House of Commons Hansard Debates for 27 Feb 1989

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The second area of stability that I should like to mention is potatoes. As my right hon. Friend will be aware, they are the second highest value crop in the country, after cereals. They, too, are of great importance in underpinning agricultural incomes for both large and small farms. They are not included in the commodities covered by the price proposals, but I have no hesitation in mentioning them, since in this debate we have been taken on airline tours and a number of other diversions.

There can be no doubt that the future of the potato crop is looming large in producers' minds. As my right hon. Friend knows, that is because the future of the Potato Marketing Board is under discussion. As hon. Members will understand, that board is always criticised when it refuses quotas, but I think that its response to the consultative document issued by the Government has been thorough and serious. I also believe that the consumers in the United Kingdom enjoy a far wider variety of quality potatoes than that enjoyed by their European counterparts. That variety and quality, coupled with good marketing methods, has increased our national consumption of potatoes--despite the best efforts of the media recently to prove that if one ate a tonne of green potatoes at one sitting one might be poisoned. In my constituency potatoes are extremely important and growers there--and, I believe, throughout the country--are unanimous in their support for option 3 in the consultative document, which will retain area and quality control in a self-financing way. I hope that, during the consultation, my right hon. Friend will consider that unanimous response carefully.

Finally, I want to comment briefly on the need for my right hon. Friend, while of course protecting the consumer by ensuring the safety of our food, to encourage our important agriculture to be proud of its products, which have taken an unprecedented knock--almost without ceasing--during the past couple of months. I believe in British foods ; the hon. Member for Cynon Valley (Mrs. Clwyd) believes only in the quality of Welsh food, but I believe in the quality of British food. Our farmers should have the confidence to pursue successful and aggressive marketing policies.

My hon. Friend the Parliamentary Secretary, the hon. Member for Calder Valley (Mr. Thompson), spelt out that need recently when he described the keystone of success as a careful and solid approach to marketing. Of course, he would admire anything that was careful and solid, but I hope that Food and Farming Year will be given wholehearted support by all hon. Members, by all at MAFF, by my right hon. Friend and by the industry. It needs a boost.

9.21 pm

Mr. John Home Robertson (East Lothian) : I am happy to join the hon. Member for Norfolk, South-West (Mrs. Shephard) in her comments about the future of the Potato Marketing Board. I am glad that all hon. Members who wanted to take part in the debate have been able to do so. We have heard thoughtful and considered speeches from all sides. The cliche about these debates is that they are wide-ranging, and this one must have been the widest of the wide--not least because we are debating 3.8 kilos of

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European Community documents. I defy the Minister to tell us that he has read every word of them ; I have not, but I did get around to weighing them in the post office.

I flicked through the documents and discovered that we could have debated the minimum price for sweet lupins, the intervention price for paddy rice-- possibly a reference to the leader of the Liberals--the aid that is available from the European Community to support silkworm eggs, and the buying in price for satsumas. In spite of all that, my hon. Friend the Member for South Shields (Dr. Clark) and the hon. Member for Torridge and Devon, West (Miss Nicholson) managed to have a wee debate on the shipbuilding industry. Later we had the wonderful experience of hearing the hon. Member for Hexham (Mr. Amos) explaining what a key industry agriculture is and how communities that depend on it must be defended at all costs. How much I agree, and how I wish that he and other Conservative Members and people in the farming industry had said the same thing when the axe was hanging over mining, shipbuilding and various other industries. Never mind : the hon. Gentleman has the point now and I hope it will stick. In his fleeting visit to the House this afternoon, the Minister mentioned a wide range of subjects in the documents, some of which I hope to touch on. He dwelt at length on fraud in the CAP, a subject that must have been discovered recently by the Prime Minister and which seems to merit a great deal of attention. Advocates of the sleazier aspects of the enterprise culture are not at their most convincing when they are being holier than thou on the subject of fraud. The Government's position on it was fatally wounded by their erstwhile colleague Lord Cockfield, who explained to the House of Lords not long ago that, when he put forward proposals as a European Commissioner that would have dealt with the problem of fraud in the CAP, it was the United Kingdom Government who vetoed his proposal. The role of the Minister of Agriculture, Fisheries and Food must surely be to be the guardian of the nation's food and to provide agriculture with leadership. One of his functions should be to tell the industry what he wants it to do. The industry requires leadership and needs to understand what policies the Government intend to implement. I have no doubt that it would respond--as it often has in the past--to a lead if ever it got one.

More than 10 years have passed since the last White Paper on agriculture made clear the Government's ideas for the future of agricultural policy. Sadly, the industry is adrift in many ways and lacking leadership. If the Minister will not take that from me, perhaps he will take it from his constituency neighbour, the hon. Member for Norfolk, North (Mr. Howell), who made that point very clear.

Is the Minister taking a responsible overview of food and farming policy, and is he playing a constructive part in United Kingdom and European Community decision-making on agricultural policy? I fear that on both counts the answer must be no. In concluding his speech he asked what our policy is. He will recall that at the general election the Labour party made it clear that it wanted to fight for the repatriation of decision- making on the common agricultural policy and to pursue the policy of quotas which his Government pioneered. He will have to wait and see what policy will come out of our current policy review. That will be coming soon, and I assure him that it will be a great success.

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May I go round the various commodities that were covered in the debate, starting with beef. The price package that we are debating comes immediately after the settlement of a new beef support regime, which we debated not long ago. There was unanimity in the House on how we wanted the Minister to approach negotiations on the new beef support regime, but he failed to get what he wanted, and said lamely that he voted against it in the Council of Ministers. He failed to take his colleagues with him there, and unfortunately that will give rise to severe difficulties for our industry and for the beef market in Britain. I wonder whether the Minister is aware that Lord Sanderson, the Minister of State, Scottish Office, said that one aspect of the beef package would discriminate against efficient specialist beef herds in Scotland. There is no doubt that that is true. We have been saddled with a problem and the industry will have to cope with it.

During our previous debate on beef, I pointed to the potential for increasing beef consumption in the European Community and in the United Kingdom, where consumption is comparatively low. Policies that could lead to such increased consumption of beef and red meat would not only be a bonus for consumers but would be conducive to more extensive grazing on farms. That policy would be worth achieving, but we are not getting there. We welcome the thrust of any policy leading to extensification on farms: that point was made by my hon. Friend the Member for Gateshead, East (Ms. Quin).

The Minister knows that he had the House behind him when he was negotiating to continue the beef variable premium. It is a great pity that he failed, not only from our point of view, but from that of other people in the European Community. There is proof of the success and efficiency of the beef variable premium in the figures for beef production and beef intervention in the European Community. Great Britain produces 10.7 per cent. of the beef of the European Community, but we contribute only 1.8 per cent. of the volume of beef that goes into intervention. That must show that the beef market was functioning comparatively efficiently in Great Britain, and that the variable premium which made that possible was a useful mechanism. Sadly, it has been lost.

Now we have the new special rearing premium, which will be introduced from 5 March. It will be payable at the rate of £28.42 a head for 90 male animals from each herd. That is just one month away, and it would be useful if the Minister would take the opportunity of this debate to tell us a little about how it will be administered. Will it be paid on the farm, at the market or at the slaughterhouse? How will the Government ensure that the cut-off point of 90 male animals per herd is observed if the scheme is administered at the slaughterhouse?

It is time the industry was given some indication how this new scheme will operate. Certainly we require an assurance that the Minister will take steps to ensure that British producers will be able to take maximum advantage of the new machinery and also of the hill livestock compensatory allowances and the suckler cow premium. At the same time, it might be useful if the hon. Gentleman could say something about the question of harmonisation in the European Community. We have been on the brink of a trade war with the United States of America because of the EC ban on hormones in beef. There is a lot of legitimate doubt about how efficiently the

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ban is being applied and enforced in parts of Europe. It would be useful if the Minister could say a word or two about that. Let me turn from the ditching of the beef variable premium to the other extensive livestock sector--sheep. There seem to be very clear indications that the sheep regime will be the next casualty in the overhaul of the CAP. Indeed, the hon. Member for Skipton and Ripon (Mr. Curry) seemed to suggest that that was quite a good idea. I do not know whether he is in cahoots with Mr. Peter Pooley of the European Commission, who used some rather extravagant language about Britain milking the system and about it being a racket. He is quoted as having said:

"I have not been discriminating against lamb producers up to the present, but, by God, I think I may have been neglecting my duty." I think he was giving notice that it is the intention of the European Commission to put the boot into the British sheep sector. I hope that, whatever the hon. Member for Skipton and Ripon may have said, the British Minister will be fighting for British interests on this occasion.

I was a little worried when I heard the assurance from the Minister that he would oppose the kind of headage limit on sheep subsidies that might be applied in future. This is the self-same Minister who sold out on the question of headage limits in relation to the beef subsidy. Clearly there will be a drastic review of the support machinery for sheep, and it appears that Mr. Pooley and others intend to give the United Kingdom producers no quarter. This really is a matter of the gravest concern in the hills and uplands of this country. My hon. Friend the Member for the Western Isles (Mr. Macdonald) was quite right to point out how important it is that producers in the hills and uplands of Britain be protected against the cuts that the European Community seems to have in mind. I want to move now to the dairy sector, which has certainly benefited from being a regulated and efficiently managed market because of the imposition of quotas. We supported the principle of quotas, though we may not have supported every detail of their application. We would have applied them in a different way- -perhaps more like the manner in which they have been applied in Denmark-- but we certainly support the principle. With those quotas, the future for the milk sector should be reasonably secure, provided that our milk marketing boards can be retained.

I am pleased that the Minister took the opportunity to reiterate his distaste for the co-responsibility levy for milk. That is certainly an absurd imposition on small dairy farmers--a point made by the hon. Member for Brecon and Radnor (Mr. Livsey). What the Minister did not mention were certain other points that are of acute importance to the dairy sector.

First, there is the question of public confidence in the product and, in particular, public confidence that milk is free from artificial contamination. We are still waiting for the Government to give us some indication that they will rule out the use of bovine somatropin in milk. The producers do not want it--in fact, nobody wants it--but the Government refuse to take any action to ban it. In connection with health standards in relation to milk, we have heard also about listeria and about BSE. Indeed, BSE has been the great unmentioned point in this debate from the Government's point of view.

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The Minister has been away for much of the debate. He did not mention BSE in his opening remarks, but he put out a press statement and a reply to two planted written questions on controls for BSE, which were tabled last week. At the beginning of the debate, on a point of order, my hon. Friend the Member for South Shields said that the Minister must give a statement to the House on this matter, which is causing such legitimate public alarm. If the Minister will not take it from my side of the House, perhaps he will listen to his hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop), who used equally strong language in saying that it was an abuse of the House for the Minister to brief the press on BSE instead of telling the House of the Government's response to it.

The Minister did not mention BSE in his speech. He spent much of the day talking to the press about it and his written replies to his hon. Friends the Members for Torridge and Devon, West and for Bromsgrove (Sir H. Miller), which had been embargoed rather conveniently for 3.30 pm today to make it particularly difficult for hon. Members interested in these matters to deal with it. I have referred to the Library and I understand that the Minister proposes to set up a research consultative committee on BSE. I hope that it does its work efficiently and quickly. I understand that no offal may be used in baby food. Whether it is at present must be a matter of some doubt. The Government have not said whether they will increase the level of compensation to farmers whose stocks must be slaughtered. [Interruption.] They are not. There is no question of 100 per cent. compensation, so there must be a risk that farmers with infected stock will not notify the authorities. The Government are failing to deal with the most fundamental aspect of the problem. The intensive livestock sector is under severe pressure following the salmonella shambles. The Minister said that over-production in the pig sector, for example, can best be regulated by market forces. That is the roughest possible form of justice. The Minister has wider obligations for those who work in these industries. It would be useful if he would say something about the health implications of the abolition of frontier controls in 1992. Several hon. Members have referred to 1992. What about the controls that will apply to imports of pigs which may be infected with Aujesky's disease?

The cereals and arable sector is carrying its share of the general gloom and depression. We all know that changes are inevitable, but stabilisers are a crude mechanism. They are a method of restructuring by redundancy or bankruptcy. The hon. Member for Norfolk, South-West made that point as a result of discussions with local bank managers on the impact of the Government's policies on this sector. These policies should go hand in hand with incentives for restructuring, change and development. The continuing problem of monetary compensatory amounts arises from the imbalances in green currencies. I agree with hon. Members, including my hon. Friend the Member for Glanford and Scunthorpe (Mr. Morley), who feel that British industry should be able to compete on a fair basis, not just in 1992 but as soon as possible.

The only gesture towards restructuring in the arable sector is the business of set-aside. Farmers can collect £80 an acre for setting aside a minimum of 20 per cent. of their arable land. That is supposedly to reduce intervention buying, but it is a form of intervention itself. It is an intervention in the land market. It takes a percentage of land out of circulation. It is a sort of rental intervention to

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prevent a fall in market rents for farms. It is inevitably a haphazard affair. The public are paying farmers to do nothing, which is difficult to understand, and in some cases people are paid off. People are losing their jobs as a result of the scheme. Will the Government make any provision for workers who are made redundant or lose their standard of living because of set-aside? No, we are getting nothing for those workers.

Even the Leader of the other place has caused people to be made redundant and has not made any compensation available to them in connection with this scheme, which is grossly unsatisfactory. I gather that his explanation was that he wanted to set an example to other farmers to take advantage of the set-aside scheme.

We must press the Minister to explain the position of the United Kingdom Government on the income aid element of the European Community agricultural programme. That would be an eminently sensible way in which funds can be obtained to pay people to help them to adjust to policy changes and to protect employment. Why can that not be done in connection with set-aside? Why are the British Government alone in refusing to take advantage of that aspect of the package? That does not make sense.

The Minister appears to be dismissing the evidence of the collapse in farming incomes in recent months and years. He says that everyone has many other sources of income, which is not accurate or fair. The Minister knows that the vast majority of people in the agriculture industry mostly earn their livings from working directly in agriculture, and he should make policy decisions to cater for those people.

I have not time to mention the further deplorable cuts in research and development. The reports last week in the Farmers Weekly were extremely alarming. As has been mentioned by hon. Members on both sides of the House, that was an outrageous Government decision that will do great damage to the industry and to the public interest. The Minister must reconsider that decision. I hope that those reports will turn out to be rumours, but I suspect that they are well founded.

The Minister of Agriculture, Fisheries and Food came to his post widely tipped as a future Chancellor of the Exchequer, but I am afraid that his reputation has slipped a little in recent months. Where there was research, he has brought ignorance ; where there was a rural economy, he has brought rural bankruptcy ; and where there was despondency, the has brought alarm. He has even managed to be the second Tory Minister of Agriculture on the trot to earn himself a vote of no confidence from the National Farmers Union--not to mention the vote of no confidence that he received last week from the voters of Richmond.

Agriculture is in a sad condition, and the Minister knows. The Labour party has a proud record of partnership with agriculture. I do not believe that this Government could do any worse than they are doing now, and I suspect that the industry will be much happier when we can return to a Labour Government.

9.42 pm

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Richard Ryder) : I was going to say that thihas been a wide-ranging debate, but after what the hon. Member for East Lothian (Mr. Home

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Robertson) said at the beginning of his speech, I shall refrain from doing so. I would describe it as a well- informed debate, and I shall endeavour to deal with as many of the points as I possibly can. If I do not answer every question--probably well over 100--I promise to write to the hon. Members concerned.

It is important not to forget that the CAP is being radically refashioned. The House may argue about the nature of the reforms, but no one can seriously deny that the wheel of the supertanker has been put hard over and that a change of course is already taking place. Budgetary discipline is working. Stabilisers--though some are tougher than others--have triggered support cuts across the board. The mechanism is in place and will continue to operate automatically. We must all hope that the GATT meeting in April will also enable progress to be made outside the Community.

I join the hon. Member for South Shields (Dr. Clark) in applauding the assiduous efforts of the Spanish presidency to reach an early conclusion to this round of price fixing, and I thank the hon. Gentleman for his limited support of a few parts of the Government's general strategy. I concur strongly with my hon. Friend the Member for Wealden (Sir G. Johnson Smith) in stressing that it is incumbent on the Opposition to formulate firm proposals of their own. Alas, the hon. Member for South Shields told the House in great detail what he objected to, but for all his sincerity, he failed to outline his alternatives. Is this because he backs our general approach, or is it because the Labour party simply has not devised viable alternative policies? Last week we saw designed Socialism without a food label--today we saw designer Socialism without a farming label. The hon. Member for South Shields had the audacity--I commend his bravery--to draw attention to food prices, but this Government have always taken their responsibilities to consumers far more seriously than the Labour Government did. Since we took office 10 years ago, food prices have increased on average by 5.6 per cent. per annum, which is nearly 2 per cent. per annum below inflation. Prices are now 17 per cent. lower in real terms than they were in May 1979 when we took office.

When the hon. Member for South Shields referred to farm incomes, one of my hon. Friends murmured about the effect of the weather. The scale of the drop in farm incomes last year was due to problems in the cereal sector. If last year's yields had been at 1984 levels, for example, farm incomes would have shown an increase.

The hon. Gentleman alluded to the fact that the aggregate income from agriculture has declined by 25 per cent. in 1988 compared with 1987. That single figure, however, masks a complex position. Despite what the hon. Gentleman and the hon. Member for Brecon and Radnor (Mr. Livsey) have said, for all parts of the United Kingdom, incomes on hill, dairy, less-favoured area and upland livestock farms show marked increases.

The less-favoured areas, which account for half the United Kingdom's agricultural area, one third of United Kingdom farm holdings and 15 per cent. of farm production, received substantial assistance and have appreciably benefited from the sheepmeat regime. Incomes in the dairy sector--there are 50,000 holdings in all--have gone up every year in the past five years. Certainly, as I have already observed, arable sector incomes have been adversely affected by poor weather and low prices, and the intensive sector is still prone to production and price

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cycles, but it is not defensible to play up the areas where income is poor without noting the substantial areas where that income has improved.

The hon. Member for South Shields, the hon. Member for Workington (Mr. Campbell-Savours) and many others have mentioned fraud. From 1984 to 1988 inclusive, there were 41 cases of detected fraud under the market support section of the CAP. As the hon. Member for South Shields has already said, 22 were settled out of court and 19 were prosecuted, leading to nine prison sentences and fines up to £40,000. In 1986, the Commission made several anti-fraud proposals, including one at the suggestion of the European Parliament for direct investigations by Commission officials into Customs matters in member states. That proposal was withdrawn following unanimous opposition from member states. Since then, the Commission has made various proposals particularly for strengthening controls over export refunds, and has brought forward new suggestions in this year's price package.

The European Court of Auditors has pointed to serious weaknesses in the intervention and export refund systems and has recommended changes. The Government are urging the Council of Ministers to act on the proposals already before it and have urged the Commission to make further proposals where the need has now been demonstrated. My right hon. Friend the Minister stressed this point again at the last Council meeting a fortnight ago. I should like to quote briefly from a press release that he put out as a result of the intervention that he made at the Council meeting. On 13 February he said :

"I make no apology for returning to the subject of fraud which I have raised in the Council on several occasions before."

My right hon. Friend is constantly pressing the Council to reach conclusions on this matter. He went on to say :

"In the nature of fraud there are no firm figures. But it is clear that the problem is very large indeed--not as large perhaps as some recent reports have suggested, but large enough to be of the most serious concern to us all. It simply cannot be right in any way that large amounts of Community money are being wasted. It is for us--the Council and the Commission--to tackle the problem and to show that we are doing so."

After my right hon. Friend's intervention at the Council meeting a fortnight ago, the presidency emphasised the importance that it attaches to sorting out this problem as soon as possible. Contrary to the assertion by the hon. Member for South Shields, we take full account of consumer interests across the whole range of our activities. Ministers and officials have always been ready to meet representatives of consumer organisations. Ministers had seven major meetings with consumer organisations last year and I am not aware of Ministers refusing any requests for further meetings during that time. Last year, officials had 31 meetings with consumer organisations such as the National Consumer Council, with which I had a meeting on Friday, the Consumers Association and the Coronary Prevention Group. In 1988, we consulted 40 consumer organisations on no fewer than 225 occasions on 35 different issues. On the proposed new food Bill, we have consulted 28 consumer organisations and 14 health organisations.

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In response to my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman), I can tell the House that, as part of the recently agreed reform of the beef regime, the suckler cow premium paid from Community funds will increase to £28 per head. As my hon. Friend may know, there is also the possibility of a national top-up. The Government will take a decision on that in the normal way before the start of the next annual scheme on 15 June.

Hon. Members have said a great deal about sheepmeat. My right hon. Friend and I have noted those views and the importance that the House attaches to the subject. I can well understand the anxiety about this matter at a time when radical change is proposed and when the future shape of the regime is uncertain. The United Kingdom sheep sector has every reason to be confident. As all hon. Members would acknowledge, it is a success story. Since 1985 the United Kingdom breeding flock has increased by 15 per cent., production has gone up by 10 per cent., and exports have increased by 56 per cent. We intend to ensure that our producers can continue to build on their natural advantages. A genuinely free market in lamb must be good for British producers, who are efficient and competitive. We may face a time of change and uncertainty, but it is also a time of opportunity.

Hon. Members asked about the sheepmeat regime and about the future of the variable premium. We shall look for a solution that takes full account of the needs of our sheepmeat sector. This may involve continuation of the variable premium which is well suited to our stratified sheep sector. We continue vigorously to oppose headage limits, as we have done in previous negotiations about sheepmeat. They are not in the best interests of the British sheapmeat sector and they are particularly damaging in areas where there are few, if any, alternatives to sheep. Hill producers are the backbone of our sheepmeat industry and the future regime must enable them to remain so.

My hon. Friend the Member for Lancaster asked about the separate GB stabiliser. We had to accept a separate stabiliser because it is only in Great Britain that this applies to the variable premium. We must ensure that future stabiliser arrangements are equitable. With a strong pound, exporting is not so easy, and levels of clawback are high, but this is an inevitable result of applying the variable premium. The cost of the sheepmeat regime is rising quickly and is expected to double between 1987 and 1989. The stabiliser system is not sufficiently effective. I can assure my hon. Friend the Member for Basingstoke (Mr. Hunter) that the United Kingdom share of EEC expenditure is in line with our number of ewes.

The hon. Members for South Shields and for Gateshead, East (Ms. Quin) expressed misgivings about set-aside. My right hon. Friend the Minister has never claimed that set-aside is intended, in itself, to bring about a full reduction in surplus. It is complementary to a prices policy.

Several hon. Members were concerned about extensification. The Government have pressed for the provision of pilot schemes, particularly for beef, because of the major problems of effective enforcement of such a scheme in this sector. It makes sense to test out the problems on the ground on an experimental basis before applying the scheme nationwide. In view of the concern of the hon. Member for South Shields to prevent fraud, I should have expected him to support this approach wholeheartedly.

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The hon. Members for East Lothian, for Brecon and Radnor and for Workington suggested that we should consider introducing income aids for small farms. The House will know that an EC income aid scheme was agreed as part of a package at the January Council. It is optional for member states, and my right hon. Friend the Minister has always made it clear that we do not find it attractive. We do not think that it is helpful to the necessary process of the CAP reform to make expensive FEOGA payments to producers to shield them for a few more years from the need to come to terms with the market. In the United Kingdom we have a social security system designed to cater for the whole population. To have a preferential system for farmers alone is unnecessary and potentially divisive. Moreover, as I have already shown, the level of farm incomes varies markedly from sector to sector and from year to year. That means that any blanket income aid scheme is inappropriate.

The hon. Member for South Shields and my hon. Friend the Member for Norfolk, North (Mr. Howell), who is not in his place, queried our position on sugar. I can understand the concern that has been expressed about the Commission's proposal to reduce prices for sugar and sugar beet by 5 per cent., but the Commission's arguments for it merit respect. In world terms, the Community sugar price is extremely high--more than three times the price in the open world

market--although I recognise that the largely self-financing nature of the sugar regime distinguishes it from other CAP commodities, where cuts in support have been necessary for budgetary reasons. Cutting the Community price would also have implications for imports of preferential ACP sugar. The Commission has referred to the possibility of compensation, but it is not clear what form this might take. This is the important aspect which remained to be clarified. I assure hon. Members, and in particular my hon. Friend

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the Member for Norfolk, North, that the Government will bear the views expressed in this debate very much in mind during the forthcoming negotiations.

The hon. Member for Gateshead, East asked about the criteria for the selection of rural areas. The reform of the Community's structural funds includes the objective of developing selected rural areas. The arrangements are laid down in the Community regulations adopted at the end of 1988. The regulations contain a list of objective criteria--such as unemployment, level of incomes or remoteness--which have to be met. As the hon. Lady may know, discussions with the Commission about an initial selection of United Kingdom areas which appear to be eligible are in progress. Applications have been made on behalf of several other areas, and each of these is being carefully considered.

I have tried to answer as many of the points raised in the debate as I can. I have also committed myself to writing to those hon. Members whose points I have not yet answered. This has been a well-informed debate, during which it has become clear that the Opposition lack any policies for farming. Only the Conservative Government are standing up for Britain's agriculture at this time of change. I ask the House to support the measures.

Question put and agreed to.

Resolved,

That this House takes note of European Community Documents COM(89)40 on the 1989 Common Agricultural Policy price fixing proposals, Nos. 4536/89 on agricultural markets in 1988, 8960/88 on the sheepmeat regime, 10083/88 and COR 1 on imports of sheepmeat from New Zealand, and 9629/88 on cereals incorporation in animal feed and of the Government's intention to negotiate an outcome on all these measures which takes account of the interests of United Kingdom producers and consumers and of the need to keep Common Agricultural Policy expenditure for 1989 within the Budget figure and for future years within the budgetary guideline.

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Forestry

10 pm

The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton) : I beg to move

That this House takes note of European Community Document No. 8415/88 on forestry ; and supports the Government's intention to ensure that action in this field takes full account of United Kingdom interests.

This motion concerns proposals that have been made by the European Commission for a Community strategy and supporting measures for forestry. I should make it clear from the outset that the Community does not have a common forestry policy, nor is it the intention that there should be such a policy. We have been given this assurance and we shall be guarding against any move in that direction.

The proposed measures are not wholly new ones as such, but are largely extensions and enhancements of existing measures aimed at providing a more positive role for forestry within the context, in particular, of the reform of the common agricultural policy and moves to implement the rural economy. This Community initiative--commonly known as the forestry action programme- -follows swiftly on from recent negotiations on the reform of the structural funds, now increased, in which specific enabling provision was made for forestry measures to be supported under the guidance section of FEOGA.

As hon. Members will have noticed, the package is somewhat complex, consisting of a strategy paper and no fewer than six draft regulations and a draft decision. The aims of the programme, stated in the rather grandoise terms often used in Commission papers are set out in pages 7 and 8 of the document. Before the Government can endorse these proposals, however, we shall wish to have a clear understanding of how the forestry action programme will be implemented and controlled and to what extent the United Kingdom is likely to be affected.

Perhaps the most important draft proposal from the United Kingdom's standpoint is proposal A, which is designed to amend regulation 797/85. It is aimed at the afforestation of agricultural land as a means of reducing surpluses, which is in line with current United Kingdom policy and practice. The Commission now proposes that aid for afforestation, with reimbursement from the Community, should be given not just to full-time farmers as in the past, but to others who wish to afforest agricultural land. It would therefore apply equally to individual landowners, forestry associations, co-operatives, or indeed to anyone wishing to plant on agricultural land. It has been proposed by the Commission that this could apply to public authorities and even to afforestation of former agricultural land carried out by member states themselves. This is, however, an aspect which we will have to look at very carefully.

Mr. Ron Davies (Caerphilly) : The Minister has referred to proposal A, and before doing so he said that there will be no Community common forestry policy. Does he mean that there will be no programme for self- sufficiency in timber products if the forestry action project is accepted in full?

Lord James Douglas-Hamilton : We have a long way to go to self- sufficiency. Each member state faces different circumstances from the others. The member states in

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southern Europe are in a different position from member states in the north. I shall give the hon. Gentleman a picture of the line that will be taken by the negotiators--I speak of the line that will be taken on each document. We shall need to be satisfied that the legal basis of the regulations is correct and we are continuing to press for more financial information. We are seeking to satisfy ourselves that the proposals will be cost-effective. We do not accept that annual payments to farmers who undertake afforestation should be mandatory. We are a long way from achieving self-sufficiency.

Mr. Ron Davies : Is that the objective?

Lord James Douglas-Hamilton : Negotiations are still going on, but the objective of self-sufficiency as such has not been stated quite in those terms. The difference between what we are doing and the proposals in the documents and a common forestry policy is that such a policy would not completely be within the discretion of the country concerned. That is the best answer that I can give the hon. Gentleman.

The proposal would also require member states to provide for the payments of annual premiums to farmers who plant trees on agricultural land. In United Kingdom terms, we already have in place the woodland grant scheme and the farm woodland scheme, so the main effect would be that our schemes would become eligible for FEOGA reimbursement. Since we are, in a sense, already ahead of other member states in this, there would be no other major implications. What has yet to be decided is whether there will be a limit in the scale of planting to qualify for Community reimbursement--expressed at present as an investment ceiling.

Mr. Dafydd Wigley (Caernarfon) : The Minister referred to the payments that are already being made under existing schemes. Is the implication that there will be no additional money for farmers?

Lord James Douglas-Hamilton : That question was raised during the previous debate and was fully answered by my hon. Friend the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food. I have nothing to add to his reply.

Mr. Geraint Howells (Ceredigion and Pembroke, North) : Will the Minister give way?

Lord James Douglas-Hamilton : I want to develop my point and I am sure that the hon. Gentleman is welcome to speak later.

Proposal B certainly involves the most money. It is designed to support integrated forestry programmes contributing to the development of rural areas. It is envisaged that such programmes would cover a wide range of forestry and associated activities, including the development and exploitation of existing woodland, and new planting. Unlike proposal A-- which would apply throughout the Community--this measure is tied in with the reform of the structural funds and targeted on those disadvantaged areas of the Community comprising objective 1 regions as defined in Council regulation 2052/88 adopted last December, and objective 5(b) areas yet to be defined according to the criteria laid down in the regulation. It is important to recognise, therefore, that the term "rural areas" does not refer to the countryside in general.

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The areas which are likely to benefit under that proposal will be defined according to the criteria and agreed between member states and the Commission. The possible rural areas in the United Kingdom have not yet been settled, but are not expected to be extensive, although Northern Ireland is an objective 1 region. The main beneficiaries will be the less developed regions of the Community, such as those covered by the existing integrated mediterranean programmes.

Proposal C is intended to amend regulation 355/77 concerned with the marketing and processing of agricultural products. Basically, the scope of the existing regulation would be widened to include cork and timber products. The timing of this proposal is rather odd, in that regulation 355/77 is currently under review and the intention is to replace it. None the less, we have to consider the proposal as it has been presented, and we are considering carefully the extension of this regulation to cover the marketing and processing of forestry products--we certainly do not want any measure that would distort timber markets, nor would we necessarily want to see the extension of coverage beyond the marketing of agricultural products to non-annex II products such as timber.

Proposal D is about the setting up of a Standing Foresty Committee which is intended to replace both the present heads of forest services group and the Forest Protection Committee. This would be an advisory committee made up of forestry experts from member states who would be able to consider and advise on any actions taken pursuant to these proposals.

Mr. Elliot Morley (Glanford and Scunthorpe) : Proposal D in relation to the forestry action programme, seems light in terms of conservation aspects for forests not only in this country but in terms of rare and endangered European forest types. Will the British Government be pressing for the conservation element in that review to be given the emphasis that it requires?

Lord James Douglas-Hamilton : Note will be taken of the hon. Gentleman's comments. Negotiations will take place tomorrow and I will discuss his point with the negotiators then.

Proposals E and F are concerned with forestry protection. The former deals with improving understanding of the effects of atmospheric pollution on forests, while the latter is aimed at improved methods of protecting forests against fire. Again, these measures build on existing regulations. As far as atmospheric pollution is concerned, we accept that more research is needed into the nature of the relationship between atmospheric pollution and health of forests in the United Kingdom and elsewhere in the Community. Therefore, we consider the existing programme to be a sensible one and the extension that is proposed is modest. On fire, the present regulation and its proposed extension will principally benefit the southern member states which suffer greatly from devastating forest fires each year. The amendment would widen the present regulation to provide support for measures to encourage projects aimed at forest protection, taking account of new methods and technologies. It would not extend to support for actual fire- fighting. The protection of European forests

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is obviously important and we certainly do not oppose those measures in principle, although we are still looking at the details. Finally, proposal G is intended to help decision-making in the forestry sector by setting up a database on forestry in the Community. Much of that information is already held by the United Nations Food and Agriculture Organisation, and it would be important to ensure that no unnecessary duplication takes place.

The European Commission proposed basing all the proposals solely on article 43 of the treaty of Rome, which is the one concerned with the CAP. That has been questioned by legal experts, including our own lawyers, and we have just received a written legal opinion from the EC Council legal services broadly supporting our view that, in most cases, the legal basis will have to be amended or extended. This is something for the legal experts to sort out.

We have called for a report from the Commission on the effectiveness of some of the previous Community forestry measures, such as those under the integrated Mediterranean programmes. That would help us to judge whether the present proposals, and particularly regulation B, are likely to work as intended. The report has just been received and will be carefully studied to see whether any lessons should be learnt.

The Commission has agreed that the estimated financial effects of the proposals, which are not inconsiderable, should be examined by the financial questions working group to see how the likely costs would fit in to the overall structural funds budget. This, as right hon. and hon. Members may know, was increased substantially following last year's summit agreement. All the proposals would be funded from the FEOGA guidance section and we wish to clarify whether there would be any implications for other expenditure under that heading.

Mr. Geraint Howells : Will the Minister clarify what he means by the planting of agricultural land? Does he mean that the Government will try to persuade British farmers to plant trees on the best productive land?

Lord James Douglas-Hamilton : The hon. Gentleman knows very well what is meant by extensification and by set-aside, and the scheme will be along those lines. The important point is that proposal B is within the discretion of the countries concerned, so the hon. Gentleman's remarks should be addressed to them.

The package of measures is complex, and the Government welcome the opportunity provided by the debate to seek the views of the House. We have a vigorous and successful forestry policy, which has seen a substantial increase in forest and woodland area in recent years together with the establishment of major timber-using industries that are at the forefront of technology and fully competitive in world terms.

The United Kingdom is in the lead in many ways, including our provisions for protecting the environment, and that claim is borne out by the steady stream of forestry experts coming to this country to find out how we do things. However, we should now consider the role of forestry in the European context, while ensuring that national forestry policies continue to recognise the widely varying conditions under which forestry is practised as between member states. As my right hon. and learned

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Friend the Secretary of State for Scotland indicated in his statement to the House on 16 March last year, the Government recognise that

"Forestry has an important role to play in the well being of this country." --[ Official Report, 16 March 1988 ; Vol. 129, c. 587. ] That is true of the European Community as a whole. I commend the motion to the House.

10.14 pm

Mr. Brian Wilson (Cunninghame, North) : The Parliamentary Under- Secretary of State was right in at least one respect. A stream of people do indeed arrive from all over the world to study the expertise and learn at the feet of those in Britain who have built up a tremendous knowledge of forestry. The tragedy is that, as in every other aspect of rural affairs and agriculture, that pool of knowledge is being dissipated, wasted and thrown away through the doctrinaire measures of Government.

Rural Britain is crying out for a coherent forestry policy, which would in turn have a beneficial effect on our economic performance and our balance of payments. Instead, under the present Government, forestry policy has become confused, directionless and subordinate to get- rich-quick interests. Evidence of environmental recklessness in pursuit of profit can be seen in many parts of rural Britain. In too many places, the wrong trees were planted by the wrong people for the wrong reasons. Future generations will have to live with a legacy of beautiful glens and valleys despoiled by ill-conceived private forestry developments. In some areas, notably the flow country, there will be precious little timber to show for the environmental damage done and the public money spent.

Within the European Community there is at least intelligent debate about forestry policy and its environmental impact. In the United Kingdom we have a stultifying pattern of lethargy with ideological meddling around the edges. Whether the forestry action programme becomes a reality remains to be seen. We can see both good and bad in the documents. The emphasis must be on maximising the national interest in a policy which evolves particularly in terms of environment and conservation. We support extensive forestry development to improve the remarkable trade imbalance in wood and wood products, but we insist that any policy must avoid the trend towards intensively managed forests of a single species where short-term exploitation produces long-term environmental damage. In the vast acreages potentially available to forestry in the United Kingdom, it need not be like that.

The European Commission has produced an admirable eight-point code of objectives for forestry policy. References to land use planning, development of rural life, supply of renewable raw materials, environmental improvement, natural setting for relaxation, recreation and culture and other such phrases occur in the document. Nothing could be further from the reality of forestry policy and practice in the United Kingdom under the present Government.

Doubtless because of the closeness of landed interests to the Government, forestry has been the vehicle for a mixed bag of damaging and exploitive policies which have left the British forestry industry in its current state of uncertainty and disarray. The Forestry Commission, which has lived under an ideological cloud virtually since

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