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The impact of the EC ban on imports is important, because once we have lost the business it will be virtually impossible to regain it. We believe that more action is likely to follow, as the Danes will want to ban all cattle imports, and Spain is reported to be considering banning all imports of British beef. The problem is going to get worse.

That brings me to the Government's handling of BSE--mad cow disease. If the green pound is the spoken agenda of British farmers, I think that if hon. Members on both sides of the House were honest, they would admit that when one talks to farmers, the matter that concerns them more than anything else --the hidden agenda of farming today--is BSE.

I fully realise the implications of what might be said in the Chamber, and I thought deep and hard before deciding to raise the matter. It seems to me to be important that the problem of BSE, which I believe is potentially the greatest single threat to British agriculture since the war, is debated in the House, and that hon. Members on both sides of the House impress on the Minister our desire for further action.

Let me remind the House of the crucial fact that the disease is unique to Britain : it exists nowhere else, except in a few cases in which cows have been exported from this country. Naturally, other countries do not want to take any risks, for--understandably--they do not want their herds to be infected.

In view of all the facts, it is not surprising that BSE has occurred in the United Kingdom. I charge the Government with direct responsibility, and I shall try to support that charge. The most probable cause of the disease in cattle is the scrapie-contaminated sheepmeat with which they are fed. As the practice is almost universal, why has BSE arisen only in the United Kingdom? The key must lie in the only element of difference--the rendering industries that process the cattle feed.

In its final years, 1978 and 1979, the last Labour Government realised that the rendering industry needed tightening up, and presented detailed proposals for consideration and comment. It is strange to think of a political philosophy relating to such a mundane process as the rendering of animal waste, but there is a relationship. One school of thought, favoured by Opposition Members and by most EC Governments, supports the production of detailed regulations on such matters as temperature control and the length of the rendering process. The approach favoured by the Conservative Government, however, has been to ensure that the final product is fit for its required purpose.

Small wonder that the rendering industry was not happy with the proposals of the Labour Government. The chairman of the United Kingdom renderers said :

"The original proposals were very expensive, but there was a distinct change of heart when the Conservatives came into office. They were happy to drop the idea of a code and settle for random testing."

The weakened regulations were accompanied, in the early 1980s, by a technological change from wet to dry steaming. Mr. Field, of the United Kingdom Renderers Association, has said :

"This was partly as a result of changes in animal feed techniques but the basic motive was profit."

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Luckily for the European Community, the changes in British practice were not adopted so widely by renderers in other EC countries. In my view, the Government's obsession with what might be called, in White Paper terms, "lifting the burdens" on industry has led to impure cattle feed emerging from the renderers. That is why Britain is the only country where BSE exists, and the Government have a direct responsibility. I believe that they knew that they had a responsibility, and that when the problem first appeared they did what they could to hide it.

In 1985--we have this on tape--a vet reported a scrapie-like illness in cattle ; the following year Francis Anthony, the eminent chairman of the farm animals committee of the British Veterinary Association, submitted a scientific paper on the matter, and the Ministry of Agriculture sought to suppress the information.

All along, the Government have been less than frank--or, to use the words of one of their senior officials, "economical with the truth"--and that obsession with secrecy continues to this day. They have consistently done too little, too late, It took them 18 months to make BSE a notifiable disease, 20 months to introduce compulsory slaughter and two and half years to announce a ban on cattle offal ; having announced the ban, they took five months to bring it into effect.

Mr. Lord : The hon. Gentleman clearly appreciates that this is a serious matter. If his thesis is to be proved, however, he must show that rendering in countries without BSE is carried out more carefully and hygienically than it is here ; otherwise the whole idea will fall flat. Is that the case, and can the hon. Gentleman prove it?

Dr. Clark : I take the hon. Gentleman's point : the sombre mood in which the House has heard what I have to say reflects the worry that we all feel. Work is in progress along the lines that he has suggested.

Mr. Lord rose--

Dr. Clark : May I develop the point?

In tentative studies--at this stage we can only study this country--we have found that when renderers have used the traditional wet-steaming technique there has been less incidence of BSE than when they have used dry-steaming. The researchers have managed roughly to marry the techniques and the incidence of the disease.

Mr. Gummer : I agree that we are dealing with a serious matter. I feel that the hon. Gentleman may be barking up the wrong tree--although, as he will appreciate, I am looking at all the possibilities.

The rules applied to rendering, requiring the end product to be fit for use, obtain in most European countries ; the other system, which he recommended, is rarely employed. Socialist France is one of the countries that takes our view, so I do not think that the hon. Gentleman can take a party-political line.

Has it occurred to the hon. Gentleman that it must be true that most other European countries have a much lower proportion of sheep offal than we do, simply because of the nature and number of the sheep involved? The work that we are doing in that direction may be more likely to find the answer that the hon. Gentleman seeks.

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Dr. Clark : I know that the Minister takes the point seriously, because I know that his officials are examining the thesis that I have advocated. I made that point to the hon. Member for Suffolk, Central (Mr. Lord).

As the Minister and others will know, the Germans, for example, have now adopted specific conditions to apply to any material exported from this country.

Mr. Ron Davies (Caerphilly) : The French and the Israelis have done that.

Dr. Clark : I thank my hon. Friend. The conditions relate to temperatures, and to the length for which they are maintained. May I be more positive, and make some suggestions to the Minister that I think will be supported by Conservative Members? Will he concede a point, and pay 100 per cent. compensation to farmers with suspect cows? I know that that would be making an exception, but I think that such an approach would meet with a consensus on both sides of the House. Given the current doubt, some farmers may well send cattle that they are not sure about into the auction or the slaughterhouse, and I should like the Minister to deal with that possible loophole. According to an NFU official,

"It is common knowledge in the industry that infected animals have gone into the food chain."

Mr. Spearing : My hon. Friend has revealed a sequence of events that may not have been so public before. As many of us are relatively ignorant about the subject, can he tell us whether the compensation paid for BSE-infected cows differs from that paid for foot-and-mouth infection? Would not everyone now support the payment of 100 per cent. compensation, and agree that logically it should have been paid from the beginning? Without it, there is a financial incentive to circumvent the regulations, leading to the spread of this and other diseases.

Dr. Clark : My hon. Friend makes a valid point. I understand that 100 per cent. compensation is paid for foot-and-mouth infection, and I cannot see why the same does not apply to BSE, which is a terrifying disease.

The Minister knows that animals are slipping through the net. Some are being caught at the slaughterhouses and livestock markets, but, with the best will in the world, trading standards officers, environmental health officers and vets see only a minority, and many animals with BSE enter the food chain. So can we have some action? As there is a possibility that BSE can be transmitted from mother to calf, will the Minister not order the culling of all calves of BSE-infected cattle? Let us give the consumer the benefit of the doubt. In the name of completeness, when the Minister bans the sale of designated cattle offal, will he include cattle under six months old? I know that the disease is not apparent at that age, but there are people who think otherwise. The eminent neuropathologist, Helen Grant, questions that point, so just for once why do not the Government take a cautionary approach and put a potential public health risk before money?

Mr. Gummer : One of the problems that arise on this issue is that we have taken a cautionary approach. We have gone further than the scientists have suggested. The difficulty is that we can become increasingly cautionary and do more than the scientists tell us is necessary. I wonder where the hon. Gentleman would suggest we

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should stop? If I can say absolutely surely that there is no danger to public health, we have taken the most cautionary approach possible.

Dr. Clark : Advisers advise, but Ministers take decisions. It is not purely a scientific decision ; it involves political and social judgments. The Minister and I know how much is at stake. There is a potential risk to our herds and there is a remote possibility of transmission to humans. It is so serious that we should be ultra-cautious.

The Minister rightly said that various bonemeal and meatmeal from offal cannot be fed to ruminants in Britain, but the export of those products is permitted. Therefore, we are exporting material that we consider dangerous to feed to our own cattle.

Yesterday, in answer to my hon. Friend the Member for Caerphilly (Mr. Davies), it was announced that, according to the latest figures available, we exported just over 13,000 tonnes in 1988. In a number of countries to which we export, such as France, Belgium and Germany, there are restrictions and conditions attached to those exports. I find it strange that when we export to Liberia, Nigeria, Kenya, Lebanon, Saudi Arabia, or other non-European countries, no conditions are attached.

I suggest to the Minister that we should ban the export of those materials or at least warn the receiving countries through a prior informed consent scheme that those products carry a potential risk, no matter how small. That suggestion would certainly receive support from all Opposition Members, and probably from many Conservative Members.

Why do not the Government seek to reassure public opinion and give us more information? Why do they not seek to gauge the extent of that terrible disease in our national herd by following the advice of the Tyrrell committee and introducing random sampling at slaughterhouses? Why does the Minister not have a certain percentage of cattle herds at slaughterhouses examined at random so that we can gain a clearer idea of the extent of the disease in our national herds?

Mr. Gill : Will the hon. Gentleman give way?

Dr. Clark : I have given way a great deal, and I wish to conclude as quickly as I can. I have given way to the hon. Gentleman once and I feel that I cannot do so again.

Before I leave the subject of public health, may I raise a further failure by the Ministry in the European context?

Mr. Gill : Will the hon. Gentleman give way?

Dr. Clark : I prefer not to. I have given way once to the hon. Gentleman. I have given way very generously and I am not prepared to do so again.

The Minister has taken steps against salmonella in British poultry flocks, yet he allows eggs from Holland, for example, some of which are contaminated with salmonella, to enter the country. The Ministry tests those imported eggs at ports and finds evidence of salmonella enteritidis and typhimurium. Yet by the time the tests of those eggs are available four days later, the remainder of the eggs have been released and are on sale to the British consumer.

That is bad enough, but last week a survey by the Dutch national health inspectorate showed that 90 per cent. of Dutch poultry farms had salmonella and thus pose a potential threat to British public health. Therefore, the

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Minister is allowing one rule for the British egg producer and much more lax regulations for foreign producers. That cannot be right.

Mr. Gill : Will the hon. Gentleman give way?

Dr. Clark : No.

The Minister says that he cannot do anything about that. Of course he can. Why does he refuse to invoke article 36 of the EC treaty which allows him in the name of public health to stop contaminated foodstuff entering the country? Why does not he invoke that and hold up the eggs until they are found to be clean? In doing that, he would have the support of the British people.

My final point was raised by my hon. Friend the Member for Wentworth (Mr. Hardy) and the Minister also touched on it. In the corresponding debate last year, I raised the issue of fraud which exists in the CAP at an alarming level. Estimates vary between 10 and 20 per cent. of the total EC budget being lost through fraud. I remind the House that the EC budget is roughly £20 billion. We are talking about a great deal of money.

In particular, I raised the statement by the head of the British Serious Fraud Office, who asserted that major fraud was being investigated in the United Kingdom, implying that prosecutions were imminent. After the debate, the then Parliamentary Secretary wrote to me informing me that I was correct and that action was likely to be taken soon. Can the Minister inform the House whether any action has been taken on the two serious cases that were raised in last year's debate? They are not just run-of-the-mill fraud. As the Minister knows, they involve large amounts of money.

I understand that the latest figures of fraud by member states reported to the EC had increased to 352 cases in the first nine months of 1989. How many of those cases were British? I noticed the glee of some Conservative Members when the Minister referred to the Greek situation. Speaking from memory, I think that Britain had the third worst record of EC countries last year.

Dame Elaine Kellett-Bowman : We have better records.

Dr. Clark : The hon. Lady says that we have better records. That is a perverse logic.

Dame Elaine Kellett-Bowman : We record these things much more consistently than other countries. The Greeks and the Italians scarcely record them at all.

Dr. Clark : The hon. Lady has a certain amount of perverse logic. She said that we have a better method of recording and reporting fraud. If that is the case, why do two other countries have worse records than we do? The House has a right to know. We often hear the Minister saying that he is campaigning against fraud. We should like to know what results he has obtained and how much fraud there is in the United Kingdom.

We welcome some of the points that the Minister made today. We hope that he will stand firm on the price freeze and we wish him success on the stabilisers. We freely concede that the Minister has difficulties in Europe because the system is not ideally suited to the structure of British agriculture or to the interests of the British consumer. Before the Minister makes jingoistic speeches in this country, he should ponder the fact that it is not wise

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to insult one's potential allies. By so doing, one loses the battle, which is one explanation why he has been so unsuccessful in Brussels in fighting for the British consumer and farmer.

6.9 pm

Mr. Paul Marland (Gloucestershire, West) : I appreciate being called early in the debate, because it gives me the opportunity to be the first to congratulate my right hon. Friend the Minister of Agriculture, Fisheries and Food on his excellent speech, in which he gave us a wide-ranging view of the position in Europe. Many Conservative Members agree with him about the appalling subsidies of the European tobacco growers and the tremendous cost of storing surplus wheat.

British farmers recognise that they now work in a changed and changing marketplace. The farmgate mentality has gone, which used to represent the fact that they had to grow produce and get it to the farm gate, after which it was someone else's responsibility. They recognise that they no longer have a divine right to produce food that cannot be eaten at home or sold abroad.

Farmers and their families have been turning their entrepreneurial skills to earning income on or off the farm. Some have gone into deer farming : many have found ways of exporting their produce ; and others now offer farm holidays. Most farmers have tried to add value to what they are producing. Those who visited the food and farming exhibition in Hyde park last summer saw fine examples of how farmers are trying to add value to their produce. Many farmers and their wives are beginning to take part-time work away from the farm. The menu of grants that are now available, and the general discussion with advisers on how to generate extra income on farms has helped farmers to firm up their ideas. That positive lead was given by the Ministry of Agriculture, Fisheries and Food.

Like other hon. Members, I was pleased to welcome the increases in hill livestock compensatory allowances that were announced last week. It is important that we protect our breed stock, from which the commercial flocks are bred. The commercial flocks stand us and our farmers in good stead.

It has always been this Government's policy to seek to help rural communities to earn their living in the countryside. Notwithstanding the current problems, the Government should be congratulated on the way in which they have sought to present the alternatives. There has been a substantial change of attitude among farmers since 1983. I remember as parliamentary private secretary to my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling), visiting the three counties show in Malvern. As we approached in the car, a light aircraft flew overhead trailing a banner saying "Jopling turns the milk sour."

It was alarming to have a police escort--I had always thought that farmers were friendly--but the fact that we had to have one to visit a show was quite a revelation.

We then went to Ross-on-Wye, where we were barricaded in the town hall by furious farmers. As if that were not enough, when we visited Dyfed, milk was poured in front of the Minister's car. We got the message--that farmers did not want milk quotas. God help the Minister who tried to remove a milk quota from a farmer today. Some farmers now say that the only profitable activities are those to which quotas apply. Many of them would like

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quotas to apply to all agricultural produce. We know that that is not possible, and unfortunately Ministers will not agree even to talk about it.

Farmers crave a level playing field and fair competition. The green pound differences are creating gigantic differences in producer returns. For example, the difference on cereals is 18.2 per cent., on sheep 19.4 per cent., on beef 13.6 per cent., on butter 17.3 per cent. and on pigs 10 per cent. Those gaps place United Kingdom farmers at a huge disadvantage and undermine their confidence. As other hon. Members have said, they put them at a competitive disadvantage within the EC.

Farmers must have the confidence to invest in the future if we are to take advantage of the opportunities that will be offered by 1992 for exports to the European Community. How can agriculture in this country compete fairly with one hand tied so securely behind its back, and without being able to invest in the future? All industries want a level playing field, and agriculture is no exception.

We must respond now to the challenges and opportunities of 1992, and a message needs to be sent from this debate that that is precisely what we shall do.

Sir Nicholas Fairbairn (Perth and Kinross) : Having been present today in Perth at the opening of the most advanced market in Britain, where I spoke to the European Commissioner for Agriculture, and as farm incomes are now about 60 per cent. lower than 10 years ago, would it not be a good idea if the Government proposed that agriculture, if nothing else, should creep towards the European monetary system and that the maximum band of the green pound should be only 6 per cent.?

Mr. Marland : My hon. and learned Friend makes his own point in a very fair way.

Before 1983, British farmers were urged to do what they could to reduce the serious balance of payments deficit left by the last Labour Government by producing more of the food that was consumed in this country.

Mr. Robin Maxwell-Hyslop (Tiverton) : Food from our own resources.

Mr. Marland : Exactly. Our farmers responded manfully to that, in a way that would shame most other industries. Today, although the game has changed, the principles remain the same--that imported food costs money and that we must all do what we can to keep it to a minimum. I accept that last year there was a small increase in agricultural incomes, but overall the trend is downwards. In 1992, the Government will be committed to the complete elimination of the green pound gaps. Today, the Commission proposes a one-third devaluation, but the Government propose a 50 per cent. devaluation. For the reasons that I have set out, I urge my right hon. Friend the Minister to consider without delay a 100 per cent. devaluation, to give us a level playing field and to offer British farmers an equal chance in Europe. I accept that this may lead to a fractional increase in the cost of shopping, but British housewives are turning increasingly to British produce because they know what they are getting--

Mr. Andy Stewart : Quality.

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Mr. Marland : Quality, and a renowned standard. Housewives may accept fractional increases without so much as a murmur.

My right hon. Friend the Minister may be interested to learn that, to substantiate that, some farmers from Gloucestershire and I will, with permission, carry out a little market research of our own. We shall visit the Asda supermarket just outside High Wycombe--which we thought a suitable place, because it is not a rural area and because many of the shoppers come from urban areas and have no connection with farming. We shall ask them whether they think that it is fair to ask them to pay a little more to ensure a continuing and steady supply of British foodstuffs. I shall take great delight in giving my right hon. Friend the Minister the results of our survey.

Mr. Teddy Taylor : Will my hon. Friend ask those people what they feel about our spending £173 a week per person on dumping and destroying food?

Mr. Marland : I am sure that they will not like that any more than my hon. Friend, but it is fair to say that surpluses have been reduced substantially, and my right hon. Friend the Minister deserves much of the credit for that.

As we are discussing EC matters, I want to turn, as the hon. Member for South Shields (Dr. Clark) did, to food safety and bovine spongiform encephalopathy, the scourge of British agriculture. The hon. Member for South Shields was right to mention that matter. It is important not to overreact. Overreaction is causing a great deal of soul-searching and heartache in agriculture. I am pleased that my right hon. Friend the Minister and the Government--for not only the Ministry of Agriculture, Fisheries and Food was involved--have allocated an extra £12 million to research on BSE to find out its cause. Although the hon. Member for South Shields may believe that he has outlined its cause, nobody knows for sure. However, I join him in saying that we should consider seriously increasing the compensation paid from 50 per cent. to 100 per cent. The lower rate of compensation puts beef producers and those who own dairy cows in a difficult position. They realise that they could sell a beast in the market for £400, whereas they will receive only £200 in compensation. I know of farmers who, with the very best intentions, have sent cows that look dodgy to the market. When the cows reach the market, the stress is too much for them and they are then discovered to have been infected with BSE.

Mr. Spearing : I agree that the matter should not be subject to great exaggeration. However, can the hon. Gentleman explain to his satisfaction why, until now the Government did not give 100 per cent. compensation for this virulent and conceivably dangerous disease? Surely all taxpayers, whatever their views on politics or taxation, would have been only too pleased for compensation to be 100 per cent. If the hon. Gentleman does not know the answer, does he agree that the Minister should tell us later?

Mr. Marland : That is precisely why I made that point. I hope that my hon. Friend will reflect on it when winding up the debate. I did not say that I was satisfied with 50 per cent. I was joining the hon. Member for South Shields on your Front Bench in suggesting--

Mr. Deputy Speaker (Mr. Harold Walker) : Order. It is not my Front Bench.

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Mr. Marland : I beg your pardon, Mr. Deputy Speaker. I hope that I have made the point.

How many hon. Members realise that BSE affects only old cows, in so far as current research has established? The youngest cow that has ever been diagnosed as infected with BSE was two years and nine months old--I checked that fact this morning. There is also no proven connection between BSE and human beings. The only part of the old cow that is susceptible to BSE is part of the offal, and my right hon. Friend has banned the sale of such offal. I commend him for that. Steaks and beef joints are taken from young cattle which have, so far, never been found to carry BSE.

To add insult to injury, the Germans have now banned all United Kingdom beef exports, which is not very communautaire, especially as those exports are worth £50 million to beef producers in this country. It is sad that we have to take the Germans to court for the matter to be sorted out.

I am sorry to shadow the hon. Member for South Shields to such an extent, but I want to turn to salmonella in eggs. The steps being taken to eradicate salmonella from laying flocks are all very laudable but, as my experience in my own constituency shows, the restrictions seem to be bearing down unfairly heavily on small producers. So far, more than 1 million chickens have been slaughtered. I cannot help but wonder whether the large producers are being quite as rigorous as they should be in the tests, for, despite the measures that are being taken by all egg producers, according to the latest issue of UKEPRA News, which is the journal of the egg producing industry, the number of salmonella-related food poisoning incidents is increasing rapidly. If there is a hint of salmonella in a small man's flock, the flock is wiped out. Are the small producers being made scapegoats?

As the hon. Member for South Sheilds reminded the House, 20 per cent. of eggs consumed in this country are now imported. Many are subsequently repacked and relabelled "packed in England" to try to reassure British housewives. I know that we carry out random tests, but as has already been said, the results take some time to come to fruition and by the time the test has been developed, the eggs have probably been relabelled and repackaged, and have found their way into somebody's refrigerator. We should not hold up imports, but in the name of fairness, we should try to hold up odd loads while the tests come to fruition.

Mrs. Ann Winterton (Congleton) : Is my hon. Friend aware that the European Community bans the marking of individual eggs, and that only certain containers of eggs can be marked as coming from this country? Does my hon. Friend favour, as I do, the return of the old lion mark on each egg to reassure the British housewife that, if she buys British eggs, she is buying the best product available and one that has been tested?

Mr. Marland : I am sure that such markings would reassure British housewives, whether we had the old lion or thought of a new symbol. My hon. Friend makes her point in her own way.

I have tried to make three points in my speech. First, we should have a meaningful devaluation of the green pound to keep British farming solvent and competitive. We should give British farming the fairness of a level playing

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field. Secondly, we should have 100 per cent. compensation for animals infected with BSE and that should be introduced without delay. Thirdly, we should ensure justice over salmonella. We should ensure that the same rules apply throughout the Community as to our egg producers. Agriculture asks for a level playing field and fair competition. I hope that my hon. Friend will reflect on that in his summing up.

Several Hon. Members rose--

Mr. Deputy Speaker : Order. Mr. Speaker has said that he intends to impose a 10-minute limit on speeches between 7 pm and 9 pm. It is an obligation on hon. Members who are fortunate enough to be called before 7 pm to try to make brief speeches.

6.26 pm

Mr. Geraint Howells (Ceredigion and Pembroke, North) : British agriculture is facing a major financial crisis, which is one of the worst since the war. As a part- time farmer, I am pleased that you have called me so early in this important debate, Mr. Deputy Speaker. The situation is so serious that we have gone beyond attempting to make a political point today ; instead, we are trying to persuade the Minister to do his utmost on our behalf. Many of the leaders of our great agricultural sector are keeping a watchful eye on us this afternoon and listening to our contributions. They have come here to urge Members to Parliament to bring pressure to bear on the Minister, so that he in turn can go to his counterparts in Europe and persuade them that they must listen to and heed what our Minister of Agriculture, Fisheries and Food is saying on behalf of British agriculture.

The Minister can be in no doubt today about the message that he must carry to Brussels on behalf of British farmers and of those hon. Members who believe that agriculture should be rescued from its present state of low morale. Real farm incomes have been falling steadily over the past few years. Farmers are suffering badly, as are many other business people, from the Government's policy of maintaining cripplingly high interest rates. It has been calculated that in 1989, the interest bill paid by farmers rose by about £250 million, a staggering rise of 37 per cent. Not surprisingly, investment in farming is falling. Over the five years to 1988, annual investment in fixed capital was down by 40 per cent. which shows clearly that resources are just not available.

I had the privilege this morning of having breakfast with one of Britain's major cereal growers. He said that he had not made a penny profit for the last two years and, worst of all, had not been able to invest in new machinery. He said that, unless something came his way within the next two years, he would have a major problem on his hands in regard to investing in machinery.

I know that the Minister is not in a position to bring down high interest rates at present, but I am sure that, on behalf of everyone in the industry, he will urge the Prime Minister, and bring pressure to bear on her, to think favourably about the agriculture in this country and the effect of high interest rates on those who farm. But what makes life even more difficult and heightens the sense of injustice in the industry is the spectre of the

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