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sale of food, so much so that they may shortly have food producers, in the form of the farming industry, by the very jugular. Their ability to use their suppliers to improve cash flow by taking extended credit is a dangerous development for agriculture. Is that fair trade, and do buyers need to operate in that way when, in the main, they make substantial profits?

America appears to be winning the argument that European farmers are unfairly subsidised. That argument should be exposed for the fallacy that it is. When I pressed that point on my right hon. Friend the Minister towards the end of the last Parliament, he stated that "United States and EC levels of support are not very different ; both are high and the need for reform on both sides of the Atlantic remains pressing."

I congratulate my right hon. Friend on that response. I only wish that that point had been more robustly made in the GATT talks. My theme, which I am sure will strike a chord with many right hon. and hon. Members, is that free trade in perishable food is a dangerous concept.

12.18 pm

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy) : I extend my warm congratulations to the hon. Member for Hexham (Mr. Atkinson) on his excellent maiden speech. I do not intend to become involved in a partisan squabble, but the Minsiter made a head count of those right hon. and hon. Members present for the debate. It is noteworthy that my hon. Friend the Member for Moray (Mrs. Ewing) is the only Scottish Member who has been present for the whole debate. Also, although I have heavy commitments in my constituency this afternoon, I shall remain for the wind-up speeches because I consider this debate to be of utmost importance.

I wish to add a guarded welcome to the long-awaited agreement on the reform of the CAP. The delay in achieving agreement has undoubtedly had an adverse effect on the morale of an industry already under siege. For a long time during the period leading up to the agreement, farmers were left in no man's land. They were hampered because they could not reasonably plan for the future and, in every industry, forward planning is the key to success. We must strive to give agriculture the stability that it requires to prosper and it is reasonable that farmers should expect to know what the next five or 10 years hold in store for them. Only then will we witness the increase in confidence that is so urgently and sorely needed. I welcome the fact that that protracted period of uncertainty has now ended.

In my constituency of Meirionnydd Nant Conwy, one in five families depends either directly or indirectly on agriculture and the CAP reforms were therefore of paramount importance. The very fabric of rural communities was threatened and diversification is not a word which has much meaning for farmers in less-favoured areas such as my constituency--and, indeed, 80 per cent. of the land mass of Wales. Climatic and geographical features make it impossible for upland farmers to diversify, but, curiously, it is the very factors that mitigate against diversification which ensure that Welsh lamb is undoubtedly the best in the world.

In February, I went with my hon. Friends the Members for Caernarfon (Mr. Wigley), for Ynys Mo n (Mr. Jones)

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and for Ceredigion and Pembroke, North (Mr. Dafis) to visit Mr. MacSharry in Brussels. We put the Welsh farmers' case to him, and I am pleased that many of the points argued for by Plaid Cymru were incorporated in the final agreement.

There is no doubt that the Commission's original proposals were discriminatory to upland producers. The adoption of the original draft proposals would have created a crisis of enormous proportions throughout Wales. Sheep producers would have been very hard hit. Plaid Cymru argued that upland producers should be more directly supported and that that principle was paramount. It appears that the Commission has recognised that, thus acknowledging the special difficulties of farmers in the less- favoured areas. For the reasons that I have given, I am thankful for that.

Plaid Cymru's delegation argued strongly that the sheep annual premium headages should be increased to 1,000 per partner in less-favoured areas and that there should be an increase elsewhere. We also argued that 50 per cent. premium should be paid on stock above the headage limits. It was acknowledged that, if our proposals were adopted, 98 per cent. of Welsh farmers in the less-favoured areas would be secure against financial ruin. I welcome that part of the agreement.

I welcome, too, the increase in the suckler cow premium, which is to be without headage limit, but let me pause on the phrase "optional national top-up". I urge the Government to take those words to heart and put their money where their mouth is. Paying lip service to the concept and offering no additional top-up simply will not do. I call on the Government to state their position clearly and urgently as failure to do so will inevitably lead to confusion and will again damage morale in a period of indecision or uncertainty.

We must strive to address the lack of confidence in the industry and this is an opportune time to do so. Market prices for lamb are disastrously low. In agriculture, as in every industry, marketing is a key to success. I welcome the initiation by the Secretary of State for Wales of Welsh Food Promotions Ltd. 18 months ago, but call on the Government to sink further funds into that aspect of marketing--to put their money where their mouth is. That rather crude phrase best expresses the feelings of those in the industry who see Wales lagging miles behind our European competitors in marketing. Almost every other European country can show us the way. As with everything nowadays, it boils down to expertise and specialist knowledge, which in turn boil down to finance.

A product cannot be properly marketed without advertisement and initiative and I call on the Government urgently to allocate extra funding to Welsh Food Promotions Ltd. so that it can extend and promote the marketing of Welsh lamb the world over. I have contacted the chairman of the Welsh tourist board, Mr. Prys Edwards, to enlist his help in marketing. All our European partners have a place in their advertising material for regional foods and I consider that Welsh lamb--the world beater--would be a great attraction in the advertisement of Welsh holidays. I am pleased that the board has accepted that in principle and will provide for it.

It is incredible that we are not marketing what is the best sheepmeat in the world. The wine growers of France market their product properly and worldwide. It is high time that the Government adopted a market-led recovery ideal in the sheep and beef sector, and there is no excuse for

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the inadequate funding of marketing. After all, in every other industry as much importance is attached to marketing as to manufacturing, and rightly so.

I draw attention to the accompanying measures in the CAP reform document. Under the heading "Environmental protection" is a reference to aid arrangements being used exclusively to compensate those concerned for measures that have a positive effect on the environment. Naturally, I consider that to be a positive step forward. My constituency is one of three pilot areas in which a scheme called Tir Cymen is to operate. It is roughly equivalent to the stewardship schemes operated by the Countryside Commission. The Government should ensure maximum funding for that scheme, which is to be operated by the Countryside Council for Wales, as it offers a great deal to rural areas ; it gives positive incentives to forms of husbandry that are environmentally sound and may well create substantial further job opportunities in areas where it is operative.

I know that the Countryside Council for Wales is enthusiastic about the scheme and I trust that its enthusiasm--and, indeed, the current interest among farmers in my constituency--will be met with abundant funding. That is of the utmost importance because if it is to succeed it must be financially attractive to the farming community. A further point that Plaid Cymru urged on the Commission concerned a scheme for early retirement of farmers. I am sincere in my belief that it is vital to ensure that producers can retire with dignity and with some financial security. It is equally vital to ensure that agricultural units are available for the next generation--or those of its members who are brave enough to enter this arduous and difficult trade. I know that there is considerable concern and I am wary of the fact that the pre-pension scheme is to be optional at member state level. We are all aware that member states had the option of paying further sums under the hill compensatory allowance scheme, but the Government were reticent, to say the least, about paying. I call on the Government without delay to bring forth plans for state-funded early retirement because without such plans we shall slip back into the quagmire of uncertainty and suffer a further blow to morale and confidence. I agree with the hon. Member for Cambridgeshire, North-East (Mr. Moss) that an urgent rethink on the pre-pension scheme is required.

In conclusion, I welcome the proposals, with the caveats I have mentioned, and urge the Government to address these points without delay in the interests of sustaining a healthy agriculture industry which will benefit us all.

12.27 pm

Mr. Michael Ancram (Devizes) : In the absence of the Register of Members' Interests, I should begin by declaring an interest in the debate. I am a partner in a tenant farm growing grain and beef. It is not for that reason, however, that I have sought to speak today. It is because I represent an area in Wiltshire where farmers have the same sort of problems as those already described by hon. Members and it is important that their concerns should be aired in the House. Having been away from the House for five years, I had only heard of the reputation of the hon. Member for South

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Shields (Dr. Clark) as Labour party spokesman on agriculture. I had heard him described as being to agriculture and agricultural prices what Cassandra was to the people of Troy during the Trojan war. Having listened to him this morning, I fear that that was something of an understatement, and I am as baffled about Labour party policy on agriculture as I was before.

I welcome the agreement that my right hon. Friend the Minister secured in Brussels. Six months ago very few of us expected him to be able to achieve such an agreement. We knew that he was against tremendous odds. It was largely due to his negotiating skills that we secured the agreement that we are debating now.

Farmers will not be cheering from the rooftops. Farmers are realists. They would have much preferred the support mechanisms to remain as they were, as they helped farmers. Equally, farmers realise that the common agricultural policy had to be reformed. They are therefore delighted at the results achieved by my right hon. Friend. He managed to secure answers to the questions which had concerned them most during the previous six months. I intend to refer to two of them.

My right hon. Friend achieved an even playing field. The MacSharry proposals had threatened efficient British agriculture in a way that would have discriminated totally against our farmers and put them at a severe disadvantage compared with their European competitors. In securing the deal, my right hon. Friend has created that even playing field, but within the deal there are certain issues that cause concern. I hope that my right hon. Friend will be able to reassure us about them. I wrote to the Minister of State about one of the issues and I intend to refer to it again, because it is of significance. It has been suggested that the intervention standard that will be required for wheat might relate to common wheat. If that were to be the case, our wheat growers would be put at a severe disadvantage. I understand that about 80 per cent. of the wheat that we produce would be outside the terms of that standard. The result would be to create once again--by the back door--an uneven playing field, to the disadvantage of our farmers. That could have significant results. Farmers might move out of wheat production into barley production--the last thing that we want. It could also have an effect on our balance of payments, since we are net exporters of wheat. I hope that when the Minister replies to the debate he will be able to reassure us that an uneven playing field will not be recreated when technical matters such as the intervention standard are at issue.

As for the longer term, reference has been made in the debate to set-aside. I believe that the set-aside programme that my right hon. Friend secured in Brussels is essential at the moment, but I am not certain that in the longer term it can necessarily be sustained. The danger is that the programme might lead to set-aside on the one hand and to intensive farming on what is left, at a time when we should be encouraging extensive farming. I hope that in the further negotiations that my right hon. Friend will undoubtedly have he will look at ways of encouraging extensive farming. In particular, he might consider looking at the point that organic farmers ought to be exempted from the requirement to set aside 15 per cent. In effect, by the farming methods that they already employ, organic farmers have already moved towards extensive, less highly productive farming. I hope that Ministers will also consider diversification in the use of agricultural products. For example, research

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into biofuels might provide another market for agricultural products in the future. I hope that that research will be intensified and supported by the Government. It may hold the key to what we all want to see--a healthy and viable agriculture industry.

I sincerely congratulate my right hon. Friend on the deal that he achieved, but I hope that he recognises that it is not the end but the beginning of the process of securing the future of British agriculture. In seeking to ensure that we have a viable agriculture industry and that our farmers are properly rewarded, we are also seeking to ensure that the whole of our rural economy, which depends on a healthy agriculture industry, is secured for the future. I congratulate my right hon. Friend the Minister and I thank the House for its attention.

12.34 pm

Mr. George Stevenson (Stoke-on-Trent, South) : I do not think that the hon. Member for Devizes (Mr. Ancram) would deny that reform of the common agricultural policy was necessary. We all agree that any reform must benefit consumers, taxpayers, the environment, our obligations to free international trade, farmers, workers in the industry, rural areas and, perhaps most important, must bring some stability, which has been long overdue in the farming industry. The package must be tested against those criteria. The Minister already seems to have made the judgment. He has hailed the package as a great success. Some positive steps have been made, but serious concerns remain and many right hon. and hon. Members have expressed those concerns today. We remember the claims of the mid-1980s, stated in the House, that the CAP had been reformed. That reform never materialised, which is why agriculture is in its present crisis. We must be careful, therefore, about making extravagant claims. The fact remains that the only real reform in the package is in the cereal sector. It is true that the reduction in cereal prices of 29 per cent. over the next few years must be compared with the Commission's original suggestion of a reduction of 35 per cent. The Minister can claim a victory for that, and we must recognise that some of the discriminatory elements in the compensation for United Kingdom producers have been removed.

Both so-called victories are an important exercise in damage limitation, because discrimination remains. First, there are many more smaller producers in the rest of the Community than in the United Kingdom. Because of the way in which the regulations have been framed, many more smaller producers in the rest of the Community will be exempt from the set-aside conditions to qualify for compensation, so discrimination still remains. Secondly, the United Kingdom has many larger holdings, which will benefit because they have more flexibility to adapt to the 15 per cent. set-aside condition. They will qualify for more compensation because of the larger areas that they farm.

We should not forget that the size of the average holding in this country is between 60 and 65 hectares. Under the new deal, the qualification cut- off point for smaller units is 20 hectares or 92 tonnes of production, above which 15 per cent. of land must be set aside to qualify. How many smaller farmers in this country will fall into that category? The net result is that smaller producers

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will face increasing serious problems and the likelihood is that they will be forced to amalgamate and be taken over, so there will be greater concentration of production than in the past.

Similar discrimination exists in other sectors as a result of the deal. It is important to recognise that--important in terms of the European Community and particularly so in terms of the United Kingdom.

It is ludicrous that, as a result of its quota regime, the European Community is still producing about 12 per cent. more milk than we need. That is sustained by an over-generous quota system. Yet the United Kingdom is closing down processing factories because we do not have enough milk. The problem is that we were sold short in 1984, when the panic measure of quotas was introduced. The Government should recognise that, but there is no sign that the Minister intends to take the matter up with a vengeance when negotiations continue. United Kingdom milk interests have been sold down the river. The Commission and producers recognise that a 1 per cent. cut in quota, a 5 per cent. price cut over two years and a 2.5 per cent. cut per annum in the butter price might sound draconian, but I promise hon. Members that those cuts are marginal. There will be little meaningful impact on overproduction. We shall face the prospect of increasing stocks and we shall still be left with a shortfall in

self-sufficiency. The damaging consequences for the United Kingdom and its milk sector are likely to continue.

The quotas are to be subject to annual review, but we must take serious measures and insist that in those reviews the Government tackle the problems facing the United Kingdom milk sector. I suggest that in his ongoing discussions the Minister should press for a redistribution of the total European Community quota so that the United Kingdom's position is recognised and so that structural overproduction in the European Community, which still remains, is also tackled. The problem in the United Kingdom is not so much overproduction as inadequate quotas and lack of self- sufficiency. I am especially concerned about the beef sector. The stated objectives run the risk of not being realised and the previous damage caused to the United Kingdom by the loss of the variable beef premium is likely to be repeated. Input costs are likely to be reduced as a result of cereal price cuts, but the beef sector will face a 50 per cent. cut in the next few years. The amalgamation of lower input costs and a higher premium will stimulate production.

The only real weapon at the Minister's disposal is to control production by limiting intervention. It is true that the present package means a severe reduction from 750,000 tonnes into intervention this year to 350,000 tonnes by 1997, but we have heard that before. A few years ago the Minister told the House that the limit on intervention for beef would be 220,000 tonnes. That did not work and we must insist that the limits on intervention are strictly adhered to or we shall again face a crisis. We must have a guarantee from the Minister.

I do not want to be accused of being too critical so I join in the general welcome expressed for the sheepmeat regime. Previous reductions in the headage limit have damaged sheep producers in the United Kingdom. We welcome a hold being put on the present limit, and the 50 per cent. premium being paid over the headage limit will provide some relief to producers. However, we must not blind ourselves to the fact that this country's limit of 18 million ewes is too low, which is why we are unable to

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increase our production and to export to other markets. It has nothing to do with the fact that other people are trying to stop us. The stabilising mechanism means a 3 per cent. cut in sheep prices this year because we are over the stabilised level, but the Minister does not seem to have tackled that problem in the negotiations. It is amazing that the so-called reform proposals do not refer to the sugar regime. We must press for immediate action. The expensive regime, which means that the European Community is 150 per cent. over-supplied, not only damages world markets but hits the consumer. A 29 per cent. cut in cereal prices must be compared with the lack of proposed change to sugar prices. Five per cent. of European Community farmers are engaged in sugar beet production but they receive unparalleled protection.

The agreement states that the Council must instruct the Commission to suggest proposals to reform the sugar regime by the end of the year. We hope that that will happen, but we are entitled to know what principles the Government will use to tackle the long overdue reform of the sugar regime. The claimed benefits for the consumer must be studied carefully. The consumer has been promised benefits before, which never developed. I believe

Madam Deputy Speaker (Dame Janet Fookes) : Order. I am sorry, but the hon. Member's time is up.

12.44 pm

Mr. Jerry Wiggin (Weston-super-Mare) : I apologise to the House for being absent for a few minutes. I had to see a medical adviser. In this company it would not be unreasonable to ask whether any hon. Member has had his foot trodden on by a horse. The only pleasant part is when the horse takes its foot off.

Pleased as I am with the reform, the fact remains that during the past few weeks decisions have been taken which will have a more marked effect on British agriculture and the farmers of Europe than anything since the introduction of the common agricultural policy. I do not envy my right hon. Friend the Minister his task, which has been one of imposing pain on farmers--a task born of common sense and necessity. It was no longer tolerable to find an endless quantity of money to force up the price of food artificially within the Community or to ruin world markets with taxpayers' money.

My right hon. Friend has almost achieved the impossible of persuading farmers that they have a good deal, while starting down a road which will end at the objectives that he and his fellow EC Agriculture Ministers have set themselves. It has finally been decided that we shall no longer subsidise the price of food. It has been acknowledged that the CAP was a social policy to maintain a standard of life--for the olive grower in Sicily and the sheep farmer in the Orkneys--which would sustain rural population and benefit the regions concerned.

Implementing the proposal will be difficult, and may be costly. I was interested to hear my right hon. Friend claim that there would be economies. That is unlikely in the immediate future. We are entering an era similar to the days of deficiency payments, when the arguments will centre not on the prices of products but on the social subsidy, whether it be paid to farmers direct, paid for set-aside, or in whatever form the central exchequers devise to maintain regional and rural policies. That is what

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has changed and I see no objection to it, but there will be a battle between the taxpayer and the beneficiary, and it seems set to continue for many years.

My right hon. Friend will have read the report on cereal prices by the Select Committee on Agriculture, of which I had the honour to be Chairman. The Committee concluded that a substantial cut in the guaranteed price for cereals was the way to proceed. Cereals are the leading commodity in agriculture and the cut would have a roll-on effect throughout the industry. The Community's efforts in that direction were therefore economically correct and, as everyone in the world would agree, they were the right way to deal with the difficulty.

I deliberately said "in the world" because my right hon. Friend did not say much about the GATT talks. It is fair that Community farmers should tell the Americans, Canadians and the other countries in the Cairns group that we are making a big sacrifice. We are going to impose severe price cuts on our farmers, which we hope will have the desired result of preventing surplus production from being put on to the world market at subsidised prices, and of restoring world price levels at which everyone should be able to make a living. I hope that in the margins of the GATT agreement the diplomats will remind the Americans and the Canadians of the subsidies that they now pay to their farmers. We can reasonably say, "Come quietly, agree to GATT and accept our concessions, or be seen to be cutting your own farmers' subsidies, or stop pretending that agriculture is a barrier to an agreement on GATT." The topic has been selected by the Americans ; we have responded and we deserve a friendly and resonable response.

I share my right hon. Friend's view that it is undesirable to fossilise the allocation of quotas and resources within the Community. The hon. Member for Stoke-on-Trent, South (Mr. Stevenson) argued perfectly reasonably that milk and sugar are under-produced in this country in relation to our domestic requirements. I find it surprising that it is possible to renegotiate, albeit relatively modestly within the terms of the agreement, milk quotas for Spain and for Greece, both of which entered the Community only recently. Although the sums concerned are small, the principle has been established. I hope that, having opened the door, although only by a fraction, my right hon. Friend will seek to use the argument that the Spanish and Greeks used when we try to promote our interests in dairy produce and sugar. I must declare my own interest as an adviser to British Sugar ; I think that most of my right hon. and hon. Friends know about that.

The hon. Member for Newham, South (Mr. Spearing) has unfortunately left the Chamber. Although it is correct to say that we shall deal with the matter of sugar during our presidency, the time is coming when the artificial agreements on matters such as Africa, Caribbean and Pacific sugar and bananas could be rattled around within our Government by my right hon. Friend. The agreements are foreign aid and no pretence is made that they are anything else. They are beneficial both to the supplying countries, and to our work force and British companies. However, as long as we import half the sugar that we consume, there are British farmers who will not grow it and British refineries which will not refine it.

I was glad to hear my hon. Friend the Member for Cambridgeshire, North-East (Mr. Moss) mention sugar, and it was also mentioned by the hon. Member for Stoke-on-Trent, South. A number of matters are likely to

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be dealt with by the Government, of which the subject of prices is the first. The sugar regime is unique in that it costs the taxpayer nothing. I hope that Ministers will bear it in mind that if they follow the argument that, if cereal prices are cut, sugar prices must be cut, they can and should reasonably expect a drop in the price of the ultimate product. I find that highly unlikely. What will happen is that there will be a move to cut prices for the sake of it which will not prove to be an advantage to the public because the sugar regime does not cost them any money anyway. The quota matter is a simple point which applies to my right hon. Friend's constituents, as it does to all the beet growers in the country.

The processing margin is crucial to enable the processors to have the necessary amount for investment. I am proud to say that the British sugar beet grower and his processor are at least as efficient as any in Europe. I realise, of course, that my right hon. and hon. Friends will have many other sugar matters to consider.

There are environmental and forestry aspects to the agreement. I was delighted to hear my right hon. Friend the Prime Minister mention forestry at the summit in Brazil. If, wearing his hat as forestry Minister, my right hon. Friend examines the Government's record on forestry, he will not feel proud. The tragic and disastrous change in the tax regime for forestry has led to a serious cut in the amount of private land being planted with trees. Trees absorb carbon dioxide, trees look good and trees are good for the environment. Trees are a long-term natural resource into which public money has traditionally been put, not only in this country, but in many others. I hope that, in dealing with the matter of removing land from agricultural production, my right hon. Friend will give even more serious thought to a more viable, long-term and stable forestry policy.

12.54 pm

Mr. Geoffrey Clifton-Brown (Cirencester and Tewkesbury) : Thank you, Madam Deputy Speaker, for calling me to make my first speech in this historic House, which has been the springboard of democracy for the world. It is a privilege to represent the people of Cirencester and Tewkesbury. The constituency has had only four Conservative Members of Parliament since it was founded in 1918. If the current Boundary Commission's proposals are accepted, I shall be the last and the most short-lived.

I believe that, on these occasions, it is customary to pay tribute to one's predecessors. I have two very eminent ones. The first was Speaker Morrison, who had a long and distinguished career in the House. In one of his earlier speeches he said, "all taxation is bad". I shall return to that issue later.

My immediate predecessor was the right hon. Nicholas Ridley. He was not only a Treasury Minister, but commanded three great Ministries of State. He was Secretary of State for Transport, Secretary of State for the Environment and Secretary of State for Trade and Industry. I am sure that all hon. Members will join me in congratulating him on his elevation to the other place.

When the history of the post-war period comes to be written, I am sure that Nicholas Ridley will be regarded as one of the great original thinkers. Conservative party

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policies to reduce taxation, to control public expenditure, on privatisation and on the impact of the environment have been indelibly shaped by Nicholas Ridley's thoughts.

My constituency is a large rural one, and 80 per cent. of it is designated as an area of outstanding natural beauty. The Cotswolds, which comprise a large part of my constituency, are internationally renowned. In the interests of tourism, I encourage every hon. Member to pay them a visit. Although agriculture and its combined trades undoubtedly form the largest, single industry in my constituency, tourism is rapidly playing a more significant part in the local economy.

The third major industry in my constituency is defence. Two major defence firms are located on the outer edges of Cheltenham, one of which was taken over yesterday by another company. I welcome the success of that other company, but I hope that it will recognise the loyalty and hard work of the work force in my constituency and that production will be maintained in those factories. Three large RAF bases, also located in my constituency, are to be subject to closure or a significant reduction in their capacity. Therefore, I have one or two problems with the relocation of the work force in my constituency.

I pay tribute to my right hon. Friend the Minister of Agriculture, Fisheries and Food on his significant achievement in negotiating the agreement. I know that that was in no small measure due to his shrewd alliances with his colleagues in the Council of Ministers. Who would have thought, just a few months ago, that we would emerge with an agreement which does not discriminate against our farmers, offers a level playing field and gives reasonable value for the taxpayer and the consumer.

There are one or two aspects of the agreement that I wish to draw to the Minister's attention, and here I should declare an interest in agriculture. We are now perilously close to the next planting season, but we still do not have the full details that are necessary for our arable farmers to make decisions about that planting season. Until farmers have the details on the common wheat and barley regime and know whether the compensation scheme will be calculated on a national or regional basis, they cannot decide whether to take the set-aside option in the coming year.

Soon after set-aside was announced, I said that it was not the best way forward in the longer term. I still maintain that. However, it is valuable for reducing production in the short term. The Minister may be interested to know that the 15 per cent. set-aside requirement will affect 1.5 million acres in Britain. The public have not yet come to grips with the large amount of land that will be lying idle. I welcome the enshrining in the agreement of environmental aspects. The Minister will need to consult widely with many bodies about how set-aside is to be handled. If everything grows wild that will mean a nasty mixture of weeds on land that has been cultivated for many years. The birds and bees people might welcome that. Will the land be sown with proper varieties of grass that will require cutting once or twice a year to keep the area tidy ? This is an important issue and the public backlash from getting it wrong could be serious for agriculture.

As I have said, my predecessor but one said that all taxation is bad. We must keep a careful eye on public expenditure. The public expenditure goal must be a set proportion of GDP of less than 40 per cent. Our major rivals, the United States, Japan and especially Switzerland,

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can maintain a much lower rate than ours and still have a satisfactory social security system. If the Madrid condition of maintaining a PSBR requirement of 3 per cent. of GDP is to be met, there must be a stringent public expenditure round in the autumn. The Minister has skilfully negotiated a package which fits that public expenditure round. Although farmers may not welcome it with open arms, they accept that cuts are necessary.

The Government are imposing cuts on farmers and it would be intolerable if the consumer did not fully benefit from those cuts. One part of the food chain should not benefit at the farmers' expense.

1.2 pm

Mr. Paul Marland (Gloucestershire, West) : It is a pleasure to follow the outstanding maiden speech of my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown). I live in my hon. Friend's constituency, and it is easy to see why he has already made such a good impact on the constituency and in the House. I offer him my warmest congratulations. He fits well into the shoes of his distinguished predecessors and we look forward to hearing him again. I congratulate the Minister on achieving what many of us thought impossible. He has succeeded because of his patience, steady negotiations and endless attention to detail in his discussions with fellow European Agriculture Ministers. It is a marvellous achievement and I am disappointed by the mealy-mouthed and mean speeches of Opposition Members. If they had their way, we would have signed up months ago to Mr. MacSharry and what he calls modulation. Modulation is Eurospeak for discrimination, favouring the small producers at the expense of our much larger producers and disadvantaging the big producers of flour mill cereals. It also means backing a permanent Luddite attitude towards large-scale production and favouring the small farmers in Mr. MacSharry's own country.

The farmers to whom I have spoken are pleased with the package, especially as it heralds the death knell of the co-responsibility levy. Housewives will also be pleased with the package, especially if it leads to the drop in farm produce prices being passed along the food chain. I hope that that will happen. The settlement heralds brand new thinking by the Commission which will now give money to the producers, the farmers, rather than endlessly subsidising overproduction. We got sick and tired of seeing that the people who made money and profits out of intervention were the store owners and, in too many cases, the fraudsters because fraud was widespread. This will go some way to stamping that out.

Many pressure groups have written to me and, contrary to the "cheer and a half" spoken about by Opposition Members, I have never seen so much correspondence saying that the Minister has done an outstandingly good job. Even the Royal Society for the Protection of Birds has said that.

For ages, arable farmers have been saying to the Government, "Tell us what to do and we shall do it." We have made known for some time what our general drift was, but now we are spelling it out to them in much more detail. We shall not go on subsidising overproduction. We shall end the co- responsibility levy and introduce area

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payments. The details must still be worked out, but farmers are getting clear signs about the way in which we are moving forward. I emphasise what my hon. Friend the Member for Devizes (Mr. Ancram) said about quickly establishing which type of wheat is meant, and what the quality standards will be for the intervention buying, because that will still form a large part of agricultural marketing for the time being. It would also be helpful to have details about set-aside so that we know exactly what is the base year, and what are the details of the environmental protection provisions that may be written into this.

I warmly congratulate my right hon. Friend on resisting rotational set- aside. Permanent set-aside in one place is better for wildlife and the environment in the long term. If, as has been said by Opposition Members, this does not offer enough of a reduction in cereals output, it is simple enough to increase the percentage that has to be set aside. We are definitely moving in the right direction.

It is not all gloom and despondency in agriculture. A small agricultural machinery firm of which my hon. Friend the Member for Cirencester and Tewkesbury may know, called Ross Farm Machinery, has risen from the ashes of collapsed enterprises. This year, its first year of operation, it sold seven new combines, 100 new tractors and 160 used tractors, so arable farmers are investing and looking to the future with some confidence now that they know what is happening. They are not, as was suggested by Opposition Members, all looking to greater and greater state handouts. There is vertical integration. Cereal farmers are getting involved in pig, chicken and poultry projects, very often as joint ventures with large end users. This is a way in which farmers are doing a great deal to look after themselves and to improve their lot.

The Gloucester farmers dining club recently visited France to see what alternatives were there. They were horrified by the lack of machinery guards on farms and of inspectors to inspect the machines. They went to a flour mill where chains at head height were whirring with great speed and no effort was being made to guard them. This is by no means the level playing field--that expression that we have learnt to hate. It does not exist in factory laws and implementation of safety laws in Europe.

Another example is slurry. The club also visited a dairy farm--actually, it was a pig farm, but it is the same thing. Well, it is not quite the same thing but they both produce large amounts of slurry and have the same number of legs. The slurry was pouring under the door and into the fields and little effort was being made to control it. The club members also visited a duck pate processing establishment. The duck liver pate producer was cutting up the carcases of the ducks in the back kitchen of the farmhouse. The wellington boots had been thrown in the corner and the dog was waiting under the table for some tasty morsels to drop from the table. Things are not done in that way in this country. Other member states do not implement regulations in the strict way that we do.

Mr. Gummer : I wonder whether my hon. Friend agrees with me that one of the important sections of the Maastricht treaty is designed precisely to deal with this problem. It will enable the European Court to fine countries that do not enforce the regulations for which they have voted. This is another example of the Maastricht treaty containing some important provisions that will serve to level the playing field.

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Mr. Marland : I was about to ask my right hon. Friend whether he would make that one of the priorities of the United Kingdom's presidency. We must ensure that regulations are enforced elsewhere. The problem spreads much more widely than the rather light-hearted examples that I have given. It extends to slaughterhouses and to veterinary inspection, and it is causing considerable difficulty in the United Kingdom. It leads to unfair competition.

The farmers to whom I have spoken are delighted that we have managed to resist modulation and that the co-responsibility levy on milk is to be dropped. The levy never did any good and it would never have done any good. Again, my right hon. Friend has done a first-class job. I am delighted that he resisted the demands that were made by Italy. It was outrageous that the Italians, who had never implemented the quota, sought more quota. A first- class move was made to prevent that from happening.

As for the future of the milk marketing boards, I am glad that my right hon. Friend is to go to Europe with representatives of the boards, to seek to promote their proposals for new approaches and that he has helped the board to get them accepted.

Large retailers, which are supplied with great quantities of milk, are anxious that during the transitional period--the introduction of new ways-- a continuity of supply should be available to them. They would obviously like to have 100 per cent., but they would be happy to settle for 75 per cent. of existing usage. It does not seem to be that unreasonable that there should be some continuity to see them through the early stages. Milk quotas for farmers were based on existing production and it would be helpful for milk users if the same consideration were given to them.

Many small producers who are processing their own milk have responded to our exhortations to add value to what they are producing. Will my right hon. Friend ensure that those who do add value to their own milk by producing local yoghurt and locally made cheeses, for example, can continue to develop their stake in the milk-processing business?

With others, I warmly welcome the environmental aspects of the package. I like my right hon. Friend's plans for extensification, for non-rotational set-aside and for setting out a legal basis for long-term set-aside. The support for organic farming is widely welcomed, as is the power to include access provision in environmental schemes, which I think will be extremely popular with the public and will go down well. It will stand the farmers in good stead as well.

It is right that my right hon. Friend should describe himself as the greenest Minister in Europe, for that he surely is. As other Ministers bluster he gets on and does something positive. Many of the environment schemes are very much to his credit. As he is a green and environment- conscious Minister, I ask him not to be swayed by the argument that corbies should be controlled on a seasonal basis. The tremendous increase in the number of magpies and rooks is doing our wildlife a great deal of damage.

Another problem--I do not think that it is yet a European issue that involves considerable damage to the environment--is the activity of the hippies or, as they call themselves, new-age travellers. We in the agriculture community call them new-age pests. Events at Castlemorton common highlighted the problem for all to

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see. There are many small groups of hippies moving around throughout the country, and once they get on to land they are the very devil to move. They are well aware of the regulations that deal with squatting illegally on other people's land. As long as they have fewer than 13 vehicles, they can stay. As I have said, it is extremely difficult to move them. They do a great deal of damage ; they have maurauding dogs that kill sheep they cut down trees and they interfere with water supplies. When they go, they leave a terrible mess, to say nothing of the costs to the police in controlling them.

We have had a great deal of trouble with hippies in

Gloucestershire. I pay tribute to the Gloucestershire police, whose vigilance has done much to rid Gloucestershire of the hippies, at least for the time being. We need much closer cross-county border co-operation to keep such people on the move. I hope that my right hon. Friend will bear that in mind.

Another aspect to consider is the easy way in which hippies get social security payments--because they are certainly surviving on them. They are able to get them wherever they stop. The hippies in our woods said that they could not leave until Thursday because that was when they were paid. Stupidly, I thought that they were actually working somewhere, perhaps picking fruit. I thought that they were getting paid for the work that they were doing.

Mr. Gill : Does my hon. Friend know that those people also get paid for their fictitious dogs?

Mr. Marland : I did not know that they were paid for their fictitious dogs, but single mothers certainly get paid for their children. That is a growth industry in welfare payments.

One difficulty is that when we do get rid of those people, landowners then block all the entrances to their land. All of the woods on the top of the Cotswolds have hundreds of tonnes of quarry waste dumped in their access routes to keep out the hippies. That denies access to ordinary, God-fearing picnickers and others who want to walk in the woods. They have to scramble over what looks like the Himalayas in some areas if they want access to the woods. I hope that my hon. Friend will take note of that problem and, together with the Secretary of State for Social Security, try to do something about it. That would be a great help.

This is one of the best packages that we have had from Brussels for many years. My right hon. Friend has achieved almost the impossible. However, a Minister's work is never done and the playing field is still not level. I do not want to sound ungrateful, but we should remember the lack of guards on machines where duck pate is produced in France. I hope that it will be a priority of our presidency to ensure that other member states fall into line with the scrupulous way that we obey the law.

1.16 pm

Mr. Michael Lord (Suffolk, Central) : I am grateful to be called to speak, Madam Speaker, especially as I missed a little of the middle part of the debate. I had no alternative but to disappear for a while. I am glad to follow my hon. Friend the Member for Gloucestershire, West (Mr. Marland), who always speaks with such authority on these occasions. He is a farmer, so he knows exactly what he is talking about. I sympathise with his point about a level playing field, although I am not sure that French pate

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