Agriculture

Opposition Day – in the House of Commons at 3:35 pm on 14th February 1991.

Alert me about debates like this

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East 3:35 pm, 14th February 1991

I have selected the amendment in the name of the Prime Minister. A large number of hon. Members wish to participate in the debate. I have no authority to limit the length of speeches in a half-day debate, but it would be helpful if hon. Members tried to limit their speeches to 10 minutes and if the Front-Bench spokesmen, of whom there will be four, exercised a self-denying ordinance on the length of their speeches.

Photo of Mr Geraint Howells Mr Geraint Howells , Ceredigion and Pembroke North 4:13 pm, 14th February 1991

I beg to move. That this House condemns Her Majesty's Government for presiding over a crisis in agriculture which has seen 6,000 farmers leave the industry in 1990, real farm incomes fall to their lowest level since the Second World War and farmers' debt increase by £400 million in two years; believes that this crisis already threatens the social and economic structure of rural areas and the livelihoods of many farmers; regrets proposed changes in the Common Agricultural Policy; arid calls on Her Majesty's Government to bring forward proposals to protect the agricultural industry by moving support from overproduction to direct support aimed at social and environmental goals by the introduction of countryside management agreements across the country, by enhanced payments for achieving environmental aims, in particular extensification of food production, by marketing initiatives, and by reformed systems of direct support targeted in particular on family farms. We are debating a serious issue. The purpose of our calling the debate is to try to restore confidence in an ailing agricultural industry. I forewarn the Minister that I will not attack him personally. I hope that during the debate I shall be able to advise him a little, from my farming experience, on the mistakes that his party and his Government have made over the last 12 years. It is to be hoped that the introduction of our 10-point policy, which I trust that the Minister has read, will enable us to go forward and improve the nation's agricultural industry.

I have had the pleasure of representing a rural constituency in west Wales for the last 17 years. The majority of my constituents are self-employed farmers, many of them on small family farms. I hope to have the pleasure of continuing to do what I can to help them for many years to come.

Never during the past 50 years has the future looked so bleak for British farming, an industry which has rightly prided itself on its efficiency. It is sufering from a crushing loss of confidence that has driven, and is continuing to drive, many farmers from the land. Over 6,000 workers, 4,000 of them full-time, left the land last year. How many more will leave the land this and next year? Let us hope that something can be done in the short term to stop the decline.

Unfortunately, farmers' debt amounted last year to £7 billion, compared with £3 billion at the beginning of the 1980s. Interest alone is now costing the industry £1 billion annually. The high interest rates that have prevailed for the last couple of years have caused increasing problems to an already overstretched industry. The reduction announced yesterday has come too late for many and is too little to save many hundreds of others from financial ruin in the next few months.

Let us make no mistake about the fact that all farmers are suffering in the current situation, including the large farmers of East Anglia, the dairy farmers of Devon and the south of England and the hill farmers of Scotland, Wales and Northern Ireland. But those who stand to lose the most are the smaller family farmers, of whom there are many in every part of Britain.

When I refer to family farms, I am speaking of farms that are looked after by the husband and wife and perhaps son and daughter, all earning a living from their parcel of land. It is important to do all that we can to preserve that type of farming, of whose record we should be proud. The livestock producers, the descendants of farmers who toiled on upland farms in the less-favoured areas over the centuries, have helped to weave the fabric of rural Britain, of which we are proud.

Some may ask why, in a time of recession, agriculture should be picked out for special treatment. We Liberal Democrats believe that agriculture has a vital role to play in the United Kingdom economy and in maintaining the structure of rural Britain. It deserves support as an efficient industry which has increased production, until today we are 75 per cent. self-sufficient in food. We must maintain a thriving agriculture so that we can carry on producing high-quality, reasonably priced food for the consumer. We also need the farmer as the guardian of the countryside, a responsibility which he has successfully carried out since time immemorial.

Photo of Mr Dafydd Wigley Mr Dafydd Wigley Leader and Party President, Plaid Cymru

Does the hon. Gentleman agree that, faced with the present crisis, we in rural Wales are concerned not just with agriculture directly but with the whole of the rural economy? Village life depends on the farms that are under threat. If farming goes, the whole infrastructure of large areas will disappear.

Photo of Mr Geraint Howells Mr Geraint Howells , Ceredigion and Pembroke North

I agree entirely with the hon. Gentleman, who represents a constituency similar to mine and encounters problems similar to those that I encounter. I am sure that the Government will take heed. We need the farmer as the guardian of our countryside—a responsibility which, as I have said, he has successfully carried out since time immemorial.

Last, but not least, we recognise that if our rural communities are to survive, the farmer, his or her family and related industries and services must be encouraged to stay in the countryside. That may be difficult at times, but we have to do our best. A Conservative Member shakes his head. I wonder whether he is against such a policy.

Photo of Mrs Ray Michie Mrs Ray Michie , Argyll and Bute

Does my hon. Friend agree that the crofters and farmers of the islands, particularly the Scottish islands, contribute to the local community and are very valuable to the countryside? The agricultural development programme that was instituted for the islands was very welcome, but people now find that they are unable to keep up their payments, and we shall have to seek an extension. Many of these people are too proud to ask for help. This is the sort of thing that makes life very difficult for the farmers of the islands.

Photo of Mr Geraint Howells Mr Geraint Howells , Ceredigion and Pembroke North

I agree entirely with my hon. Friend, who cares so deeply about her people in Scotland. As I have told her many times, I refer to her as "Miss Scotland". I hope that the Secretary of State will take note of what she has just said. We need the part-time farmers and crofters in many parts of Scotland. [Interruption.] I am sure that she is proud to be called "Miss Scotland"—if only because of the record of her father, who played so often for Scotland.

We must not leave the industry at the mercy of naked market forces, as the Government seem intent on doing. They are willing to allow free market forces to take over completely, and quite content to allow the structures that have been developed since the second world war to encourage British farming to wither away.

Photo of Mr Alex Carlile Mr Alex Carlile , Montgomery

My hon. Friend has just mentioned the Government's willingness to allow market forces to run riot. I know that he is aware that the Government seem willing to allow that in relation to agricultural tenancies, too. Does he agree that the policy that the Government have offered in their recent consultation paper—that agricultural holdings should be subject only to negotiation in the free market—is unrealistic? Bearing in mind the inequality of bargaining power between a young applicant for a tenancy and an experienced land agent, does he agree that a free market in tenancies is likely to wreck the strength of the agricultural rented sector? [HoN. MEMBERS: "Speech."] Does my hon. Friend agree that the only way to ensure that there is a reasonable supply of farm tenancies is to give fiscal incentives to both landlords and tenants?

Photo of Mr Geraint Howells Mr Geraint Howells , Ceredigion and Pembroke North

That is my hon. Friend's speech done. As a poor hill farmer, I must listen to my colleagues at length. I am sure that my hon. and learned Friend will advise the Government. If my memory serves me well, he has until 31 March to express his views. I am sure that he has already drafted something and that it is on the way to the Minister. The point that he has just made is very valid and constructive.

Our parents and grandparents saw unfettered market forces in action in the 1920s and 1930s. At that time there was even greater desertion of the land. Rural communities were dispersed, and the production and distribution of food were inefficient and inadequate.

During their 12 years in office, the Government have signally failed to provide the necessary encouragement for an industry which surely deserves better. Therefore, they are failing not only the farmers, but the consumers and rural community of which farmers form the backbone.

I shall give a little bit of advice and a little history lesson to the Minister. I do not think that he was here in 1973—[Interruption.] He indicates that he was here then. Just to remind him—the Tory Government of 1973 decided to do away with the deficiency system for beef cattle. Within 12 months, the beef industry had hit rock bottom, calves were left at the market throughout the country and could not be sold. We could not sell our beef cattle.

In 1974, I was elected to the House. I am sure that the Minister will agree that the late Fred Peart made a wonderful job of saving the beef industry in that year. It was a lesson for every one of us, and makes me wonder whether the agricultural industry of Britain will survive in a free market economy without safeguards for the produce of this country.

I listened to the Minister with interest at the annual meeting—

Photo of Mr Geraint Howells Mr Geraint Howells , Ceredigion and Pembroke North

He spoke quite well, but he made a point about the future of the milk marketing boards about which I am a little worried and perturbed. I remember the days before the war when we had a free market economy. During the past 50 years, the forefathers of hon. Members on both sides of the House have fought hard to establish the milk marketing boards. It all started in Cardiganshire in west Wales in the early 1930s. During the past 50 years, the boards have served producers well and dairy farmers are still farming in every part of Britain.

I do not think that the Minister was responsible although I may be wrong, when the Government decided in 1988 to do away with the guaranteed price for wool. This year, the farmers will be paid that guaranteed price of between £1·15 and £1·25 per kilo, but next year they will not have the guaranteed price, and our sheep and wool producers will lose about £30 million next year because the Government have done away with the financial agreement.

The decision was taken unilaterally and had nothing to do with the European Community. It was a Government decision and a big mistake. On behalf of the sheep producers of this country, I say—I am sure that hon. Members will agree—that we should bring pressure to bear on the Government to reintroduce that financial agreement for another five-year period until we are out of our present crisis. If the will is there—I hope it is—that can be done.

Photo of John Home Robertson John Home Robertson , East Lothian

I agree with everything that the hon. Gentleman says about the critical position facing family farms throughout the United Kingdom. To go back to his history lesson, do farmers in Ceredigion and Pembroke, North agree with the view expressed to me by many farmers in Scotland, that agriculture always does better under a Labour Government? Would he like to speculate on why so many of them persist in voting Conservative?

Photo of Mr Geraint Howells Mr Geraint Howells , Ceredigion and Pembroke North

I will not follow that line, but I will say that most farmers in Britain will vote for us next time, because we have a good policy to help them out of this crisis.

The Government made a big mistake in the early 1980s when they persuaded our farmers to expand, to spend more, to invest more and to produce more. That continued for four or five years. I respect the Minister's views, but now, five years later, he is trying to persuade farmers to produce less. I honestly believe that the Tory party has misled and mismanaged agriculture during the past 12 years—

Photo of Mr Colin Shepherd Mr Colin Shepherd , Hereford

Going back to an earlier passage in the hon. Gentleman's remarks about the milk marketing board, is the House to understand that he is advocating the retention of the board with no change in it? If so, can he explain how he reconciles that with the requirements of the European Community, which I believe his party supports?

Photo of Mr Geraint Howells Mr Geraint Howells , Ceredigion and Pembroke North

I am sure that the hon. Gentleman will know from speaking to dairy farmers in his constituency—I spoke to many of them at their annual general meeting this week—that more than 90 per cent. of them favour holding on to the milk marketing board with its present statutory powers. That is food for thought for the Minister. Given the will to do so, he may be able to persuade his counterparts in Europe to keep the present system.

Photo of John Gummer John Gummer Secretary of State for Agriculture, Fisheries and Food

I respect the hon. Gentleman's views on these matters, but I wonder whether he will help me. At present, 35 per cent. of the milk sold in this country is of the skimmed or semi-skimmed variety, which does not come under the present marketing arrangements. There is also the problem that the movement towards standardised milk will have serious effects on those arrangements; and there is the further problem that this country has so far not been able to produce the quality of product at the top end of the market, so, even though we are less than fully supplied with milk, we are producing milk for intervention products such as butter.

All three aspects mean that, as the milk marketing board has itself said, the board should start thinking of moving towards a voluntary co-operative. How does the hon. Gentleman reconcile that with his views that somehow we can stay exactly as we are?

Photo of Mr Geraint Howells Mr Geraint Howells , Ceredigion and Pembroke North

I advised the Minister a few minutes ago that the Government made a big mistake with one of our statutory boards—the British Wool Marketing Board—in 1988. He should not make a similar mistake in 1992. We have learnt the lesson the hard way, so I hope that the Minister will not let our dairy farmers down after 50 years of stability.

Photo of Mr Richard Livsey Mr Richard Livsey , Brecon and Radnor

Does my hon. Friend agree that the future of the milk marketing board is under threat from the views of the Dairy Trade Federation, and that it is having to bend to the federation's views? Other Ministers have protected the milk marketing board's position in the past and this Minister is duty bound to do the same now.

Photo of Mr Geraint Howells Mr Geraint Howells , Ceredigion and Pembroke North

My hon. Friend's views are always sound; but I must add that I shall not give way any more today.

One of the problems is that there has been no consistent agriculture policy; instead, there have been sudden switches of tactics which cannot entirely be blamed on the Government. In the early 1980s, the cry was for increased production—and as fast as possible. Farmers were urged to invest in equipment and buildings, and then suddenly there were cuts and quotas. Little wonder, then, that agriculture has been so unnerved. From one year to the next, farmers have to change their plans and have little opportunity to form long-term strategies or to invest sensibly. They must be given the chance to plan ahead.

The Minister is right to criticise the current MacSharry proposals, but he is wrong to lay the blame for all the industry's ills at the door of the common agricultural policy. The Minister has so few positive proposals that we wish to make some constructive suggestions of our own. The industry would benefit from a 10-year strategy aimed at assisting farmers during transition. It would encourage them not to resist inevitable changes and would ensure that they compete on equal terms with other European farmers.

We have a 10-point plan and some of the points are especially relevant. First, we have said that resources must be switched from supporting over-production to direct support for farm incomes, and that payments must be specially targeted on medium and small family farms. Secondly, as agriculture underpins the social fabric of rural Britain, it follows that direct support must concentrate on social as well as environmental objectives. Thirdly, the future of the European family farm should not be sacrificed in any attempt to bring the GATT negotiations to a conclusion. If a reduction in some support for agriculture can be justified, it must be gradual and sensibly phased.

We say that less-favoured areas and environmentally sensitive areas should be extended, and the system used to sustain local farming communities and to encourage environmentally friendly farming and the preservation of the countryside. In case some Conservative Members think that this attack on the Government is only by Liberal Democrats, let us hear the view of the National Farmers Union. I am delighted to see that the new president of the NFU, David Naish, is here listening to the debate. I wish him well in his new office and thank the ex-president, Sir Simon Gourlay, for the services that he rendered to British agriculture.

According to the NFU the MacSharry proposals strongly discriminate against British farmers. The NFU states: Although rebuffed on first outing by Council of Ministers, these proposals are likely to come back in some form in some very tough EC price proposals due to be announced soon". The NFU says that the Minister be left in no doubt that he must not come back from Brussels without having removed the discriminatory aspects of the package. It says that the cut in interest rates is welcome, but that there is a pressing need for the Government to go further, and soon. It states: Unless urgent action taken soon we shall see the demise of the small family farmer in British agriculture, together with his role in the rural community and management of the countryside. The Farmers Union of Wales states that it recognises the threat to Welsh agriculture of a revised CAP favouring the 'Allotment' farmers of Europe". The Minister understands that quotation. The FUW continues: however it is undeniable that 80 per cent. of EEC support goes to 20 per cent. of farmers—and that 60 per cent. of farm support does not get through to the farming community"— that is most important— Preliminary estimates suggest that this waste—the proportion of consumer and taxpayer expenditure on current farm support which does not get through to farmers—is about 60 per cent. on average. While public dissatisfaction with the growth in this spending is almost all directed to agriculture only some 40 per cent. is actually benefiting farmers. We are concerned that the Government are presiding over a gradual decline in agriculture. It has been starved of support and resources and, as a result, it is fighting for its future. I fear that it may already be too late to reverse that trend. Time is not on our side. We face the consequences of further cuts in support, the open market of 1992, and greater access to the European market by iron curtain countries. Urgent and effective action is needed to ensure that farming survives as an effective force. We hope that this debate will make a turning point in public and Government perception of a once great industry, which came to the country's rescue in two world wars.

In the last century, a prominent Englishman, George Borrow, travelled through Wales, from north to south—and his book, in which he describes his experiences, is very interesting. When he came to my area of mid-Wales, he wrote: This is an area where crows will die and men will live. I hope that the day will never come when only crows will live in mid-Wales, and there will be no men there to farm the hills and uplands.

Photo of John Gummer John Gummer Secretary of State for Agriculture, Fisheries and Food 4:40 pm, 14th February 1991

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: welcomes Her Majesty's Government's intention to negotiate in Brussels so as to secure changes to the Common Agricultural Policy of the European Community which make it more market-oriented, thereby giving an incentive to efficiency, reduce surpluses, thereby lessening tensions in international trade, keeping spending within the agricultural guideline, avoid discrimination against United Kingdom interests, and integrate environmental considerations more firmly into the Policy; and recognises that such a stance is necessary to take proper account of the interests of taxpayers and consumers while offering a realistic prospect of a successful future for British farming.". I thank the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) for the courteous way in which he moved his motion, and for reminding the House that he and I have, on a number of occasions, fought side by side when we have found ourselves at odds with the majority of the Opposition—not least, when the hon. Gentleman bravely supported the Government's efforts to back the safety of British beef, when it was so deeply undermined by the official Opposition. If I am critical of the views held by the hon. Gentleman's party, I hope that he will not take my remarks personally.

The hon. Gentleman described, quite rightly, the serious position of agriculture throughout the European Community and emphasised the problems of the United Kingdom in general—and of the Principality and his own constituency in particular. However, perhaps it would have been more sensible for the hon. Gentleman to begin by admitting that, as more than 80 per cent. of spending on agriculture comes from decisions made in Brussels, the nature, future and activity of the common agricultural policy is central to what happens. If one examines only that amount being spent by the British Government, one sees that the figure has risen constantly. The argument that agriculture is starved of funds comes oddly from the hon. Gentleman, who knows that only this week I announced another £17·5 million for the poorest farmers in the most difficult areas—many of them in the hon. Gentleman's own constituency.

Although we share the hon. Gentleman's concern—and I hope that no one doubts my personal commitment to the role of the farmer as the custodian of the countryside, as well as a producer of food, and belief that it would be wrong to take the present period of plenty as necessarily the pattern for the future, and therefore that it is absolutely necessary to maintain our ability to produce food at home and to have farmers and farm land available for that purpose—the hon. Gentleman did not seem prepared to face up to the real choices and problems that confront us. He prefers merely to state the problem, without proposing any solution.

I invite the House to examine the motion carefully. It states that the Liberal Democratic party regrets proposed changes in the Common Agricultural Policy". I am glad that the Liberal Democrats are not representing this country, if all that they could say to Mr. MacSharry is, "We regret what you are doing." If that had been clone, Mr. MacSharry would be doing it still. There would have been no possibility of getting the group of nations and strength of feeling behind the United Kingdom that we did, if all we had said about Mr. MacSharry's proposals was that we regretted them. To regret would have been to allow to pass.

We start by saying that we oppose Mr. MacSharry's proposals. We hate them. We condemn them. We do so in the terms expressed in a letter to The Times from the editor of a farm newspaper. He needed to write to The Times because that newspaper is not always clear about the needs of British farming. That correspondent asked why is it acceptable to put the farmer in Dyfed—perhaps the farmer in Ceredigion and Pembroke, North—out of business because he has 50 cows, but to keep the farmer in Sligo in business because he has 40 cows. The hon. Member for Ceredigion and Pembroke, North must accept that the MacSharry proposals are extremely damaging to European farming generally, and especially damaging to British farming—and to Welsh farming in particular.

Photo of Mr Geraint Howells Mr Geraint Howells , Ceredigion and Pembroke North

The right hon. Gentleman could not have been listening, because I said that I supported him for opposing the MacSharry proposals—but that whether it be in six months' or 12 months' time, Mr. MacSharry's proposals will have to be accepted by the British Government, even though I hope that they can be amended.

Photo of Mr Geraint Howells Mr Geraint Howells , Ceredigion and Pembroke North

The hon. Lady can shout as much as she likes, but if the Minister is not in favour of the MacSharry principle, or of the amended version within the next two years, I am certain that he will not have an alternative policy. Perhaps the Minister will say what are his alternative policies.

Photo of John Gummer John Gummer Secretary of State for Agriculture, Fisheries and Food

I hope that my right hon. and hon. Friends will make it clear in agricultural constituencies throughout the country that it is the Liberal Democrats' official policy to accept the inevitability of Mr. MacSharry's proposals. [HON. MEMBERS: "Rubbish."] I base that not only on the hon. Gentleman's remarks but on the Liberal Democrats' proposals in the document "A Thriving Countryside", which I read most carefully. 1t is a better document than that which I had cause to discuss with the hon. Member for Caithness and Sutherland (Mr. Maclennan), which promoted, among other things, a national statutory pig-weaning period. Such was the nature of the proposals that we once received from the Social Democrats.

Those who carefully record the signatories to Opposition motions will have noted that the hon. Member for Southwark and Bermondsey (Mr. Hughes) is not a signatory to today's motion. I suspect that is because he, and others who have not put their names to the motion know of the deep division among Liberal Democrats between those in the countryside, who want to appear that they are in favour of a continuation of the present system, and those in the towns, who want to suggest to the taxpayers that there are great sums of money to be saved.

I am not in favour of the proposition that one can have a free market in agricultural products. How can one use that argument when, in the first place, the market would not be free? The United States is a major supporter of its agricultural producers. Japan, the world's other large exporter and a major proponent of better trade, is not prepared to do anything about the fact that it is an even bigger supporter of its agricultural producers than we in the European community. It would be entirely wrong to suggest that anyone is proposing a free market. What Conservative Members are saying is that, if our farmers are to be given a chance to compete, blocks must not be placed in their way.

Let me take head on, as it were, the point raised by the hon. Member for Ceredigion and Pembroke, North about the Milk Marketing Board. I remind the House that he said neither that he was in favour of its reform nor that he was against it. That position is reflected in the answers given by Liberal Democrats from platforms all over the country: when it is convenient, they will say that they are in favour, and when it is inconvenient they will say the opposite.

Photo of John Gummer John Gummer Secretary of State for Agriculture, Fisheries and Food

No. I wish to finish what I have to say: it is of crucial importance.

Who has suggested the reform of the Milk Marketing Board? The board itself. Why? Because it believes that, to defend the producer's interest, it must face the present reality. I am all for a history lesson, but I know of no other industry that would consider it sensible to argue that what was good 60 years ago must inevitably be good now. Such a proposition demands a certain amount of questioning. After all, 60 years ago we had a closed milk market: people were not importing milk or milk products to any significant extent, and if they had we could have stopped them. Today, we have a free market, and we must ask ourselves, "Can the British producer expect a fair deal within the present structure?"

The Milk Marketing Board has said that it fears that that will not be possible. For several years, the British milk producer has received less for his milk than any other producer in the European Community, while the consumer has paid more for her milk than any other consumer in the Community. Ideal though it was in earlier circumstances, the Milk Marketing Board must be changed to suit the consumer.

Let me make a commitment to the hon. Gentleman. M y concern is to ensure that the producer can obtain a fair return for his work, and I do not believe that the present system will enable him to compete effectively with those whose products will enter this country in the Common Market of 1992. The reason is clear. Three of the food-producing companies that have performed best over the past 10 years are producers of yoghurt; they are based in France, and are selling high value-added products on our market. I do not mind that—indeed, I am in favour of it—but I know of no similar British companies that are selling similar products on the French market, gaining for the British producer the margin that I wish him to have. I want a system that will return to the industry the innovation that it has lost, and only a reform of the Milk Marketing Board will make that possible.

Photo of Mr Geraint Howells Mr Geraint Howells , Ceredigion and Pembroke North

There is only one way to find out who is right and who is wrong. Will the Minister give the country's dairy producers an assurance that he will hold a referendum to establish what percentage of those dairy farmers are in favour of retaining the Milk Marketing Board with its present statutory powers?

Photo of John Gummer John Gummer Secretary of State for Agriculture, Fisheries and Food

I can give a better assurance than that. I have told representatives of the industry that I want them to present their own propositions for their Milk Marketing Board, and I am now waiting for their answer.

Whatever happens, I have a duty to protect the ability of British milk producers to compete with others. It is all very well for the hon. Gentleman to comment, but no one will remember that he has said what he has said. Everyone will remember if I turn out to be the Minister of Agriculture who fails the country's milk producers. I am not going to do that, because I am committed to them, and that means that I must tell them plainly that 34 per cent. of today's liquid milk sales are outwith the scheme.

We cannot view the scheme as unchangeable, when the whole question of standardised milk is becoming central to the discussions in the Community. We cannot discuss the scheme as it is now without taking into account the terms under which the Community originally accepted it, and the dangers that it now holds as our liquid milk consumption falls. It is bilking the issue to cast general aspersions, and not to accept the Milk Marketing Board's own statement that it may well need to change if it is to do its job for the producer.

The hon. Gentleman bilks the issue in another respect. Having listened to the question asked by his hon. and learned Friend the Member for Montgomery (Mr. Carlile), he remarked how valuable his hon. and learned Friend was, as a lawyer, and assured him that he would take heed of his requests relating to agricultural tenancies. Who has asked us to change the law on agricultural tenancies? It was not the landowners but, primarily, the young farmers, who said that they needed a change if they were to have an opportunity of acquiring tenancies. It is a curious Liberal approach to suggest that I should be condemned for issuing a public consultation document seeking to persuade the industry to face the realities.

The hon. and learned Member for Montgomery, who has now left us, said that he wanted us to continue statutory controls on tenancies. Perhaps the industry proposes such an arrangement in one way or another—and this is a consultation document—but I must ask whether a sensible tenancy system can be achieved if the system is cast in a way that encourages people to get around it with fake arrangements for share farming and special deals, all of them on a very short-term basis and most putting far more power into the hands of the landlords than the hon. and learned Member for Montgomery suggested would result from the kind of open system that is proposed in the consultation document.

Several Hon. Members:

rose

Photo of John Gummer John Gummer Secretary of State for Agriculture, Fisheries and Food

I will give way to my hon. Friend the Member for Ludlow (Mr. Gill), who has been waiting for a long time.

Photo of Mr Christopher Gill Mr Christopher Gill , Ludlow

Is not the point at issue in regard to both tenancies and the Milk Marketing Board our belief, as a party, in a demand-led rather than a command-led economy? The agricultural position in both western and eastern Europe shows where a command-led economy has taken us. The only apparent difference is that, whereas in the west the command economy has led to surpluses, in the east it has led to deficiencies. To that extent we are better off, but many of the problems affecting our agricultural system are caused by the fact that it is commanded by the state and by politicians, rather than being exposed to market forces.

Photo of John Gummer John Gummer Secretary of State for Agriculture, Fisheries and Food

I am sure that my hon. Friend is right, but I suggest that there is another connection between the two issues. In both cases the Liberal Democrats will say whatever suits their audience at the time. When it comes to discussing tenancies, they will do what they have been doing in every agricultural constituency in the country: they will say to those they think would like to have tenancies, "Yes, of course we want reform." They will say to those they think would not like the new tenancies, "We oppose them." Opposition Members do not want to intervene because that is an incontrovertible statement. The Liberal Democrats have 650 separate policies, one for each constituency. Those policies break up by ward when it comes to local government elections.

Photo of John Gummer John Gummer Secretary of State for Agriculture, Fisheries and Food

I must continue with my speech, in view of what Mr. Speaker said.

Photo of Mr George Foulkes Mr George Foulkes , Carrick, Cumnock and Doon Valley

The right hon. Gentleman ought to give way, because no Labour Member of Parliament has been allowed to intervene.

Photo of John Gummer John Gummer Secretary of State for Agriculture, Fisheries and Food

We are debating the motion tabled by the hon. Member for Ceredigion and Pembroke, North and I want to complete my reply to him.

Photo of John Gummer John Gummer Secretary of State for Agriculture, Fisheries and Food

I realise that some Labour Members of Parliament wish to speak in the debate, and I look forward to their contributions. I want the hon. Member for Glanford and Scunthorpe (Mr. Morley) to explain to British farmers why the Labour party supports Mr. MacSharry's policies. On 24 January the hon. Member for Clwyd, South-West (Mr. Jones) asked: Has the Minister noticed the uncanny resemblance between the recently leaked proposals from the Commission for the reform of the CAP … and of the Labour party, which are … virtually indistinguishable from those proposals?"—Official Report, 24 January 1991; Vol. 184, c. 449.] I look forward to hearing how the Labour party intends to explain to British farmers why 99 per cent. of the cuts in the sheep market should affect the United Kingdom while the rest of the Community will suffer only a 1 per cent. cut.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. Even someone as thick-skinned as I is well aware of the fact that the Minister does not intend to give way. The hon. Gentleman must therefore resume his seat. The Minister has made his position quite clear.

Photo of John Gummer John Gummer Secretary of State for Agriculture, Fisheries and Food

We are debating a Liberal Democrat motion. I want, therefore, to refer to the motion that is before the House.

Photo of Mr George Foulkes Mr George Foulkes , Carrick, Cumnock and Doon Valley

On a point of order, Madam Deputy Speaker. I have never known a debate, albeit on the motion of a minority party, in which an Official Opposition Member of Parliament has not been allowed to intervene during a ministerial speech. The Official Opposition represents 220 constituencies. I represent a rural constituency.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. That is not a point of order for me. If the Minister is allowed to make progress, I am sure that I shall be able to call other Opposition Members.

Photo of John Gummer John Gummer Secretary of State for Agriculture, Fisheries and Food

Thank you, Madam Deputy Speaker. It is worth pointing out that more Members of the Liberal Democrat party are in the Chamber at the moment than Members of the official Opposition—a fact which may be commented upon in many constituencies.

The positive part of the motion restates my words o the National Farmers Union the day before yesterday. That part of it which deals with the environment is largely a straight crib from Conservative Government policies, so I do not need to argue against them. I know that the hon. Member for Ceredigion and Pembroke, North agrees, because he did not refer to that in his speech. He knows that we agree with many of his proposals, although not all.

I do not agree with the suggestion that we should look after the countryside according to the diktat of local authority committees. I am not sure that farmers would want to manage their land according to the diktat of the chairman of the planning committee of Ceredigion district council. I suspect that farmers would prefer to have greater control over the future of the countryside which they created and which they manage.

I must refer to the desperate danger that is implicit in the last sentence of the hon. Gentleman's motion, which reads: and by reformed systems of direct support targeted in particular on family farms. If we were to suggest that some farms in Britain are family farms and that other unspecified farms are not, we should be saying to Mr. MacSharry, "Your policies are absolutely right." Almost every farm in Britain is a family farm. Some family farms consist of husband and wife, son and daughter working one farm together. Others consist of father and son working two separate farms. On some farms, cousins, aunts and others play their part in running a family farm.

The danger with the MacSharry proposal is that a family farm with mother, father and three sons fully active is less of a family farm than one which is divided among four different families. I know that the hon. Gentleman does not mean that, but if he suggests that there is such a distinction, his words will be used by our European Community foes in our negotiations on these matters.

The document "A Thriving Countryside"—rather ominously referred to as Federal Green Paper No. 18—refers constantly to small farms. If that were taken to mean that farms in Dyfed would receive special, uncovenanted extra support, the hon. Gentleman would be misleading the public. In Britain, there are no small farms, by European standards. There may be sufficient small farms to count as one vote for each Liberal Democrat Member of Parliament, but that is about all. For his own electoral good, the hon. Gentleman ought to realise that he should never refer to small farms when dealing with agricultural matters, since the European Community might remind him that 90 per cent. of the farms in Portugal consist of less than 5 hectares and that in Italy the average farm is a holding of 14 acres.

Photo of John Gummer John Gummer Secretary of State for Agriculture, Fisheries and Food

If aid is directed to those small farms, there will be none left for the farmers in Dyfed. If he wants resources to be transferred from this country to Portugal, Italy, Greece and Ireland, he should tell the electors of Ceredigion. No one in Ceredigion would support him. In those circumstances, he ought to stand for election in Portugal, Italy, Greece or Ireland.

Photo of Mr Barry Field Mr Barry Field , Isle of Wight

Will my right hon. Friend give way?

Photo of John Gummer John Gummer Secretary of State for Agriculture, Fisheries and Food

I must not give way to my hon. Friend, or the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) will feel justifiably hurt.

The hon. Member for Ceredigion and Pembroke, North and I agree that the common agricultural policy needs to be fundamentally reformed. Environmental support must be the driving force if we are to ensure that our agricultural industry is provided with a firm foundation for the future. We must ensure that British farmers are able to look after their land and produce food. We agree about those issues. However, it does the hon. Gentleman no good to pretend that that can be achieved by any British Government on their own. It has to be achieved within the European Community, of which we are a member. His party rightly supports our membership.

Photo of Andrew Welsh Andrew Welsh , Angus East

Will the right hon. Gentleman give way?

Photo of John Gummer John Gummer Secretary of State for Agriculture, Fisheries and Food

No, I cannot give way to the hon. Gentleman.

It is not right for the hon. Member for Ceredigion and Pembroke, North to pretend to the farming population that there is a tenable small farms European Community policy that will not result in the devastation of British agriculture. Any party that makes such a proposal does so for electoral reasons that will be found to be dishonourable.

I shall conclude by repeating the points that I made in my speech to the National Farmers Union about how to change the common agricultural policy to enable it to deal with a time of surplus as it was able to deal with a time of shortage. First, we must change it to bring the farmer closer to the market, as the hon. Member for Ceredigion and Pembroke, North agrees, but at a pace and speed that farmers can accept. That is necessary and we know that. No amount of enthusiasm for the interests of consumers can hide the fact that they would be a great deal worse off if they could not go into a countryside cared for by farmers or buy food produced by British producers.

Secondly, we must ensure that there is a better way to help farmers to care for the countryside—

Photo of John Gummer John Gummer Secretary of State for Agriculture, Fisheries and Food

I shall send the hon. Gentleman a copy of my speech which describes in great detail how we should proceed. We must convince the Community.

We are the European leaders in environmental improvement and our environmentally sensitive areas policy has now been copied by France, Germany and Denmark. Our nitrate-sensitive areas policy is now seen as a model for the rest of Europe. Our countryside premium is a successful pilot scheme in the east of England and I hope that it will be the basis for extension elsewhere. We are proposing environmentally satisfactory set-aside with a different structure which would enable us to improve farming incomes and, at the same time, to provide better land protection, preservation and conservation. As we are the leaders, I suggest that the hon. Member for Truro (Mr. Taylor) reads my speech which sets out in detail and clearly the environmental direction that we hope that the European Community will take.

There is no way in which we can achieve that unless we can defeat the MacSharry plan and replace it with the sensible common agricultural policy that we want. I beg the hon. Member for Ceredigion and Pembroke, North not to say the type of things that may sound all right on the hustings in British constituencies, but which would enable the Community to make changes that would destroy the livelihoods of the people whose votes he seeks to attract.

Photo of John Gummer John Gummer Secretary of State for Agriculture, Fisheries and Food

The hon. Member for Caithness and Sutherland (Mr. Maclennan) is good at making sedentary comments. He has not stood up to try to intervene. He may comment on the intellectual content of my speech, but I remind him that he is the creator of the compulsory pig-weaning system. He suggested that we have pig police to check that pigs are not weaned earlier than they should be. He did not realise that pigs farrow sequentially and that if they farrow at midnight, the ones born later would have an extra day before they were weaned. That is the intellectual base of his agricultural knowledge, so it is not surprising that he addresses the House from a seated position. If he were to stand up, he would be knocked down. The hon. Gentleman must not help us in that way.

The motion is a means by which the Liberal Democrats seek to hide the fact that they have no alternative policy and it uses language that they hope will win one or two votes. In case anybody believes it, I shall quote some facts at random. These are the figures for the north-western region, which includes Lancashire and the dales. I hope that the Liberal Democrats will explain to people there that there are 7,937 active milk producers, 58 per cent. of whom would suffer cuts of 10 per cent. in their quotas if the MacSharry proposals were accepted. By talking about small farmers, the Liberal Democrats are determined to undermine the Government's intention to fight the proposals. That fact should be known by every farmer not only in Ceredigion and in Brecon and Radnor, but in the Lancashire dales in case they have an opportunity to ensure that that party is no longer represented in this House.

Photo of Elliot Morley Elliot Morley , Glanford and Scunthorpe 5:14 pm, 14th February 1991

I congratulate the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) on his able speech. I have a great deal of respect for his experience and I enjoyed listening to what he said on behalf of his constituents and farmers in general.

The Labour party recognises the pressures that farmers are facing in the present circumstances. This year is perhaps one of their worst for a long time. Their problems are not all caused by the European Community, as has been mentioned, but, so far it has not been mentioned that one of the worst pressures facing farmers is crippling interest rates and the Government's general mismanagement of the economy. Like other businesses and industries, large or small, farmers are hurt by the economic climate.

The Opposition wish to make it clear that we agree with the Government that the CAP must be reformed urgently. There must be movement towards the general agreement on tariffs and trade with other countries. It is intolerable that subsidised food surpluses from the European Community are dumped on to the world market and then hinder other countries, especially developing countries and third-world countries, in developing their own agricultural industries. In many cases those industries are the only ones that they have to sustain their economies.

Following the Minister's comments, I wish to put it on record that the Opposition accept that the MacSharry proposals discriminate against the United Kingdom in particular. The Minister was unfair to my hon. Friend the Member for Clywd, South-West (Mr. Jones) who referred to the "future harvests" proposals of the Council for the Protection of Rural England and said that the MacSharry proposals on the environment—not all his proposals—were in line with Labour party proposals. At that time, the MacSharry proposals had not been made public.

Photo of John Gummer John Gummer Secretary of State for Agriculture, Fisheries and Food

I know that the hon. Gentleman has not had time to refresh his memory. The question asked by his hon. Friend the Member for Clywd, South-West (Mr. Jones) referred clearly to the impact of agriculture on the environment. However, in his supplementary question he asked: Is he aware also of the policies of the National Consumer Council and of the Labour party, which are also virtually indistinguishable from those proposals?"—[Official Report, 24 January 1991; Vol. 184, c. 449.] He meant the proposals of the Commission, which refer not to the environment but to the proposals for reform of the CAP. The hon. Member for Glanford and Scunthorpe (Mr. Morley) must accept that his hon. Friend said that the Labour party favoured the MacSharry proposals.

Photo of Elliot Morley Elliot Morley , Glanford and Scunthorpe

I am giving the official Labour party line on the proposals, which is on record as opposed. To clear up the matter, I shall quote my hon. Friend's full supplementary question. He asked: Has the Minister noticed the uncanny resemblance between the recently leaked proposals from the Commission for the reform of the CAP and CPRE's excellent document. `Future harvests'? Is he aware also of the policies of the National Consumer Council and of the Labour party, which are also virtually indistinguishable from those proposals? Will he now change his approach to the problem?"—[Official Report, 24 January 1991; Vol. 184, c. 449.] By any standard, that is not an endorsement of the MacSharry proposals.

We recognise that the MacSharry proposals would increase the cost of the CAP. That in itself is a cause for concern, given its enormous cost to the taxpayer and to the consumer. In all fairness, Mr. MacSharry was trying to tackle the problem of the CAP. His proposals will discriminate against many British farmers and may fall disproportionately heavily on the United Kingdom, but he was making a genuine attempt to do something about the CAP. He does not deserve the abuse that he has received, especially from the Minister, for his proposals. Some of his arguments in defence of small farms are not unreasonable, either here or abroad.

Many members of the farming community are concerned about the Minister's attitude. Let me quote the opinion of The Scottish Farmer:Mr. Gummer, on the other hand, is unequivocal … Small farms should be helped to restructure, he said. If that was not possible, they should be prepared to move out. And that cannot be a warning just for the so-called inefficient farmers across the Channel. It must also be of great concern to many farmers on this side, highly dependent on EEC and government support, which is undoubtedly set for continued decline. That is not my opinion but the opinion of the farming press, expressed in a newspaper which I imagine speaks for a great many farmers and their concerns.

Photo of John Gummer John Gummer Secretary of State for Agriculture, Fisheries and Food

Let me make this clear. I said that, in EC terms, there were no small farms in this country. Many small farms in the British sense—family farms—are economically viable and, if the Community were properly organised, would be perfectly capable of producing an adequate income for their owners and workers. On the continent, however, many farms are so small that in no sense can they produce an adequate income. Surely one can make the distinction between sensibly sized farms and the farms to which some have referred as allotments. Even such an eminent source as The Scottish Farmer must see that that distinction is clear. We need restructuring where farms are so tiny that they cannot be sensibly worked. Britain has already undertaken such restructuring and I do not see why we should pay for other countries to do the same.

Photo of Elliot Morley Elliot Morley , Glanford and Scunthorpe

I do not disagree that some farms on the continent are so small that their viability is called into question, but we should also bear in mind the fact that many European farms are better for the environment because they have not been amalgamated in the damaging way in which many farms in this country have been amalgamated over the years.

Small farms may be economically inefficient, but we are talking about supporting people on the land. The EC spends £24 billion on the common agricultural policy, the bulk of which goes on the storage and disposal of surpluses. If the EC can do that, I see no reason why it should not have a coherent policy to support small communities and small farms and to keep people on the land by providing them with income and helping them to protect the environment in desirable ways.

I would point out to the Minister that certain areas and practices are extremely important in ecological terms. I cite the traditional grazing practices used in Spain, and the cork forests. If we are to spend money on the CAP anyway, I would rather see my money and my taxes being spent on supporting small communities and on protecting the environment than on the disposal of food mountains.

Photo of Gwyneth Dunwoody Gwyneth Dunwoody , Crewe and Nantwich

Is not my hon. Friend saying something slightly different? Is he not suggesting that we need rules to allow us to abandon the rubbish of the CAP, which is destroying agriculture, and to look for alternative ways of directly affecting the environment? That will not happen if we support the MacSharry proposals.

Photo of Elliot Morley Elliot Morley , Glanford and Scunthorpe

My hon. Friend makes a helpful suggestion, very much in line with the Labour party's green premium, which would direct support to farmers in ways beneficial not only to communities but to the environment generally.

We have talked about the move towards larger farms. I listened carefully to the Minister's speech at the National Farmers Union annual general meeting and there was much in it with which I would not necessarily disagree. Having said that, I believe that he placed too much emphasis on the need for larger farm units, although perhaps I misinterpreted his remarks. I do not believe that the amalgamation of small farms into larger farms is necessarily the best way forward for British farming. It deprives many young people of the opportunity to go into farming, and concentrates power in the hands of a few people. I do not see anything particularly efficient about one large farmer receiving lots of subsidies as opposed to more small units receiving a share of the support.

The Minister also appears to view in black and white the environmental impact of small and large farms. There are good and bad farms in both categories.

There are some very well run large farms but in many cases, larger amalgamated units have uprooted hedgerows and chopped down woods to get ever larger machinery on to the land. I am not sure that we should want to pursue that route. In the end, circumstances may arise in which even the farms that are large and efficient by present standards may not be able to compete and they will still need a measure of support. I refer to the uncertain future in farming, to the likely move towards world prices and to the unknown impact on farming of the developments in eastern Europe. I do not disagree with the Minister that the move towards world prices and towards greater freedom in terms of produce ought to be gradual.

Many farmers in the less-favoured areas and uplands do not seem to fit the Minister's criteria for the future of farming. I think that there is room for traditional small farms, and I disagree with the Minister that there are no small farms in the United Kingdom. Has he not heard of crofts? Do not they fit into his analysis of small farms? In my view, crofts deserve some support.

A balance should be struck between the need for efficiency and for larger units and an international free market for their produce to allow a fair share for third-world and developing countries. We need to give financial support and to provide a safety net and to improve our environment through the continuation of policies that we have supported, such as environmentally sensitive areas, and policies that we advocate, such as the green premium. We need to build upon those achievements. We need to look at the use of set-aside, and I welcome the enhancement of set-aside payments to allow its use for conservation purposes. That is a great step forward in a policy about which I have grave reservations none the less.

We need far more research and development of alternative crops and farmland uses. I was interested to read Sir Derek Barber's comments about the use of farmland that is suitable for the growing of phragmites to clean up sewage and dirty water. It is an exciting and radical proposal. I have read scientific papers on the use of phragmites in wetlands. It is one way of recycling and of cleaning up emissions. It is useful and enhances the environment.

I was disappointed in the Minister's comments to the NFU about biomass experiments, even though I accept that they may not be especially economic at present. I have seen them in Sweden and I have seen the experiments that are being funded in Northern Ireland, and I would not rule out such a radical approach to the provision of alternative crops and farmland uses.

At a time like this, farmers need to be encouraged and supported by the Government. I took the Minister's comments that he was not advocating a free market approach but that was not the impression I had from his speech and his undue emphasis on larger units. A balance must be struck if we are to move towards orderly change and the reform of the CAP. The Government must face up to their responsibilities for research and development, structural support and environmental policy. Above all, they must give some thought to their disastrous economic policy which has been responsible for pushing so many farmers, who were already teetering on the edge, over the brink. The responsibility lies with the Government. I accept that these days much farm policy is directed by the EC but it is in the Government's hands to change and improve the economic policies under which farmers operate, and they should give some serious thought to that.

Photo of Mr Paul Marland Mr Paul Marland , Gloucestershire West 5:29 pm, 14th February 1991

It would be wrong to say that farming was not in difficulties at present, because there is no doubt that, like many other businesses, it is. But many factors other than Government policy affect the future and the success of farming. After all, farming is a cyclical business. For example, recently the great difficulty of the snow has made the job of the farmer a great deal harder. Before that, last summer, there was a serious drought in this country. It is all too easy for Members of Parliament, working in the environment here, to forget about that. The drought had a serious effect on the livestock farmers in my constituency.

The amount of fodder that farmers could produce last summer was greatly reduced because the lack of rain meant that the grass did not grow. By the middle of October, a great deal of the fodder for feeding dairy cows had been used up. I have a friend in the forest of Dean who has over 100 milking cows and is having to spend £1,000 a month on concentrates to feed his cows and keep the milk flowing. Of course, that is having a dire effect on the profitability of his enterprise, as, indeed, is the tremendous drop in the price of calves. In the year 1989–90, my friend was receiving £155 per calf. In 1991 that price has fallen to £45. That again has a tremendous impact on the man's profitability. Along with static cereal prices, levies and stabilisers, that has a serious effect on the income of all farmers.

But things would be much worse if Mr. MacSharry had his way. I make no apology for returning to some of his proposals. First, the proposals would increase the cost of the common agricultural policy, rather than reduce it. They would do nothing for the environment. They make no mention whatever of consumers or the farmers' customers. The proposals would make European agriculture non-competitive and non-innovative. The farmer will be told that, if he has a small dairy herd or a few beef cattle now, he will be supported to continue to farm in that way for the rest of his life. Of course, some small farmers in Europe would very much welcome such a proposal.

Opposition Members may be interested to know that 80 per cent. of the milk consumed in Portugal comes from dairy herds of three cows or fewer. Those are the herds which Mr. MacSharry proposes to support. Equally, one cannot help but wonder why Mr. MacSharry wants to give small Irish farmers with herds of only 40 cows extra money to keep them in business while their larger partners in Wales with 50 cows are put out of business by the proposals.

Under Mr. MacSharry's proposals, 85 per cent. of United Kingdom production of milk would suffer a cut, whereas only 32 per cent. of the production in Europe would suffer a cut. There is a temendous slant against the United Kingdom. In cereals, 58 per cent. of United Kingdom area and revenues would be cut by up to 27 per cent., whereas 56 per cent. of EC area and revenues would be increased by 5 per cent. There would be no reduction in the support prices of sheep for our 11 partners in the EC. All reductions would fall on the bigger flocks in the United Kingdom. Matters would be a great deal worse if Mr. MacSharry's proposals were seen through.

I am extremely glad, as are most British farmers, that we have such a strong Minister to stick up for the interests of British farmers. He showed that by his spirited performance at the annual general meeting of the National Farmers Union earlier this week. My right hon. Friend the Minister of Agriculture, Fisheries and Food deserves congratulation and recognition for what he has been able to do for British farmers. It is important to remember, as he said, that 80 per cent. of European support money is dished out by Europe and only 20 per cent. is provided by domestic Governments.

Photo of Gwyneth Dunwoody Gwyneth Dunwoody , Crewe and Nantwich

Would the hon. Gentleman support a move to ask the Government to abandon the CAP and return to national Governments the right of support? [HON. MEMBERS: "Hear, hear."] Does he agree that that would allow individual small farmers to have a proper income and that it would benefit taxpayers?

Photo of Mr Paul Marland Mr Paul Marland , Gloucestershire West

The hon. Lady has obviously struck a chord with some of my hon. Friends. But as we are a partner in the European community, I do not see how we could possibly come out of the CAP.

As I said, the efforts of my right hon. Friend the Minister should be recognised. He has done a good job in seeking more money from our Treasury to support farmers in difficult and disadvantaged areas. The 14 per cent. increase that he announced earlier this week will go down well in all districts.

I notice that the Liberal party's motion calls for more money for environmental projects and works and more assistance to farmers for marketing, but grants are already available. Grants are being slewed towards encouraging more environmental work, under the countryside stewardship and other schemes. Tree planting and care of trees once they are planted is being encouraged. I hope that soon we may see a system whereby farmers are encouraged to take care of existing trees and woodlands and given some small recognition for doing so.

Grants are available for new projects which farmers want to launch and for feasibility and marketing studies. Although set-aside is a controversial matter, in marginal cereal-growing areas it is widely welcomed. It is an alternative for cereal growers. The money goes direct to the farmer, rather than into storage and disposal, about which so many people have already expressed their displeasure today.

Photo of Matthew Taylor Matthew Taylor Liberal Democrat Spokesperson (Education), Chair of Communications, Liberal Democrat Party

Does the hon. Gentleman agree that it would make more sense and be more popular among farmers if more effort were put into a programme of extensification, rather than set-aside, which can promote more intensive farming methods on the land still in use and is unpopular with the farmer and the consumer?

Photo of Mr Paul Marland Mr Paul Marland , Gloucestershire West

I shall come to efficiency and intensive agriculture in a moment, if the hon. Gentleman will allow me.

Another of the many alternatives being suggested to farmers offers a way in which they can improve their business and their cash flow. My right hon. Friend the Minister has asked local authorities to ease planning permission on projects put forward by farmers to make use of redundant farm buildings and other rural projects. Farmers should be congratulated on drawing up such schemes. Perhaps another letter from my right hon. Friend the Minister to local authorities reminding them of that request would not go amiss.

Photo of Mr Teddy Taylor Mr Teddy Taylor , Southend East

How can m y hon. Friend seriously say that set-aside is a success? He must know that we have spent a fortune paying people for not growing cereals, yet the amount of land used for cereal production has increased by 212,000 hectares. How does that make economic or common sense?

Photo of Mr Paul Marland Mr Paul Marland , Gloucestershire West

The extra ground which has come into production may well have been balanced to some extent by the amount of ground that has been taken out of production. We do not seek to dictate to farmers exactly what they should do with their land. We seek to give them a menu of alternatives while telling them—the majority accept it—that we are not prepared to continue financing increased production indefinitely.

The hon. and learned Member for Montgomery (Mr. Carlile) spoke earlier about proposals for bringing more land for letting onto the market. He may be interested to know—I hope that one of his colleagues will relay the message to him—that some of us on the Conservative Back Benches had the Tenant Farmers Association to see us earlier this week, which welcomed with open arms my right hon. Friend the Minister's proposals. Again, my right hon. Friend should be congratulated.

We have never wavered from backing efficient production. We have said a firm no to the theory of supply management, which is not the right way forward. Furthermore, it is a myth to imagine that small farmers are more environmentally conscious than large farmers. In my experience, small farmers need all the money they can generate on their farm in order to survive. They cannot leave money aside to invest in promoting and succouring wildlife.

I am not keen on the endless move towards smaller farms, nor the assistance given to them at the expense of larger ones. In this connection, I am talking about either the farms that we describe as small ones, or the allotments in Europe that are regarded as small farms.

I have a friend in south-west Scotland, in Wigtown, who farms some of the most difficult land in that country. He has 1,100 suckler cows and he employs 14 men. He also employs members of those men's families, and together they have created a worthwhile and solid agricultural unit. It is wrong that that efficient farm should be penalised so that support can be given to smaller, less efficient family farms. His family farm is much respected by everyone who lives in the district.

As we move into a more competitive world I am glad that my right hon. Friend has asked the Milk Marketing Board to make some suggestions as to how it can become more appropriate for today's market. Apparently the announcement on that will be made on 6 March and I hope that the board will offer some constructive suggestions for the way forward. A lot has changed in 60 years—the board fulfilled a much-needed role then, but not today.

It is not right to deride the dairy trade industry because it is seeking to change the board. Of course it is, because it wants the right product so that its members can obtain maximum value from what they are seeking to produce. Some yoghurt producers want low butter-fat content milk, but they cannot get that from the Milk Marketing Board. It is right that the board should be asked to modernise so that more money can go to the farmers. I hope that Bob Steven, the chairman, will get solid support from the 15 farmers who also serve on the board.

It is a competitive world in the EC, and I hope that the Minister will do something to improve the lot of our farmers regarding salmonella. The Select Committee on Agriculture held an inquiry into salmonella and the Ministry responded by introducing a system for slaughtering chickens infected with salmonella. That system has done a fantastically good job of cleaning up egg production in the United Kingdom, but what about the eggs that are imported? Few of them are ever checked for salmonella. That process takes five days and I know that random checks are undertaken, but by the time the salmonella infection has been proven, the rest of the eggs in that batch will have been eaten. Often imported eggs are repacked and the box carries the message "packed in England", so some of our less well informed housewives think that they are English eggs. That is causing great difficulties for our egg producers, and I hope that Ministers will do something about it.

I am sceptical about the attempts to improve animal welfare. I am a farmer and I do not want anyone in the House to think for one minute that I am against animal welfare. I am glad, however, that the Ministry has set an eight-year lapse before dry sow stalls and tethers are to be abolished. I hope that that abolition will promote happy pork, produced in the United Kingdom, so that people do not choose imported pork. However, we still eat a lot of white veal and pate de foie gras that is produced abroad, and those processes show scant regard for animal welfare. That has not dried up the demand for those products.

Photo of Mr William McKelvey Mr William McKelvey , Kilmarnock and Loudoun

Such products should be banned.

Photo of Mr Paul Marland Mr Paul Marland , Gloucestershire West

Those processes have been banned here, but not on the continent. Such matters should be taken up vigorously by our vigorous Minister. I am sure that that will happen.

A year ago, the price of a calf stood at £155; now, it is £45. I understand from a reliable source that imports from eastern Europe have depressed the calf price in this country. Those calves are smuggled over the border into what used to be known as East Germany, and they are then released on to the market. Those calves are being imported by the lorry load—30 lorries a day—and, as they are sold in the EC market, they attract extra grants and subsidies. That is having a serious effect by depressing the price of beef in this country. I know that other hon. Members have heard similar tales. I hope that the Minister will take steps to bring that practice to an end.

Fallen stock used to be picked up by the knacker men who made money from it by turning it into tallow. However, the market for tallow has dropped and farmers are now being asked to bury their own dead or fallen stock on their premises. It is quite a big job to bury a cow, and the only alternative is incineration. We know that there is not enough incineration capacity in this country and we have all seen pictures in the press of open pyres with bovine spongiform encephalopathy-infected cattle being burnt on them.

What is the Government's attitude to the establishment of more animal incinerators? Someone in my constituency wants to build such an incinerator and, believe me, that is a controversial issue. No one wants such an incinerator near their house or village. I should be interested to learn the Ministry's attitude towards incinerators and whether it has in any way encouraged the building or development of such incinerators.

Photo of Mr Hector Monro Mr Hector Monro , Dumfries

I have been pursuing the problem of fallen stock for the past 15 months. Does my hon. Friend agree that it might be a good idea to have on-farm disposal pits or an incinerator system? Those suggestions deserve a 50 per cent. grant under the farm improvement scheme or some pump priming from the local authorities.

Photo of Mr Paul Marland Mr Paul Marland , Gloucestershire West

That is a useful suggestion. I raised that very issue in the hope that Ministers can enlighten me about it. I understand that the Governments in some other EC countries take a positive role in providing incinerator facilities for fallen stock.

Photo of Mrs Elaine Kellett Mrs Elaine Kellett , Lancaster

Incinerators and animal processing units should be built as far away as possible from any village, farmhouse or populated area. They must be built near motorways and provided with a decent motorway exit, but they must be well away from all inhabited dwellings. My constituency has suffered this problem for the past 20 years, and it does not go away.

Photo of Mr Paul Marland Mr Paul Marland , Gloucestershire West

Thanks for the warning. I shall be interested to hear what the Minister says about that when he replies.

Agriculture is going through a difficult stage now, but it is a cyclical business and it would be wrong to lose sight of our objectives in the reform of the CAP. We have a spirited team of Ministers to look after the interests of our farmers in Europe, their attitude is enormously to their credit. I recommend to my hon. Friends that we should throw out the Liberal Democrat motion with little ceremony.

Photo of Andrew Welsh Andrew Welsh , Angus East 5:47 pm, 14th February 1991

The hon. Member for Gloucestershire, West (Mr. Marland) raised specific issues relating to fallen stock and farm size and I hope that the Minister will respond to those issues.

I shall not deal with the specific aspects of the current crisis facing agriculture, but I shall outline the general problems that confront farmers throughout the length and breadth of the United Kingdom.

Agriculture is in a crisis which is affecting almost every sector. The range and diversity of the problems make it difficult to know where to start to provide solutions, but those solutions—be they long-term or short-term—are desperately needed. The problems are clear. Farm incomes are now at their lowest level in real terms since the end of the second world war. Farmers are also facing difficulties because of high interest rates and increased input costs. A record number of farmers have left agriculture—I believe that, in the past 10 years, 80,000 farmers have left farming: that fact speaks for itself.

The crisis is affecting every sector of agriculture. In the beef sector, store prices have tumbled. The dairy sector has been affected. In sheep farming, there has been a 30 to 40 per cent. fall in lamb prices over the past two years alone. Cereals, too, have been affected. The result is falling farm incomes. That means that there is no money for investment and that further trouble is being stored up for the future.

Looming ominously over all this are the GATT talks and a disastrous CAP, both internally within the European Community and externally in its relations with the rest of the world. The European Community, with its common agricultural policy with massive surplus production, also happens to be the world's leading agricultural importer and the world's second largest exporter. Its common agricultural policy is a recipe for trouble unless it is sorted out.

The question is: how will it be sorted out and in whose interests? Scotland's problem is that our farmers listened to Governments and followed their policy directions, backed up by the world's finest agricultural research organisations. The very products of Scottish agricultural success—larger, efficient units, top-quality production allied to massive investment in machinery and farm improvements—are threatening the livelihood of farmers throughout Scotland who have followed Government policy up to now.

It would be easy to catalogue the problems facing the industry—the livestock disaster threatening the hills and uplands, the annihilation facing Scotland's magnificent soft fruit industry because of short-term eastern European bulk imports, the poultry and beef sectors rocking back under recent health scares, and so on. It is more important to ask the Government what they intend to do positively about the problems. The Minister did not address that earlier. He spent much time attacking the Liberal Democrats but very little addressing his answer to the current problems.

It is not much use telling us that we should have attended the NFU meeting. Surely it would be better for the Minister to be in the Chamber, stating positively what he will do to answer the MacSharry proposals. We are entitled to ask the Government to spell out clearly what they intend to put in place of the unacceptable European proposals. We need a clear statement of the long-term proposals for the industry. Agriculture by definition requires longer-term planning if it is to survive and prosper.

The bane of agriculture has been a series of short-sighted, short-term solutions which have stored up the present problems. "Food From Our Own Resources" is a historical document, but it was the nearest that any United Kingdom Government ever got to a general, integrated, co-ordinated plan for agriculture. The more is the pity. Instead of clear thinking and a stable set of policy guidelines, we have witnessed a series of manoeuvres, wheezes and sticking plaster solutions.

For farmers that has meant a series of changing roles. They are now custodians of the land, with a range of changing products and income bases from farm shops to golf courses, from afforestation to raising red deer and llama, and chasing the bed-and-breakfast tourist trade, as well as income substitute schemes, such as set-aside. All this has happened rapidly and is simply a survival mechanism against falling agricultural income. That is where the Government should concentrate their minds. They should consider how to get money back into the rural areas of Scotland and into the pockets of the people to allow them to live and prosper in their rural communities.

The reality is an industry turning cartwheels because it does not know what it has to do to survive. Only Governments, who take the decisions, can tell farmers. That is what the Minister must do. It is no use attacking MacSharry and getting his first NFU round of applause for years. The Minister must state his positive proposals to give stability, income and a future to the agricultural industry.

What is the Government's view of agriculture in 10 years' time or even in five years' time? Where do the Government want the industry to be? What do they want the industry to produce? What is the Government's attitude to rural areas and communities? Do they really want the hills and upland areas to be cleared of population? That is exactly the direction in which Government policies are taking the hills and upland areas in Scotland and elsewhere in the United Kingdom.

Agriculture has shown its adaptability and its immense capacity for efficiency and change, but it needs a set of guidelines about where it is expected to go. Leaving structural changes to be decided by the brute forces of bankruptcy and unfettered temporary market forces is an abnegation of responsibility by the Government.

While appreciating the necessity to cut production and export subsidies, the SNP believes that the cash saved by the cuts should be redirected into the guidance section of the European agricultural guidance and guarantee fund to finance structural programmes to assist the rural economy. The Scottish Office should press for structural programmes for all the less-favoured areas in Scotland to include support for quality-assured schemes, diversification of farm activities into such areas as farm woodlands and new forms of quality production, as well as general support for social, commercial and small-scale industrial activity throughout the rural economy.

It is not in the interests of Scottish or European consumers and taxpayers to see agricultural production slashed through farm bankruptcies and economic hardship throughout remote rural communities. The Commission's proposals to concentrate farm support on small farms ignore the serious financial problems facing so-called large Scottish hill farms in marginal areas, where farm incomes may be considerably less than on many small farms.

The British Government led the Council of Ministers in the demand for cuts in production subsidies to aid the GATT talks. The Government must now lead a campaign to ensure that the application of the Commission's new proposals does not lead to a new wave of clearances from the land.

Scotland is capable of self-sufficiency in all aspects of food production associated with a temporate climate. It is the SNP's policy to maintain that position and to ensure that production above that level is aimed at high-quality foods for export. It is also our intention, which I recommend to the Government, to ensure that agriculture remains a mainstay of the rural economy and that, where practicable, it should be organised around units of viable family farms.

I remind the Minister that agriculture is proportionately far more important to the Scottish economy than it is to the United Kingdom economy. We believe that Scottish agriculture would benefit massively if Scotland had independent representation on the Council of Ministers and on the European Commission, and increased representation in the European Parliament. All that the Minister and his colleagues have done in Europe has convinced me more and more of the truth of that statement.

We seek a system that allows stability in price, in markets, in Government policies and in income levels, and with a clear goal for the future structure and production levels of agriculture. Agriculture is by nature a long-term activity; it must not be allowed to be gutted by short-term factors.

6 pm

Photo of Mr David Nicholson Mr David Nicholson , Taunton

I assure the hon. Member for Angus, East (Mr. Welsh) that I appreciate the way in which the farmers of Scotland have suffered in recent weeks because of the weather conditions. My farmers on Exmoor and the Brendon hills have been coping with snow up to 1½ ft deep.

The considerable difficulties which farmers in Somerset and the west country face were summed up in the Somerset Farmer, reporting Professor John Webster of Bristol University as having told the NFU county annual meeting in Taunton a few weeks ago: We are no longer lovable in the eyes of the consumer, and we are poor as well. To be rich and unloved would be bearable. To be poor but lovable would not be so bad. But to be both poor and unloved, as we are, smacks, as Oscar Wilde put it, of carelessness. Despite that plight, we can boast certain success stories. We have the success of Liscombe research, launched by the Minister in another place about two years ago. That is happening on Exmoor. Also, increased interest is being shown by the farming community in Somerset and the west country in marketing their produce, summed up in Somerset Farmer for February of this year as follows: Quality not quantity should be the aim if farmers are to regain both their popularity and profit over the years ahead. I hope that the Ministry will continue to support in every way possible Taste of Somerset, which helps to market the foodstuffs that we produce. I commend greatly our excellent Somerset brie, which is equally as good, probably better, than the French product, and while my constituency is well known for Taunton cider, produced by the very successful company of that name, the real cognoscenti, when it is not Lent, partake of Sheppy's farmhouse cider, and I am delighted to see on the Government Front Bench my hon. Friend the Member for Skipton and Ripon (Mr. Curry) who visited Sheppy's about this time last year. I cannot remember whether it was Lent.

I am glad that my hon. Friend the Member for Gloucestershire, West (Mr. Marland) referred to the need to check on unhealthy imported eggs. On 31 January, as reported in column 615 of Hansard, I received an excellent written answer from the Under-Secretary of State for Health in which he listed all the dates on which infected imported eggs had been found, with the countries of origin. I regret to say that the country of origin was usually Holland. I hope that that problem will be tackled.

Having heard much in recent years of NFU criticism of Her Majesty's Government, I am delighted to quote from a resolution that was passed on 28 January by the Somerset and South Avon county branch of the NFU which, unlike the Liberal party and the hon. Member for Ceredigion and Pembroke, North (Mr. Howell), was unequivocal in its view of the MacSharry proposals. It said that it condemns commissioner MacSharry's proposals for reform of the CAP as being deeply damaging and discriminatory against United Kingdom agriculture as a whole and against full-time family farms in the United Kingdom in particular. The Minister will be encouraged by the next part of the resolution, which fully supports the Minister of Agriculture in his opposition to the proposals, calls for the package to be scrapped and insists that the EC Agriculture Commissioner goes back to the drawing board and produces proposals which address the problem of rising support costs and falling farm incomes without damaging the interests of any particular group of farmers or any particular EC Member State. The county branch estimated that, for a dairy producer with 85 cows, which is not a large herd, returns under the MacSharry proposals would be down by nearly 20 per cent. The Department has produced similar examples.

We congratulate my right hon. Friend the Minister on his firm commitment to the farming community and the wider interest of the nation, the countryside and food production that he has shown in recent months. At Bournemouth last year, he said: If farmers cannot earn a living then they cannot look after the land. He said much the same in his speech to the NFU conference in London. He set out the issues clearly. He exposed the ghastly term "modulation," which sounds like an expression used in music teaching—I suppose that we are being made to suffer an Irish music lesson—and the extraordinary proposals there.

I am glad that the Minister mentioned in his speech to the NFU conference what appears to be a tobacco scandal. Apparently, nearly £1 billion is going into subsidising the production of quite low-grade tobacco, which I believe is exported to third world countries and does immense harm to the health of the people there. I have received letters from my constituents on the subject. I hope that the responsible Departments, whether the Department of Trade and Industry or the Department of Health, will tackle this matter.

I congratulate my right hon. Friend on his announcement this week of a 14 per cent. increase in the hill livestock compensatory amounts, which will be welcome to my hard-pressed sheep producers, and in responding on Tuesday to the interests of young farmers in producing his tenancy proposals.

I am constantly reminded by farmers in my constituency that we must have a policy to replace the generation of farmers approaching retirement. The statistics show that many farmers now in work are relatively old and are approaching retirement, and it is difficult to know who will replace them, as so many sons of existing farmers are not interested in taking on even family farms. I hope that the tenancy proposals will help with that state of affairs.

At the same time, I warn Ministers of the danger of encouraging farmers or intended farmers to get into debt. I make no apology for raising this matter, which I raised earlier with the Prime Minister—the contribution of the banks and other lending institutions to business indebtedness in recent years. I have particularly in mind the effects on farmers, because an important factor that reduces the overall net incomes of British farmers, who are larger-scale and more efficient than continental farmers, is the indebtedness into which they have got in recent years. I welcome the Prime Minister's sympathetic comments on that matter.

I again press the Minister to bring forward as soon as possible more comprehensive and co-ordinated schemes to help the environment and countryside. We have many small schemes which are excellent—including environmentally sensitive areas, less-favoured areas, the farm woodlands scheme and so on—but the farming and environmental community want more co-ordination between the various schemes.

In that respect, my hon. Friends the Members for Tiverton (Mr. Maxwell-Hyslop) and for Honiton (Sir P. Emery) and I supported the giving of LFA status to parts of the Blackdown hills in our constituencies. The Department took proposals to that effect to Brussels, and, although they were good proposals which encompassed the parishes on the Blackdown hills in my constituency, they were turned down on what we thought were spurious statistics.

There is now a proposal from the Countryside Commission to give the area outstanding natural beauty status. My hon. Friend the Member for Tiverton and I support that, but emphasise that it must be accompanied by environmentally sensitive area status, which includes grants and produces incomes for the farmers involved. We must have co-ordination between the various schemes, and I hope that the Ministry of Agriculture and the Department of the Environment will work together to achieve that.

I shall not spend time today on the proposals of the Liberals, much though I respect the hon. Member for Ceredigion and Pembroke, North, because he and his hon. Friends will get nowhere near governing this country. But some of our farming constituents might be considering the prospect of a Labour Government.

On that basis, it is worth while reminding them of two comments made by Labour's senior agriculture spokesman, the hon. Member for South Shields (Dr. Clarke). He is not in his place for the debate, and I note that the Labour party is rather diminished in its Back-Bench support. In Farming News of 1 June 1990, he was reported as having said about agriculture: We have no strategy and we won't have until the general election. I hope that farmers will see through that. At a recent Question Time in which I participated, he asked: Is the Minister not aware that it simply does not make sense to throw good money after bad to subsidise farmers?"—[Official Report, 29 November 1990; Vol. 181, col. 998.] Farmers will remember that as we approach the next general election. They will see through the Labour party's blandishments in trying to coax support front the countryside.

Photo of Martyn Jones Martyn Jones , Clwyd South West 6:09 pm, 14th February 1991

Last November, I was unlucky enough to come second in the ballot for private Members' motions. I chose a subject almost identical to the one that we are debating today, though I limited it to the future of Welsh farming, since it is areas such as mine in Wales that are being hit hardest by the conditions created in agriculture over the last 10 years. I believe that such areas throughout the United Kingdom will suffer a decline of catastrophic proportions if farming is subjected to the continued pressures of dropping prices, crippling interest rates, high inflation and the vagaries of the weather, compounded by badly handled food scares and, in the sheep sector, French protectionism.

Farmers, especially small farmers, are in a vice. On the one hand, to maintain incomes they must intensify and modernise. That threatens the industry's long-term sustainability and can harm the natural environment, the social structure in rural areas and even, possibly, public health. On the other hand, current methods of farm support are discredited by consumers and taxpayers alike; they do not even support farming, which is their stated aim.

Farmers in areas like mine will not be able to continue in agriculture and also continue to protect the visual and amenity value of the countryside if prices keep declining. Last October, draft ewes were selling for £15. In 1989, they made £27, and the year before that, £35. The Government's own figures bear this out. They show that farm incomes in Wales were cut by more than £12 million last year, on top of a fall of over £20 the previous year. If prices continue to decline and price support is cut also, farming will have little future on the hills of Wales.

This drop in prices alone would be bad enough, but when it is coupled with higher prices for machinery and inputs, huge rises in interest rates, the poll tax, reduced services in rural areas—bus services have been decimated in my area since deregulation—it makes the rural situation dire. The list does not stop there. Water connection charges have quintupled since privatisation and telephone connection charges, too, have risen. Post offices are being forced to close, and small shops are becoming non-viable. The rural environment in Wales and elsewhere is under serious threat.

If farmers are driven off the land—it is happening already—whole parishes will become wastelands. In my constituency, farmers with family farms feel powerless. They see lamb on sale in Tesco's for the equivalent of £70, when they have received possibly £25; they see their bills rising remorselessly; they see capital tied up in equipment that they cannot use because they cannot afford the staff to operate it.

Faced with this depressing scenario, what are the Government doing? They have given a small increase—14 per cent.—in hill livestock compensatory amount payments. That is very welcome indeed, of course, but it must be remembered that farmers' total incomes have fallen by 22 per cent. in the last year alone. If the HLC'A payments are adjusted, in real terms—that is, taking account of 1990–91 prices—the £142 million that is to be spent this year is approximately the same as the amount paid in 1988, and is less than that paid in 1987.

The Minister, quite rightly, rubbished the proposals for reform of the CAP that Commissioner MacSharry published recently. I am afraid that the Minister also attempted to score a cheap debating point when I put a question to him on 24 January. That was deplorable because, as he must know, I do not speak from the Front Bench, and therefore could not reply.

My question related to leaked proposals, which, so far as I was aware at the time—the Minister may have had other information; for all I know, he himself may have leaked the proposals—related to a reduction of expenditure on intervention and to support for small farmers. When it turned out that Mr. MacSharry's detailed proposals contained a definition of "small farm" that excluded the kind of small family farm in my constituency and in most other parts of Great Britain, it was clear that the results of the proposals would be quite different from their aims.

It is true, however, that the document of the Council for the Protection of Rural England—"Future Harvest"—is very similar to the Labour party's policy, and not very different from that of the National Farmers Union. Mr. MacSharry's proposals certainly would not help British farming at all. They seem designed to help the tiny, inefficient farmers of southern Europe, while creating large areas of wasteland out of the efficient family farms of Wales.

While, as I have said, the Government rightly criticised Mr. MacSharry's proposal, they seemed very reticent about coming forward with anything of their own. I suppose that, as their entire philosophy is based on slavish adherence to the free market, this is hardly surprising. A free market, which even the Minister acknowledges does not exist, would mean our farmers having to compete with world prices determined by levels of subsidy, both hidden and overt, paid to farmers elsewhere.

People in Britain want to enjoy the countryside as well as its produce. They do not want it to decline into a derelict industrial site. However, what can the Government do? We on the Labour side believe that there is a viable future for British farming, but it requires an alternative approach that would be very distasteful to avowed free marketeers. We support the payment of direct income aids to farmers who need support most. Furthermore, we believe that the objectives of the CAP should be broadened to embrace qualitative aspects of food production, including the provision of safe, wholesome food at a reasonable cost, the sensitive management of agricultural land and the maintenance of rural communities. Green premiums would be introduced—farmers would receive a payment for managing their farms according to agreed criteria to encourage less intensive farming methods.

I am sure that the farmers in my constituency, especially those who wish their families to continue in farming, would welcome the opportunity to farm in such a sustainable way, to be able to plan for a future and to perform their very real role as custodians of the countryside.

Photo of Mrs Elaine Kellett Mrs Elaine Kellett , Lancaster 6:17 pm, 14th February 1991

I begin by declaring an interest: I am a farmer.

I read the Liberal motion with some astonishment. Of all the parties in this House, the Liberals are the most fanatically pro-Europe. They know perfectly well that agriculture is a European policy, and that 80 per cent. of agricultural expenditure is authorised by the EC, yet their motion ignores that fact. They dismiss it in precisely eight words, in an extremely lengthy motion.

The Liberals know, too, that, ever since the Conservatives took office in 1979, our Ministers have been trying ceaselessly, in season and out of season, to change the CAP. For years they came up against a brick wall. They were the only Ministers trying to change the policy; all the others were in favour of it. But now even the most bigoted can see that the CAP is leading to disaster, and our Ministers are at least getting some support from the others—and not before time.

No one now pretends that the situation is other than serious. The future is uncertain, but it is at just such a time that we need a tough Minister who will fight hard for us. We certainly have just such a friend in the present Minister. He is a jolly good chap to have in our corner, but he has certainly got a fight on his hands.

The greatest problem is the wholly biased and unrealistic attitude of the European Agriculture Commissioner, Mr. MacSharry. It is incredible that someone who has such a romantic, nursery-rhyme concept of agriculture should have been appointed Agriculture Commissioner in the first place. If it were not so serious, it would be laughable. He equates small with good, and his proposals weight the scales against efficient farmers, in favour of small farmers—just because they are small, not because they are good. His idea of a family farm is a tiny, heavily subsidised smallholding—possibly somewhere in Eire or in Germany—where the husband works in a car factory during the day, works on the farm part-time and lives off subsidies. This is certainly not in the interests of consumers, who want to see food produced as efficiently, not as romantically, as possible, at prices they can afford.

The words "family farms" in the Liberal motion send shivers up my spine. The Liberals use that term at their peril, because their idea of a family farm and the continentals' idea of a family farm are poles apart. It would be crazy so to arrange farm prices that only farmers with fewer than 40 cows could make a living; 60 per cent. of British milk producers would suffer savage cuts, compared with only I per cent. in Greece, Spain and Portugal.

The farmers in my constituency will have noted with interest the Minister's observation that in north-west Lancashire and the Dales, out of 7,937 active milk producers, 58 per cent. would suffer a 10 per cent. quota cut if the MacSharry proposals were to be implemented. His proposals will cut cereal support prices by 40 per cent., but farmers with under 30 hectares would be fully compensated, and twice as many continental farmers as British farmers would be compensated. Under the proposals, 20 per cent. of United Kingdom cereal areas would have to be taken out of production but only half that amount in the EC. He also wants to reduce the headage rates for sheep, which would affect us more than any other country. This would be utterly disastrous for farmers in my part of the world.

The proposals are absolutely idiotic because, by encouraging the least efficient farmers—Mr. MacSharry always refers to them not as inefficient farmers but as family farmers—Mr. MacSharry would leave the world markets wide open for the United States, Australia and New Zealand exporters. The United Kingdom would be driven from the world markets. If farming is to survive as an economic activity in this country, the proposals must be defeated. The Minister devotes much energy to ensuring that they are defeated and to building up coalitions in the European Community. The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) will know that, in the European Community, we have to build up coalitions in order to achieve anything. However, we need to replace those proposals with ones that will be less costly to the taxpayer and will go directly to the farmer, while improving and maintaining the environment.

If support prices are to be reduced, they must be reduced fairly throughout the EC and in the general agreement on tariffs and trade. The hon. Member for Glanford and Scunthorpe (Mr. Morley) seems to be more interested in the incomes of those in the developing world than the incomes of our farmers. I am very interested in the developing world and have served on committees and delegations that have been there.

Photo of Mrs Elaine Kellett Mrs Elaine Kellett , Lancaster

I shall give way in a moment.

Farmers in the developing world can grow a great many crops that we cannot grow and they should concentrate on them. If we must take cuts in support for our products, we must insist that support prices for wine, olive oil, tobacco and cotton are also reduced. It must not pay southern European farmers to produce for intervention, as they were doing until quite recently. They must also be obliged to obtain an increasing share of their income from the market.

Set-aside may reduce surpluses in the arable sector, but the countryside must not be left looking ugly. It must be environmentally cared for and financed. We must be certain that, if we set land aside, other EC countries do not increase their production to fill the gap. For centuries, the British have taken it for granted that farmers do not merely produce food, but care for the appearance of the countryside. After all, they had the biggest interest in doing so, as their children, grandchildren and great grandchildren would inherit that countryside. That was easier to achieve when labour was cheap and plentiful, but it takes much training, skill and time to maintain the dry stone walls and lay hedges, which are so beautifully maintained in my part of the country, and which townspeople will drive many miles to see.

If urban dwellers want farmers to care for the countryside, farmers should be paid a fee—not a subsidy—for maintaining our hedges and walls in the traditional way. There is much more mileage in the environmentally sensitive areas scheme, which benefits farmer and visitor alike. The cost of caring for the countryside should be an integral part of the common agricultural policy and should be paid for, not just tacked on at the end.

Farmers are fiercely individual, and the huge, and economically powerful food processors and chain stores take advantage of that fact to cut prices to farmers. Ten years ago, milling wheat cost £105 a tonne and the housewife's loaf cost 34p, of which the farmer received 8·5p. Now, milling wheat costs about £110, and a loaf costs 50p, of which the farmer receives 9p—just ½p more in 10 years. The remainder is gobbled up by the processors and retailers. There should be a fair balance between what the farmer receives and what the consumer pays, and the middleman should not skim off all the cream.

A substantial fall in interest rates would help farmers most. Yesterday's 0·5 per cent. fall is welcome, but a further 0·5 per cent. cut in the near future could make the difference between survival and failure for many farmers. I thank my right hon. Friend the Minister for the 14 per cent. increase in the hill cow subsidy and higher-rate ewes announced on Monday, and his efforts to have payments made more rapidly, to which my farmers attach much importance.

I shall close as I began. When things are tough, one must know who one's friends are; I know that my right hon. Friend the Minister is a friend of agriculture and will fight hard in Europe for British farmers and housewives.

Photo of Sylvia Heal Sylvia Heal , Staffordshire Mid 6:25 pm, 14th February 1991

Opposition Members have often criticised the Government's economic policy, highlighting its disastrous impact on industry, commerce and families. Among the many groups who have been adversely affected are the farming community. They do not always have a good public image. Perhaps in the past they have cried wolf too often, but this year there seems to be a great deal of substance to their claims that they are facing difficulties.

Farming income is at its lowest for 40 years and, according to the National Farmers Union, farmers' bank debts have soared to £7·3 million. That combination spells disaster and hardship, for behind every stastistic there is an everyday story of country folk who face difficulties. High interest rates have been one of the major factors, and the 0·5 per cent. drop announced yesterday, although welcome, is by no means enough to solve the problems. The farmer who owns his own farm, has no overdraft and no hired labour may be able to weather the storm if he draws in his belt, but far more typical is the tenant farmer who has an overdraft and employs farm workers. He faces several problems. He also faces the justifiable demands of the farm workers, who are seeking to earn a reasonable living wage as they too try to cope with additional financial pressures.

Farmers whom I have met in my constituency are aware of the need to meet those demands, but they regard them as yet another pressure on them. For that group of farmers, there can be no light at the end of the tunnel. The National Farmers Union says that farmers' debts for 1990 were five times as great as their income, which dropped by 15 per cent. that year. I have spoken to farmers whose income is unsufficient to service their overdrafts. One Mid-Staffordshire farmer has shown me his bank statements over a 10-year period. His overdraft has increased by 800 per cent., his standard of living has declined considerably, yet he is working as hard in 1991 as he was in the 1980s—if not harder.

Some farmers have solved that problem by selling parts of their farms—providing that they can find buyers. In addition to high interest rates, farmers are struggling with falling crop and livestock prices. Many farmers in Mid-Staffordshire rely on members of their families to provide the extra labour required to manage the farm. That extra pair of hands is often provided by their wives, who not only help on the farm but may even run bed and breakfast to help supplement the family income. Farmers with children express concern and disappointment that their children no longer work the family farm, not necessarily because they do not want to, but because they are offered much better-paid jobs elsewhere, perhaps with perks and conditions with which the farmers cannot compete. The income from farming cannot support the family unit.

Farmers are worried not only about the loss of a pair of hands, but about the future of farming and rural communities. The nature of the industry is such that when farmers are planting crops or breeding and buying livestock they need stability to help long-term planning—and that has been missing. Farmers also need a Government who will respond quickly to their need for advice or compensation when faced with crises such as salmonella or BSE. They want reforms in the CAP, so that most of the budget does not go on disposing of surpluses which are both inefficient and morally wrong.

Perhaps British farmers have been the victims of their own success at improving efficiency and productivity. The subsidy must help both the supplier and the consumer. If reforms do not take place, we are likely to be left with some large ranch-type farms at one end and small part-time farms, like many in Europe, at the other.

In the past we have relied on the farmers to manage the countryside so that we can all enjoy the benefits of their good husbandry. The farmers, however, will not be able to continue to be the caretakers of the countryside if they are short of money. That is why a policy like that of the Labour party, which offers green premiums to help farmers to protect the countryside and grow food using fewer chemicals, is attractive to them.

Tomorrow morning, more than 52 million people will require breakfast, and most of the ingredients of their breakfasts will be supplied by the British farmer. Will that still happen in 10 years' time, or will we rely even more on imports from the rest of the world?

As a Member representing a farming constituency, and as a consumer who wants the security of knowing that we have a stable home agriculture, I declare an interest in the future of farming. This debate has been about the crisis in farming, and, to judge from what I hear from farmers in my constituency, they believe that the Government cannot solve their problems in that crisis.

Photo of Ian Paisley Ian Paisley Leader of the Democratic Unionist Party 6:32 pm, 14th February 1991

Northern Ireland has a unique place in agriculture in the United Kingdom because agriculture is its main industry. More than a third of its exports come from the agriculture sector, which provides more employment in its ancillary industries than any other source of employment. Therefore, Northern Ireland is interested in and shocked by what is happening in agriculture today.

I believe that it would be in the best interests of farmers if the common agricultural policy were scrapped and we returned to national Governments looking after their own farmers. I heard the Minister saying that he hates the MacSharry proposals and that he was going to fight them and defeat them; but I want to ask how he proposes to do that. Under the new voting arrangements in the Council of Ministers, opposition from the United Kingdom, even in concert with one or two other states, would not be enough to block any package supported by the other member states. What is happening in agriculture, as the Parliamentary Secretary well knows, is politics. It has nothing to do with good farming or good production. That is why Portugal, Italy and Ireland—and Mr. MacSharry—are involved. The sooner the House faces up to that, the better for everyone concerned.

The Parliamentary Secretary has been in Europe and he knows what is happening there. He has been a Member of the European Parliament. I asked in a parliamentary question recently what consultations the Commission has had with Her Majesty's Government about the proposals for the compensation of the small family farmers of Northern Ireland. I was not referring to farmers with two or three acres; I was talking about farmers with an average 50 acres. That is the size of the average small family farm in Northern Ireland. In any event, I was told in a written answer that there had so far been no specific consultations on this question between the Government of the United Kingdom and the Commission. How do farmers feel about that? I am sure that the House would like to know what substitute or alternative proposals there are—what strategy the Minister intends to pursue.

Farming is in crisis, and more so in Northern Ireland because of our special position. People in Britain buying cereals do not have to pay extra transport costs for them as we do. Every farmer in Northern Ireland is at a disadvantage from the start. Now they will be at an even greater disadvantage; they will be pushed off the land altogether.

The Minister would help us all by telling us tonight what his alternative strategy is and how he intends to call on the EEC to reject the MacSharry proposals and replace them with proposals that will help throughout the Community. Does he have alternatives; can he sell them and find the necessary support to defeat the proposals? There is a political coalition in the EEC which is not interested in farming. It is interested in the EEC purse and in how deeply it can put its hand into that purse.

These are the facts as I see them, as a Member of the European Parliament.

Photo of Mr Russell Johnston Mr Russell Johnston , Inverness, Nairn and Lochaber 6:36 pm, 14th February 1991

This has been a debate about a serious issue. Agriculture unquestionably faces its worst crisis since the war. I welcome the Minister's presence throughout the debate, but I regret the absence of the shadow Minister of Agriculture, Fisheries and Food and the absence of any Scottish Minister.

After the war, we first had a long period of relative stability, ushered in by Tom Williams. It is right to pay tribute to him for what he did. Then we joined the European Community and had a relatively short but enormously successful period of expansion and increased production and productivity, during which, through the common agricultural policy, we achieved a 75 per cent. self-sufficiency rate.

Many Members have rightly said that the CAP is in desperate need of reform—but we must remember two things: first, that it produced self-sufficiency where before there was shortage; and secondly, that when there began to be over-production, the European Commission, which is often vilified, repeatedly brought the problem to the attention of the Council of Ministers, with proposals for rectifying it. It was the political failure of the Council of Ministers to tackle these matters which lies at the root of our present problems.

I notice the Minister nodding happily, and that is all very well; but, for example, the right hon. Member for Worcester (Mr. Walker), the then Minister of Agriculture, Fisheries and Food, went down to the west country weeks before milk quotas were introduced urging farmers in the west country to adopt the solution of producing more and more. So we share our part of the blame for that.

There is uncertainty, and lack of confidence and of a sense of a clear way ahead—and we tax the Government with all those things.

The Minister provided us with a sort of low-grade entertainment show—[Interruption.] The hon. Member for Lancaster (Dame E. Kellett-Bowman) was perhaps a little better. I want to quote a letter from a constituent, Mrs. Mary MacKenzie of Newtonmore, written on 12 January: We all know that the British Government are able to increase HLCA payments, but not only will they not announce an increase, they have not even sent out the application forms yet. The letter was written in response to a letter that I had sent to the Minister of State in the House of Lords with responsibility for Scottish agriculture. It continued: In any other year our completed form would be being processed by now and we would be awaiting the cheque a good proportion of which (£2,900—last year) would be used to pay the farmer who winters our hogs and gimmers. He says"— that is, the Minister in the Lords— 'the French farmers have been 'especially hard hit'. When I first wrote to you we were very despondent, having just sold our calves with much reduced income, but worse was to come when we sold the sheep and lambs. In 1989 our income from the autumn sales of sheep, cast ewes, claves and cast cows was £25,784 and 1990 that income was £19,032·10. That is a very large drop. I accept that the HLCA has now been paid, but neither the Minister's speech nor his record impresses people who are struggling with debt.

The hon. Member for Glanford and Scunthorpe (Mr. Morley), who led for the Opposition, delivered a sensible and constructive speech and was right to attack the Minister's obsession with size. The hon. Member for Gloucester, West (Mr. Marland) helped us with a useful critique of the figures proposed by MacSharry. He was quite right, of course, but if the figures are changed, matters could also greatly change.

For example, the NFU calculation on milk shows that, if 200,000 litres is used as a definition of a small milk producer, cuts in Germany will be 3 per cent., in France 5 per cent., in Denmark 17 per cent., in the Netherlands 30 per cent. and in the United Kingdom 50·4 per cent. Plainly, that is totally unacceptable. What difference would it make if the base were 300,000 or 350,000 litres? We must discuss this, not just in terms of the proposed figures, but in terms of what we are trying to do. I shall return to that. Existing milk quotas in European Community countries, except for the United Kingdom, are too high and are resulting in overproduction of approximately 14 per cent.

Photo of Mr Russell Johnston Mr Russell Johnston , Inverness, Nairn and Lochaber

I am pushed for time, but I shall give way and hope that the hon. Gentleman is brief.

Photo of Mr William McKelvey Mr William McKelvey , Kilmarnock and Loudoun

As I am sure the hon. Gentleman is aware, when those figures are adjusted for Scotland, they will mean a 75 per cent. cut for Scottish farmers.

Photo of Mr Russell Johnston Mr Russell Johnston , Inverness, Nairn and Lochaber

That is a good point, and I accept it.

The hon. Member for Angus, East (Mr. Welsh) drew attention not only to the livestock crisis in the hills, but to the difficulties faced by soft fruit growers. If the amendment that he and his hon. Friend the Member for Moray (Mrs. Ewing) tabled had been selected, we would have supported it. He was right about the absence of forward thinking.

The hon. Member for Taunton (Mr. Nicholson) spoke about indebtedness and the consequent impact of interest rates, as did the hon. Member for Mid-Staffordshire (Mrs. Heal), who was also properly concerned with farm wages. The hon. Member for Clwyd, South-West (Mr. Jones) spoke knowledgeably about the erosion of the rural environment in Wales. The hon. Member for Lancaster felt that food should be produced economically and not romantically, but she favoured well-maintained dry stone dykes. Perhaps we are closer than the furious torrent of her words suggested.

The hon. Member for Antrim, South—

Photo of Mr Russell Johnston Mr Russell Johnston , Inverness, Nairn and Lochaber

I beg the hon. Gentleman's pardon. I am sure that he is always north of most of us. He rolled out in his thunderous way and rightly asked the Minster what on earth he proposes for the future. That is the key to the whole debate.

My hon. Friend the Member for Ceredigion and Pembroke, North (Mr. Howells) was polite and over-fair to the Minister. Sadly, the Minister was himself—smooth tongued and glib and, as always, eager to make party politics and to obscure the principal issues in a plethora of words. He was much more anxious to spend time trying to make political capital than to address issues. The Minister cannot tell me or any of my hon. Friends that we have an easy time in politics or that we play at pretend politics and do not care for our constituents. I am a tolerant man and I am prepared to listen to his arguments, but I am not getting the chance to hear them. He should do me and my hon. Friends the decency of listening to us.

There is a considerable surplus in butter and beef. I am told that about 45 per cent. of the beef surplus is directly attributable to the customer response to BSE, mad cow disease.

Photo of Mr Russell Johnston Mr Russell Johnston , Inverness, Nairn and Lochaber

It is all very well for the Minister to shake his head, but that is what the NFU tells me, and that is the only criterion that I can use. The Minister did not mention mad cow disease, but if it is responsible for about 45 per cent. of the beef surplus in the Community, it is a substantial matter. What is being done about it, how much more is being spent on research and are we making any progress? That is an important and grave matter.

We have to contain production, reduce surpluses and, naturally, we have to contain public expenditure. We must enable rural economies to survive, and that will mean redirecting income, which is what MacSharry talks about. We must find a way through the GATT negotiations. As the hon. Member for Taunton perceptively observed, those things have to be done at a time when agriculture is less politically popular than it used to be. It is more under assault than it used to be and finds it more difficult to get a resonance from the public.

We do not pretend that the problems are easy to solve; nor do we say different things in different places. I should like to think that we are reasonable politicians and, as such, we should like to see a sensible, staged policy for the future. I accept that the MacSharry proposals are unacceptable, not just in the north of Ireland but in that other place which the hon. Member for Antrim, North would not normally mention.

The problem that MacSharry addresses will not go away. Extensification, set-aside and rural management schemes will all help, but there must be some transfer of income from the big to the small to maintain rural life while retaining the market spur. MacSharry has the right idea but the wrong figures. The Minister said about the MacSharry proposals: We hate them. We condemn them". Those are not the words of a rational negotiator.

This has been a good debate and hon. Members have shown a deep concern for agriculture. The Government have not given agriculture sufficient priority in their thinking; nor have they been sufficiently clear about where they are going, and that is what farmers want to know.

Photo of David Curry David Curry , Skipton and Ripon 6:47 pm, 14th February 1991

Almost all hon. Members agree that many farmers face difficult times. We know that that is true and that there is no point in pretending otherwise. Few people have given the reasons for that. A biblical plague of locusts has not descended from the sky. As the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) has said, the basic structural problem of over-production still exists in the Community. In many respects, there is over-production also in the world market. Until we tackle that, we will not put farm incomes right, because we cannot maintain everybody on the land producing food that people do not wish to eat. Until supply and demand can be brought closer together, it will be impossible to maintain incomes from the marketplace. If that cannot be done, little can be done to maintain incomes other than by aid and subsidy.

It is not the policy of this Government or any hypothetical Government to allow farmers to become the recipients of perennial social security payments merely because they are farmers. That would be wrong for this or any other Government. I have mentioned overproduction, but we also know that there have been fundamental changes in patterns of consumption. BSE has been a problem in this country, but throughout the Community there is a decline in beef consumption. It may be a sociological trend, but it exists, and it started well before the BSE problem started in the United Kingdom.

There have been specific problems such as BSE, the drought, and early marketing of lambs because of the mild winters that we enjoyed until recently. There were problems also in the French and Irish markets, and because of the Gulf war, with the closing of middle east markets. In addition, output has been increasing, and this time there is not the blessed drought in the United States that helped us so much for a couple of years. World prices are declining, and the catastrophic fall in the value of the dollar has had an impact on the Community budget.

Neither farmers nor Governments can do much about those factors. Instead, we can only try to cope with them in the context of the Community. Where we can help, we do. That is why we increased the HLCA, and why it was so well received. We targeted it specifically at the most difficult sector—the uplands and the hardy breeds, which also received an increase last year. The forms were delayed because we were compelled to adopt a new scheme, which we opposed but which was forced upon us by the Community. Until we did that, we could not proceed to issue forms—but they are now all on their way. We will do the maximum we can to get payments to farmers as quickly as possible, because we know the urgency of the cash flow problems they face. I freely give that undertaking.

We also increased the suckler cow premium to the maximum, and developed a whole series of schemes to assist farms where possible. However, we must still apply a test of value for money. I repeat that we are not, and cannot be, in the business of turning the farmer into a recipient of social security purely because he is a farmer. That is at the heart of our objections to the MacSharry proposals—for it would have that effect on a whole category of farmers.

I admire the struggle of the hon. Member for Glanford and Scunthorpe (Mr. Morley) in trying to decide what parts of the MacSharry proposals he liked or disliked. But he said that he was trying, and we all like triers. We are all reasonable people on these Benches, and we have never abused Mr. MacSharry. [HON. MEMBERS: "What?"] We may have said one or two marginally critical things about his proposals, but there is a distinction to be drawn between Mr. MacSharry—the personality with whom we have to deal, day in, day out, and with whom our relations are impeccable—and his proposals, which we think are pretty bad for the United Kingdom.

My right hon. and hon. Friends and others reiterated their objections, and it helps us to know that the House is united in its opposition to the proposals. We need that influence and certainty in Brussels in arguing why we think that MacSharry's proposals are unfriendly to the United Kingdom. One reason is that they are fundamentally anti-commercial and anti-economic. One cannot engineer a flight from the marketplace. The quotas and controls implicit in the MacSharry proposals move away from the marketplace, and that does not make sense for farmers. Agricultural needs are best met by a policy that is organised around commercial operations that can survive in a market place. The proposals would also be expensive to implement. Curbing excessive expenditure by a large-scale programme of adding to the budget seems to us somewhat perverse.

The proposals also discriminate against the United Kingdom because of the price-tagging restraint that would have to be observed by United Kingdom farmers, and because they are selective in the product range that they cover, whereas the products of others that are seriously in surplus in the Community are not even touched by the MacSharry proposals.

The hon. Member for Inverness, Nairn and Lochaber mentioned small farms. We should not romanticise about them. Many people are getting out of farming on the continent, where there is a problem of diversification. We do not have that problem in the United Kingdom, as I know from my own constituency. I will take lessons from no one on the problems of small farmers and farming. The problem in my Pennine constituency is not farmers trying to get out, but people trying to get planning permission to convert the barn and to live in it.

We object also to the attempt to keep pocket farms in existence beyond any reasonable test of viability. We are not opposed to the small farm. When we had 1 per cent. of milk quota to distribute, my right hon. Friend the Minister and myself decided to give a little over the odds to the smaller farmer to help him to survive. We sought also to introduce a new entrants scheme to help people who wanted to move into the industry. We have introduced our proposals on tenancies to help the smaller or younger farmer to get into the industry.

We will not take it from anybody that we have an ideological hostility to the small farm. Instead, we believe that the small British farm should not pay for the pocket farm elsewhere. That is not only wrong, but a futile policy. A farm of 40 cows, which will produce roughly 200,000 litres, is a fairly small one for the United Kingdom and for other parts of the Community. Even some people in the Republic of Ireland would regard it as a small-scale farm. The small or family farm would undoubtedly be hit by the MacSharry proposals, and there would be precious few beneficiaries in the United Kingdom from the pocket farm approach that appears to be at the heart of them.

It is true that we must work to find allies in the Council, and that we must respond to its proposals. The Commission has the sole right to initiate legislation, and we realised from the start that coalition building is the name of the game. We have been very successful in that. We were at the heart of the rational opposition to the MacSharry proposals because we managed to persuade others to come to our side.

Despite much of the rhetoric surrounding small farmers, when they were faced with the choice of opting for the commercial farm capable of delivering to the market place or for the nostalgic concept of peasantry, they decided that their national interests were best served by the commercial farm concept. That was the day when the bluff was called.

My hon. Friend the Member for Gloucestershire, West (Mr. Marland) made an important speech. He will excuse me if I refer to the intervention made in his speech by my hon. Friend the Member for Southend, East (Mr. Taylor), who I think was disappointed not to be called. He referred to the cereal acreage increase and to set-aside. British cereal acreage fell by 173,000 hectares in one year, and by 30,000 hectares the previous year. Since we introduced set-aside in Britain, there has been a decline in the cereal acreage. That philosophy has not been applied with anything like equal vigour on the continent.

The set-aside may turn out to be one of the pivotal ideas in the reformed MacSharry proposals. One of our pivotal ideas is to ensure that, whatever new law the Community makes, it becomes the law for everyone. Laws should apply equally across the Community, and burdens should be fairly shared.

Photo of Alan Beith Alan Beith Shadow Spokesperson (Treasury)

The Minister has explained why he does not like the MacSharry proposals, and the right hon. Gentleman said why he does not like our proposals. Nor does the Minister like the NFU's proposals on production control. In what direction do the Government want to go?

Photo of David Curry David Curry , Skipton and Ripon

If the hon. Gentleman will be patient, and if I have time, I will give him that explanation. The Government have set out their ideas on changing the CAP. They embrace a wide concept, but the essence is that there must be a move closer to the marketplace.

Photo of Elliot Morley Elliot Morley , Glanford and Scunthorpe

The hon. Gentleman does not say how.

Photo of David Curry David Curry , Skipton and Ripon

The hon. Member for Clwyd, South-West (Mr. Jones) spoke of slavish adherence to the free market. Anyone who has to run a part of the CAP will find it slightly curious to be accused of that. We would like to see a little more slavery from the rest when it comes to a free market. The hon. Gentleman said also that there should also be direct income aid. That is a horrendous proposition, if one multiplies it across the Community. There followed a series of happy little phrases, one of which was sensitive management. That was not very specific in helping farmers to comprehend the prospects of a Labour Government.

We think it important to operate closer to the market place. We see a role for specific aid for farmers—well tested and well costed—when there is a countryside function for them to preform. We see a role for certain restraints on output, which we may well find ourselves obliged to observe under the GATT. That is an important element for our farmers as well as all the others; the alternative is an horrendous trade war.

Those are coherent and long-standing policies, which remain valid and which we will defend. The Liberal motion is woolly, wordy and worthy, and is not worth a row of beans. I am disappointed to learn that the great party of Gladstone has surrendered to dirigisme and bureaucracy. I regret it, and the party will regret it, and I ask the House to reject the motion.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 46, Noes 141.

Division No. 66][7 pm
AYES
Abbott, Ms DianeMcKelvey, William
Ashdown, Rt Hon PaddyMaclennan, Robert
Barnes, Harry (Derbyshire NE)Madden, Max
Beggs, RoyMarek, Dr John
Beith, A. J.Michael, Alun
Bellotti, DavidMichie, Mrs Ray (Arg'l & Bute)
Campbell, Menzies (Fife NE)Mitchell, Austin (G't Grimsby)
Campbell-Savours, D. N.Molyneaux, Rt Hon James
Carlile, Alex (Mont'g)Morley, Elliot
Clwyd, Mrs AnnO'Hara, Edward
Cook, Robin (Livingston)Paisley, Rev Ian
Cox, TomSalmond, Alex
Ewing, Mrs Margaret (Moray)Skinner, Dennis
Foster, DerekSmyth, Rev Martin (Belfast S)
Foulkes, GeorgeTaylor, Mrs Ann (Dewsbury)
Hardy, PeterTaylor, Matthew (Truro)
Haynes, FrankWalker, A. Cecil (Belfast N)
Heal, Mrs SylviaWallace, James
Howells, GeraintWelsh, Andrew (Angus E)
Hughes, John (Coventry NE)Wigley, Dafydd
Hughes, Simon (Southwark)Wilson, Brian
Johnston, Sir Russell
Jones, Martyn (Clwyd S W)Tellers for the Ayes:
Kennedy, CharlesMr. Archy Kirkwood and
Livsey, RichardMr. Ronnie Fearn.
NOES
Alexander, RichardFreeman, Roger
Alison, Rt Hon MichaelGale, Roger
Amess, DavidGill, Christopher
Arbuthnot, JamesGlyn, Dr Sir Alan
Arnold, Jacques (Gravesham)Goodlad, Alastair
Arnold, Sir ThomasGregory, Conal
Ashby, DavidGriffiths, Peter (Portsmouth N)
Baker, Nicholas (Dorset N)Grist, Ian
Banks, Robert (Harrogate)Ground, Patrick
Benyon, W.Gummer, Rt Hon John Selwyn
Bevan, David GilroyHague, William
Blackburn, Dr John G.Hampson, Dr Keith
Body, Sir RichardHargreaves, A. (B'ham H'll Gr')
Boscawen, Hon RobertHarris, David
Boswell, TimHaselhurst, Alan
Bowden, Gerald (Dulwich)Hayhoe, Rt Hon Sir Barney
Bowis, JohnHicks, Robert (Cornwall SE)
Bright, GrahamHind, Kenneth
Brown, Michael (Brigg & Cl't's)Howe, Rt Hon Sir Geoffrey
Bruce, Ian (Dorset South)Hughes, Robert G. (Harrow W)
Buchanan-Smith, Rt Hon AlickHunt, Sir John (Ravensbourne)
Buck, Sir AntonyJack, Michael
Butler, ChrisJanman, Tim
Carrington, MatthewJones, Gwilym (Cardiff N)
Carttiss, MichaelJopling, Rt Hon Michael
Channon, Rt Hon PaulKellett-Bowman, Dame Elaine
Chapman, SydneyKilfedder, James
Chope, ChristopherKing, Roger (B'ham N'thfield)
Clark, Rt Hon Alan (Plymouth)Knight, Greg (Derby North)
Clark, Rt Hon Sir WilliamKnowles, Michael
Clarke, Rt Hon K. (Rushcliffe)Lawrence, Ivan
Coombs, Anthony (Wyre F'rest)Lester, Jim (Broxtowe)
Coombs, Simon (Swindon)Lord, Michael
Cran, JamesMcCrindle, Sir Robert
Curry, DavidMacfarlane, Sir Neil
Davis, David (Boothferry)Maclean, David
Douglas-Hamilton, Lord JamesMans, Keith
Dunn, BobMarland, Paul
Dykes, HughMarshall, Sir Michael (Arundel)
Emery, Sir PeterMaxwell-Hyslop, Robin
Evennett, DavidMeyer, Sir Anthony
Favell, TonyMiller, Sir Hal
Fishburn, John DudleyMitchell, Sir David
Forman, NigelMonro, Sir Hector
Forsyth, Michael (Stirling)Morrison, Sir Charles
Fox, Sir MarcusMoynihan, Hon Colin
Neale, Sir GerrardShepherd, Colin (Hereford)
Neubert, Sir MichaelSims, Roger
Newton, Rt Hon TonySmith, Sir Dudley (Warwick)
Nicholson, David (Taunton)Smith, Tim (Beaconsfield)
Norris, SteveSpeed, Keith
Onslow, Rt Hon CranleySpeller, Tony
Oppenheim, PhillipStanbrook, Ivor
Page, RichardStevens, Lewis
Paice, JamesStewart, Andy (Sherwood)
Parkinson, Rt Hon CecilSummerson, Hugo
Patnick, IrvineTaylor, John M (Solihull)
Pattie, Rt Hon Sir GeoffreyThompson, Patrick (Norwich N)
Pawsey, JamesThurnham, Peter
Peacock, Mrs ElizabethViggers, Peter
Porter, David (Waveney)Waller, Gary
Powell, William (Corby)Warren, Kenneth
Rathbone, TimWheeler, Sir John
Rhodes James, RobertWiddecombe, Ann
Riddick, GrahamWiggin, Jerry
Ridsdale, Sir JulianWinterton, Mrs Ann
Roberts, Sir Wyn (Conwy)Winterton, Nicholas
Rowe, AndrewWood, Timothy
Ryder, Rt Hon Richard
Sackville, Hon TomTellers for the Noes:
Shaw, David (Dover)Mr. Neil Hamilton and
Shaw, Sir Michael (Scarb')Mr. Timothy Kirkhope.
Shelton, Sir William

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 300 (Questions on amendments), and agreed to.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Deputy Speaker (Second Deputy Chairman of Ways and Means)

forthwith declared the main Question, as amended, to be agreed to.

Resolved,That this House welcomes Her Majesty's Government's intention to negotiate in Brussels so as to secure changes to the Common Agricultural Policy of the European Community which make it more market-oriented, thereby giving an incentive to efficiency, reduce surpluses, thereby lessening tensions in international trade, keep spending within the agricultural guideline, avoid discrimination against United Kingdom interests, and integrate environmental considerations more firmly into the Policy; and recognises that such a stance is necessary to take proper account of the interests of taxpayers and consumers while offering a realistic prospect of a successful future for British farming.