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Mr. Geoffrey Clifton-Brown (Cirencester and Tewkesbury) : The hon. Gentleman went on at great length about fraud in the tobacco regime. If he is so concerned about fraud in the common agricultural policy, how does he expect this considerable sum of money--amounting to £1 billion extra this year--to be given out without proper checks being made on those who apply for it?
Dr. Strang : That is the point. That is what I am saying. Given the system that was agreed at the level of the European Community, for which the Minister must share some responsibility, it was almost inevitable that one would end up with this sort of bureaucracy and with farmers having to spend hours of their valuable time filling in forms. But the hon. Gentleman is right : once you have the system in place, it follows that you must have all these forms.
Mr. Gummer : The hon. Gentleman has just said that his real objection to the system is not that we are having a system like this, but that it is not quite so environmentally directed as it ought to be. His own propositions would end up with precisely the same need for precisely the same information on precisely the same forms. The hon. Gentleman must not mislead the country. He would need
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the same information produced on the same forms, but he would not have bothered to spend the time that we have spent, making it easy for people to fill in the forms. He must not mislead the country.Dr. Strang : No, I will not mislead the country. I am not convinced that the environmental policies that we have been advocating would require this kind of form, but even if they did the British people would understand because they would see some real environmental benefit. They will see nothing from this. This is simply another way of spending their money. It is a way of spending their money which constitutes direct aid to the industry and to that extent we support it, but I cannot believe that it is impossible to develop a better system of making these direct payments to producers than the one currently in place.
That is not our major criticism of the system, however‡--far from it. Our criticism is that it does not address the real weaknesses in the CAP. To a limited extent--we acknowledge this in our amendment--it addresses the issue of the inflated prices of the CAP. The cut in the cereal price and the cut in the beef price are positive, but they fall a long way short of what is required. Does MacSharry adequately enable the Community to look forward with confidence to any GATT agreement?
It was somewhat surprising that the Minister did not mention the word "GATT". Surely if there is a major issue on the horizon of the agriculture industry it is the implications of GATT. We do not know what the position will be in relation to the United States and the GATT agreement, or what the attitude of the new French Administration will be, but we must recognise that any test of the CAP reforms must include a reference to the GATT agreement and to the need to cut the volume of subsidised agricultural exports from the European Community. Many of us are not convinced that these reforms will adequately render the CAP acceptable to the proposals in the GATT agreement.
Labour has been consistent in its pressure for a swift settlement to those negotiations. Subsidised exports of surplus United States and European Community agricultural commodities have swamped and depressed international markets, disastrously pricing farmers in the developing world out of their own domestic markets. The House will remember that an EC/US GATT agricultural settlement was reached in November, including a commitment from the EC to reduce over six years the volume of subsidised exports of each product by 21 per cent. The Minister and the Commission insist that the commitments can be met as promised within the limits of the measures agreed in the CAP reforms, but many authorities disagree. Perhaps the right hon. Gentleman will agree that the way in which the Council of Agriculture Ministers has shaped up on this price package so far does not encourage much optimism about meeting the objectives, particularly in the dairy sector. The Minister himself implicitly acknowledged that. Our major criticism of the so-called reforms of the CAP, however, is that they have failed to address the biggest problem--the huge cost to the Community taxpayer. The cost of the CAP has risen again in 1993. In the past couple of weeks the Commission has confirmed that expenditure this year will be higher than anticipated.
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Much more serious, it has acknowledged that the cost of the CAP will go through the roof next year. It will certainly not come within the guideline. I quote from Agra Europe of 5 March :"The senior controller of EC farm spending has conceded that the EC Commission is likely to have to resort to creative accounting' in order to avoid exceeding the budget guideline in 1994 Michel Jacquot [director of the agricultural guarantee fund] stated that the combined impact of a lower budget ceiling next year and the higher cost resulting from the maintenance of the switchover system would cause serious problems for the Commission next year."
He goes on to explain what these creative accounting devices are, and they are pretty mind-boggling. They might include counting payments incurred in 1994 against the 1993 budget, closing the budget a year early or further delaying payments to member states--that is, the payments in our country by the intervention board to the agencies which intervene in the market.
The CAP reforms do not adequately address the huge cost of the CAP to British taxpayers and to taxpayers through throughout the Community. Because they fail to do that, because they fail to give confidence that we can meet the GATT obligation, and because they fail to give any confidence that we shall see any reduction in expenditure in the long term, they are inherently unstable. That is a bad thing for the industry because, as hon. Members will acknowledge, there is rightly a limit to the amount of money that the taxpayer is prepared to spend on agricultural support, especially when it is spent as wastefully as it is in the common agricultural policy. Against that background, producers cannot be confident about what the long- term future holds for them.
The reforms which continue to dominate discussion about the CAP do not meet what is required. They introduce unnecessary bureaucracy. They fail to cut the cost to the consumer sufficiently. They will not provide long-term support to which the industry is entitled. They will not reduce the cost of the CAP to anything like a level acceptable to British taxpayers and taxpayers throughout the Community. For those reasons, we urge all hon. Members to vote for the Labour amendment this evening.
8.37 pm
Mr. Peter Atkinson (Hexham) : It is very easy for the hon. Member for Edinburgh, East (Dr. Strang) to stand on the sidelines and throw brickbats at the common agricultural policy because we all know that in many respects the common agricultural policy is a fairly unlovely creature. But it is all that we have and we must make the best of it.
I am grateful to be called first from the Back Benches tonight because it gives me the opportunity to thank my right hon. Friend and his team for what they have done in recent years to make the common agricultural policy far more acceptable, certainly to Conservative Members. They have improved it. They have moved it closer to the way that we wanted it, to the benefit of our farmers.
It is all very well for the hon. Member for Edinburgh, East to say that we should dump Greek tobacco farmers or that we should take a stern view of assistance given by the German Government to German sheep farmers, but if we do not concede this kind of compromise with our fellow members of the CAP, what will they do when we go, as we did recently, to seek an additional 70p on a ewe for hill farmers in my constituency? We must live together, which means from time to time swallowing things that we do not
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like to swallow. Improvement in the CAP has come slowly and that is why my right hon. Friend and his team have been impressive. The system is better because prices are now closer to world prices and that has been our aim.I intend to deal with some of the environmental aspects of the CAP. Once again, the Government have a very creditable record in dealing with the environmental aspects of set-aside in particular. We have certainly moved the environmental aspect of the CAP to the top of the agenda. It was of no interest to France, to the Italians or even to the green Germans. It was this country that pushed forward the cause of environmentally friendly set- aside, and that is another credit to my right hon. Friend and his team. Only the other day, there was the £31 million package for new environmentally sensitive areas and for the restoration of moorlands and intensive grazing of hills. That is another great credit to our agricultural team.
There are problems--I accept what the hon. Member for Edinburgh, East said on this--about rotational set-aside or fallow. I hope that, just as my right hon. Friend has improved things in the past, he will be able to get a better system for rotational set-aside. It is no good opposing set-aside. We cannot magic it away. The system has been adopted by Europe and, again, we have to live with it and to make the best of it. The problem of rotational set-aside is the requirement that fields should be cut on or after 1 May. In environmental terms, May day is as much of a disaster as it has been for the country generally, although it is enjoyed by people over there. I should like the May day bank holiday to go and the May day set- aside day to go as well.
The problem with rotational set-aside and the 1 May date is that if one allows a field to go wild up to 1 May, it becomes a honeypot for all wildlife, especially game birds and ground-nesting birds. They move into the area because it provides them with shelter and with food left by the combines in the previous season. It is also a reservoir of insect life and of weeds that grow in May. If the farmer starts to work on the field on 1 May, he is not only cutting the grass or ploughing it up, but cutting or ploughing the young partridge and the partridge chicks. That is why I was pleased that there was a meeting yesterday between the National Farmers Union and a number of bodies interested in wildlife to see whether they could reach a better compromise on the date. I am sure that many farmers who are environmentally responsible will move that day back from 1 May at least to 1 June so that the chicks, the ground-nesting birds and other wildlife have been reared by the time the mower or the plough goes over the land. I welcome any changes in that rule. The reason for the rule is the prevention of fraud, which is a real problem with which our Ministers have to deal. It is not beyond the wit of Greek or southern Italian farmers who farm cereal on rather sparse fields to claim that a field that appears to be growing crops is growing nothing more than volunteer grain from seed left over by the previous combine. I urge that in our continuing review and improvement of this aspect of set-aside, we try to reach a better date for the mowers to begin their work.
The recent meeting shows that Britain's farmers are concerned about the environmental aspects of their policies. They know, as everyone does, that the CAP is costing a great deal of money and that the public are entitled to something for their cash. That is why farmers will enter the longer-term set-aside schemes, the woodland schemes and the permanent set-aside schemes. They
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believe that the public are entitled to a return on that money. I urge Ministers in the coming year to try to re- negotiate that system and not to let a load of more crafty Greeks or Italians do a lot of damage to a scheme of set-aside that is potentially beneficial for our wildlife.8.44 pm
Mr. Paul Tyler (North Cornwall) : We may find that there is an unusual degree of consensus about objectives across the Chamber this evening. I agree with much of what the hon. Member for Hexham (Mr. Atkinson) has just said about the long-term advantages that can be achieved by non-rotational set-aside. I shall come back to that point.
We get an opportunity to range over the strategic objectives of the CAP only once a year. In previous years, there has been a full six-hour debate whereas this evening, we may have four hours of debate. In the interests of restricted production, about which we are all talking this evening, I intend to be brief.
It is extremely important that the Minister's words about surplus and shortage should be at the heart of our debate. After a period of considerable surplus, it is all too easy to forget that shortage is even more dangerous. Surely a modest surplus is better than even the most marginal shortage. That must be true not only of the United Kingdom, but of the Community generally and of the world at large and it should be in the back of our minds throughout all our discussions.
Like the Minister, I have addressed meetings of and have had discussions with the Small Farmers Association today. One of the reasons why there is increased interest--outside the House at least--in all parts of the country, urban and rural, in the way in which the CAP is developing is not only that the CAP has got to a watershed in terms of cost, but that many people--non-farmers as well as farmers--are more aware of the visible products of the CAP than has been the case in recent years.
In the similar debate in February 1989, the then Minister, the right hon. Member for Norfolk, South (Mr. MacGregor), stated : "one of the biggest threats to the CAP and hence to our farmers would be failure to achieve a successful outcome to the GATT Uruguay round".--[ Official Report, 27 February 1992 ; Vol. 148, c. 28.] Those who now have their body clock adjusted to "Farming Today" and who woke up early this morning will have heard the new Trade Secretary of the United States speaking on the subject. It is far from clear, four years after the right hon. Member for Norfolk, South made his prediction, whether the GATT round is any closer to completion than it was six months ago, let alone 12 months ago. If anything, we seem to be slipping back rather than going forward. Although it is true that in the autumn there seemed to be some ground-breaking in an agreement on agriculture, that is surely now under threat and there is still no GATT resolution in sight. I know that some Conservative Members were delighted by the recent election results in France. I wonder whether they will still be delighted when our Minister meets the new French Minister, Jean Puech, and discovers whether there is a meeting of minds on the future of GATT and of the CAP. I believe that a time-bomb may be ticking away there. If so, we may find that even the comparatively small advance made in the latter part of last year is now at risk.
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When the CAP reforms were brought back to the House last May, the Minister did not use the phrase "peace in our time", but the piece of paper that he waved at us was represented as a major triumph. It was represented as a triumph for simplicity, as a triumph for economy and as a triumph for an even playing field. On 22 May he said : "This was a major step forward for British consumers and taxpayers".--[ Official Report, 22 May 1992 ; Vol. 208, c. 629.] When we debated the agreement in full in June, the right hon. Gentleman said :"Overall, the cost to the consumer and taxpayer will be lower under the reformed CAP."--[ Official Report, 12 June 1992 ; Vol. 209, c. 555.]
This evening, the Minister said firmly that what we are now debating is the increased cost of the CAP reform. Surely that is the issue about which people are concerned. Moreover, there appears to be no beneficial result from that increased cost. To many people, it is totally inexplicable where all those billions are going. It is clear that they are not going into the pockets of the comparatively badly off small farmers whom the Minister and I met today. Equally clearly, it is not going to the marginal parts of the country--the less-favoured areas. On the whole, it does not seem to be going to the livestock producers. Where is it going? Is it going into intervention costs, distributors, and processors' costs or supermarket profits? Of course, it may be going into fraud, in which case we shall no doubt see, with the tightening of the fraud provisions that the Minister has claimed are now coming into effect, where savings can be made.
As has already been said, there are in this bundle several detailed documents relating to farmers in the eastern La"nder of Germany, tobacco growers in southern Europe, and so on. However, there are one or two significant omissions. It is true that there is a very useful document on attempts to tighten up in the case of the approach of three member states to milk quota, but a universal review of the milk quota system is surely long overdue. This matter was referred to in last week's debate. The Minister and I had an exchange on the whole issue of quotas and there was another brief exchange this evening. The Commission, under instruction from the Council of Agriculture Ministers, should undertake a universal review. The ad hoc attempt to deal with the Italian problem or the Spanish problem is not sufficient.
Similarly, for the reasons given a few moments ago by the hon. Member for Hexham, there is an urgent need for a complete analysis of the real alternative of non-rotational, permanent set-aside. Not only is this the core of the problems that affect the United Kingdom ; the country is uniquely affected by them. From an answer that the Minister gave me a few weeks ago, it is apparent that we are imposing upon ourselves a degree of set-aside that is totally unrepresentative of the scale of our agriculture and is not reflected in any way in other member states. I believe that over 60 per cent. of the farmers of this country will be affected by the set- aside provisions. The nearest figure--34 per cent.--is that of Denmark and the level falls right away in many other countries. Set-aside has become the core of the United Kingdom's approach to the CAP reforms, rather than something that we can simply blame on Brussels. Indeed, this country has a terrible tendency--perhaps the Government encourage it--to believe that
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everything that is wrong with the CAP is "over there", or that if it is "over here", it must be the fault of people "over there". In this case, the reliance on set-aside is home-grown. It is a major mistake. This is only one of the reasons for the fact that the reforms that were put before the House last year, and are now coming slowly through the mincing machine, will prove to be very transitional. They are not a permanent solution to the major problems of the CAP.On the question of environmental implications, I welcome all converts. I am delighted that there is unanimity in the House. I do not adopt the grudging attitude that Opposition Front-Bench Members display towards converts. My party and I were promoting these policies as long ago as 1978, when I co- authored a document entitled "New Deal for Rural Britain". I do not take any great pride in being 10 years ahead of others. Indeed, I am delighted that everybody else is with me now. However, if that is to be the approach, this country's insistence on relying on rotational set-aside flies in the face of all sensible and expert opinion.
It is impossible to provide new habitats for species by rotational set- aside. It is impossible to plan, on a long-term basis, to meet the needs of conservation with rotational set-aside. Even if it were sustainable as an environmental policy, it is quite unsustainable as a political policy to ask the people of this country, when they holiday in Cornwall--as I am sure they will--to pay for organised dereliction : nettles, docks, and so on. Surely the appearance of total neglect is too high a price to ask the taxpayer to pay in tight times. It might work for a year, but I do not think that it would work for longer.
In this regard, we shall have a major problem in the near future. There is the question of a wider awareness in this country of the needs of a hungry world, including the needs of a hungry eastern Europe. I believe that rotational set-aside will prove to be the undoing of the whole of the package. It is as if the package contains the seeds of its own destruction.
There has been much reference to the integrated administration and control system forms. The Minister was kind enough to reassure me last week that these would be in the hands of the entire farming community by 2 April. For a reason about which we agreed--All Fools' day--he said that 1 April would not be appropriate. What is important is the way in which the forms will be processed and treated. I have asked that the comparable forms to be used in the other 11 member states be placed in the Library for us all to see. I hope very much that those will be available before the House rises at the end of the week. With the new system of monitoring the whole way in which the CAP is operating, it is critical to ensure that the same amount of information is available to all Governments and that those Governments are in a position to act on it.
Of course, we support attempts to control fraud. Of course, we are anxious to ensure that the right information is available. It will be difficult enough in this country to ensure that maps are sufficiently up to date to meet the requirements. Are we confident that, in the case of peasants in Greece, the right information will be provided? Are we confident that if information is not provided, or is provided in a deliberately misleading way, Ministers in other Community countries will insist on
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are against is an unreasonable degree of bureaucracy in this country which is not matched by effective monitoring in the other member states. The Minister was quite right in referring to the need for a system of uniform effectiveness throughout the Community. One of the advantages of the Maastricht treaty is that it will give more teeth to the implementation of such systems.We are not discussing potatoes in this debate. Potatoes do not yet feature in an EC regime. However, I hope that the Minister takes very seriously indeed the widespread misgivings--misgivings expressed in all parts of the House last week--about too fast a transition from the present managed market to the unknown of a regime that we do not understand. We do not yet know how it will work. That all-party concern is reflected by all sectors of the industry and by many other parts of the agricultural community.
There is a specific mention in the package of the sheep regime in France. The concern expressed earlier about the extent of derogation to national Governments will be widely supported. If we are to have a common agricultural policy and if there are broadly similar circumstances for particular sectors, it should be the exception rather than the rule that a Government, like the French Government, should be able to come forward with quite specific proposals for their sheep sector when that will obviously affect the competitive advantage of other sheep sectors in other member states.
It is difficult to ensure that the level of derogation is kept to a reasonable limit. However, we should be conscious of the potential conflict between increasing subsidiarity on the one hand and the initiative to which I have just referred on the other, which then calls into question the overall common agricultural policy. That may also affect what is eligible and what is not eligible for the so-called green box in the GATT negotiations.
If there is too much derogation and subsidiarity among member states' Governments, the green box might be called into question. That, again, is why there is an advantage in a Community-wide approach to issues such as set-aside and environmental advantages. Those issues will clearly fall in the green box and should therefore not be subject to any undermining by the GATT negotiations. I have been brief as I am conscious that other hon. Members may want to contribute to what should be an overall assessment of what is happening to the CAP. There will be widespread support in all parts of the House for the concern expressed this evening for the health of the agriculture community. However, in my book, that is only part--although a vital part--of the concern that we should all share for the health of the rural economy, of the rural environment and of balanced communities in rural areas.
Of course, agriculture remains the core industry for most parts of the countryside, but it is not the only part. One of the complaints that is often voiced by many interests is that in the past the CAP has concentrated far too much on a selection of agriculture production objectives rather than on the health of the rural economy as a whole. That was why many of us were so concerned about the way in which the hill livestock compensatory allowances were downgraded in the past few weeks.
I hope very much that the new regime in France will not destabilise the CAP. However, we should all be conscious of the fact that, even with everything going the right way, the CAP reforms are by no means as permanent as they looked last summer. The Minister said this evening that
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uncertainty has been lessened. Last summer he said that it had been removed. The best that we can say this evening is that the CAP reforms may last a year or two, but, before very long, Ministers will be around the table again.9.2 pm
Mr. David Harris (St. Ives) : I hope the fact that the House sat all night has not upset my normal placid attitude and reputation. However, I want first of all--I have given notice of this--gently to chide the hon. Member for North Cornwall (Mr. Tyler). While he was speaking, I could not help noticing that his Bench was as empty as most Benches. I mention that simply because he wrote a letter to the Western Morning News which I found rather silly and, if the hon. Gentleman will forgive me for saying so, a little sactimonious. In reference to last week's debate on agriculture, the hon. Gentleman wrote :
"Conservative MPs representing Cornish and Devon constituencies were, however, conspicuous by their absence."
As the hon. Gentleman knows, we often speak in the House to a less packed audience than we would perhaps like. For my part, I was missing last week because I was in Brussels on business as a member of the Select Committee on European Legislation. I have no doubt that the hon. Gentleman's leader, who did not vote at the end of last week's debate, also had an equally good reason for being absent.
Mr. Tyler : I must confess that my colleagues have a curious choice of priorities in that they came to listen to the Minister this evening, but did not stay to hear me.
Mr. Harris : They did pop in for a few minutes and then left to return to their dinners or to their pressing engagements. I fully acknowledge that we all have many engagements. I will not labour the point, but I hope that the hon. Gentleman will have the grace to acknowledge it.
My real criticism is directed at my right hon. Friend the Minister--and perhaps this is the effect of an all-night sitting. I said that I was in Brussels last week as a member of the European Legislation Committee. Last night, during the all-night sitting, I read the papers relating to that Committee. A particular paper was tagged to the papers for this debate--so that I am able to refer to it--on national aid for French sheep farming, a subject to which the hon. Members for North Cornwall and for Edinburgh, East (Dr. Strang) referred.
I have had the advantage of seeing some of the papers in more detail because of my position on the European Legislation Committee, and I have been astounded by what they contain. During a meeting of the Agriculture Council on 17 March, the Minister--I informed him that I would refer to this issue--apparently agreed to a proposal that France should be allowed to put in place an £8 million subsidy scheme for its sheep farmers. The papers to the European Legislation Committee point out clearly that the Commission had considered that the provision of that national aid to French sheep producers was "incompatible with the Common Market."
The reason given in the papers was that a letter had been written by the Minister of State
"to the Chairman of the European Legislation Committee ... explaining why Mr. Gummer gave his agreement, thus contributing to the unanimous decision, as required if the Commission's ruling was to be overturned. This involved
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assurances by the then French Minister of the Interior that his Government would take all necessary steps to secure the free flow of goods, particularly fish."Two points immediately arise. First, should our Ministers have put faith in the assurances of the then French Minister of the Interior on 17 March, knowing that the following Sunday was to see the first round in the French general election? As we know, that saw the exit of the previous French Government and, with them, the exit of that socialist Minister of the Interior. But apparently his assurances were worth while, and for that reason we went along with giving that extra aid to French farmers.
The second point is more fundamental. I do not for the life of me see why the British Government should be giving a special dispensation to the French Government to do what they have a duty to do, which is to allow and facilitate the import into France of legitimate produce from this country, be it sheepmeat, poultrymeat, dairy produce or fish. Whatever assurances were given, there have been continuing difficulties in getting produce into the French market.
I praise the Minister for doing his utmost to get the French Government to behave in a more reasonable manner. It is true that arrangements have been put in place to enable convoy facilities and protection to be given in respect of fish going into France, and I welcome that ; but we should not have gone along with giving national aid to French farmers, apparently on the basis of assurances that the French Government would behave in a proper manner on matters on which they had an absolute duty--in particular to facilitate imports into France. There may be a completely different aspect to the story which has not been brought out in the documents which I have quoted. I am ready to listen to any explanation given by my right hon. Friend the Minister, and perhaps there is one.
We all know about the disgraceful behaviour in France, particularly over imports of lamb from this country, let alone fish. When a Government, be they French or any other, in the European Community do not carry out their duty on imports of agricultural produce, our Government should make it clear that, instead of giving them special dispensation to get their co- operation, we will, if necessary, in conjunction with the Commission, take action against them by using article 169 of the treaty of Rome, which makes it clear that a member state has a duty to ensure that legitimate imports get through. I am sorry to go on about the matter, but there is another important aspect. The Community is in the process of giving £8 million as national aid to French sheep farmers. That may well make it more difficult for sheep farmers in the south-west of England, for example, to export legitimately to France, because the French farmers will have additional assistance. Earlier, I chided him, but I will support what my hon. Friend--I call him that deliberately because we both represent Cornish constituencies--the Member for North Cornwall said about the position of farmers in the south-west when we are considering national aid by other member states to their farmers. Speaking on behalf of the Opposition, the hon. Member for Edinburgh, East made heavy weather, as does the amendment, of trying to attack my right hon. Friend the Minister of Agriculture. The Minister has done a good job in trying to lead the reform process on the common
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agricultural policy. The hon. Member for North Cornwall is correct ; this is not the end of the story. I would be appalled if it was. I hope--not fear--that Ministers will be back round the table working for further sensible reforms. Despite the great advances that have been made, aspects of the common agricultural policy still need to be reformed ; it is a continuous process.I welcome various points in the price review and the measures surrounding it. I was very pleased that there is not to be a further cut in milk quotas in the coming year. That is welcomed too by milk producers.
Having read the briefing notes provided by the National Farmers Union and the Country Landowners Association, I cannot help contrasting the nature of those notes and their comments on the current position with the briefing notes which we all received a few years ago. There has been a distinct change in the reaction of farming unions, farming organisations and other bodies associated with rural life. That is very welcome.
For example, the National Farmers Union welcomes the Commission's intention to end the milk co-responsibility levy from 1 April this year. We can all say amen to that, because hon. Members on both sides of the House have opposed that nonsensical levy. The Country Landowners Association starts its briefing note by saying : "The annual European Community CAP prices negotiation may be less controversial than usual this year."
We can read between the lines of that and see that the position is not too bad. The association goes out of its way to congratulate the Minister, rightly, on the green package and other aspects of the matters which we are debating tonight.
If I considered agriculture in my constituency and the county of Cornwall, I would conclude that there was a distinct and significant improvement in the returns for farmers, despite their difficulties. Farmers have not stopped grumbling and they still have problems. The hon. Member for Edinburgh, East is correct to say that the improvement in returns is due partly to the value of sterling, but I do not think that it is entirely due to that. For example, I noted that broccoli--Mr. Deputy Speaker, you know it as cauliflower, but in Cornwall we refer to it as broccoli--and spring cabbage prices have been fairly good this year. The price of livestock has also been good : one need look only at beef prices. I am in no way saying that everything is wonderful or that the agricultural industry does not have its problems.
I take the proper point that my right hon. Friend made--that the improvements, which we all welcome, start from a low base as far as incomes are concerned. I am not for one moment suggesting that everything is wonderful but, when there is an improvement in income, at least we should point it out and say that that is good and we are moving in the right direction.
Attendance at this debate, which is not overwhelming, is perhaps in some way a reflection of the fact that there is not the anxiety about agriculture that there has been recently.
Mr. John Greenway (Ryedale) : Quality.
Mr. Harris : The quality is high.
My mind goes back to previous debates on agriculture when the House was fairly full. I agree that the attendance tonight should not be interpreted as in any way detracting from the importance of agriculture. Agriculture is the backbone of my constituency and of the economy in
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Cornwall and in many other parts of the country. We all want to ensure that agriculture has a future, in which people in it can have confidence. Without wishing to overstate the case, I believe that we are at least debating the issue in a much better atmosphere than in the past and with more knowledge of where we are going.9.17 pm
Mr. George Stevenson (Stoke-on-Trent, South) : The motion asks us to take note of
"the prices and on related measures, 1993-94 : and supports the Government's intention to negotiate an outcome ... that will take account of the interests of United Kingdom producers and consumers, builds upon the 1992 Common Agricultural Policy reforms,". I read that out purposely, because we need to examine carefully exactly what we are building on.
The Government say that the general principle underlying the price package is stability. We can all say "Hear, hear" to that, because, if there is one thing that agriculture has been lacking for many a good year, it is a set of objectives and a sense of stability to which the industry can look forward. That principle is extremely important. When we talk to farmers, as we all do from time to time, the one thing that they impress on us is the need for a set of clear objectives--where we are going--and a need for stability. On that basis, I shall judge whether we can build on the reforms that were agreed in 1992.
It seems that the Government's measure of stability is that prices this year are unchanged. Vital long-term stability is not especially evident. The Minister said that it is not feasible to look further into the future than next year. What sort of confidence does that give agriculture? However, I do not blame him for saying that. When we consider what we are facing as a result of the so-called reforms, I think that the Minister was wise to say that we should look no further than next year. Short-termism is evident throughout the so-called reforms.
There has never been any doubt that the CAP was in need of fundamental reform ; we know that it has been a spectacular failure. Unfortunately, I have severe reservations about the deal that was reached in May 1992, which is contained in the documents that are before us. It does not constitute the fundamental reform that will bring stability and confidence to agriculture throughout the Community, and especially in the United Kingdom.
With cereals, there has been reform, but even that is flawed. The system still discriminates against larger producers, who must still put 15 per cent. of their land into set-aside to qualify for compensation. Those with holdings of up to 20 hectares--there are many such holdings in other EC countries--do not have to do that. The Commission says that at the heart of the reform of the CAP is the desire to sharpen or reduce price support, to compensate farmers for a fall in income and to preserve the level of agriculture that is based on family farms. For my sins or otherwise, I have spent some time as a Member of the European Parliament. I know that, if one issue has been discussed more often in agriculture debates than anything else, it is what constitutes a family farm. My clear impression is that what we in the United Kingdom describe as a family farm is far distant from that which is recognised as such in the rest of the member states. Unfortunately, the so-called CAP reforms have been
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slanted heavily towards the interpretation of a family farm in the rest of the Community, to the disadvantage of United Kingdom agriculture.The so-called reform that we are discussing will benefit smaller and less efficient producers. That needs to be underlined. Some systems of agriculture in the Community are relatively old-fashioned. They are relatively less efficient, but we must be careful about how we judge efficiency. It can be judged by how much money comes out of the public purse to a producer. If it is judged by how much is produced per hectare, the clear result is that United Kingdom producers are very efficient. That is not the position in many member states, because of the size and structure of agriculture. The various reforms reflect a dramatic shift in emphasis. There is the danger that they will lead to the support of less efficient producers instead of efficiency. That will lead in turn to the danger of an ossification of backward practices. That could affect the ability of European Community agriculture to compete on the world market. That is particularly important when we consider that all the evidence shows that efficiency is likely to be penalised and lack of efficiency likely to be supported. We shall say to Portuguese farmers who work on very small holdings, "Do not change. We will support what you are doing," while at the same time we are in danger of penalising the more efficient producers. That is not the right framework to take us into what we hope will be a more liberalised world market in which competition will become more the order of the day.
Some Conservative Members have criticised my hon. Friends for criticising the Minister of Agriculture too much. I suppose that we are all sorry about that, but it is not my intention to do that. I certainly do not want to be accused of being churlish. There have been some improvements on the original package. The cereals compensation has been improved. Larger farms will receive compensation for all the land that they set aside. However, I still argue that the system discriminates against United Kingdom producers. We must never forget that. Larger producers will still have to set aside 12 per cent. of their land to qualify for compensation. That is not the case for smaller producers.
In the sheep regime, the headage limit has been increased from 750 in the original proposals to 1,000. That is to be welcomed. I also welcome the increase from 350 to 500 for lowland areas and the continuation of the 50 per cent. of the premium above those limits. All those improvements came out of the negotiation, and we should recognise and welcome them.
I also welcome the environmental moves that have been made. Certain CAP subsidies will be tied to observation of basic environmental standards by the producer. The Minister referred to the so-called cross-compliance when land is set aside. These are all small but welcome developments. I also welcome the greater emphasis on projects such as the creation of environmentally sensitive areas, although the amount of money involved remains lamentably small.
I have mentioned the most notable examples of the improvements that resulted from the negotiations. However, by no stretch of the imagination do even those improvements provide a stable framework for agriculture, especially in the United Kingdom. If one asks farmers the length and breadth of the land whether they feel more
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confident now about the future, they may say that they feel more confident about the coming year, but they may not feel so confident about the future.Agriculture has to be a long-term project. One cannot turn the tap off from one year to the next. Therefore, while we shall see improvements this year, we shall be in danger of deluding ourselves if we consider that they represent the confidence and stability which farmers look for. Indeed, there are already signs that the deal is falling apart at the seams.
There is a continuing controversy about the compatibility of CAP reform and the GATT agreement. A special committee meeting of the Council of Ministers on 18 February reported little progress on the issue. It recorded that some member states had severe doubt about the compatibility of the CAP reform and the GATT agreement. Heaven knows what will happen when the new French Government carry out their threat. Perhaps they are another Government who will not keep their promises.
However, let us ignore that controversy for the moment and examine the issues that cause anxiety to everyone in the agricultural industry. People know that it is not possible to continue pushing costs up and up. They are not daft ; they are business people. Let us consider the reality. The 1993 budget for agriculture was set at 34 billion ecu. There is about 80p to an ecu, but I shall not do the conversion ; I shall leave that to hon. Members. In mid-January, just two weeks into the budgetary year, the Commission said that it wanted a 1 billion ecu increase. Some of that, but not all, was due to currency changes. Some was due to the considerable increases in unplanned costs resulting from additional production. The estimated result for the 1993 budget is now 3.9 billion ecu above the 1992 budget. That is significant because the 1992 budget showed little increase over the 1991 budget. It is therefore obvious that the position is rapidly deteriorating.
Before I am again told that that is a one-off problem, I want to go into a little detail about the projections for 1994. The documents give estimated costs of 36.7 billion ecu, which is 2.7 billion ecu above the original 1993 budget and a staggering 5.6 billion ecu above the 1991 budget. In just three years, the European agriculture guidance and guarantee fund has increased from 31 billion ecu to 35.5 billion ecu. There is the prospect that, if we do not take account of the coming year, farmers' incomes will not increase. That is hardly an example of budgetary control.
The level of stocks also gives rise to significant concern. No one could argue that we should continue to hold such massive stocks. I accept that we need to be self-sufficient and to have a buffer, but there can be no justification for holding such enormous stocks. Indeed, it has been a central part of policy to try to reduce them. This year, 30 million tonnes of cereals will be in stock. That is a dramatic increase, despite a relatively poor harvest. There are also high stocks of beef, despite a very costly programme under which 1.1 million tonnes were exported. According to the Commission, beef stocks are now approaching 1.2 million tonnes, which is a record high. Stocks generally are now reaching record proportions, although, to be fair, stocks of butter and skimmed milk powder have fallen.
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If we take account of the various scenarios being considered by the Commission, the impact of the proposals on cereals- -the one area that could rightly be described as reformed--over five years could result in 1997-98 production being as high as 173 million tonnes. If that estimate is correct--I think that it is on the low side--that is only 7 million tonnes less than production in 1991-92. It is only a 4 per cent. reduction in cereal production despite measures which, on the Commission's own admission, will cost 5.6 billion ecu more than they cost in 1991.Beef production is set to increase up to 1997 and the Commission expects a considerable rise in both surpluses and stocks. Hon. Members have mentioned milk reform : they have mentioned the agreed cut in the quota of 1 per cent. in successive years from 1993 onwards. That has already been deferred. I suppose that the milk industry and the farmers will be pleased, but the position cannot be described as consistent. It cannot be consistent to agree a reduction of 3 per cent. over three years in May, and to change one's mind within months.
If I were a milk producer, I would say, "Hang on a second : if that can happen in a matter of months, they can change their minds again. How am I to plan for the future? How will my investment be affected? I do not know what is happening from one month to the next." The documents before us present an inherent threat of inconsistency, instability and short-termism.
Other hon. Members have mentioned Italy. I see no justification in agreeing --even in principle--to a 900,000 tonne increase in the Italian quota, even if such an increase is circumscribed by the conditions mentioned by the Minister. His faith in Italy is touching : he assured us that he would expect the Italians, as well as us, to fill in the forms to which other hon. Members have referred. I hope that that happens, but I cannot embrace that touching faith, given the Italians' record--particularly their record in regard to milk. The 900,000 tonne increase is unjustifiable, especially as neither the Minister nor anyone else has asked the question that I would ask. We are not self-sufficient in milk production ; are we fighting for additional quotas for our producers?
It is no good saying that quota is useless because we cannot convert it into added-value goods. That is because, owing to our not having sufficient quota, we are closing down processing factories. We are in a vicious circle, but the Minister did not seem to recognise that.
Italy has never implemented the system, and I believe that this agreement defies even the most charitable logic. According to European Community officials, consumers--a group we all represent, but who are not mentioned in our debates as often as they should be--may benefit from a paltry 2 per cent. reduction in food prices in three years. Devaluation has put paid to that. Already the pressure on food prices is increasing, especially in the case of sugar.
The Court of Auditors usually delays judgment until after the event, but it has seen fit to comment on the so-called reforms before the event. It has said that the reforms are a bureaucratic nightmare and a recipe for fraud.
I see no real, long-term progress towards the objectives that are in the interests of agriculture, the consumer, the environment, budgetary control and a system that will lead us into the next century. There is no perceptible benefit for consumers ; indeed, as I have said, devaluation has brought
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