I welcome the opportunity to raise the subject of the viability of the farming industry in East Sussex. It is important because of its direct employment of farmers and farm workers. It is also important to the rural economy of East Sussex and to the care of the countryside of which farmers are the custodians.

I regularly meet farmers from my constituency and will meet some on Friday. Over the past year, I have identified several worrying trends that the Government should address. They are aware of those trends, but I shall spell them out for the record.

First, the average age of farmers appears to be increasing. There is a shortage of new entrants to farming, and that is compounded by the fact that one traditional means of entry—county farms—was eliminated by the policies of the previous Government, which required county councils to offload those starter farmers. It was a foolish move and the effect has been regressive.

Secondly, reductions in the agricultural work force weaken the base of the whole community. Farmers who used to employ 10 or 20 people now employ two, one or none at all. They are surviving as best they can in the present circumstances. There has been a loss of tenant farms and a general increase in the size of farms in the county, and the situation is even worse elsewhere.

Thirdly, farmers have suffered significant—some might say catastrophic—reductions in income. Early last year, the National Farmers Union estimated that the real terms decline in farming incomes between 1996 and 1997 was in the order of 47 per cent. Even the Government's figures on total income from farming show a drop of 37 per cent. Not many people or industries could sustain such a drop in income during a single 12-month period.

In the past, it has been usual for one or another sector of the farming industry to suffer. At present, however, the problems are hitting all sectors together. Farmers have had nowhere to go to make up the lost income. The problems continue. According to figures from the Ministry of Agriculture, Fisheries and Food and from the Meat and Livestock Commission, a comparison of farmgate prices in October 1997 and 1998 shows the price of feed wheat down 13 per cent., lamb down 32 per cent., beef down 18 per cent., pigmeat—suffering particularly badly—down 41 per cent., milk down 12 per cent., eggs down 13 per cent. and broilers down 7 per cent. The catastrophe facing the industry continues.

Those reductions in farmgate prices are not always reflected in retail prices. I wrote at the end of last year to the four major supermarket chains to draw attention to the fact that their prices appeared not to be dropping although farmgate prices were. In the period 1987 to 1997, farmgate prices increased by around 6 per cent., but retail prices for food increased by about 35 per cent. Why should supermarkets have such a big mark-up that is not passed on to the farmers? In response, the supermarkets blamed a number of processor costs, for example hygiene inspections, and said that they now had to pay for parts of animals that had been used previously, such as blood products, to be taken away. They blamed increasing transport costs.

I do not believe that those factors alone justify what appears to be an increased mark-up for supermarkets at the expense of the basic producers, the farmers. I should be grateful if the Minister would say in his reply whether he believes that there is an element of the cartel and profiteering in the behaviour of supermarkets, to the detriment of our farmers.

How can the Government help? I have a number of suggestions, to which I hope that the Minister will respond constructively. First, the beef ban must be lifted. I do not blame the Government at all for the ban. Since they have been in power, they have done their best to deal with a difficult situation and have made progress—credit, where credit is due. However, time is marching on and we are now a long way down the track. I hope that the Government will be able to give some sign tonight of when the ban will be lifted.

Secondly, there is a ban on beef on the bone. I speak as a vegetarian, but my analysis is that beef is perfectly safe. Even if it is not, people who wish to buy it should be able to do so and judge the risks for themselves. It is not for the Government to act as nanny state and to ban beef on the bone.

In Committee, I remember asking the Minister who is to reply, and who is responsible for food safety, whether he believed that beef on the bone was more dangerous than genetically modified foods, which are available in all our shops. He thought that that was a fair question. Perhaps he will elaborate on the subject tonight.

Also, I want some clarification from the Minister on a question that involves East Sussex county council. 1 understand that he may want to reply to me in writing on that matter. The National Farmers Union in my constituency naturally wants to ensure that, in schools and other establishments, the council serves beef that is subject to the same high health and hygiene regulations as British beef. The chief executive of the council has told the NFU that the council is precluded from doing so and from choosing British beef on legal grounds. I would be grateful if the Minister would clarify, tonight or subsequently, whether that is the case. Clearly, it is wrong and ludicrous if for regulatory reasons the county council cannot make a positive choice for British beef, which it no doubt believes—as do I—is subject to higher health and hygiene regulations.

Another problem is the addition of meat hygiene inspection charges. I welcome the Government's help to pay for the additional charges for a year; that is a welcome move. I and the right hon. Member for Wealden (Sir G. Johnson Smith), who is present tonight, have both been busy on that matter as regards the abattoir at Heathfield. However, paying the charges is a breathing space and not a solution.

I hope that the Government will produce measures to ensure that small abattoirs continue to exist. Any additional charges should be based on the throughput of an abattoir, not some flat-rate charge, which necessarily discriminates against the smaller abattoirs.

Small abattoirs are important. They are a link in the community. Wearing my animal welfare hat, I say that I want animals to be transported as little as possible between the point of production and their slaughter. The Government say that they want that and that they want to avoid live exports, so why do they countenance the closure of smaller abattoirs, thus requiring animals to be transported over longer distances?

The Government could also do more to promote animal welfare-friendly produce and I hope that they will. In this country, our production is more animal welfare friendly than anywhere else in the world. It is important for the Government, first, to make it plain to the consumer where possible that produce from outside this country may not be produced according to the same high standards and, secondly, to promote and market British produce that is subject to high standards.

Certain labelling requirements may apply. The Minister is keen on labelling and rightly so, but is it not the case that processed products that come into this country do not have to be labelled with their country of origin? Fresh, entire products have to be, but processed products do not. Therefore the consumer could be misled. Goods of a lower standard can come in and masquerade as good-quality goods, undercutting high-quality British produce.

Does the Minister believe that, under World Trade Organisation rules, Britain can require high animal welfare standards or are we subject to the free trade extremism that we saw on bananas and that we may see—I hope not—on genetically modified organisms? What will the Government do to help promote UK produce produced to high animal welfare standards? I know that that is their intention, and I am sure that we share the same agenda on that, but they need to act on it.

Supermarkets have said that they are happy to buy products of a lower standard from overseas. A letter from Sainsburys of 18 November about chicken from Thailand stated: The advantage for our customers of sourcing from Thailand is purely cost. The wafer-thin chicken delicatessen product and the frozen chicken pies and ready meals offer customers a cheaper alternative. By using chicken sourced from Thailand, our suppliers can enable us to offer customers with a smaller purse the opportunity of buying a product which they might otherwise have not been able to afford. Chicken from Thailand is produced in unacceptable conditions and undercuts higher animal welfare standards in this country.

I want to raise some other matters briefly because 15 minutes goes by quickly in this Chamber. Will the Minister publish soon the Monopolies and Mergers Commission inquiry into Milk Marque? I understand that it has been sitting on the desk of the Secretary of State for Trade and Industry for two months, with all the resultant uncertainty for farmers.

Will the Minister say what he can about the position on common agricultural policy reform? I welcome the direction that the Government are taking to move it forward, but it is not enough. They need to do more to satisfy WTO rules and to take proper account of the environment. I hope that he will revisit the matter. Environmental measures on set-aside that would have allowed land to be permanently under wildlife were overruled in the negotiations. That is a step backwards.

East Sussex welcomes the environmentally sensitive area payments for the south downs. It is a good, successful scheme. The Minister of Agriculture must ensure that payments are not based only on profits forgone but include an incentive element to encourage participation.

The National Farmers Union believes that the organic farming scheme has been "a disappointment". Shaun Leavey of its south-east region writes: The newly announced OFS has been a disappointment and militates against those who have been farming in an environmentally friendly way. Participants in Countryside Stewardship schemes and the ESA are treated for the purposes of the OFS as having unimproved land and so only qualify for the lower rate of grant. My phone has been red hot with complaints about this! In addition, there are unrealistic restrictions on the number of sheep out at keep (from other farms) that can be run on a farm participating in the scheme. Many complainants point out that they would have got a better deal under the old Organic Aid Scheme but were advised by MAFF staff to wait for the new scheme—they suspect (however unfairly) that this was MAFF's way of saving money. I know that the Government are committed to organic farming so I hope that the Minister can deal with that point.