On a point of order, Mr. Deputy Speaker. Do you agree that the previous points of order underline the need to end the anonymity of objections to Bills? The right hon. Member for the City of Chester (Mr. Morrison) might have been inundated with the wrong pile of letters, but they can now go to the hon. Member for Devizes (Sir C. Morrison).
We keep wasting the time of the House by going over the same course regularly on private Members' Bills.
I should explain to the hon. Gentleman that identifying an hon. Member who shouts, "Object" is no different from the situation that arises when the Question is put to the House and the Chair collects the voices. In those circumstances neither the hon. Gentleman nor anyone else would expect that those, singular or plural, who shouted aye or no should be identified. Perhaps we can now get on. Mr. Edward Leigh.
I am not, as you well know, because the hon. Gentleman will get his half an hour. I shall not delay the House for more than a few seconds.
Order. The hon. Gentleman has been in the House on other Fridays when the same situation has arisen. He must not seek to make a speech and I hope that he will carefully reflect on what I said.
Lincolnshire farmers are internationally renowned. They supply about 20 per cent. of the United Kingdom's potatoes and sugar and 10 per cent. of its cooking oil, bacon, poultry and wool. Since the war the Lincolnshire farmers have responded magnificently to the need to ensure that British families have the benefit of a wide variety of safe food at farm-gate prices which are cheaper than elsewhere in the European Community.
Without doubt the county is one of the most progressive, productive and innovative agricultural areas in the world and it is blessed with some of the world's finest soils. Lincolnshire is rightly famous for the vegetables it grows—almost half our domestic vegetable produce comes from the area. The flowers and bulbs of the southern part of the county do much to brighten our homes, but I am proud that north Lincolnshire, which I represent, is the bread basket of England.
Agriculture is vital to the rural economy of my area, creating more than 100,000 jobs in allied industries connected with fertilisers, fuel, food processing, freezer centres and so on.
One of the great strengths of farming in the county is the fact that its farms are still largely family concerns. They are run by people who have the care of the countryside in their blood. Over many years they have contributed much to Lincolnshire. The principal problem confronting the farming industry in that region is the extent to which its economy has been hit. That poses real problems for its future. Unless the decline in farm incomes can be arrested, the result may be many family farms going out of business.
I shall illustrate the problem by discussing a farm that I visited recently as part of my continuing efforts to visit any farmer who wants to see me. J. G. Dring and sons at Legsby near Market Rasen farm 1,200 acres. The farm consists of combinable crops, potatoes, sugar beet and beef cattle. Between 1980 and 1989 expenditure increased by some 62 per cent. for electricity, 98 per cent. for machinery operation costs, 83 per cent. for rates and water charges, 75 per cent. for insurance, 126 per cent. for sprays—but only 2 per cent. for fertilisers—a colossal 148 per cent. for seeds, and a staggering 230 per cent. for medication and veterinary fees. The rise in labour costs has been kept at 70 per cent., but only by reducing staff by a quarter.
Against that one should note that, although sales during the same period have increased by 54 per cent., end-product price increases have been small—wheat, barley and rape rose between 7 and 8 per cent. There was no increase for potatoes, peas and beans. The 20 per cent. increase in cattle has, in effect, been lost to bovine spongiform encephalopathy, although I give full marks to the Minister for standing up so magnificently for British farmers. I wish that that could be said for everyone in this House. That illustrates graphically the problems confronting farmers, and it gives rise to considerable concern.
One effect is the loss of full-time jobs in the industry. J. R. Dring now employs only five regular staff on a large farm of 1,200 acres. Nationally, 23,000 full-time jobs were lost in the five years to 1988. The need to cut costs has reduced farm employment to a level where parts of the industry are short of skilled labour. It has also contributed to a much-reduced entry of trainees into the industry.
An example was given to me by my local branch of the Country Landowners Association. A tenant in north Lincolnshire—a good farmer on strongish land paying reasonable rents—grossed only £3,000 in 1989 and is now on family income supplement. I hope that that gives the lie to the myth of the rich farmer. Many more farmers are likely to be in the same position. A recent Farmers Weekly survey showed average farm incomes of only £11,000.
In addition, expenditure on farm infrastructure has had to be dramatically reduced, which produces a knock-on effect on everybody. In 1980 the town of Horncastle boasted no fewer than 10 machinery dealers. By the end of this month the figure will be reduced to just two. Additional imposed overheads have been created due to Government legislation during the past 10 years, including cost, chemical and spray regulations, and the requirement to record the movement of cattle.
I would not for one moment say that such measures were unnecessary. The problem for agriculture is that, unlike other industries, it cannot pass on the cost to the consumer. Equally, it is unable to pass on any other costs, such as bank charges and wage increases. Most industries can add value to output to meet rising costs. Agriculture can do so only by diversification. At best, that can be exploited only by those who are already sound and have the necessary resources, which many farmers simply do not have.
In 1989 a report of the Ministry of Agriculture, Fisheries and Food showed that the average increase in profit for those who had entered the farm diversification scheme was only £500. The central problem for farmers in Lincolnshire during the past five years or so has been the stagnation in the price of the goods they produce. For example, a farmer received £122 a tonne for milling wheat five years ago, and the price has remained the same. Over the same period, the loaf of bread that the housewife buys, has risen from 39p to 50p. Five years ago, a pint of milk left the farm for 8.6p and the housewife bought it for 22p. Now that same pint leaves the farm for 9.8p and costs 30p in the shops.
On behalf of Lincolnshire farmers I warmly welcome MAFF's recent decision on farm prices, which should add £500 million to farmers' returns for a full year. I pay tribute to the fighting stance of our agriculture Ministers in those negotiations and say "Well done" on behalf of all Lincolnshire farmers.
I also welcome the Government's firm commitment to end disparties between green and market rates of exchange of the pound by the end of 1992. I would like them ended now, but I appreciate that in this, as in all matters, the Government have to convince our so-called partners, who are in fact competitors with many unfair advantages. It is about as easy as persuading a lightweight jockey to add a few pounds to his saddle. But how else can the race be fair?
The recently agreed green pound devaluation will increase cereal support in the United Kingdom by 10.7 per cent. at the start of the next marketing year. That is something for which Lincolnshire farmers and I have been arguing for some time and they, like me, are pleased that the Government have persuaded our European colleagues to take steps towards ending those undesirable discrepancies. Will my hon. Friend the Minister assure me that the Government will do all they can to ensure that the Community sticks to its commitment to remove monetary compensatory amounts by 1992? I need that assurance today, as do the farmers whom I represent.
Nevertheless, the industry in my constituency still perceives disadvantages placed on it as against its European competitors. I shall give two examples of that. Corn sold into intervention in the United Kingdom has to beat 14.5 per cent. moisture, whereas corn sold into intervention by our EC counterparts has to be at 15 per cent. moisture. That increases drying costs. Quite rightly, in the United Kingdom there is stringent checking of chicken stocks for salmonella. By the beginning of the month new fewer than 1,200,000 birds had been slaughtered. Naturally, that increases costs, but there is no such testing in our EEC counterparts.
On the subject of disease, will my hon. Friend comment briefly on the agreement reached recently in Brussels on foot and mouth disease, and on how that agreement will assist companies such as Cotswold Pigs in my constituency to export?
Another problem that the Government should deal with is the monopoly created by the drastic reduction in the numbers of buyers at the farm gate. Not only has that enabled the few remaining buyers to dictate terms, but it has allowed them to inflate their prices to the consumer. That is illustrated by the figures that I gave comparing increased food prices with reductions in farm income over the past 10 years. According to "Euromonitor" no fewer than 15 of the 22 most profitable European food manufacturers are British. Perhaps the balance of trade in this respect has been upset. The Monopolies and Mergers Commission should investigate the activities of five supermarket chains which control a substantial proportion of the retail market. Their power is healthy neither for the farmer nor for the consumer—nor for the rural shops in my constituency and elsewhere which often find it hard to compete. They frequently have to sell their goods at prices much lower than supermarkets can charge for them.
The last major problem facing agriculture lies in the workings of the European Commission. Much concern has been expressed in the country and the county about the proposed nitrates directive. Were it enacted it would have a catastrophic effect on farming in Lincolnshire. No convincing evidence has been found to show that current nitrate levels are harmful to health, and I urge the Government to remain steadfast in their opposition to this ill-conceived European directive. Will my hon. Friend give an assurance today that under no circumstances will the United Kingdom agree to any proposal that imposes a cost on the farmer out of all proportion to the alleged benefits to the environment? Will he ensure, too, that nonagricultural sources of pollution, about which we hear far less, are tackled?
On the subject of the environment, no Lincolnshire Member dealing with farming in the county could pass over the need for strong sea defences. Perhaps my hon. Friend will briefly comment on them and on the resources that the Government will allocate for them.
What the Lincolnshire farmer requires, in the famous cliché, is that elusive level playing field. He is the most cost-effective farmer in Europe; all that he asks is to be allowed to compete with his European counterparts on an equal footing. He realises that it no answer to seek massive subsidies, and as a Member of Parliament representing a largely rural constituency I have never asked for massive subsidies, although I realise that they might have been an easy way out and might have earned me short-term popularity. We in this House know that subsidies only produce distortions and imbalances in the market and act unfairly.
Government policy, and the common agricultural policy, should be to ensure that farmers produce food at sensible prices for everyone and that food stocks are kept at sensible levels. I have mentioned the need for sensible levels because I am conscious that the Food and Agriculture Organisation of the United Nations has warned that global cereal stocks are below safe levels and that any adverse weather conditions could affect them. We have seen in recent years how one event in Chernobyl or one small drought in Spain severely damaged the stocks.
Of course, I appreciate that the massive surpluses of the early 1980s had to be dealt with, and they have been. Now our farmers, the most efficient in Europe, should be given an opportunity to earn a decent living in open and fair markets.
This debate is not only about farmers; it is about improving the environment, and only farmers can do that. I hope that my hon. Friend the Minister and his colleagues in the Department of the Environment will resist the recent spate of unwanted planning applications by Unigate for large poultry units to be sited across my constituency. The company wants to produce 1 million birds a week. What will that mean for small poultry producers in my constituency in terms of unfair competition? A fundamental part of the Government's agriculture policy must be to ensure that by 2000 we have a viable farming industry and that a family firm such as J.R. Dring and sons is still farming and providing good-quality food for a decent return. That will enable such firms to support a thriving rural economy and will ensure the continuance of the magnificent contribution made by farmers to Lincolnshire life.
I congratulate my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh) on his initiative in bringing forward this debate. I know that he does not hesitate to tell his farmers when he disagrees with them. He does not necessarily reproduce the National Farmers Union brief. When he says that there is a real problem in farming, especially in Lincolnshire, which is one of the better endowed counties in the United Kingdom, we have a duty to listen to him. I undertake to study carefully what he has said.
I regret that the Opposition have not had an opportunity to study at first hand what my hon. Friend has said, because there is not one Opposition Member in the House and the Opposition Front Bench is not therefore represented in the debate. No doubt my hon. Friend will point that out to his farmers when the Opposition pretend that they are capable of looking after British agriculture.
I agree that there is a problem about farm income and we should not pretend that things are other than what they are. The farmer's costs are fixed by the market which is free to move, but, by and large, his income is fixed by politicians. That is because of the pricing structure in the European Community and because of the impact of economic policy on the farmer. However, farmers should reflect on what the situation would be if their incomes depended wholly on the market. If farmers were required to produce at world market prices, it would have a severe and immediate impact on agriculture and severe radical restructuring would follow. It would be akin to what we have seen in other industries that have not had a price support mechanism and the limited but certain insurance that the Community has given to farmers.
We know the reasons for the difficulties, but we had to tackle the problem of surpluses. I pay tribute to my hon. Friend for acknowledging that and for defending that policy in his constituency. We had to control dramatically rising expenditure and we have to pursue an anti-inflation strategy. Perhaps that matters more to the farmer than to many other people precisely because of the way in which his income is made up.
We shall do what we can to help. In the livestock sector we have more instruments at our disposal for dealing with sheep and cattle whereas in predominantly arable constituencies we are more limited. My hon. Friend mentioned the green pound. I give him the pledge that he seeks; we will do everything in our power to eliminate the green pound by the end of 1992. He will be interested to know that on Monday the monetary compensatory amount on cereals will fall to 2.5 per cent., which will be the lowest level for five years. The MCA for pigmeat and beef will be zero. We got substantial devaluations at the previous price fixing and what has since happened to the pound has tended to move those further. That is an important contribution to the creation of a level playing field which I recognise as one of the most consistent demands of the British farmer.
By means of the diversification programme, the Government have also sought to assist by set-aside and schemes such as woodland and conservation schemes. I do not pretend that those provide help other than at the margin, because in general terms they will not make the difference between life and death, but they are an attempt by the Government to make available to farmers the means by which they can diversify a little and explore alternative sources of income. They also enable us to take the edge off some of the immediate pressure applied by the application of the stabilisers and European constraints.
My hon. Friend spoke about moisture content. The United Kingdom applies 14.5 per cent. while the rest of northern Europe applies 15 per cent. That percentage is a Government choice and was not imposed by Brussels. We have the option to apply the same moisture content as the rest of the northern European Community. Should conditions in 1990 indicate that we should move to the slightly more relaxed 15 per cent. we shall do so. We have not done so in the past two years because we have had relatively dry harvests and such a move has not been required.
I entirely echo my hon. Friend's comments about salmonella. This is a classic case of the Government taking draconian measures to tackle disease in our flocks, and we are pressing the Commission to produce proposals which will impose a similar requirement on others. My right hon. Friend the Minister mentioned that point to the Agriculture Commissioner at the Agriculture Council, in which we both participated earlier this week. Incidentally, my hon. Friend referred to the notable triumph at the Council meeting with respect to foot and mouth, which is the biggest single animal disease problem. It would be of particular concern in Lincolnshire, where pig production is a major agricultural activity.
My hon. Friend referred to Cotswold Pigs as one of the country's premier pig production units. We have agreed that the whole Community will move towards the slaughter policy carried out by the United Kingdom, Ireland, Denmark and Greece and away from the vaccination policy that the rest of the Community has pursued. That is an example of where British practices will be the norm for European practices. They will give much greater security in terms of disease-free livestock and movement inside the Community. It will give an assurance that we can export to the world market, knowing that our home base—which will be the whole Community—is able to give greater guarantees that livestock is free of disease.
My hon. Friend referred to the limited number of companies that tend to dominate the grocery sector. Competition is a matter for my right hon. Friend the Secretary of State for Trade and Industry, and I shall draw my hon. Friend's remarks to his attention. There are some positive aspects which I am sure my hon. Friend would acknowledge. Competition between retailers is fierce and it is fair to say that that is probably good for the housewife. More important agriculturally, those retailers are increasingly collaborating with farmers and farm organisations to require a high standard of production, which is bringing farmers closer to the market place. Recently, I visited Bedfordshire Growers—which I realise is not in my hon. Friend's constituency—which has links with some of the major chains. It is producing high-quality produce in response to demand. Perhaps we should discuss whether farmers would find it easier to form co-operatives that would take them more directly into the wholesaling and retailing sector. The law is somewhat dificient in this respect and needs updating—a matter to which we should perhaps devote our attention.
I endorse my hon. Friend's comments about nitrates. My right hon. Friend the Secretary of State for the Environment is a prime negotiating partner in discussions on that matter. When I represented the United Kingdom at the Agriculture Council in May, I insisted that the Council should set up its own group to advise environmentalists on the purely agricultural implications. I was afraid that the matter would run away from Agriculture Ministers and would be settled by other Environment Ministers who do not have a close relationship similar to that which exists between my right hon. Friends the Minister for Agriculture, Fisheries and Food and the Secretary of State for the Environment.
We should have a sensible authority to blend and treat the water. A reading of 50mg per litre taken once in the year should not immediately condemn us to large-scale set-aside or afforestation. That is nonsense in terms of environmental policy. We are co-operating closely with my Government colleagues to ensure that the agricultural point of view is portrayed effectively. We will honour our assurance to pay the closest possible attention to this matter.
Because I did not have time to mention this point, perhaps my hon. Friend will comment on set-aside. It has a part to play in improving the environment. I understand that recently the Commission agreed an increase to £250 a hectare. Without any cost to the Treasury we might be able to increase the generosity of our set-aside procedures. Although my hon. Friend may not be able to comment today, perhaps he will agree to consider the matter.
We are preparing the third round of set-aside. We are anxious to enhance the set-aside programme to give it a greater environmental content. That will have implications for the rates. Perhaps my hon. Friend will take my comments as a hint that I shall consider his points.
My hon. Friend mentioned flood defences and I realise that they are important in Lincolnshire. The amount allocated to flood defences has increased by more than £29 million between 1989 and 1992 and the main target is the east coast. My right hon. Friend the Minister is especially anxious that he should not be deprived of a job by the submergence of his constituency, although in the early 19th century, submerged constituencies were represented in the House, thus relieving the hon. Members concerned of any constituency burdens. Lincolnshire will receive the maximum grant rate of 75 per cent. for sea and tidal works. I have discussed the matter with the National Rivers Authority and 20 per cent. of the total grant that we give to it will be targeted to Lincolnshire in 1990–1991.
My hon. Friend will not expect me to comment on the planning problems in relation to chickens. In my role as a constituency Member, I know that planning is the harshest bed of nails on which an hon. Member can find himself impaled. I shall simply note what my hon. Friend has said and draw it to the attention of my colleagues who may eventually be directly concerned in the matter.
My hon. Friend has done a great service to his constituents in bringing the situation in Lincolnshire to the attention of the House. We should remember that Lincolnshire is a relatively favoured county. My hon. Friend praised the production of grain, and the county is one of the bread baskets of the United Kingdom. My hon. Friend also praised the county's record in agriculture. Bulb production, to mention the most spectacular area, is a major national asset. My hon. Friend also mentioned pigmeat production in which Lincolnshire is at the forefront of technology.
While praising the county, we must listen carefully to the problems raised. I will take careful note of what my hon. Friend has said about the concerns of farmers in the county. He will, no doubt, note that the Government are committed to do their best for agriculture. With such a partnership, I am sure that my hon. Friend will continue to represent his constituency outstandingly and that his constituency will continue to make an outstanding contribution to our agriculture.