[John Cummings in the Chair] — Agriculture (South-West)

Part of the debate – in Westminster Hall at 10:29 am on 20th January 2009.

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Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs) 10:29 am, 20th January 2009

I am grateful to my hon. Friend. I must move on to other issues, but before I do, I shall make one other point about bovine TB.

I fully recognise that the right hon. Lady took up her post only recently and has not yet had a chance to make an impact on what I know she accepts is a serious issue; however, I am astonished by the way in which DEFRA and the Treasury work out their funding and, in particular, their public service agreements. It is astonishing that DEFRA's public service agreement with the Treasury, PSA 9, involves an incremental trend of 17.5 confirmed new incidents per annum. When I looked into what that meant, because, like a lot of these things, it is not easy to understand, I found that it meant that the rate of increase could rise annually by 17.5 confirmed new incidents. If, for example, there had been 250 confirmed new incidents in new parishes last year, and that is not far from the reality, this year there could be another 250—plus 17.5. In other words, the rate of increase could rise. Fortunately, the rate in reality is going the other way and the number of confirmed new incidents has declined over the past few years, for which we should all be pleased. However, it does not negate the fact that the PSA is absurd, and it is almost impossible to conceive of the Department failing to meet it. At the same time, there is the point that my hon. Friend Mr. Gray made about the disease spreading at 10 or more miles a year, which brings me to a part of what I believe is an essential package: dramatically stepping up the testing process in what I have always called the frontier areas of the country—the areas into which the disease is moving—to try to identify and halt its progress, while addressing it in particular areas.

The hon. Member for Somerton and Frome spent some time discussing the dairy sector, because it is so important in the south-west, and he rightly said that that sector and, indeed, most of British agriculture is currently sheltered by the collapse in the value of sterling, primarily against the euro, but against other currencies, too. World commodity prices in the dairy industry have dropped by anything up to 50 per cent., and there has been a huge collapse in the price of skimmed milk and whole milk powders, and in the mild cheddar market. We are protected from that, but, as a result, I fear further price cuts, because, for other reasons, we hope that sterling's collapse will not last forever. It may well reverse and, indeed, there are indications that it is beginning to.

That brings me to the issue of the power of the supermarkets, with which I always associate the power of the producer because I think that they are opposite sides of the same equation. I shall not go into any more detail about the issue of an ombudsman, because other Members have made the point and I support the approach; however, we must look at the share of the retail price that the producer receives. I draw a comparison with Germany, where, over the past 10 years, the retail price of milk has risen gradually but the supermarkets' share has remained the same. Reports in this country indicate that while the retail price of milk has risen, the supermarkets' share has gone up far faster than the retail price, to the detriment of the producer. When I look at the reasons, I cannot help feeling that we arrive at the issue of the power of the producers, through co-operatives, farmer-owned businesses or wherever we want to call them, which are much more powerful in Germany than they are in this country.