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beware of falling into the situation of the dairy industry, where the high added-value products come increasingly from abroad, and we are left with the commodity end of the business. I am not prepared to be seen as the Minister who was so unable to confront short- term fears that he allowed an industry to destroy itself.The House will wish to know that there will be a number of additional arrangements to be made to make the transition as smooth as possible. First, we shall not be seeking to reverse the amendments made in another place. There will merely be some tidying up of the wording. Secondly, part IV accomplishes what the Government announced in 1988--the ending of the potato guarantee. Unlike the enabling provisions of part II, ending the guarantee is a decision that has already been taken, and it will be carried out as soon as possible after Royal Assent. It is a decision already accepted by the industry and not, as far as I am aware, contentious. The third detailed point is that, as I have already pointed out, the Bill will enable the non-regulatory functions of the Potato Marketing Board to be carried out by a successor body.
I hope that the House recognises that we have to make some such change in any case, because if the European Community were to agree to a lightweight regime--the signs are, as I have tried to explain to my hon. Friends, that that will be the case--it would mean that the system would fall. It would not be able to continue. I do not want that to be the result. I want to have a system that will allow a satisfactory transition from one regime to the other. I hope that the industry will then face up to the question whether it wants a continuation of the board, which would deal, as it can, with the marketing and promotion of potatoes in generic terms and research. That would be done if a development council were the successor body to the board. If Ministers saw substantial support for that idea in the industry, they would be able to make the necessary order to allow the Potato Marketing Board to continue as a development council. That would also enable the board to have levy-raising powers but, as there are some doubts about those powers, clause 52 improves the position by making it possible for a levy to be collected via an intermediary. That would also be helpful should the milk marketing arrangements be followed by a desire for the industry to have a development council. I am concerned that there should be no philosophical bar to the ability of the industry to decide that it wanted corporately to do some of those things for itself. Part 3 deals with marketing grants.
Mr. Christopher Gill (Ludlow) : Will my right hon. Friend give way?
Mr. Gummer : I will give way, but it must be for the last time.
Mr. Gill : Could my right hon. Friend obtain clarification of the reference on line 4 of page 13 to
"section 53(4) of this Act",
given that on page 27 there is no clause 53(4)? I do not expect him to know the answer, but it would be helpful if he could obtain it.
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Mr. Gummer : I am always pleased to give way to my hon. Friend and never more so than I am now. I shall seek an answer, and I regret it if there has been a mistake.
In the detailed consideration that the Government have given to the marketing of both milk and potatoes, we have shown our concern to improve our ability to compete and to give our producers and manufacturers a better opportunity to win a larger share of the market for added-value products. In the same spirit, we introduced our marketing grants in April last year, following the seminar called by the Prime Minister in November 1991, which concluded that there was a need for farmers to develop professionally run marketing enterprises on a competitive scale.
For example, the opportunities presented by our supermarkets can be fully seized only by businesses big enough to negotiate satisfactory terms and to deliver the required quantity and quality consistently. There are some signs that, in other countries in the Community, the organisation of agricultural businesses and food processing is such that they can compete more effectively to sell into this country than we can into theirs. That is one reason why the marketing grant is so important.
Unfortunately, the existing grant scheme has its limitations, particularly in our ability to involve the businesses downstream of the producers, which are crucial to the success of the industry. Part III will enable us to introduce something more satisfactory. I have no doubt that groups of milk and potato producers will be among those applying for grant.
In part IV, there are a number of other items that the House will want me to refer to. The first is the wool guarantee. The Government announced, more than four years ago, their decision to end the wool guarantee. Clause 48 implements that decision. The guarantee was introduced in the 1950s with the reasonable aim of stabilising sheep farmers' returns from wool. Conditions are now different. Developments on the international wool market, where huge price changes can result from decisions taken in China, Russia, Australia and New Zealand, mean that the guarantee can no longer operate effectively when it is used entirely as a stabilisation measure. The sheep farmer now relies essentially on the return that he gets from the market, enhanced by the direct payments on breeding animals in the shape of annual ewe premiums and hill livestock compensatory allowances--payments which, for 1992, will total around £495 million. In the light of the substantial support to the sector, continued Government intervention is unnecessary and simply cannot be justified. The marketing arrangements for clip wool, including the statutory monopoly on purchase, will be retained. The scheme has been administered effectively by the British wool marketing board, which will have an opportunity to build further on its achievements after the guarantee has ended.
I hope that the House will recognise that we have tried to look at each of these and get the best answers for Britain--not to apply to it some predetermined philosophical position. That is why we have insisted on keeping the scheme, because it is the one way in which we can deal, in an international market, with similar schemes that represent other people in other countries.
Mr. Campbell-Savours : Unbelievable.
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Mr. Gummer : The hon. Gentleman must accept that what one believes is the believable, and that is entirely believable. We shall listen to his speech at the end of the evening and see how one can go beyond the bounds of belief rapidly and never return.
A further belated recognition of changed realities is the abolition of the annual review of agriculture. It is a relic of the days when farm prices were fixed in consultation between the Government and the farmers' unions. Since we have joined the Community, the focus has switched to the CAP, and in that context our close contacts with the farmers' unions and other bodies will continue. The Government will also continue to publish an annual report on agriculture, as the Bill provides. I am sure that the House will agree that that is a sensible measure to bring the legislation up to date.
Of the Bill's remaining provisions, those relating to Northern Ireland will be found in clause 57, which lists those parts of the Bill that will apply directly to the Province. They include the termination of the wool guarantee. Clause 55 deals with the procedure for extending various other provisions to the north of Ireland. In that respect, I can confirm that it is the intention of my right hon. Friend the Secretary of State to introduce an Order in Council to apply the provisions of part I so as to end the Northern Ireland milk marketing scheme.
It is the Government's purpose to do all that they can to enhance the conditions in which our food and farming industries can compete. We have identified a clear need to encourage groups of farmers and others to work together to improve the marketing of food and agricultural produce. As with the milk marketing boards, we have come to the clear conclusion that the statutory monopoly should give way to a better method of marketing milk and milk products.
Increasingly, the same conclusion comes to anyone who looks at the place of the Potato Marketing Board within the new European single market. It is not surprising, therefore, that there is mounting support for the proposals that the Government have put forward this evening.
Our aim is to help the industry do its job better, to liberate it from the shackles of the past and to realise its potential. At a time when there is so much talk of restrictions and quotas, this is a move to set the industry free. I commend the Bill to the House. 5.40 pm
Dr. Gavin Strang (Edinburgh, East) : There can be no doubt about the importance of the Bill to agriculture, but it is also important to the food industry and to consumers, of whom there are millions in Britain.
The Bill will make fundamental changes to the way in which milk is marketed in Britain. For most people, milk and milk products, such as butter, cheese and yoghurt, are an important part of their diet. Annual household expenditure on milk and milk products is about £6 billion. About one seventh of what the average family spends on food goes on milk or milk products.
Consumers are entitled to ask whether the Bill will improve the quality of those foods. They are entitled to ask whether it will enable milk and its processed products to be marketed at lower prices. The answer to both those questions is an unequivocal no. The milk marketed in Britain is of the highest quality in Europe, and nothing in the Bill aims to improve that. The milk marketing boards
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deserve a great deal of the credit for the hygienic quality of our milk. It is to be hoped that the new arrangements will allow those standards to be maintained in the future.The abolition of the milk marketing boards and the pricing arrangements which operated with them will not reduce the price of milk--far from it. There is a real danger that, as a result of the new arrangements, there will be an unjustified increase in the price of milk for consumers.
The House does not often have the opportunity to debate agriculture and the food industries. Total annual consumption of food and drink in Britain is now in excess of £90 billion, £45 billion of which is accounted for by household food expenditure and the remainder by drink and meals out. About one eighth of household expenditure is accounted for by expenditure on food. For people on low incomes, the proportion of their income that goes on food is much higher. Food is not just another product ; it is a basic essential, like shelter, water and fuel.
Agriculture is important because it is a provider of the raw materials for our food industries. Hundreds of thousands of jobs in those industries are dependent on agriculture, and millions of pounds of investment each year. Agriculture is also important as the core of the rural economy in most parts of Britain. It is not just the jobs of the farmers and farm workers that are important but all the other jobs which are created by the inputs into agriculture and the expenditure created in those rural communities. That is why it is vital that the Government should provide adequate support for our agriculture industry.
It has to be said, and it gives me no pleasure to do so, that times have been hard for the agriculture industry in recent years. We have seen a fall in investment. The Government's own publication, "Agriculture in the United Kingdom 1992", published only last week, states :
"The total stock of capital"--
referring to investment in the industry--
"has gradually declined over a number of years and is slightly below its 1981-83 level."
That is the measure of the extent to which the agriculture industry has been depressed for the past five or six years. It is a measure of the extent to which there has been under-investment in the industry. There are some signs that things will improve in the future, primarily because of the devaluation of the pound, for which the Government can hardly claim credit, since they tried up to the last minute to avert it. Let us hope that that devaluation--black Wednesday, sometimes called golden Wednesday in the agricultural industry--and the subsequent alterations to the green rates, will lead not only to higher incomes for farmers and farm workers but to increased investment and an improvement in the overall jobs and standards of our agriculture industry.
Part II, dealing with milk marketing, is the most important part of the Bill. It is undoubtedly the case that the milk industry is vital to Britain. I have referred to its importance to consumers. The annual value of milk at the farm gate is about £2.8 billion. We have the best quality milk in the EC. Only Denmark has milk of comparable quality.
The milk marketing boards have provided a guaranteed outlet for British dairy farmers, no matter how remote their farms. They have also played a major part in maintaining a substantial doorstep delivery service in Britain. It is true that the amount of milk sold through the shops and supermarkets has increased, but the doorstep
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delivery service is at a level much higher than in any other European country. That is of benefit to Britain and something that we should seek to encourage and maintain. The milk marketing boards deserve credit for that.There has been a suggestion recently in some quarters that the milk marketing boards have not achieved the most for the producers, that the price obtained by the producers in Britain through the boards has been less than in some other EC countries. I reject that as a criticism of the boards. I have never accepted that the purpose of the milk marketing boards was to maximise revenue. The milk marketing boards existed to strike a balance between the interests of the producers, the processing companies and the consumers. The pricing arrangements were designed to do that. They are based on a negotiation between the Dairy Trade Federation and the milk marketing boards.
The milk marketing boards have an excellent record in Britain on milk testing, on-farm milk recording, artificial insemination and all the other schemes developed and maintained by the boards which have brought substantial benefits to the British milk industry. The milk marketing boards were established by legislation enacted in 1931 and 1933. Since then, there has been a bipartisan policy with all-party support for the milk marketing boards. There have been changes in social and economic conditions and the functions and role of the milk marketing boards have been adapted to meet them. In the 1970s, the milk marketing boards were threatened by the EC. The then Labour Government, of which I was a member, decided as a priority to secure amendments to the appropriate EC regulations to enable the milk marketing boards and their counterparts in Northern Ireland and Scotland to continue. In that, we were supported by the Conservative Opposition.
I am pleased to see in his place the right hon. Member for Westmorland and Lonsdale (Mr. Jopling), a former Minister of Agriculture, Fisheries and Food. Speaking for the Opposition in a debate on agriculture in the House on 21 March 1978, he said : "As to the future of the Milk Marketing Boards, the Conservative Party has consistently expressed its support for all our marketing boards, but we recognise that certain parts of the milk boards' activities might have to be altered. However, we believe that it is absolutely vital--we fully support the Government in their efforts--to preserve the basic functions of the milk boards and of the structure of milk marketing in this country. We think, above all, that it is right that the milk boards should preserve their powers to be the sole first buyers of milk and to have the right to pool prices. To put in another way what the Minister said, it is no coincidence that the United Kingdom is almost the only country in Europe to have such a statutory organisation, while at the same time it is the only one to have such a large market for liquid milk sold on the doorstep However, I cannot think of any other issue on which the whole House would be unanimous in opposition but that of failing to get a satisfactory solution to the position of our milk boards."--[ Official Report, 21 March 1978 ; Vol. 946, c. 1358-59.]
We found that solution. I was privileged to be a junior Agriculture Minister in that Labour Government, and I remember sitting in the Council of Agriculture Ministers arguing for hours in an attempt to secure the changes in regulation which would enable our milk marketing boards to continue. We secured those changes, with the support of the whole House.
Since then, there have been some changes in the market place. In particular, we have witnessed the growth in low
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fat milks. Although the Minister did not refer to that directly in his speech, he alluded to one of the problems which developed during the 1980s--the failure of the scheme to provide properly for the production of low fat milks. The Government were told of that problem as long ago as 1986.In 1984, the milk industry adopted a system of non-binding arbitration. The first arbiter was the late John Silkin, under whom I had the privilege of serving when he was Minister of Agriculture, Fisheries and Food. In 1986, he produced the first non-binding report relating to milk marketing arrangements, stating :
"The question of low fat milk and other products now outside the Scheme and on-farm manufacture will in my view assume a much greater importance as time goes by to an extent where unless care is taken they may begin to threaten the existence of the Scheme itself. It is my opinion that it is to the interest of both the MMB and the DTF that a common course of action should be resolved between them. I would not regard the solution to this question as lying within the competence of this Opinion but I believe that an inquiry ought to be undertaken among all those concerned It is my recommendation that MAFF should undertake an internal inquiry into the problem, which, as I stated unless care is taken, might begin to threaten the existence of the Scheme itself".
Of course, Ministers did not respond to that. Although they received regular representations from the Dairy Trade Federation, no action was taken. It is hard to resist the conclusion that the Government were happy to preside over the undermining of the scheme, because they wanted it to be challenged : for dogmatic reasons, they wanted to bring about circumstances in which it would be easy for them to wind up the boards, as they are doing today.
As there is a substantial Conservative majority in the House, it is possible that the Bill will be given a Second Reading. As a constructive Opposition, we shall concentrate on the arrangements with which the Government--or, indeed, the milk marketing boards--wish to replace the existing system. Our first and fundamental criticism of the Government relates to their adication of responsibility for introducing satisfactory arrangements. Surely no food industry is more important to the country than the milk industry. It is highly efficient and a great national asset. In making such a historic change, the Government have an obligation to endure that it develops satisfactorily.
Mr. Gill : Who does the hon. Gentleman believe knows more about the milk industry--both production and processing--than the industry itself? Why should politicians decide such matters? I think that the hon. Gentleman is quite wrong.
Dr. Strang : We live in a democracy, and the way in which things happen is decided by Government and by Parliament. Of course, before introducing any replacement scheme, the Government should consult not only the milk marketing board and other boards but the Dairy Trade Federation, the consumer organisations and all interested parties. That is not in dispute. None the less, it is entirely inappropriate for the milk boards to introduce the new scheme. Although that scheme should be based very much on the views of the boards, open and public consultation should have taken place. Given the importance of the industry, the Government should have accepted their responsibility to present alternative arrangements, which should then have been dealt with by affirmative resolution in both Houses of Parliament.
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Mr. Gummer : Would the hon. Gentleman apply the same argument to, for example, the car industry? Does he suggest that the Government should present proposals about the way in which that industry should conduct itself, or is it better for those in the business of manufacturing cars to run that business as they think best? Is it not rather curious to suggest that the milk industry does not know its own business? I thought that the hon. Gentleman believed that ours was the best milk in the European Community. Surely the producers of the best milk in the Community can decide how best to produce it.
Dr. Strang : If there were a national car marketing board with the statutory right to buy every car manufactured in the country, and if the Government were about to wind up that monopoly, I would indeed suggest that they introduce satisfactory arrangements to free the market and eliminate the monopoly.
I am not sure whether the Minister attended this morning's meeting at which Ministers examined the future of the coal industry, but I believe that there may well be a parallel not with the car industry, but with the highly regulated energy industry. When the Government sought to deregulate that industry, they tried to pretend that it was a genuinely free market ; in fact, it was a market dominated by major companies and major vested interests. We are likely to see a milk market dominated by the successor to the milk marketing board--Milk Marque--which may involve 80 or 90 per cent. of producers. The Government should face up to their responsibilities. They should have had the courage to consult the industry, and to present their own proposals to free the market, if that is what they wish to do. The European Commission has already told the milk marketing boards and the Government what they can and cannot do. The Commission has said-- understandably, and I do not think that any hon. Member would necessarily dispute its view--that it would not be acceptable for the milk marketing boards and Dairy Crest, their processing arm, to be allowed to continue as a single body in a voluntary market. Such a body would be huge, not only in terms of the milk market in England and Wales but in terms of the European Community market. The Commission decided that the milk marketing boards and Dairy Crest should be separated.
At that point, the Government could have made a decision. They could have considered whether there was a case for integrated milk co-operatives, allowing the processing arm to be associated with the producers. They could have decided to set up a number of integrated producer co-operatives. I am not saying that that is the best solution ; I am merely saying that it is very unsatisfactory that the Government never even considered it.
The Northern Ireland milk marketing board buys more milk than its Scottish counterpart. Surely there is a case for protecting the Northern Ireland board, which is fundamentally important to Northern Ireland's agriculture, and for helping to ensure that its processing facilities--which need help and investment--can be maintained. As my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) pointed out, the position in Scotland is ridiculous. I refer to a report : it is not about the Scottish milk market, or about whether the processing arm of the Scottish board should remain with the board--it concerns
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only whether the Scottish board could acquire a dairy from the Co-operative Wholesale Society in Glasgow. Anyone reading the report may be surprised by its conclusion. I must say that I was surprised. I thought that it made a very good case, on the ground that there is a real United Kingdom milk market--not only in processed products such as butter and cheese, but in the milk that flows across the border between Scotland and England. I was amazed that the Monopolies and Mergers Commission concluded that that merger should not take place. It is unacceptable that, as a result of that report, we are being told that the processing side of the Scottish milk marketing board must be split from the producer organisation.The European Commission does not believe that the industry in Northern Ireland and Scotland is big enough to have a distorting effect on the market for milk in Europe. Having decided to get rid of the milk marketing boards and the statutory scheme--a decision with which we disagree--it is wholly unsatisfactory that the Government did not sit down, consult the interested parties and produce arrangements that were in the best interests of the industry, the processing companies and the consumers.
I must remind the House that the arrangements are not necessarily permanent. Mr. Leon Brittan sent a letter to the Minister in October 1992 in which he commented on the scheme put forward by the milk marketing boards to replace the statutory arrangements in England and Wales. He wrote :
"Against this background, and on the basis of the information made available to me, I believe that there are no grounds for action under Articles 85 and 86 with regard to the proposed new co-operative for an initial period of two years".
It cannot be satisfactory for the milk marketing boards to set in place arrangements which are authorised by the Commission for only two years. As the Minister is aware, as soon as the legislation is in place, the Director General of Fair Trading will be entitled to investigate the arrangements for the marketing of wholesale milk in this country. He will be entitled to refer the arrangements to the MMC within two years. It is unsatisfactory for us to go down a road to so much uncertainty.
Much concern has been expressed about the future of the assets of the milk marketing boards, other than the processing arm, Dairy Crest, which will be floated off as a separate company. I am referring to the milk testing arrangements, the national milk records and to Genus which includes the artificial insemination service and the advisory services which have served the industry so well.
It is absolutely fundamental that every producer, regardless of whether he becomes a member of Milk Marque, should have equal access to those services. Those services have been built up by all milk producers, past and present. It would be unfair if the successor to the milk marketing boards were able to take over those services and operate them in a way which discriminated against non-members of Milk Marque. The alternative would be to transfer those activities to another body. I am not suggesting that, but perhaps that point should be considered in Committee. It is crucial that those facilities should be available to all milk producers.
Quota management is another important issue which must be addressed. As a result of the boards, we have a very efficient system of quota management. The big difference between today's milk industry and the industry of 10 years ago is that we have quotas. I accept that there
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is alarmist talk about the effect of the changes because we have milk quotas. If a very powerful producer co- operative is established against a background of quotas, and there is an under-supply of milk in this country, that body might be able to ratchet the price of milk to unjustified levels. I can assure the Minister that the Labour party will be outraged if the price of milk for consumers is raised unnecessarily as a result of the arrangements.The Minister described the milk boards as the milk producers' gaoler in this country. I do not know how the Minister can use that description. Only a few years ago, the boards had the overwhelming support not just of the consumers organisations and the Dairy Trade Federation, but also of the milk producers who control the boards. It is nonsense to claim that the boards are the producers' gaoler. It is equally nonsense to claim that the Potato Marketing Board has shackled our potato producers. As my hon. Friend the Member for East Lothian (Mr. Home Robertson) said, it is amazing that the potato producers are determined to retain those shackles. The legislation in respect of potatoes is enabling. Many potato producers and, I suspect, the Potato Marketing Board, received a shock when they discovered that the Government were not simply planning to get rid of the Potato Marketing Board on the basis of EC legislation, but had decided, on the basis of their own independent judgment of what was best for the British potato industry, that the Potato Marketing Board should go. We do not accept that. We agree with the Minister that the last thing we want is an EC regime for potatoes which includes intervention buying. Open-ended state buying is the bane of the common agricultural policy. We absolutely agree that there should be no question of the Government agreeing to a new potato regime which would allow intervention buying whereby the taxpayer buys potatoes when the market is over-supplied.
However, I do not accept the Minister's arguments. I do not accept that it is automatically a mistake for the producers in this country to choose to manage their market against the background of free trade in potatoes in Europe. There is already a free market in potatoes in the Community. As the Minister has said, the board has accepted that the last vestige of state support for the potato industry--in respect of the contribution that the Treasury is willing to make to part of the Potato Marketing Board's support buying programme--should be removed.
Mr. Michael Jopling (Westmorland and Lonsdale) : I am enormously puzzled by what the hon. Gentleman has just said. He said that he would oppose a new potato regime in Europe which involved intervention buying. So far as I am aware, the Labour party has always supported the powers that the Potato Marketing Board currently has, and which it has had since the war, to support the market through acreage quotas and intervention buying. Why has the hon. Gentleman suddenly become the first Labour spokesman in my lifetime to speak against intervention buying for the potato sector?
Dr. Strang : I am happy to respond to that point. It is one thing to have a support buying programme financed
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by a levy on producers. When the Government remove the guarantee, it will be wholly financed by the levy on the industry. We believe that that is correct and appropriate.As the right hon. Member for Westmorland and Lonsdale (Mr. Jopling) will acknowledge, we have always opposed intervention buying in terms of the CAP. He would probably agree that the old deficiency payments system based on guaranteed prices served this country better than intervention buying. We need only consider the beef market and the hundreds of millions of pounds that are spent buying beef, storing it, freezing it and taking it out at some point in the future. I could refer to other excesses of the CAP, all of which relate to intervention buying.
Mr. Clifton-Brown : I am still rather confused. Is it Labour party policy that the taxpayer should subsidise a potato buying-up scheme?
Dr. Strang : It is not our policy. We go along with any Government proposals to remove taxpayer support from the potato industry. However, the Potato Marketing Board should stay in place, and the production target area and quotas should be continued, as should all the other work that the board does. That is what the producers want. Against the background of a light EC regime, such a course should be possible.
We shall consider the Minister's arguments very carefully. We shall give close consideration to the reasons for the increased imports of chilled and frozen chips. I am sure that the right hon. Gentleman will acknowledge that it is in this area that the increase has arisen. One company accounts for 60 per cent. of production in this field. That company has excess capacity in the Netherlands, and there has been penetration of the German market, which does not have quotas, just as there has been penetration of the British market. We shall consider all the arguments objectively. The last thing the Opposition want is constraint of opportunity to invest in processing and thus to create wealth and jobs.
However, we are not persuaded by what we have heard. We agree with the Potato Marketing Board and with potato producers that the board should be allowed to continue. Developments this afternoon in the European Parliament show that there are Conservatives who agree with us and that that Parliament's Agriculture Committee is of the same opinion. It may well be that the Commission can be persuaded to add its support, and then it will be up to the Agriculture Ministers in the Council of Ministers.
I should like to deal now with the removal of the wool guarantee--a decision with which we do not agree. Our judgment is that it is particularly unfortunate that the state-guaranteed price for wool is to be removed. Many hon. Members know that the wool market grew enormously in the 1980s. But then China and Russia withdrew from the market, and there was a huge increase in wool production in New Zealand and, in particular, Australia, where intervention buying was operated. Massive quantities of wool are now held in intervention stores in Italy, and these overhang the market. When prices start to rise, this wool is released, and prices come down. The collapse of the house-building programme in this country has also resulted in a reduction of the demand for wool. Thus, this is the very worst time for removal of the guarantee, which will damage our hill farming industry.
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We are concerned that the price a farmer will receive for a clip from a hardy breed will be so low as to make it hardly worth his while. That will not be in the interests of his flock or of the country. There is a very real danger that this change will result in considerable damage to the sheep industry. I hope that it is not too late for the Government to think again and to consider a compromise arrangement whereby there could be some element of continued state support, even if only for a few weeks, to enable the Wool Marketing Board to continue to provide a realistic guarantee. I agree in general with what the right hon. Gentleman said about the board, which has an excellent record with the collection of wool from producers. The board has the support of buyers also.Clause 44 relates to grants for group marketing. We support the provision. I had hoped that the Minister would announce the provision of some extra money, but in view of the state into which the Government have got the public finances of this country, it is not surprising that there is no such provision.
Finally, I refer to a minor but historic provision tucked away in schedule 5. The right hon. Gentleman himself referred to the repeal of that part of the Agriculture Act 1947 which made provision for an annual review of agriculture. Hon. Members on both sides of the House will remember the importance of the annual review. The negotiations between the farming unions and the Government preceded the setting of national support prices. After we joined the European Community, this became less and less significant, and it is not now practicable to think in terms of an annual national review.
However, the review was indeed a valuable exercise. The agricultural support policies encompassed in the 1947 Act and in the legislation of the 1950s served this country well, enabling people to buy food at world prices. Farmers and farm workers were provided with an effective system of support, and the taxpayer was given value for money.
How different the situation is today. Now, in this country and in the rest of the EC, food is sold at prices well above world levels--indeed, well above levels in the United States. Thousands of millions of pounds are spent on the most inefficient agricultural support system imaginable. Huge mountains of food are bought up, and sometimes commodities are dumped on world markets, to the disadvantage of developing countries, while the common agricultural policy fails to achieve even an adequate means of supporting farmers and the rural economy generally.
The Bill does not address any of the real issues facing the agriculture industry. At best, it fails to confront all the important issues facing agricultural producers and consumers ; at worst, it creates arrangements which will be unstable and may in the long term damage consumers and producers. We believe that the milk marketing boards should be adapted, not abolished. We believe that those boards, the Potato Marketing Board and the wool guarantee could still play an important and valuable role in our agriculture industry. For those reasons, the Opposition will vote against the Bill.
6.15 pm
Mr. Michael Jopling (Westmorland and Lonsdale) : The hon. Member for Edinburgh, East (Dr. Strang) has a good deal of knowledge of agriculture but he got himself into an awful muddle. His apparent opposition to support buying--he said that he would not support a future potato regime
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that involved such buying--goes wholly against the history of the Labour party in government since the war. Throughout its years in office, the Labour party promoted a support-buying regime for the Potato Marketing Board. Labour Members may say that that system was inherited, but I remind the hon. Gentleman, whose memory seems to be very short, that one of the first actions of Fred Peart, when he became Minister of Agriculture in 1964, was to introduce legislation to deal with the marketing of home-grown cereals.Indeed, my maiden speech was delivered during a debate on the Cereals Marketing Act 1965, which set up the home-grown cereals authority, with its reserve support-buying capacity. That mechanism, which was introduced by the then Labour government, was never used, but it was available. The price of cereals never dropped to the level at which the scheme would have kicked into operation. The hon. Member for Edinburgh, East really must do his homework and must remember what his party stood for in the past.
I want to begin the substance of my speech by making two points. First, I hope that my right hon. Friend will forgive me for intervening in a debate on agriculture. As he knows, it is almost six years since I was in his seat. During that time I have had many private conversations with him and with his predecessor, both of whom served with me in the Ministry. Over the years, I have very rarely intervened in public. Indeed, I take the view-- perhaps rather old-fashioned--that anyone who has had the privilege and honour of holding senior office displays the grossest and most appalling bad manners by breathing down the necks of his successors, especially if they are old colleagues, as soon as they take over. These jobs are difficult enough at the best of times. I hope that my right hon. Friend will forgive me for intervening after six years. Parts of this Bill are extremely important to my constituents, and I feel that I must make certain comments.
I also want at the beginning to declare my interest--something that I have often done to the House--as a farmer and, in particular, as a grower of potatoes for the processing industry. I just say to the hon. Lady the Member for Bristol, East (Ms Corston) that her intervention, if I may say so, totally misunderstands the modern cult of agricultural marketing, whereby one finds out what the processor and the public want and then produces for that market. If the processor says that the potatoes to be grown should be Record, one grows that particular variety at his insistence, because one is growing for one's customer. That is the way in which agricultural marketing should go in the future.
All my life I have been an enthusiast for managed agricultural markets, by statute if necessary. Farmers are notoriously impossible to organise collectively into marketing their own produce to their own best advantage. The commendable individualism of the farming community is very often a real drawback when it comes to sensible marketing. All my life, therefore, I have supported the milk marketing boards, the Potato Marketing Board and the wool marketing scheme. I was extremely flattered that the Member for Edinburgh, East should have read out so much of what I said so many years ago. In my heart, I still totally subscribe to what I said at that time, and I am not ashamed of saying it.
When I was responsible for these matters, the schemes of the various boards were often attacked, sometimes by the European Commission and sometimes by some of my
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Cabinet colleagues. It is a matter of some pride to me that, in the four years that I was responsible for these matters, there were very few changes in the marketing boards. I recognise, however, that changes must now be made, and I thought that the hon. Member for Edinburgh, East was perhaps not as fair as he might have been in recognising that changes need to be made. There have been challenges from the Community and from the courts, and the Government, quite understandably, must make these changes. It is about the nature of the changes that I want to speak.I have a good deal of nostalgia for the schemes which are now to be changed, and I have always subscribed to the view that the devil you know is nearly always better than the devil you don't. The big question is how these essential changes can be made while leaving farmers with adequate marketing arrangements so as to give them a fair chance collectively of getting the best price for their produce.
As an example of this, we should recall that the first milk marketing board was set up in the early 1930s, and it became the saviour of thousands of farmers. In the dales and valleys of the north of England, in the west country and in Wales, many small farmers were being driven relentlessly out of business because of their weak, fragmented marketing position.
Dame Elaine Kellett-Bowman (Lancaster) : Sixpence a gallon.
Mr. Jopling : My hon. Friend who has such experience of these matters reminds us of the paltry sums paid for milk in those days. Today it is appropriate that somebody should pay tribute to the milk marketing boards, because they have done a fine job in spite of some difficulties. I have often thought that the boards could have done considerably better but for what I have always regarded as almost a fatal flaw in their constitution, which made it, in practice, impossible to have adequately skilled business leadership at the head of the boards. If I could have made one change in the constitution of the boards, that would have been it.
However, given the difficulties that successive boards have had, they have done a fine job, of which we can all be proud. My anxiety tonight is that some of these changes could well return dairy farmers to those bad old days. To an extent--the hon. Member for Edinburgh, East was right--that cannot happen, given the quota. The quota will make it much more difficult for the various purchasing organisations to hold farmers to ransom and to drive the price down and down, and the existence of milk quotas and the absence of surplus milk production should mean that that is unlikely to happen.
I should very much like to have seen one co-operative, covering England and Wales, to succeed the milk marketing boards, and I welcome the launch of Milk Marque, which I wish every possible success. I am particularly pleased that it has made it clear that it will not discriminate against milk producers on the grounds of size of operation and milk collection or the location of the farm. Already, other potential buyers have appeared on the scene and, as one who believes in competition, I wish them well, but I hope that the price is not driven down by predatory buyers, as happened between the wars. I urge
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my right hon. Friend never to forget what happened before the Milk Marketing Board was set up, and always to be prepared to act again if the industry suffers seriously as a result of these changes. The potato regime is a wholly different set-up. As I said in that speech I made when we were in opposition in the 1970s, the milk marketing board is a very heavy regime, as the sole first buyer of milk, whereas the potato board merely has a reserve right to support-buy. The potato scheme has worked extremely well over the years and, as a potato grower, I am much disappointed that there is a danger of the potato marketing scheme disappearing. There is a free market, which is at times fiercely competitive.I realise the problems of getting full supplies for the processing industry in this country, and I hope, as a potato grower for processing, that we can in future supply a bigger part of it. I pay tribute to the processors, who have done a great deal to get contracts which are satisfactory to growers. My own son is on the negotiating committee of one of these arrangements. They have been very much in the interests of farmers, producers, processors and the consumer.
Under the potato scheme as it exists, producers and consumers are protected by the quota acreage regime, which has worked well over the years. The Minister has told us that none of the other Ministers in the Council is particularly enamoured of the British scheme. That is a pity, if I may say so, and I urge my right hon. Friend to try just once more to see if he can persuade them of the merits of the British scheme.
I am glad that the Potato Marketing Board supports the Bill. In a letter to me, it wrote :
"The PMB broadly supports the Bill, since it permits a successor body' for limited purposes, if the Potato Marketing Scheme (PMS) were to be revoked."
The Minister said that he believes that the potato marketing scheme must be revoked. I was surprised to hear him being as critical of the scheme as he was in his speech. I hope that I can say this to him in a friendly way. I was surprised that he talked that way, in view of the fact that the scheme was reviewed only in 1989 and the producers decided to take up one of the options proposed by the Government at that time.
I was sorry to hear the Minister be somewhat dismissive of the way in which the Potato Marketing Board has been arranging its affairs. I hope that he will not seek to change the Government's defeat in another place. In his speech, he said that the Government would not do that, and that is welcome. It is right that, if the potato marketing scheme must be revoked, the Minister, his successor or whoever, will have to come to the House for a separate decision of the House to revoke the scheme. That is right.
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