a point that was referred to by my hon. Friends the Members for Wentworth (Mr. Hardy) and for Walthamstow (Mr. Deakins) and by the hon. Member for Meirionnydd Nant Conwy (Mr. Thomas). They referred to the proper concern about the burden that that exercise imposes on the voluntary organisations. I note that they had to pay for the distribution of food from the intervention stores. I wonder whether the same conditions are applied to the Soviet Union. Will it come to the intervention stores to take the stuff away or will the food be provided for it at cut-price levels, free on board ships, or whatever other means of transport may be used?
There are two fundamental problems. We have a seriously depressed and distorted farming industry and we have runaway expenditure on a failed support mechanism. Everyone knows that something drastic will have to be done. What have the Commission and the Government done? They are not so much fiddling while Rome burns as tinkering while Rome is buried in food surpluses.
In fairness, I acknowledge that the Commission and the Government acted to contain milk surpluses by establishing a quota system back in 1984. However, the Minister covered himself with glory — as ever — by ensuring that the British dairy sector got the worst possible deal on that occasion. He accepted a singularly inappropriate base year — 1981 — for the quota calculations. He also failed to take account of New Zealand, a matter to which a number of Conservative hon. Members have referred.
The position has been compounded and aggravated, year after year, by each subsequent quota cut. The hon. Member for Cunninghame, North (Mr. Corrie) referred to the effect on some remote creameries, which will find themselves without enough milk supplies to keep going. I recently had the privilege of meeting representatives from a National Farmers Union branch in his constituency on the Isle of Arran. I can assure him that he cannot expect to escape his share of the responsibility for what is happening to agricultural policy— [Interruption.] The Under-Secretary of State for Scotland and the hon. Member for Torridge and Devon, West must contain themselves. The Minister has actually bought a copy of our green paper, which I shall summarise in a moment.
The quotas in the milk sector have pushed farmers into producing more of the other crops that are already in surplus—beef and cereals—and now there is a genuine fear that the sheep sector might be on the point of producing surpluses, too. That is certainly not a satisfactory position.
As we travel around our constituencies through the countryside this weekend, we can look at the amount of cereal planting this year—all those nice green acres. The acreage of cereals that has been planted this year is about the same as last year. It is unlikely that the Spanish harvest will fail again, so all those lovely green acres will probably be translated into record cereal stocks and another CAP crisis in a few months' time. The hon. Member for Honiton mentioned that point in his speech.
What is the European Council doing? On 1 April, the Minister replied, rather propitiously, to a parliamentary question:
The council had a first discussion of the Commission's proposals for agricultural support prices and arrangements for 1987–88. No decisions were reached on these proposals, and the Council will take them up again at its next meeting on 27 April. The marketing years for beef and dairy products, which otherwise would have expired, were therefore extended until 31 May."—[Official Report, 1 April 1987; Vol. 113, c. 542.]
The show must go on.
Today the Minister has further elaborated his position, but there has been more than enough talk already. The time must have come for decisions. All those timid gestures about environmentally sensitive areas diversification, new crops and farm woodlands are all very well, but nothing significant is happening to deal with the problems. There is a full-scale budgetary crisis and there are growing symptoms of panic in the industry. The European Council of Ministers is still only talking about the problem.
Our Minister is pursuing his inimitable career, having undermined the operation of the Agricultural Development and Advisory Service at the very time when the industry has greatest need of guidance. He kicked the dairy sector when it was still reeling from the effects of the quota clamp down by imposing a £90 charge for statutory dairy inspections. That will not he forgotten in rural areas. If anyone doubts that, let him read the farming press. When the Minister read it a few months ago he knew that he was in for a rough time at the NFU annual general meeting. Thus we had the great media events of 9 February and 10 March.
As you will recall, Mr. Deputy Speaker, there was high drama. It started with open conflict between the Department of the Environment and the Ministry of Agriculture, Fisheries and Food. There was then the hastily prepared statement of 9 February with the launch, a month later, of a glossy brochure full of pretty prose and even prettier pictures, of my constituency among other places, and a fanfare about a £25 million package that was supposedly intended to deal with a £2·5 billion problem. That obviously did not measure up to the job and, not surprisingly the National Farmers Union duly passed its motion of no confidence in the Minister.
The Minister spoke again today about the 10 March ALURE package. He knows of the massive opposition in the House and the country to the idea of a general relaxation of planning controls, the idea of giving free rein to speculative development in the countryside. I sincerely hope that he has got the message on that.
We certainly support a number of other aspects of the ALURE package. Credit where credit is due to the Minister on that matter. We support the increased back-up that there is to be for the less favoured areas. We support the farm and countryside initiative and the extension of the scope of the agricultural training board. However, we wish that there was sufficient money to make all those things work. It is not good enough just to make it possible for the Industrial Training Board and other organisations to do those things. They require the wherewithal to make it possible.
We support the diversification incentives in principle and we support the incentives for extensive farming, marketing and environmentally sensitive areas. In fact, we would go further on the matter of farm woodlands. We claim credit for leading the debate on the need to expand farm woodlands in Britain. Our complaint on all those matters is simply that the package is far too little, far too late. The Ministry has been able to achieve a total of £25 million. If we discount the £8 million of tree planting grant that will be available anyway and the administrative costs, there is apparently only £17 million of new money in the package. That falls far short of what is required.
The current incentives for planting trees on low ground farms are obviously not meeting present targets, so what prospects are there of the new scheme having any significant impact? The hon. Member for Dorset, North (Mr. Baker) said that incentives of £125 per hectare are not likely to attract many low ground farmers to plant trees. The package fails to measure up to the problems.
The Minister spoke about the urgent need to control cereal production, but nothing is being done about it. The industry knows that something drastic will happen and it is entitled to expect decisions to be made by politicians. That is supposed to be our job.
I shall now deal with the Commission's proposals which are on the table. The Minister rightly dismissed the proposed restrictions on the ewe premium and salted butter as being discriminatory against the United Kingdom. He has the support of the whole House on that. The Commission's present proposals would rely heavily on the proposed oils and fats tax. That does not make sense. The Minister said that, and the whole House agrees with him.
Those proposals must be strongly resisted, and it has to be said that only the European Commission could come up with a proposal to deal with the problem of stocks of expensive butter by forcing up the price of margarine. It will have no impact on the butter mountain if we force up the price of a 500g pack of Stork from 31p to 41p and it will do no good to force up the price of some cooking oils by as much as 90 per cent.
I wish sometimes that some of those people would consider the fact that the people of Europe might like to eat some more of those food commodities that they cannot afford at present, although they pay for them through the nose in taxes because of the way in which the CAP is working. Beef is a good example. Has it ever occurred to the Commission that an extension of the beef variable premium to make beef cheaper in the shops would probably cut the cost of intervention? It would encourage beef production and therefore there would be a bigger acreage of grass and greater consumption of feeding cereals. There would probably be a lower production of feeding cereals because it would displace land that is currently being used for growing cereals. Such a course would probably solve many of the problems we are taking about today. It would also allow our people to enjoy more red meat, which would not necessarily do them any harm.
I have three further points relevant to the beef sector. First, will the Minister take this opportunity to tell us more about the famous 435 million ecu which he said were available to help to dispose of beef from the culling of dairy cows? He has said on a number of occasions that that sum exists, but where is it? What budget does it appear in? Is it in a sleazy slush fund somewhere in the EEC? It would have to be quite a big slush fund. It does not appear in any of the published accounts. I will accept that it exists, but when and how will the sum be deployed to meet the need?
Secondly, we recognise the anxiety of producers about unfair competition from Ireland and support the call for an adjustment of the green pound to protect the competitive position of British Beef in the market place.
Thirdly, will the Minister tell us something about hill livestock compensatory allowances? Is he prepared to take them up to the permitted ceiling to help our less favoured areas?
We have been pressed to talk about the Labour party's ideas for agriculture. Our green paper was widely read and acknowledged as a serious approach to the future of the industry by those who replied to our representations. We start from the premise that it is most unlikely that there will ever be a comprehensive detailed agricultural policy appropriate to every part of the European Community from Caithness to Crete. The time has come for the Council of Ministers to face up to that problem and to consider repatriating national aspects of agricultural policy. The European Community would still be able to set its prices and national production targets, but national Governments, who surely must know best in their areas, would be able to deal with the national application of those policies.
For Britain, we see no fair alternative to a quota system covering the main commodities. We reject strongly the Tory idea of regulating production by price — that means Government by bankruptcy—and we also reject the idea of a two-tier pricing system, which simply does not seem appropriate to the United Kingdom. The right hon. Member for Plymouth, Devonport (Dr. Owen) has put forward a proposal for a two-tier pricing system which I understand would involve a cut-off point at 140 tonnes of cereals.
The hon. Gentleman had an opportunity to speak earlier and the right hon. Member for Devonport is on the record as saying that in the Bledisloe lecture. It would discriminate against the vast majority of British farmers because it would affect anyone with more than 50 acres of cereal, which applies to many British farmers.
We recognise that all this points to the need for new uses for farm land. We propose substantial incentives for new land uses and have put forward far more extensive proposals than those of the Government. We are prepared to make the resources available because it is necessary and in the long run will save money. We suggest that 1 million hectares should be planted in trees in the course of 20 years, and we would provide more direct aid for small farms and environmentally sensitive areas.
We would establish a land bank to release land to let to young farmers. We have put forward the idea of a department of rural affairs to co-ordinate policies across the board in rural Britain and to undo some of the damage done to the rural community by this Government. Finally, we have pledged ourselves to publish a White Paper to give clear guidance to this important industry within a year of coming to office—something that the Government have resolutely refused to do since they came to power in 1979.
No. the Minister wishes to speak.
I should like to press the Minister of State to respond to the points raised by my hon. Friend the Member for Pontypridd (Mr. John) about value added tax on food. The silence of the Minister of Agriculture, Fisheries and Food on this point was deafening. This serious point must be dealt with by an Agriculture Minister during this debate.
The Minister of Agriculture, Fisheries and Food concluded by referring to what he described as "a healthy rural economy" based on strong agriculture. That is not a picture that many of us recognise. As I travel around rural Britain, I see a devastated rural economy with a shell-shocked agriculture. The Government have failed shamefully. Rural Britain should take account of the siren voices of the free market fanatics of the Tory party, who would cheerfully do to agriculture what they have already done to the coal and steel industries.
The Conservative party always poses as the party of rural Britain, but I suggest that it is a party that over the years has shamelessly ridden on the back of rural Britain and has got away with it for far too long. In the corning weeks, the people of rural Britain will have an opportunity to look at the Labour party's ideas for regeneration of their communities. I sincerely hope that rural Britain will play its part whenever the general election takes place, in dismissing the Tory Government.
It is clear that if, over the next few weeks, the people of Britain want to know what the Labour party's policy is, they will have to pay £1. They certainly will not discover it from any statement made by Labour Members. It was all very well for the hon. Member for East Lothian (Mr. Home Robertson) to comment on the way in which the quotas for Britain were established. They were established in such a way that 44 per cent. of quota cuts in Europe were bigger than in Britain and 44 per cent. were smaller. We obtained a very good deal. The deal did not take account of New Zealand. Thank goodness it did not because, if it had, our quota would have been cut. That would have been the only way in which account could have been taken of New Zealand. The hon. Member for East Lothian has misled the House in the way in which he presented that case, and he should not have done so.
We started the debate with some points on which we all agreed, and it is right to repeat them. We shall miss the three hon. Members who are not likely to speak again in an agriculture debate. I add my tribute to the hon. Members for Carmarthen (Dr. Thomas) and for Sheffield, Brightside (Miss Maynard). I hope that the hon. Member for Brightside is pleased that the tributes paid to her have come from both sides of the House. Although we have often argued strongly with each other, and although the hon. Lady's views are deeply opposed to those for which I stand, we all acknowledge her considerable integrity in putting forward those views. She has a delightful way of putting them toughly and at the same time charmingly. In so doing she has caused many of us to think about matters in a way foreign to us.
Few hon. Members would fail to say that we have always learnt from what my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills) has said. We have always recognised that he speaks from the sincerity that comes from a long attachment to agriculture and the sincerity that comes from someone who stands up for what he believes and speaks so clearly and with an honesty that is remarkable in politics.
I was pleased to note at the beginning of the debate that we agreed that certain measures in the package were unacceptable to Britain. I have just returned—in some ways rather more precipitately than I had hoped—from west Africa. I believe that the House has a duty to bring home to people the severe effects on the poorest in the world of the oils and fats tax. I hope that I carry the House with me when I say that I can think of few things more immoral than taxing the products of the poorest to use the money to subsidise the exports of the richest to the very countries that have been taxed in order to undercut in their markets the products that they can no longer sell to their people. That is what an oils and fats tax does.
I came back from the Cameroons appalled by the fact that the Prime Minister of France, having been there and having stated how much he supported the developing nations in having a voice for Africa in the Community, seemed not to understand that his own Agriculture Minister was at that point supporting the oil and fats tax, which is the most damaging thing that has been proposed to developing countries by the Community for many years. I hope that we in this country will not press it because of our home population's pockets. I hope we will insist that there is a moral duty on those who are rich not so to distort the market and tax the products of the poor that we find ourselves living on their backs. That is wholly unacceptable.
It is odd that the hon. Member for Caithness and Sutherland (Mr. Maclennan) should have said how strongly he was against the suggested figure—a sort of top limit — on the new premium, because that is precisely the two-tier system. That is to say, one gives to certain farms more than to other farms. Why he shold have got on his high horse when that was the whole basis of it, I do not know. I find it unacceptable and despicable that the alliance puts forward its policies so as to appeal to whichever parts of the electorate it is addressing.
Those policies have little to do with principle, and very little to do with continued principle. That is the reason for the old alliance between the two other parties. The reason why the hon. Gentleman finds the two other parties so often on the same side over individual policies of the alliance is that both parties have the honesty to realise that the policies should cover the whole nation and be capable of implementation were they to be in office, whereas the alliance holds no restriction, moral impediment or practical restraint.
The hon. Member for Pontypridd (Mr. John) put forward a number of points and, on the question of the free food scheme, asked whether we had done better than any other country. Combining butter and beef, the total EEC distribution was 17,500 tonnes. The United Kingdom distributed 7,400 tonnes. The next largest distributors were Germany, with 4,400 tonnes, France with 3,200, Ireland with 1,400, Spain with 900, and Italy with 200. It is true that we did not distribute more of every product—I do not think I ever claimed that; after all, there were some products which we did not distribute at all — but of those products that we did distribute, we distributed considerably more than other countries.
Those are the figures. We ought to congratulate the various charities on the great work that they did. I say to the hon. Member for Walthamstow (Mr. Deakins) in absentia—he honourably said that he would be unable to be here for the winding-up speeches — that certain charities found it more difficult to use their particular organisation than did others —but most of the charities found that, on balance, the opportunities given greatly outweighed the disadvantages.
I say to the hon. Member for East Lothian that it is not true that charities had to pay the cost of moving the goods from intervention stores. They had to pay the cost from the distribution points which they nominated. That is precisely what the Russians have to do, although the comparison is entirely odious and unacceptable.
The balanced way in which my hon Friend the hon. Member for Torridge and Devon, West presented his points was an excellent example of how this debate ought to be conducted. The House will agree with his assessment of the importance of the beef industry and with his concern about the present situation. I assure him that in the negotiations that will now take place we will bear those points in mind, because they must be put clearly to the Commission. The beef industry is an important supporter of many rural areas which have little else to do or to turn to.
I have to say something about the speech of the hon. Member for Caithness and Sutherland, if only because it was very long, or seemed very long. [Interruption.] Well, it seemed an extremely long speech. It was with exquisite courtesy that the hon. Gentleman refused to give way to me, having attacked me on an individual issue. This has added point to the long-standing rumour that of all the defectors to the Social Democratic party, the hon. Gentleman is the only one that the Labour party asked to leave. One can understand why.
If there is a way in which the hon. Gentleman can get the wrong end of the stick, he will take it. What is more, he goes on and on about it and never gives way to anyone who might be able to put him right. I have refused to give way to him recently because he has refused on every occasion to give way during his speeches. Having made his speech, he leaves the Chamber. leaving everyone else to continue the debate, to return only to listen to those who share his views, the other alliance members. I understand why he does that. Perhaps they do not share his views. Perhaps he returns to the Chamber to listen to their views to check whether they are the same as his.
That is the problem with the alliance, and the House must not be misled by alliance policies. I intend to repeat clearly what they are, which will leave the House with a wide range of policies from which to choose. The hon. for Caithness and Sutherland cannot tell us with his air of injured innocence that we are misleading the House by referring to the speech of the right hon. Member for Plymouth, Devenport (Dr. Owen) because I shall make reference only to his speech. The only person who can mislead the House on that score is the right hon. Gentleman. I am not quoting the glosses of the speech that appeared when the figures had been worked out. I am not quoting the defence of it after Simon Gourlay pointed to the nonsense of it. I am not quoting the revised version from the new translations which the hon. Member for Caithness and Sutherland presented to the National Farmers Union. Instead, I shall quote the speech.
There is a clear reference to 140 tonnes, which means that the producers of 80 per cent. of Britain's grain would receive world prices, while 80 per cent. of the producers of grain in the rest of the Community would receive Community prices. That means that the price of reforming the agricultural policy on cereals would be borne almost entirely by British farmers, and almost not at all by the farmers of the rest of the Community. That is why that policy is unpatriotic as well as being damnably bad.
The hon. Member for Caithness and Sutherland has expounded a new policy. It is not quite as damaging as its predecessor, because it is rather more difficult to understand, which means that some may not consider it to be as damaging. The hon. Gentleman says that each country would be able to produce as much grain as it needed and would be able to ensure that it was shared among farmers as it thought fit.
What does that mean? It means that the two countries that produce the surplus grain would be the countries whose farmers would pay for the reform of the cereal regime, whereas all countries would bear the cost of the reform of all the other regimes. That means that the entire cost of the cereal regime reform under the David Owen plan would be borne by Britain, but under the Maclennan plan it would be borne by Britain and France. That is very lucky! It is probably the same thing as the joint nuclear deterrent—we shall do it together. However, the cost will be the British farmers' cost. The hon. Gentleman must not tell the House otherwise, because that is what his figures mean.
The hon. Member for Caithness and Sutherland is not the only alliance spokesman. I have been lucky enough to find another one. I have received a letter from Mr. Gerald Tatton Brown, who claims to he the alliance candidate in the Honiton division. I do not expect that we shall hear much of him after the election, but at the moment he is writing to everyone.
What does Mr. Tatton Brown say? He says that there will be a three-tier system. There will be not one tier, not two, but three. What else will he have? He will support the 500-lamb proposal, something which we have heard denied during the debate. It seems that if the Commission proposes that policy the alliance is against it, and that if Mr. Tatton Brown wants it, it is for it. Why should that be? Could it be that most of the farmers in his constituency have fewer than 500 lambs? Could it be that he hopes that people with larger flocks will not have heard of Mr. Tatton Brown? Could it possibly be that once again it is a policy per constituency, indeed a policy per ward? And it is not just the policy; it is the facts.
We found on Sunday that the Liberals not only have a policy for every constituency but have a poll result from every constituency. The hon. Member Southwark and Bermondsey (Mr. Hughes)——
I would not have mentioned Bermondsey had it not been for the fact that the hon. Member for Southwark and Bermondsey is the spokesman on the environment for the alliance. He may have been sacked — it is very difficult to keep track — but he was the spokesman at one stage when the Liberals announced their environmental policy. I see that it is the Liberals, not the alliance, for which he is the spokesman, but I remind the House that the hon. Member for Caithness and Sutherland explained to the National Farmers Union how convenient it was to belong to an alliance because it meant that there were two policies on everything and one could decide which one one supported at any particular time.
Now we have a poll which turns out, supposedly, to have been leaked and which turns out not to have been produced. The fact that it happened to show the alliance ahead in London explains why it was brought up in the first place. The poll is about as true as the hon. Gentleman's policy and is based upon an assessment of the facts which is as about as true as the hon. Gentleman's inability to distinguish between my hon. Friend the Member for Calder Valley (Mr. Thompson) and my right hon. Friend the Patronage Secretary. The hon. Gentleman's eyesight is as defective as his knowledge of the facts.
The hon. Gentleman suggested that we were not standing up for Britain in what we did on the co-responsibility levy for cereals. The proposal put before us by the Commission would have meant that German farmers escaped any kind of levy on all but 18 per cent of their production and that Britain paid the levy on 80 per cent. of its production. By the time we finished, Britain and Germany paid the levy on about the same amount.
What the alliance wants to do is to disadvantage Britain. Every part of its policy is designed to disadvantage this country. Yet its members have the effrontery to come here and attack the Government as the hon. Gentleman has done in this debate by refusing to give way to anybody and then not dividing the House. Having been as insulting as that to the Government and having said that everything is wrong, will the hon. Gentleman vote against what is proposed? No. He can be as smugly insulting as he likes, but in the end he knows that the truth is that the Conservative party has at least put forward the policies on which it stands.
I must say to the hon. Member for Sheffield, Brightside that I do not believe that the nationalisation of land would help to achieve the aims that she has in view. I know she believes that it would, but that is not the experience of any other country that has nationalised land. I do not think that the Soviet Union would say that it has been a magnificent success. I do not believe that that is the way forward.
I agree with my hon. Friend the Member for Cunninghame, North (Mr. Corrie) that we are spending far too much on storage and dispersal. It would be very much better if we spent that money on farming and got more of it back into the farmers' pockets. That surely is what we ought to be aiming to do.
The hon. Member for Walthamstow made his usual serious contribution to the debate. On the question of the oils and fats tax, I hope that he will underline the big impact that it would have, not just on our trade with the United States, but on our trade with the developing countries.
My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) put forward a strong view about New Zealand. I was attacked very strongly by the Prime Minister of New Zealand because I mentioned that the New Zealand position on defence cannot help the attitude towards his country. I remind my hon. Friend that that is the position of the New Zealand Government, not necessarily that of the New Zealand people, and that we have certain long-standing obligations.
I say to my hon. Friend that I would find that argument easier to bear if we were selling competitively against New Zealand. My hon. Friend the Member for St. Ives (Mr. Harris) was right to remind us that New Zealand does not have a guaranteed market in Britain; that it has an opportunity market. We have not yet been successful enough in selling our own products against theirs. The word "marketing" is the most important word in the name Milk Marketing Board. It is an important word and one that I hope will increasingly be underlined.
It is wrong for the hon. Member for Meirionnydd Nant Conwy (Mr. Thomas) to suggest that Chernobyl had the effect that it did, without recognising the considerable way in which the Government have aided those farmers who have suffered. That is whingeing a little. There is no doubt that we have been more generous and responded more rapidly and more extensively than any other Government. It is right to say that, because many townsfolk find it difficult to understand why we did it. We know why, but we should say "thank you" occasionally on such matters.
I agree with the comments of my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman), who put several points very clearly. However, I am a little alarmed by her view on New Zealand, because I believe that we have a special responsibility there. I warn Opposition Members that they were the people who insisted that we had not just a temporary agreement, but one that was a continuing acceptance of a continuing responsibility. The truth is that the amount of butter coming in from New Zealand has halved since we joined the European Community. Our production of butter has increased from supplying 20 per cent. to 50 per cent. That is a big change round.
We must realise that we have pushed out of our market large quantities of butter that came from the rest of the Community. What is more, we have put a great deal of butter into intervention. As my hon. Friend the Member for St. Ives said, it is not possible to argue with our friends in the European Community that somehow or other we do not contribute to the surpluses when we put 90,000 tonnes of butter into intervention. We should not try to push that argument too hard.
The hon. Member for Sheffield, Brightside was one of those hon. Members who were guilty of saying, "We are not self-sufficient; surely we should be on our own." That is a little odd coming from the internationalist party. However, the fact is that the hon. Lady is not right in saying that, because in many things we are much more than self-sufficient. My hon. Friend the Member for Devon, North (Mr. Speller) was right to say that in the end we are in the business of trade. We are now one of the world's great agricultural exporters. One cannot expect to export without importing. The Community must learn that as much as anybody else, and must learn it about the developing as well as about the developed countries.
Britain would not be true to herself if she started to become a protectionist nation and would lose out considerably. Britain should demand fair dos for her own exports in other people's markets. I have much more sympathy with the points that have been raised by my hon. Friends, not least by my hon. Friend the Member for Rutland and Melton (Mr. Latham) who demanded that we have fair exports and that we should go down that route and not the route of protectionism.
I agree with much of what was said by my hon. Friend the Member for Honiton (Sir P. Emery). His explanation of the green pound structure and of the problems that that causes British agriculture was extremely helpful. I have some specific answers on his points about the outgoers scheme. What he adumbrated was mostly right, but I should like to reply to him in detail in writing.
The hon. Member for Brecon and Radnor (Mr. Livsey) worries me. I asked him what it was about our joining the ERM — the exchange rate mechanism — that would decrease interest rates by 2 per cent. The House must agree that answer came there none. In fact, he looked more puzzled about the question than I did about the answer. That is difficult, because his answer was inconceivable, so I do not know what his question must have been about. Therefore, I ask him again, before he trots out easy economic answers to difficult economic problems, to do his homework and come here with a better answer.
I liked what my hon. Friend the Member for Gloucestershire, West (Mr. Marland) said about the problems facing agriculture. However, I ask him to consider carefully before attacking the health regulations of other countries. We are concerned to make sure that our health regulations are careful. The one to which he referred, relating to minced beef, may not sound important, but it is crucial for the protection of health in this country. Therefore, I ask him to look more carefully at that.
I am pleased that my hon. Friend raised the matter of rating agricultural land. It is no good alliance Members pretending that they do not want to tax agricultural land when it is clear from last year's document, called "These are Liberal Policies", that there shall be a tax on such land. I do not know whether that is Liberal policy now, but it was last year. It was Liberal policy until the right hon. Member for Devonport said that it was not. Therefore, we know precisely who the leader of the Liberal party is today.