Agrimonetary Compensation

Oral Answers to Questions — Agriculture, Fisheries and Food – in the House of Commons at 12:00 am on 1st February 2001.

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Photo of Robert Smith Robert Smith Liberal Democrat, West Aberdeenshire and Kincardine 12:00 am, 1st February 2001

When he intends to reach a decision on the payment of agrimonetary compensation to British farmers. [146783]

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

The final figure will not be known until later this month. However, the amount available is likely to be about £200 million. We have until 30 April to decide. Since 1997, the Government will have paid £629 million in agrimonetary compensation, at a cost of £455 million to the United Kingdom taxpayer.

Photo of Robert Smith Robert Smith Liberal Democrat, West Aberdeenshire and Kincardine

I thank the Minister for his answer, as far as it goes, and recognise that some money has been paid in the past.

The message from the farmers whom I met in Alford and Stonehaven last week—confirmed by figures from the Ministry showing a fall in farm incomes—is that they would like an end to at least one element of their uncertainty as soon as possible. Will the Government make a commitment, in principle, to recognise that a mechanism is available to alleviate the currency problems that the farmers face, and that they are willing to access the money involved as soon as possible to alleviate that uncertainty?

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

The Government recognise that such a mechanism is available. We have made extensive use of it, both on the mandatory side—it is worth reminding the House that this Government negotiated the mandatory element of agrimonetary compensation—and on the discretionary side. We have made use of the instrument when times have been very difficult for farmers, particularly in the livestock sector.

Photo of Dr Alan Williams Dr Alan Williams Labour, Carmarthen East and Dinefwr

Now that the euro has regained about 10 per cent. of its value against the pound, what effect will that have on the money available in agrimonetary compensation? More generally, does not that rise mean much better support prices and better market prices? Indeed, could not it herald the turnaround in the fortunes of agriculture?

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 fair point. However, the calculations are of course historic, so they relate to where the euro was rather than to where it is going, although he is right to say that a strengthening of the euro would be to the advantage of United Kingdom agriculture.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

In the light of the facts that dairy farmers in Wales last year earned as little as £3,000, that further money is available in agrimonetary compensation, which the Minister accepts, and that the figures are historic and reflect the lack of support payments to farmers over the past few years, will he now give farming industries in Wales and throughout the United Kingdom the assurance that the Government will receive every penny possible despite the Fontainebleau agreement, which was negotiated by the Conservatives?

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

The hon. Gentleman is right to refer to the previous Conservative Government's Fontainebleau arrangements because those arrangements put the cost of agrimonetary compensation primarily on the shoulders of the British taxpayer. The issue of further agrimonetary payments is under consideration by the Government and a decision will be made, as it usually is, in—[Interruption.] I cannot tell whether Conservative Members, who are shouting at me, are making the case for membership of the euro or for devaluation of sterling, but it is clearly one of the two. No doubt a Conservative Front Bencher will intervene in a moment to say which.

In answer to the hon. Member for Ceredigion (Mr. Thomas), when we considered the circumstances of the dairy industry for the previous agrimonetary round, we drew down every penny we could in recognition of the difficult circumstances. I know that averages are always held to be unfair, but that decision is worth £900 per dairy farmer.

Photo of Lindsay Hoyle Lindsay Hoyle Labour, Chorley

Does my right hon. Friend agree that a typical livestock farmer has benefited by between £1,000 and £1,500 through agrimonetary compensation? Will he consider the fact that an increase in that would benefit farmers who are in need this year and also confirm what the previous Government paid in agrimonetary compensation?

Photo of John Bercow John Bercow Shadow Spokesperson (Home Affairs)

That is not enough money to heat a swimming pool.

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

The hon. Member for Buckingham is right. The sum paid in agrimonetary compensation under the previous Conservative Government would not pay to heat anything at all, because they did not pay out a penny in agrimonetary compensation—not a single penny. [Interruption.] I do not know how I managed to stir Opposition Front Benchers from their usual lethargy, but, for the sake of the record, the hon. Member for South-East Cambridgeshire (Mr. Paice) is shouting, "Three months, three months!" Before the general election, it would have been possible for the Conservative Government to commit to just under half a billion pounds of agrimonetary compensation, if they had so chosen. They did not commit to a penny.

It is worth reminding those who follow these debates that, although Conservative Members now call for substantial extra public expenditure on agrimonetary compensation, they also call for overall reductions in public expenditure and tax cuts at the same time. I would be as interested as everyone else to hear how on earth that could be done.