Farm Incomes

Oral Answers to Questions — Agriculture, Fisheries and Food – in the House of Commons at 12:00 am on 16 March 2000.

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Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield 12:00, 16 March 2000

If he will make a statement on the change in farm incomes over the past three years. [113368]

Photo of Nick Brown Nick Brown Secretary of State for Agriculture, Fisheries and Food, Minister of State (Ministry of Agriculture, Fisheries and Food)

From 1996 to 1999, total income from farming fell by 56 per cent. in real terms. Total income from farming increased by 100 per cent. in real terms between 1990 and 1995, before dropping 60 per cent. between 1995 and 1999.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

I am grateful for that honest answer, at least. However, does the Minister yet realise that, in the past three years, farmgate milk prices have fallen by a third, more than 5,000 dairy farmers have given up work, the cost of milk production is 11p per pint and the farmgate price paid is less than 10p a pint? Mr. Micawber would tell the right hon. Gentleman what that means. How long can he remain complacent? Will he be satisfied when the only milk that we can buy in the United Kingdom is frozen milk from France?

Photo of Nick Brown Nick Brown Secretary of State for Agriculture, Fisheries and Food, Minister of State (Ministry of Agriculture, Fisheries and Food)

I am not complacent about the difficulties in the dairy sector. The Government are examining what they can do to help. As the House will know, the remedy lies in the supply chain and in the marketplace.

Photo of David Taylor David Taylor Labour/Co-operative, North West Leicestershire

As my right hon. Friend knows, agriculture receives more subsidy than the rest of British industry put together, and it has the lowest incomes for a long time. Is he confident that we are taking genuine and radical steps to move farming away from its dependence on subsidies and transform the common agricultural policy into something that resembles more closely a rural development policy?

Photo of Nick Brown Nick Brown Secretary of State for Agriculture, Fisheries and Food, Minister of State (Ministry of Agriculture, Fisheries and Food)

My hon. Friend makes a good point. The supply side of the CAP, although it is extraordinarily expensive, does not serve United Kingdom agriculture well. That is why, last December, I announced the new direction for agriculture and our making much more use—something that is a departure for the UK Government—of the new second pillar of the CAP, which provides support for farm businesses that is decoupled from production and directed much more to the marketplace than to the CAP's traditional structure.

Photo of David Heath David Heath Shadow Spokesperson (Environment, Food and Rural Affairs)

With dairy farm incomes continuing to fall, with milk prices the lowest in Europe and with supermarkets pushing their three-for-two offer—they buy three litres of milk and pay farmers for only two—is it not time for more action? Will the Minister look again at agrimonetary compensation before it is too late? Will he think about the over-30-months scheme and will he talk some sense into his colleagues at the Department of Trade and Industry on milk co-operatives and on concerted efforts to increase milk prices?

Photo of Nick Brown Nick Brown Secretary of State for Agriculture, Fisheries and Food, Minister of State (Ministry of Agriculture, Fisheries and Food)

As the hon. Gentleman knows, I have been a strong advocate of farmer co-operation working through the supply chain. I believe that real benefits accrue to farmers if they are able to exercise some influence further down the supply chain. As for the over-30-months scheme, surely the Government's real objective should be to work towards an unwinding of the scheme. That is clearly obtainable in the medium term. As my right hon. Friend the Prime Minister made clear at the National Farmers Union conference, the door is not closed on agrimoney.

Photo of Lindsay Hoyle Lindsay Hoyle Labour, Chorley

Following the comments of my hon. Friend the Member for North-West Leicestershire (Mr. Taylor), I am sure that the House has recognised that more money has gone into farming through this Government than through any previous Government. However, I am sure that my hon. Friend is aware of the plight of dairy farmers in Lancashire, who are being paid the lowest prices. Will he have discussions with supermarkets and other middle men paying low and unjustified prices? All that they are doing is putting our poor farmers out of business. I am sure that, with my right hon. Friend's good offices, we can improve the plight of farmers.

Photo of Nick Brown Nick Brown Secretary of State for Agriculture, Fisheries and Food, Minister of State (Ministry of Agriculture, Fisheries and Food)

My hon. Friend is right. The answer to the problem lies in the supply chain and ultimately in the marketplace. There are not sufficient sums available under the agrimonetary compensation regime, for example, to compensate farmers for the difficulties that they are going through. Of course there are measures at the margin that the Government could take to help. However, we must focus on the real problem, which is the marketplace.

Photo of Tim Yeo Tim Yeo Shadow Secretary of State for Environment, Food and Rural Affairs

Given that many dairy farmers are selling their milk at a price below the cost of production, does the Minister support the plan announced today by Safeway and Waitrose to increase the price of milk—yes or no?

Photo of Nick Brown Nick Brown Secretary of State for Agriculture, Fisheries and Food, Minister of State (Ministry of Agriculture, Fisheries and Food)

I have made it absolutely clear in all my answers that the difficulties can be resolved only through the supply chain and in the marketplace. That is why I support the initiatives of retailers that are designed to help their own producers. They have my support and encouragement, but these are private sector arrangements. The hon. Gentleman has listened carefully to my answers, and I notice that those on the Opposition Front Bench are not coming forward with a remedy of their own.