House of Commons Hansard Debates for 6 Feb 1990

Mr. Martyn Jones (Clwyd, South-West) : I have been told by the Minister in the past that the devaluation of the green pound that has already been obtained represents a substantial step towards the elimination of monetary compensatory amounts by 1992. But the farm business survey shows that the underlying economic condition has been declining steadily for all farming sectors, although, in the case of milk, there has only recently been a modest increase. For the last 10 years, the trend has been inexorably downward, while outstanding debt has been

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going up. It ought to be of concern to the Government that, as other Members have pointed out, investment in United Kingdom agriculture has fallen by 40 per cent. in the last five years. But it does not seem to bother them in the case of other sectors, so I do not suppose that it will bother them in the case of farming. The number of people in full-time employment has also fallen, with the loss of 60,000 jobs in the same five years. In a constituency such as mine, the great majority of jobs in rural parts are connected, directly or indirectly, with farming. Unless the trend is reversed, the fabric of the countryside will be in real danger. The complete and immediate elimination of the monetary compensatory amounts would be a real help to the farmers who come to my surgeries weekly, many of whom are struggling with all the other ills that, lately, have been inflicted on small businesses as a result of this Government's policies.

High interest rates, VAT on electricity, the poll tax and the uniform business rate, and price increases well above the rate of inflation on a whole string of farming supplies--all these take their toll. Add to these ills the problems of the exporting of beef cattle--or, rather, the ban on the exporting of beef cattle--to western Europe, thanks to BSE and to the unwillingness of the Government to recognise the extent of the problem by paying full-price compensation for infected cattle, and we have a recipe for disaster.

Incidentally, I have great respect for the farming knowledge of the hon. Member for Ceredigion and Pembroke, North (Mr.

Howells)--unfortunately, he is not in his place at the moment--but if he knew of the existence of BSE in cattle over 60 years ago, I wish he had told previous Governments. If he had, we might not have the present BSE problems. It is likely that BSE is really caused by the Government's policy of putting profit before safety in the rendering industry. I rather suspect that that is the real reason for the massive increase in BSE.

We in north Wales have further difficulties--this time, imposed directly by the Government. The Minister's right hon. Friend the Secretary of State for Wales is apparently considering closure of at least one veterinary investigation centre--Bryn Adda in Bangor. That would leave north Wales covered--if "covered" is the word--by Aberystwyth, Shrewsbury and Preston. This would be totally impractical for most farmers who have to take their animals to these centres.

Just recently, the Secretary of State announced plans to close the Welsh Office agriculture office in Ruthin--or rather, downgrade the office by reducing the number of staff from 55 to 18. Effectively, that would amount to closure in at least one area of service. I might add that that decision was taken without consultation, and in such haste that staff at the office were asked to decide between moving to Caernarvon and taking a redundancy payment--a payment not yet agreed by the Treasury--within a matter of weeks. At least one 25-year-old was offered early retirement.

Effectively, this change will mean the grants and subsidies on which many of the marginal hill farmers in my constituency depend to eke out a living being dealt with by Caernarvon. The farmers of Clwyd will no longer be able to resolve their problems face to face without a long and expensive journey to Caernarvon or long and expensive phone calls. In short, it may well be the last straw for some farmers who are working long hours for little reward, on very marginal but scenic land. It will certainly be the last

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straw for the employees of the office, who have provided an excellent service for agriculture in very sub-standard conditions. Will the Minister ask his right hon. Friend to reconsider this closure decision, and will he himself make a commitment to immediate and complete devaluation of the green pound?

7.36 pm

Sir Hector Monro (Dumfries) : I begin by thanking all the Agriculture Ministers in this Government for the exceptional work that they have been doing over the past few years, especially the past 12 months, for the farming industry. Much of the Minister's speech was encouraging, especially what he said about the future and about the strength of the argument that he is going to take to Europe. I hope that no Minister will overreact to the scares that arise almost weekly concerning food. Often, the problems have been resolved without too much difficulty.

I want to say three things with which I think all hon. Members will agree. First, I say, "Well done," to Ian Grant, who, during the last month of his presidency of the Scottish National Farmers Union, made an outstanding contribution to farming. Secondly, like the right hon. Member for Strangford (Mr. Taylor), I believe most strongly that we must not tinker with summertime and go on to continental time. We must make as strongly as possible the case for farming, for which a change would cause enormous damage. Thirdly, I hope that we will do all that we can to retain the marketing boards. The milk marketing boards have done exceptionally good work. I hope that it will be possible to find a little more quota to help the manufacturing industry in the not too distant future. We must give credit also to the Wool Marketing Board and the Potato Marketing Board for all that they have achieved over many years.

I shall refer to two main issues : first, the current economic problems and the loss of confidence in agriculture ; secondly, the future and environmentally friendly farming. As the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) said, the value of this debate is to show the Minister what farmers in our constituencies are feeling and enable him to use the evidence in his argument when he goes to Europe.

The economic facts are irrefutable. The industry has suffered a major loss of income over recent years. Let us look at the Scottish figures. If the figure was 100 in 1978, it went down to 59 in 1979 because of bad weather. In 1982, it was 74, in 1984, it was 90--that was a better year--in 1985, it went down to 15 because the weather was dreadful, and in 1988 it was 65. The graph trend is steadily downward, and we must try to change that. Whatever the statistics say, the situation is very serious.

We must highlight how employment in Scotland over the last five years dropped by no less than 23 per cent.--from 19,000 to 14,000. That represents a big loss to rural areas. The resources are no longer available to re-equip with new machinery, to invest in livestock or to think, as many people believe we should, in terms of alternative land use. Almost every alternative land use costs a great deal of capital if it is to be successful. As we all know, the high interest rates that are necessary to contain inflation have a serious impact on farming.

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The fall in farm incomes makes it much harder for farmers to pay the wages which farm workers undoubtedly deserve. I believe that many farmers pay considerably more than the minimum wage set by the wages board, but it would be easier for them to be generous to the workers if their incomes were higher.

Farmers are entitled to a fair return on their capital in exchange for providing high quality food. At the centre is the common agricultural policy. The price proposals will be before us shortly. I welcome what the Government have done on the hill livestock compensatory allowance. I welcome particularly what my right hon. Friend said today about fighting very hard to retain the HLCA in 1991, I hope at a rate at least as high as this year. If there is any difficulty with Europe, I hope that the Treasury will make up the difference.

The Minister should consider again the headage payment on finished cattle. The premium is payable on 90 cattle. The Minister should consider whether it could be paid on farm to the producer, particularly for calves. There are technical difficulties, but the Minister should make a real effort to overcome the problem. My right hon. Friend accepted the need to deal with the green pound. I support the 1990 campaign of the National Farmers Union of Scotland to devalue the green pound, certainly well before the end of the three-year period which is to be used as a sliding scale. If it could be devalued this year, it would be of enormous benefit to agriculture. Other hon. Members have given the devaluation percentages--arable at 17 per cent., dairy at 17 per cent., beef at 13 per cent. and so on. There is a big difference. The Minister said that he would do what he could to help. He was backed up this afternoon by my right hon. Friend the Prime Minister, who understands the position on the green pound. I do not think that phasing it out over three years is acceptable.

Much of the common agricultural policy is not sensitive to the environment or to the rural economy. The HLCA, the suckler cow subsidy and the beef premium are important if farming is to be profitable and if people are to remain in the countryside, particularly in hill areas. We must consider how to bring more jobs into the villagesand small towns that we all represent. If we do not have people there, everything begins to disintegrate--schools, churches, halls and the community spirit. All in all, keeping up profitability in the less-favoured areas is very important. As a Government we began, through the Wildlife and Countryside Act 1981, to find ways to help using management agreements. The Government have helped by promoting environmentally sensitive areas. We must keep income in the hills without increasing grazing pressure by adding to the stock of hill cows and sheep.

Set-aside schemes almost invariably cost jobs. If a farmer sets aside part of his farm by letting it lie fallow, or worse, he will shed labour-- something that we do not want to see in rural areas. I have been watching closely what has been happening to woodlands and forestry. We must reconsider the fiscal decisions made two years ago, because maintenance is important in woodlands. If we take away the tax incentive on maintenance that we have had for many years, the forestry ecology will not remain as it is.

On alternative land use, there must be a more realistic approach to planning by local authorities which turn down many good ideas for no good reason. Much more could be said about the environment. I have a vision of a

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well-farmed countryside, with greater diversity of wildlife and habitat. I believe that many of the Government's policies show clearly that that is the road down which they are going.

7.45 pm

Mr. Eric Martlew (Carlisle) : I was concerned about being attacked by the Minister as a food fascist. I am sorry that he is not in his place ; he must have gone off to savage one or two diplomats. Fascism is much more the creed of the Minister than of myself. When he made his famous speech on food fascism, I wonder if he was referring to the hon. Member for Derbyshire, South (Mrs. Currie), who exterminated 10 per cent. of the laying flock and created the largest food scare that we have ever known.

I might well be accused of being a food fascist, because I am concerned about Government policy on the EEC and on food poisoning. Over the last decade, food poisoning cases have increased from 10,000 to 30,000. It seems that 1990 may be a record year for food poisoning. That is the background to my speech.

There is still a problem with eggs and salmonella. There is much confusion in the industry. People do not believe that the slaughter policy is working. I am not convinced that it is working, and I have been a member of the Select Committee. However, the slaughter policy underpins confidence in British eggs. Hon. Members can say that British eggs are better than Dutch eggs : there is no doubt about that. Already, concern has been expressed about the Government's reluctance to ban the importation of eggs from parts of Europe which are contaminated by salmonella. I am thinking especially about the Dutch. There is a belief that the Government would not ban the importation of rats from Holland even if they had bubonic plague, on the grounds that everything that comes from Holland is irradiated anyway.

The German Government do not take the same attitude. The Germans are saying to us, "We understand that we cannot prove that there is a problem with bovine spongiform encephalopathy but we're not having your beef, and that's the end of it." Our Government cannot do anything about it. The Germans are probably right to take that line. They are losing nothing, but they are protecting their

population--something that the British Government fail to do time after time.

It is said that BSE originated from feeding cattle with sheep offal which was contaminated with scrapie, yet we appear to be doing nothing about scrapie. That worries me. The argument is that scrapie has been known about for 200 years and that there is no link between scrapie and humans. I do not accept that. I think that some of the cases of Creutzfeld-Jakob disease could have been caused by scrapie. If BSE is transmitted to man, I think that it will only be in small numbers.

It is said that there are only 50 victims a year of the human form of BSE. That is probably an under-estimate. Some cases may not be diagnosed, but I do not think that BSE or scrapie will create a major epidemic. We should not frighten the public, but we should protect them. I asked the Minister if he would stop contaminated sheep going into the food chain. The written reply that I got today was no. If a sheep came to the slaughterhouse suspected of having scrapie, the animal would be slaughtered and dressed in the usual way, but it would be processed apart

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from other animals. If inspection of the offal revealed that there was no other sign of the disease, the head would be removed and condemned but the carcase would be passed fit for human consumption. In other words, where a sheep is known to have scrapie, we cut the head off, stain it and throw it into the bin, and send the other part to the butcher.

I asked the Minister today if he would stop that exercise, and the answer was no. I ask him again to come to the Dispatch Box tonight and change his mind, because it is important that we protect our consumers, even if there is only a very slight risk, and I accept that it is only a very sight risk.

On another point--the Minister should listen to this, because his whole political career may depend upon it--if that sheep I was talking about was made into hotpot and was to be served to the Prime Minister, would the Minister allow her to eat it? I know that I would, but I am not sympathetic to the Prime Minister. I think he had better be careful what he replies.

Coming to BSE, I am glad to see that the hon. Member for Penrith and The Border (Mr. Maclean) is in his place, because at the Dispatch Box recently he told the House that there was no chance of BSE-contaminated beef getting into the food chain. He said that he had belt and braces, but if my investigation of what goes on with his belt and braces is correct, the Minister's trousers will be round his ankles before much longer.

I went to a local auction mart--the Bordway at Carlisle, which is an excellent one and the largest in the country. Inspection there was carried out by the trading standards officer. It was voluntary ; there was no legislation that said it had to be carried out. The county council will soon be in great difficulty because of cuts imposed by the Government, and it may not be able to continue to carry out inspection of that sort.

I looked around the largest auction mart in Britain to see if there were any notices from MAFF saying "Beware of BSE" and telling people about the problems and the penalties, because it is illegal knowingly to send BSE- contaminated cattle to market. There was not one notice in that auction mart. The managing director of the mart had rung MAFF and had been told that there were no notices to be put up in the auction mart. I therefore do not believe the Government are doing the job very well. Furthermore, the instructions that have been given to the environmental health inspectors at the abattoir contradict what is laid down by the Government as to how animals of this sort should be treated.

The thing that I find really strange is that all sorts of people say that only 50 per cent. compensation is being paid. That is not strictly true. If a farmer notifies MAFF that the beef on the farm has BSE, he will get 50 per cent. ; and if BSE is found at the auction mart, he will get 50 per cent. But if an animal gets right through the system and is killed at the abattoir, 100 per cent. compensation is paid. In most cases, that 100 per cent. compensation does not go to the farmers--we have had many complaints on their behalf today--but goes to the butchers.

From the puzzled look on the Minister's face, I suspect that he is not aware of this, but it is in MAFF instructions. There is no doubt about that.

In order to protect the industry, we should give 100 per cent. compensation to everybody. We should have a policy of trying to eradicate this generation of cattle from our fields as soon as possible. The sooner we can get rid of

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cattle that have eaten that contaminated feed, the better. I would go so far as to say that we should have a voluntary slaughter policy. Anybody who wants to get rid of beef of that age should be allowed to do so, and should get 100 per cent. compensation. The sooner we are again able to tell Europe that we have the cleanest herd in the world the better.

There is a certain irony in our dealings with the European Community. Is it not sad that we are today debating a situation in which other countries of Europe are refusing to take our cattle, alive or dead, although it appears from EC regulations that we are to start re-exporting live horses to Europe? That is the anomaly of the EC at the present time.

I hope that Ministers will take the warning from the House tonight and get together with those concerned--farmers, MAFF and the veterinarians--and make sure that our flocks, herds, pigs and poultry are pure and clean and ready to put on the table. That is the problem at the moment : people in Europe do not trust the food produced in this country.

7.55 pm

Mrs. Ann Winterton (Congleton) : I am pleased to be able to contribute briefly to this wide-ranging debate as the representative of a rural constituency with a very important milk sector. Naturally, I reflect the fact that that part of the industry, which has now settled down to quotas, is probably more profitable and settled than other parts.

I very much welcome the fact that the Minister may be looking at the prospect of loaning some percentage quota to young entrants to the agricultural industry. The great problem, however, is in defining a new entrant. No farmer or producer in my constituency would want to see an incentive given to some yuppie farmer or somebody who has sold a business and is investing as a new entrant to agriculture. All hon. Members present who represent rural constituencies will agree with me that the agriculture industry as a whole is the backbone of the rural economy and that farmers are the only true custodians of the countryside--a countryside which is admired, enjoyed and appreciated by vast numbers of British people and tourists and which has virtually been created by the farming community with its good husbandry over the years.

The industry has always responded to incentives provided by central Government and indeed, the EC. In these difficult days, when there is overproduction of food, it will respond with equal vigour to the emerging priority to get supply and demand into better balance and to focus on the marketplace in meeting change and the requirements of the consumer.

It should be said that there is no great divide between the farmer and the consumer. Farmers are consumers and so are their families ; they shop in the same supermarkets and corner shops as the rest of us.

There is today an excellent range of home-produced food--helping, incidentally, our balance of payments--at modest prices. Let us not forget that the return to the producer is a small part of the cost in the shops, most of which is made up by processing, packaging and transportation costs. But it is equally true that the industry

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faces a severe crisis of confidence in its future, with average farming incomes dropping by about 9 per cent. each year, extremely low profitability and, as a result, very low investment. These problems are further exacerbated by the high interest rates which are being used as the sole weapon in the fight against inflation. The theme that has run through the many and varied contributions to the debate is that the current green pound gap must be eliminated. It is a discriminatory currency mechanism and, in the best interests of Britain and its farming community, must be removed, and as a matter of urgency. Indeed, 1992 is so far ahead that some farming businesses will not last until then, and the Commission proposal of an initial reduction of one third is totally unacceptable. Of course we all realise that the Minister will be batting against 11 European Agriculture Ministers, who have a vested interest in retaining the green pound disadvantage to this country. I hope that the Minister will take away from the debate a message from both sides of the House, distilled into the simple call that this country demands fair play and action now--nothing less than the total removal of the green pound gap will do.

Agriculture needs to be profitable, to reinvest to face the challenges and opportunities of the 1990s and to be competitive. It has never turned its face away from a challenge but it cannot compete with one hand and one leg tied behind its back. The Minister should be in no doubt that the industry's future depends on the forthcoming negotiations ; much is at stake and everyone who is involved with or concerned for this country's rural environment will wish him well in those negotiations.

8 pm

Mr. Ieuan Wyn Jones (Ynys Mo n) : During this welcome debate, tremendous concern has been shown about the future of the rural economy, in which agriculture plays such a major part. I welcome many comments from both sides of the House about the importance of maintaining a good base for the economy in rural areas to sustain the rural way of life. The debate has to be seen in that context because in most rural constituencies, agriculture is the most important industry, not only because of the direct employment it

creates--self-employed farmers and those working on farms--but because of the ancillary industries which depend on it. Those who supply the feed to the farmers, distribute milk to our doorsteps, work in food processing plants and supply farmers with feedingstuffs are as dependent as the farmers on the maintenance of a viable agricultural industry.

I want to widen the debate and talk about the link between the economic future of rural areas, and social cohesion. The economy in our rural areas must be maintained and supported if we are to retain the social fabric of our rural districts. Every family that leaves the land leaves the rural community more exposed--as we have already heard--to rural depopulation and destruction. I hope that the Minister will listen to my remarks about this, because he has responsibility not only for the economic future of rural areas, but for their social, cultural and--in Wales--linguistic future.

Ministers have a great responsibility for the future of the Welsh language, because the future of the language in

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our rural areas depends on a viable agricultural base. Many of our farmers maintain the language through their cultural links. There is a tremendous lack of confidence in agriculture that manifests itself in a variety of ways. I am sure that all Members, particularly those in rural constituencies with agricultural interests, have been lobbied today by farmers from their constituencies about the problems bedevilling the industry. Is it not right, therefore, that we should place on record their views on issues such as high interest rates so that the Minister can take them to the deliberations with the European Commission? I am told that in the current year farmers will pay £1 billion in interest alone--that is not the total cost of borrowing, but the interest on the loan. Coupled with that is the rate of inflation, now at 7 per cent., and the lack of investment in agriculture, which is a particular problem.

During the past few weeks, I have been invited to visit a number of farms in my constituency. The point put to me time and again was that farmers are failing to invest in the industry's future because they lack confidence in how the Government are handling agriculture on a range of issues. I visited a farm where the farmer has put in the foundations of a new building to house his cattle and sheep, but was not prepared to complete that building because he was not sure that the Government would support agriculture in future. That is a mark of a lack of confidence shown by one farmer that is repeated time and again all over rural Wales and other parts of the United Kingdom. Investment in the industry has been 40 per cent. lower in the past years. That figure speaks for itself. Recently, I carried out a survey of the number of students now attending agricultural colleges. From a reply to a parliamentary question that I asked some weeks ago, it is clear that there are fewer students attending colleges of agriculture than there were a few years ago. That is because farming is a family concern and farmers are not sending their sons to agriculture colleges. They are advising them not to go into agriculture because they do not see a future in it. The reduction in the number of farming students is a good indicator of the current lack of confidence in the industry. My colleagues in the Scottish National party agree with my sentiments.

Farming is a family business and there are few entrants from outside the industry coming in. Therefore, we should look at the signals coming from the agriculture community. We must ask ourselves why there is such a lack of confidence in the industry. It is due to the underlying, long-term decline in the industry's profitability. Some of the figures were given to me by farmers in my constituency. Many people who have voted for this Government now tell me that they will not support them again if the long- term decline in the profitability of agriculture continues.

It is in this context, and having looked at all the problems, that the industry now demands the complete elimination of the green pound disparity. It was put to me that the elimination of that disparity would not substantially increase farmers' incomes overnight, but would be a benchmark against which to measure the Government's commitment to agriculture. If the Government committed themselves to the complete elimination of that disparity they would send an enormous signal to the industry that they were serious about restoring confidence in it.

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This debate is about sending signals to the European Commission, to tell our European counterparts that we are serious about ensuring a level playing field for farmers in the counties of Britain. It is also about sending a signal to agriculture at home. It is about the Government ensuring a restoration of the confidence which is sadly lacking to ensure that farmers invest in our future, and the social fabric of our rural communities is maintained.

8.8 pm

Mr. Teddy Taylor (Southend, East) : I beg to move, at the end of the Question, to add

but regrets the expenditure in 1990 of £9,000,000,000 on the disposal or destruction of surplus production despite the multitude of costly reform plans in recent years ; regrets the massive additional cost to the average household budget of the Common Agricultural policy ; regrets the damage to third world economies of the disruption of world food markets caused by European Economic Community food dumping ; and regrets in particular, the decision of Her Majesty's Government not to vote against the proposal to disregard for monetary compensatory amount purposes, cereal production above the stabiliser limit, despite previous pledges that the stabiliser mechanism would be automatic and legally binding.'. It is a great pleasure and privilege to move the amendment and, I hope, to persuade the Government to accept these very simple and basic changes.

We have heard a great deal of discussion of a happy nature today. It seems that we have general agreement that the green pound differential should be removed. We have not had much discussion on which way it should move-- whether European prices should come down to British ones, or British prices rise to the European level--but it seems to be agreed that we want a substantial increase in British prices, which will of course have a substantial effect on food prices at home.

There has been a demand from the Welsh National party, and from some Conservative Members, for level playing fields. Many other industries in Britain would welcome level playing fields. They ask why agriculture should be the only industry that does not pay rates on buildings, when every other industry in Britain is facing major problems with rating relief. Those other industries might say, "Why can't we have level playing fields?", and they might ask why they cannot have the same protection as agriculture. There are protection levels of 40 per cent., 50 per cent. and, in one case, 90 per cent. for agricultural products. What other industry in Britain has that? Very few businesses, even in Wales--if the Welsh nationalists have any consistency--have the right to access to vast sums of money to dump abroad at crazy prices surplus products which simply cannot be disposed of. To have a demand from the agricultural community for level playing fields is a distortion, and a pure hypocrisy, as every single person taking part in the debate must know.

I hope that the Government will accept that the common agricultural policy is a foul protectionist device which is totally opposed to everything that the Conservative party stands for, and totally opposed to all justice and reason, if we have any concern for the world as a whole.

If the Government accepted this amendment, they would at least be accepting that we should stop kidding ourselves with the almost annual hope that things are being resolved, that our problems are being sorted out, and that if we can only keep going on the present course, those problems will somehow fade away.

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If Ministers had the honesty and integrity to look at things as they are--as I am sure they have--they would see how time and time again in debates on this issue we have been presented with new hope that somehow things are going to change.

I remember that optimism was expressed when the Prime Minister came back to the House saying that we now had budgetary control and that the CAP was under control. We saw for ourselves how that pledge was kept--the Common Market simply had a metric year of 10 months, with 12 months' worth of money coming in, and 10 months' worth going out. That was the success in that year.

Then we had the quota scheme. Everyone said that that was a grand idea which would revolutionise agriculture and bring stability. We know what happened--we paid a vast sum of money to buy out farmers from producing milk, and they simply switched the land to produce other things that were already in chronic surplus. Sadly, despite all the massive pay-outs, we now have a substantial surplus of milk production.

Then there was the set-aside proposal. That seemed to be logical. Instead of paying farmers to produce stuff that we had to pay a fortune to dump, we paid them for basically doing nothing--although the Government have insisted that they are not doing nothing but are putting a green cover on their land. In a very short time, no less than 400,000 hectares of land in Europe were covered by those payments for doing nothing except putting a so -called green cover on the land. That hardly affected surplus production, because usually inadequate land was used for that purpose.

More recently, we had another hopeful sign--the hunt for fraud. It was suggested that fraud was costing too much money, and that sharp people were taking good people's money to waste it on agriculture. I think we all know exactly what has happened--we have set up a department for fraud in the EEC. Everyone must know, if they consider the issue honestly, that it is impossible to avoid fraud in the crazy situation where one pays vast sums of money for dumping food abroad. Another device to try to reduce the cost of the CAP--and a very effective one--was simply to transfer the spending costs from the EEC to member states. The Minister will be aware, from the previous point that he made, that that was declared unlawful by the Court of Auditors, but it was nevertheless done, and the Court of Auditors' report was never discussed.

Now, on the basis of the Government's motion, we have one of the most hopeful signs that we have had for a long time--the elimination of food mountains. The Government have said today, and on previous occasions, that this was the result of Conservative-initiated reforms. I appeal to the Government to consider what really happened. For example, there was a dramatic reduction in the butter mountain, from 1,007,620 tonnes to only 162,928 tonnes, and that was applauded by all the farming representatives as a triumph. The mountains were fading away, because of the Conservative- initiated reforms. However, we all know what happened, and I wish that people would admit it. We simply had a fire clearance sale, and sold 887,105 tonnes of butter at ludicrous prices--as

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low as 1.75p per pound. It was simply a device to sell things off, it was not a reform. If we think that it was a reform, we are kidding ourselves.

Now we have the latest proposal--stabilisers. We are told that stabilisers will work unlike all the previous reforms, which did not work. Despite all the horrible people in the Commission, it was automatic and legally binding. In this amendment we have expressed disappointment that when it came to the co-responsibility levy the Common Market decided to ignore the stabiliser level, which was the quite substantial sum of £40 million. That meant £40 million down the drain and the automatic, legally binding stabiliser simply disappeared.

In those circumstances, we would be kidding ourselves if we passed this motion and simply said that more should be done for the agricultural community. The Government must know that previous reforms have not achieved success and that the basic structural problems remain. If anyone doubts that, I ask him to look at the figures which have been published in Hansard recently. Now that the food mountains are almost gone, should we not have very little spending on food dumping and food destruction?

We all know what the figures are. This year, despite the elimination or near-elimination of all the mountains, the Community will spend £9,000 million simply on dumping and destroying food. That is £173 million every week. In 1980, the figure was £89 million a week, in 1985 it was £134 million a week, and now it is £173 million. The Government may try to say that that is an improvement, and it is down on last year. They know exactly why it is down on last year. It is because we had the fire clearance sale to eliminate the mountains.

I am sure that the Welsh Nationalists would like us to spend more money, probably on the Welsh language, using Common Market agricultural subsidies. But £173 million a week could do a lot to help the poor, to help those people who need help, to help people who need more housing, or to help the schools that we are always talking about. That is shameful misuse of money.

What is the impact of those measures on production? We all know that we have now become the highest exporters of sugar in the world--that is unforgiveable. We know that, according to the last fair estimate, the average family in Britain--including poor families--spend £13 a week extra on their food. Should we not give some thought to what we are doing to the world?

Madam Deputy Speaker (Miss Betty Boothroyd) : Order. The hon. Member will understand that I have to impose the Standing Order. 8.18 pm

Mr. Harry Barnes (Derbyshire, North-East) : Do not worry, Madam Deputy Speaker : what I have in my hands is not the speech that I am about to deliver but the documents with which the debate is expected, technically, to deal. I realise that we are not going to go through them individually, as we are engaged in a discussion of principle rather like a Second Reading debate.

Some 43 documents are involved, many containing multiple items. They deal with issues that we should be scrutinising so that we can advise the Minister before the Council of Ministers makes its decisions. The rather problematical position in which we find ourselves has often been mentioned before.

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The Minister has not only presented his case in the Chamber today, but has been questioned in the Select Committee on European Legislation. As a member of the Committee, I have had an opportunity to hear his arguments. The hon. Member for Congleton (Mrs. Winterton) talked about fair play, and the Minister has claimed on several occasions that he stands for "fair dos" for Britain and British agriculture. He has often resorted to tautology, especially when discussing the European monetary system ; he says that if we join at the right time and in the right conditions everything will be all right, whereas if we join at the wrong time and in the wrong conditions everything will be all wrong. He has also pointed out that he is outnumbered by 11 to one.

That is sometimes rather a luxury in negotiations, as it enables the outnumbered person to be high on principle and extremely low on achievement, and to go down in history as the victim of a revolutionary defeat. On the other hand, the Minister may view himself as a Henry Fonda on jury duty, trying to persuade fellow jury members through both the logic of his case and the art of persuasion. In that case, he should take on board some of what my hon. Friend the Member for South Shields (Dr. Clark) said earlier about the need to avoid alienating one's fellow debaters : the art of persuasion often involves taking account of their problems.

I fear that the Minister will turn out to be neither a defeated man of principle nor a Henry Fonda, pulling such policies as the abolition of the green pound out of the bag through a superior effort of will. He may prove to be more like a demoralised goalkeeper whose team has been trounced 11-1. We do not know yet what the final decision of the Council of Ministers will be, and, despite our expectations, a gradual third-by-third move away from the green pound may not emerge from the negotiations.

The problems that we face have arisen largely as a result of the vast and antisocial nature of the common agricultural policy. Stabilisers and the phasing out of the green pound cannot remove that reality. They can alter and adjust, as transitional payments can alter and adjust the poll tax, but our continuous budgetary problem, like the poll tax, will remain as long as the arrangement itself remains.

The Minister spoke of the problems of over-supply and lack of demand in the European Community, but there are still poorly fed people in the United Kingdom, as well as waves of starvation from other countries--from Ethiopia to Poland--which the agricultural policies under which we operate do little to assist. It is not lack of demand from which the country suffers, but lack of a demand backed by enough cash to enable people to look after themselves. The Government's economic and social policies are on the line this evening.

In tackling the injustices of the CAP, we must consider a number of interests. I do not under-estimate the needs of farmers, but they are not the only people affected by the green pound, the 1990-91 budget and Britain's high interest rates. Other producers are involved, but their interests are fairly well represented. The Dairy Trade Federation, the British Poultry Federation, the Food and Drink Federation, the Association of Meat Producers, the Milk Marketing Board and many others have made representations to the Government. We must also consider the wider consumer interests. The Minister prides himself on meeting bodies such as the National Consumer Council, which represents their

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interests, but ultimately they are not well organised. Members of Parliament therefore have a special responsibility to represent them. G. D. H. Cole, in his "guild Socialist" phase, wanted to change the House of Commons into a House of Consumers and the House of Lords into a House of Producers. That might have been quite interesting ; certainly the suggestion illustrates the fact that consumer interests were to the fore among our elected representatives.

We were right to consider the problems of BSE and salmonella in eggs, and the general price problems. Price problems involve not only what farmers receive, but what consumers pay. Although farmers are also consumers, not all consumers are farmers ; far from it. However, I want to highlight the problems of agricultural labourers, whom the Minister does not consult with any effectiveness. In his evidence to the Select Committee, he said that his personal preference was to try to talk to individual agricultural labourers as he went about the country, rather than consulting their representatives, who were only a small group. No group, however, is as small as the isolated individual who is not organised ; at least a number of agricultural labourers have joined forces.

Agricultural labourers face many massive problems. The National Farmers Union has suggested that those living in tied cottages should not receive amounts equivalent to the rates that have been paid in the past, and that individual workers should pick up the poll tax bill. Those workers are not consulted about the budget we are discussing, although there are 37,000 of them in the Transport and General Workers Union agricultural group and 5,000 in other unions such as the General, Municipal, Boilermakers and Allied Trades Union. Some 20 per cent. of agricultural workers are organised, but that is an under-estimate of the number who are represented, because up to 50 per cent. of farms are family holdings in which self- employment and contract work is extensive.

Agricultural workers need the kind of representation and consideration that operates in the National Farmers Union ; the Ministry recently regionalised its training boards on the basis of the structure in the NFU. They can, of course, draw on the general prosperity of farming, but a move towards that will, in the short run, involve the abolition of the green pound and the ending of the problem of high interest rates. In the long run, it will require a pan-European movement to democratic Socialism. There is the answer to the CAP question. With a set-up like that, we would no longer operate on the basis of such a stupid policy.

8.29 pm

Mr. Alan Amos (Hexham) : In the limited time available, I shall restrict my remarks to sheep and cattle farmers in the hill and upland areas which form the backbone of the agricultural community in my constituency and, I believe, the British farming community. In so doing, I shall concentrate on the agricultural structures policy. I intend to make three general points : first, the need to extend objective 5b to Northumberland and apply objective 5a more comprehensively ; secondly, the need to shift the emphasis of agricultural support away from intervention price support and towards direct payments to farmers on the headage of the animals ; and, thirdly, the need to ensure that the United Kingdom receives its fair and proper share of EEC resources and assistance.

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The section on rural development in the 1989 report states that the

"European Community approach to rural development entails adjusting all the existing policies in order to keep abreast of the needs and development priorities of the regions."

The FEOGA guidance section on reform focuses EEC action on, first, common horizontal measures--that is objective 5a--applicable throughout the Community designed to speed up the adjustment of agricultural structures within the context of CAP reform and, secondly, two regional objectives which are jointly agreed by the Commission and the national regional and local authorities. Objective 1 refers to promoting the development and structural adjustment of the regions whose development is lagging behind. More importantly, objective 5b refers to

"promoting development of rural areas in difficulty with a view to reform CAP."

The 1989 report states that the continuing aims of the CAP include a better balance between producers and the markets--that is supply and demand-- implementation of the reform of the structural funds and completion of the single agricultural market, but it reaffirms its principal objectives as budgetary discipline to give farmers effective support and, significantly, a greater effort to promote and develop activities in rural areas.

The European Community accepts the need to narrow the gap between the regions of the Community, and it also accepts that agriculture is undergoing fundamental changes. It is therefore incredible that, although structural measures eligible for EEC funding are targeted on agricultural and rural development, Northumberland gets no assistance under objective 5b although parts of western Scotland, Wales, Devon and Cornwall do. Only 2.6 per cent. of the United Kingdom population is covered by objective 5b compared with 7.4 per cent. in Germany and 10 per cent. in France.

The percentage of the United Kingdom population covered by objectives 1 and 5b still amounts to only one fifth of the EEC average. Even under objective 1, in rural regions, European regional development fund and European social fund moneys, plus FEOGA intervention funds, extend to all areas of activity and infrastructure development. Surely a more reasonable application of such criteria would include parts of Northumberland, some remote areas of which do not even have mains electricity.

I firmly believe that Northumberland's right to more targeted assistance under objective 5a deserves new and sympathetic consideration. The United Kingdom has already had an extension in its less-favoured areas so that 53 per cent. of usable agricultural land is now covered. I welcome the further application for an extension which was submitted on 21 June last year.

I am not suggesting blanket subsidies but rather the provision of an adequate income to maintain demographic, economic and ecological balance in vast areas of Northumberland. The balanced development and survival of entire communities depend on the viability of hill farmers. Objective 5a must provide for the encouragement of the existing competitive agriculture in the form of British sheep and cattle farmers, assistance for marginal

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