House of Commons Hansard Debates for 24 Mar 1994

Mr. Jack : May I give the hon. Gentleman the assurance that he seeks straight away ? If he can provide me with concrete evidence from Mr. Baxter and other growers in the area, we shall look at that claim and any others raised in this debate about unfair state aids.

Mr. Pickthall : I am grateful to the Minister of State for that intervention and I shall convey what he says to Mr. Baxter immediately.

It is not pleasant to hear, time and again, sectors of the industry complaining bitterly that other Europeans are not obeying the rules and stealing a march on the poor British, who naturally always obey the rules. It is even less pleasant to hear Europhobes in the House converting those

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complaints into what is sometimes a very saleable xenophobia. Although most of the farmers whom I represent welcome the European Union and the opportunities of the single European market, they have persistent nagging anxieties about the unevenness within the Union in the use and abuse of subsidy.

A consistent complaint in recent years has been about the power of big superstore chains to control prices, constantly driving down farmers' margins while not noticeably lowering prices for consumers. Any attempt by farmers to resist that process is immediately countered by the superstores' ability to switch their buying to elsewhere in Europe. Farmers suspect that that ability, for example on the part of the Dutch in the case of cabbage, to undercut British growers' prices so systematically cannot always be achieved through greater efficiency alone.

Mr. Baxter also tells me that at least one superstore chain, which formerly switched to English lettuce in May, will not do so this year. A simple change in timing of the switch to British produce can cripple the industry. Two years ago, the big stores did the same to tomato growers, immensely damaging them.

In the Select Committee's investigations into sea fisheries and the poultry industry, we have met persistent complaints about the rules being bent or even framed to favour the French or German industries--for example, in the size and make-up of battery hen cages. It is important that such accusations be taken up as swiftly as possible by MAFF and either promptly and clearly disproved or, if proved, rapidly tackled in Europe. It is depressing to hear those accusations, which may sometimes be myths, float around and gather strength and influence.

Yesterday, we were lobbied by the Small Farmers' Association which, in canvassing its interests, asked some of the right questions about the CAP and subsidies. It put forward three basic proposals : first, a ceiling or cap of £50,000 on the total amount of subsidy which a single farming business can receive in a year ; secondly, within that, all subsidy payments to be tiered or modulated ; and, thirdly, environmental premiums of an extra 10 per cent. for minimum use of pesticides and nitrogen and an extra 30 per cent. for organic farming.

I do not necessarily agree with the figures, which may have been put forward for debate rather than as concrete amounts. I do not even necessarily believe in the precise methods proposed, but I do believe that the association's underlying argument warrants attention. It says that :

"the only JUSTIFICATION for the huge expense of the CAP is that it should keep people on the land. The original purpose of the CAP was to ensure a decent livelihood for farmers, unfortunately no-one foresaw that the price levels necessary to maintain the average farmer were unnecessarily high for the larger ones. Over the years the smallest have dropped out and the ambitious have grown steadily bigger. The point has now been reached where 80 per cent. of subsidies are going to just 20 per cent. of farmers--the largest ones. . .This situation is not sustainable."

The association fears that the impetus of the CAP is to bring about the gobbling up of smaller units by larger ones, with a consequent diminution of farming opportunities and the work force.

I fear that the abolition of minimum terms for tenancies will accelerate the process in the medium and long terms. I urge the Secretary of State to consider carefully before following the Country Landowners Association and the National Farmers Union down that road, which could be catastrophic for many tenant farmers in the future.

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Mr. Cynog Dafis (Ceredigion and Pembroke, North) : May I offer some comfort to the hon. Gentleman and make it clear that not all farming or country organisations support the Government's proposals on tenancy. The Farmers Union of Wales and the young farmers federation in Wales are strongly opposed to the package proposed by the Government and believe that we still need a minimum term.

Mr. Pickthall : I am grateful to the hon. Gentleman for reminding me of that. I knew that the Farmers Union of Wales and the regional branch of the NFU in the north west were opposed to it. Many farmers in my constituency oppose it and have been here to lobby my hon. Friends and me on the issue.

It must be right gradually to remove subsidy from production and to ease the process by paying farmers as, for want of a better phrase, "environmental managers" responsible for keeping Britain a decent place to inhabit and, hopefully, for reversing the environmental damage created by some aspects of farming. In that respect, the removal of assistance or grant to recreate hedgerows is important in my area and the removal of grant for maintaining dry-stone walls is important to the Lake District, where I spend a great deal of time. Will the Secretary of State, in her busy schedule, take time to look at the problems being created in areas like mine by the existence of the green belt ? I do not complain about its existence--I am delighted that it is there. The Secretary of State may say that, like Wales, it is someone else's job. But when the Government decided to force local authorities to insist on planning permission applications from many small businesses operating in or on the edge of green belt, they caused what is about to become an economic calamity in my area.

Green belt planning regulations have threatened the closure of dozens of small enterprises. Ironically, these small enterprises were set up by members of the farming community who were trying to diversify into other areas, such as horticultural transport--hauliers wanting to garage their wagons, or centre their enterprises on old barns or the backs of houses in the middle of nowhere. That has created huge economic problems in areas where there is no alternative work. In fact, it might lead to a reduction in employment, especially in farming areas.

In closing, I ask the Secretary of State to talk to the Department of the Environment about the problems faced by legitimate agriculture-related industries in and around green belt.

6.20 pm

Mr. Robert Jackson (Wantage) : The agricultural chapter of the enlargement agreement with Austria and the Scandinavians has an interesting element of which I believe the House should take notice. It could contain the seeds of something very important for the future, and I urge the Government to build upon it in agricultural negotiations in the years ahead.

Norway, Austria and Finland subsidise their national agriculture to an even greater extent than the common agricultural policy subsidises the agriculture of the Union, and Sweden's agricultural policy has also been relatively highly protected and subsidised. As part of the transitional arrangements for Norwegian, Finnish and Austrian

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agriculture, it has been agreed that those countries may pay national aids to their farmers for the first four years of their membership of the Union.

There are also special arrangements for areas north of the 62nd parallel which will allow national payments to support farmers, with production ceilings based on historical levels of production. I understand that these arrangements will be reviewed after 10 years, but there is no doubt that the countries with Arctic agriculture will wish them to continue indefinitely.

The Scandinavian and Austrian enlargement thus includes explicit provision for national income aids to farmers linked to controls on output. I agree with my hon. Friend the Member for Lincoln (Mr. Carlisle) that this is the direction in which we should aim to develop the CAP in general in the years ahead.

The trend is there already, in the arrangements for set-aside with compensation to producers, and in the arrangements which allow national support for environmental measures related to agriculture. But compared with the developments I am advocating, the problem with the set-aside measures is that they are still funded from the Community budget, while the problem with the national environmental measures is that their scope is still far too limited.

Dame Elaine Kellett-Bowman : Does my hon. Friend not agree that, if we have national aids, the French will outbid us all the time and so disadvantage our farmers ?

Mr. Jackson : I want to develop the argument, and I will return to the perfectly fair point raised by my hon. Friend. Obviously, measures of control will be required in any system of national aids. The fact is that the European Union has not yet faced up to the need to establish a proper regime for national aids to agriculture. I think that is the point that my hon. Friend is making.

This issue has been referred to already in this debate. Brussels seems to be incapable of reacting quickly enough to illegal national aids like those referred to by the hon. Member for Lancashire, West (Mr. Pickthall) and by my hon. Friend the Member for Suffolk, Central (Mr. Lord), who referred to the pig sector, and the illegal aid which the French have introduced into that area.

It is a highly cyclical industry, as is the case with lettuces, and a permanent advantage can be obtained if an illegal subsidy enables a national group of producers to ride out the bottom of the cycle. It is very important that there be a proper system of control of national aids, both in the existing CAP and under the future arrangements which I am advocating.

The rationale behind the common agricultural policy is the securing of a common market for agricultural products throughout the European Union. That is an important interest for the Union, and it must continue to be safeguarded. But it has long been apparent that the common price support mechanism as the central instrument for a common market in agriculture is becoming increasingly obsolete. The problems of the price support system are notorious. I do not disagree with what has been said by the hon. Member for Edinburgh, East (Dr. Strang) or the hon. Member for Lancashire, West in spelling out the problems.

Our food prices to consumers are high by world standards, which helps to undermine general European competitiveness in global markets. We are incurring very

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high budgetary costs for the storage and disposal of surpluses. The system has created a flow of transfer payments which has long been inequitable in the case of Britain and Germany, and which are becoming increasingly unacceptable to the Germans, if not to us. Within the Union, these arrangements are coming under increasing budgetary constraints. At the same time, they are also subject to international restrictions through GATT, which I guess will continue to be tightened.

That means that, if the non-commercial or the less commercial sectors of European agriculture are to survive, they will have to do so on the basis of direct subsidies of one kind or another--for which GATT expressly provides. Provided that the output of the sectors is restricted so that they cannot displace genuinely commercial production, there is no reason why such direct payments should not be made from national budgets.

To ensure that the common market in agriculture remains open, there will have to be a closer regulation of such arrangements by the European Union than exists presently. But it would be absolutely in line with the principle of subsidiarity, to which my hon. Friend the Member for Lincoln referred, that there should be national aids to non-commercial agriculture reflecting different national priorities and preferences.

Needless to say, such a development would be of great benefit to the United Kingdom, whose vast net contribution to the European budget over many years --amounting to tens of billions of pounds--mainly reflects the imbalance of transfers under the common agricultural policy.

I emphasise that I do not believe that this policy would be disadvantageous to British farmers if--I know that this is a big "if"--it were designed properly. Much of British farming is capable of standing on its own feet commercially, not only in competition with the commercial sectors of continental agriculture but also in competition with commercial producers in other parts of the world. But Britain also has small farmers, and farmers in areas of natural beauty. In every part of Britain, there is a countryside environment that we wish to protect. A deal which enables us to fund these worthy non-commercial objectives from our national budget, while controlling their output on a European Union basis, is perfectly consistent with the continued progress of British commercial agriculture. I suspect that a change of this kind would not be unwelcome to British farmers. If I have properly understood the discussion paper entitled "Real Choices" recently released by the NFU, that is the conclusion to which the NFU is coming.

But such a change would be greatly feared by many producers on the continent. That is why, in the present dispute about the size of the blocking minority in the Council, it might be worth remembering that, in the European Union, Britain is a revisionist state whose interests will generally be best served if it is easier, rather than more difficult, to outvote recalcitrant minorities.

Some hon. Members may find it surprising, but I believe that, in developing the common agricultural policy in the direction that I am advocating, it may be that we can make common cause with the French. Of course, there is a huge amount of historical baggage of Anglo-French conflict in this area. For some reason that I have never been able to

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understand properly, small farmers in France have believed that they benefit from European agricultural support arrangements which, as the hon. Member for Lancashire, West said, have really worked to the advantage of France's large commercial producers.

It seems that French small farmers and their political spokesmen have believed that they will get a better deal from a common agricultural policy based on price supports managed from Brussels than from a system of income aids managed from Paris. But I believe that recent developments in the CAP and the GATT are beginning to shift perceptions in la France profonde.

Certainly the Maastricht referendum was largely a vote of no confidence in Brussels by France's rural areas. Meanwhile, the French political leadership is beginning to recognise that it is inevitable that European farm price levels will converge with world markets, and that some system of direct payments is therefore desirable. The main problem will be to persuade the French leaders that those payments should be funded on a national rather than a Union basis. We may be helped by the fact that, although the Germans want to protect their agriculture--which is not commercial in world terms--they also know that Germany cannot continue to sustain and increase its net liabilities to the Union's budget. We must make it clear, meanwhile, that there can be no question of reducing Britain's budgetary abatement.

The enlargement of the Union to include Austria and Scandinavia will be followed, quite possibly before the end of the decade, by a further enlargement towards the east. Each of the Visegrad four--Poland, Hungary, the Czech Republic and Slovakia--has substantial and relatively under- developed agricultural sectors. In Poland there is a marked fragmentation into smaller units.

Elsewhere, communism has left a legacy of large-scale, under-capitalised farm structures, such as those which the Union is currently absorbing in the five eastern lander of Germany. It seems inconceivable that the Visegrad countries can be assimilated into a common agricultural policy based on price supports. The only way that we will be able to absorb their important agricultural sectors will be on the basis that I am advocating for the Union as a whole--a low level of Union price support convergent with world prices, combined with the close Union-level regulation of national aids to farmers. Britain should be encouraging the European Union to face up to the issue of national aids in agriculture. It is often argued that the so-called "repatriation" of the CAP would be inconsistent with a common market in agricultural products. But that is simply not so--there is express provision for national aids in the Community treaty in articles XCII to XCIV, which admit the possibility of national aids in certain circumstances, provided that they should not

"adversely affect trading conditions to an extent contrary to the common interest".

The GATT arrangements also make explicit provision for non-distorting income support measures in agriculture.

The legal framework exists for the policy that I am advocating. Economic common sense has always pointed towards it ; and now the balance of social and political forces is pressing us towards it.

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6.31 pm

Mr. Paul Tyler (North Cornwall) : Debates such as today's are always of special interest, because we achieve some consensus across the Chamber. There have been a number of contributions from both sides with which I have sympathy, particularly those of the hon. Members for Wantage (Mr. Jackson) and for Lincoln (Mr. Carlisle). One reason is that, in a sense, we are all in a minority today, because we represent rural districts and are conscious that many other colleagues who represent the majority areas of urban electorate are not sympathetic to our considerations. That may be an important theme running through today's considerations.

I have recently celebrated--if that is the right word--the anniversary of my first appearance in the House 20 years ago

Mr. Simon Burns (Chelmsford) : That is no cause for celebration.

Mr. Tyler : I thank the hon. Gentleman.

I first entered the House in 1974. I have been here slightly longer this time than when I previously came, when I entered the House on 1 March 1974 and departed in the autumn. The political landscape has dramatically changed in the countryside in that period.

Some 20 years ago, the Church of England was considered to be the Tory party on its knees, and 20 years ago the National Farmers Union was considered to be the Tory party on its hands and knees. That has all changed, and I suppose that I should pay tribute to the right hon. Member for Suffolk, Coastal (Mr. Gummer) for his single-handed efforts in making both those transformations.

Today, large areas of rural Britain are no longer represented by the Conservative party and feel that it has neglected them, as was evident in the county council elections last year. As the House will recall, the Liberal Democrats were left in charge of four county councils, and provided the lead in another 10. The Tories were left with a rump of one. The political landscape reflects an important change of attitude among the people in the countryside. The certainties that have been removed in that period were summed up in the certainty that was previously attached to the common agricultural policy, but has now come tumbling down.

When the then Minister came to the House in July 1992, he told us that he had achieved a great deal in Brussels. He said that he had put the CAP on a secure footing and that it would cut its costs, complexities and surpluses, and yet still leave farmers with improved competitiveness and improved standards of living.

I think that, 18 months later, we have heard evidence in every speech today to show that people recognise that that was not a solution--it was but a transition. It may be necessary to unravel it to a considerable extent if we are to achieve the sort of healthy economic countryside referred to by many hon. Members today. I noticed that the Minister said that the reform package was settling in. The contributions of Conservative Members, let alone those of Opposition Members, show that many of us feel that it is not so much a matter of settling in as of setting out major changes.

It is unsustainable for British agriculture and the British economy as a whole to maintain that deal for any length of time. I am convinced, and have long been convinced--I

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said so at the time of the then Minister's statement--that a tremendous backlash is developing among the taxpayers of the more urban population to the cost of the ill directed, ill targeted investment in agriculture. That backlash is building up to a such level that the policy simply cannot be sustained.

The elements that are most visible to the public through the media are the set-aside payments. I think that it was the hon. Member for Lincoln who said in a previous debate that the £840 million--the estimate at the time--being invested in set-aside did not bear cheerful comparison with the cuts being made in the modest budgets of the sectors that he mentioned today. If hon. Members were to tell their constituents that they were asking for a 28 per cent. pay rise, but intended to set aside 15 per cent. of their correspondence and leave it unanswered, that would not be considered productive or good value for money.

Today's debate is traditionally the opportunity to review the past year. It is sad that we have not had a major agricultural debate for so long. There is clearly a perception that the way in which the Government are implementing the CAP--quite apart from the CAP itself--is making the more isolated farming and rural communities comparatively less well off over a period. That is nowhere more apparent than in hill farming regions.

I make no bones about the fact that I am not a farmer, but I live in a hill farming area, and the majority of my right hon. and hon. Friends come from hill farming areas. I mentioned that fact in my speech to a lunch of the Guild of Agricultural Journalists today, and said that those areas were less-favoured areas. The audience thought that I was making a political comment--I leave it to the House to judge whether that was so. What I said was factually correct. The way in which the Government approached the decision has been taken by the industry--not just this sector--as indicative of a false sense of priorities. The original justification for hill livestock compensatory allowances was not to put money in the pockets of specific farmers, but to enable farming to continue in landscapes that would otherwise be uneconomic. The HLCAs were deliberately introduced to bridge a gap, and were precisely the sort of target investment to which the hon. Member for Wantage referred. However, they fell victim to the Chancellor's axe, whereas other ill targeted general expenditure in other sectors did not.

Without question, the less-favoured areas account for some of the most important landscapes and ecological and environmental habitats in the United Kingdom. The public, even the urban majority, want to invest in just such a scheme. Not only do the vulnerable rural communities in our country deserve that support, but the nation wants to give it. That is why many of us feel that the policy adopted showed that the Government have their priorities wrong. Any dispassionate study would soon show that the true position in the hills is not one of massive increases in income over recent years. Of course it is true that LFA farmers' incomes have risen, but they started from a very low point and are only now returning to the levels of 1988-89. In 1992-93, nearly a third of the full-time LFA hill farmers with livestock in England had a net income of less than £5,000 a year.

In Scotland, the situation is just as bad. I was given the figures by the National Farmers Union of Scotland, representatives of which met some of my right hon. and

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hon. Friends today. If anything, the situation is more critical in Scotland, where hill farming accounts for about 90 per cent. of the agricultural land. Even after increases this year, however, Scottish hill farm incomes still averaged only £13,000. That is insufficient for reinvestment in farm businesses and for maintaining the economy of the LFAs. What is more, the extra money that is coming in is having to be used both to service debt and to replace aging machinery.

We know that there have been some improvements in the past 12 months, principally because of the one-off change in the green currency, not because of the HLCAs or because of any targeted investment in hill areas. Black Wednesday was directly responsible for the change ; unless the Minister can announce today that there will be a regular black Wednesday each year--that would cause some consternation if the City were still operating at this time of night--we cannot expect it to happen again.

Other factors have also affected the hill farming economy in the United Kingdom. The fall in the value of sterling meant that sales of light-weight lambs to France and Spain rose and inflated stock prices well above the norm. But since last August, an increase in sterling has meant that lamb prices have dropped again.

Then there was the outbreak of foot and mouth disease in some parts of eastern Europe ; that meant that the Italians started purchasing bull beef from other European Union states, especially this country. That too had a considerable effect, mitigating some of the difficulties confronting our farmers. We cannot expect that to happen all the time, either--it would be very depressing if it did. Given those special factors, we cannot expect hill farmers to be able to benefit again as they have done in recent months. My principal concern is not just this decision itself but the fact that it seems to be indicative of how the Government approach the whole future direction of the CAP : not the more effective direction of investment, to which the hon. Member for Lincoln and other hon. Members have referred. This seems to be a Treasury-driven policy to get its hands on what it is easy to get them on--farm conservation grants, HLCAs, waste water grants and the Agricultural Development Advisory Service. All these cuts have the Treasury's fingerprints on them.

I hope that Conservative Members will be stroppy in this debate. If they are, they will be helping the Minister, who wants more muscle in her discussions with the Treasury. We, the minority who represent rural areas, must ensure that, when the Minister indulges in her arm wrestling with the Chancellor, we are behind her telling her to be stroppy.

Mr. David Nicholson (Taunton) : I do not propose to be stroppy, either with the hon. Gentleman or with my right hon. Friend. He will recall that I intervened in his speech a year ago on this same point. He, I and, I believe, my right hon. Friend will all agree that farming in the upland areas needs continued support, so that it can be done in an environmentally sensitive way. The hon. Gentleman is paying due regard to the complexities of this matter, but I ask him to bear in mind the many, and increasingly environment-related, subsidies that are available to farmers.

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Mr. Tyler : I understand that point, and I welcome the hon. Gentleman's general support. A study of the budgets available for what I call selective help of that sort shows that they are minute--they are chickenfeed--compared with the huge sums put into area aid and the set- aside scheme. The danger is that, if there is a backlash, it will be against all forms of support, and that would be extremely dangerous to the whole industry.

Hon. Members have already referred, rightly, to the compatibility of the CAP with GATT. I listened with great interest to Sir Leon Brittan when he spoke via a television link to the NFU AGM recently. In his first few sentences, he said that he was convinced that the general outline of the CAP package was entirely compatible with GATT, but the whole of the rest of his talk was devoted to identifying areas in which the CAP needed further reform if it was to be compatible with GATT and to achieve the sort of objectives that Sir Leon felt European taxpayers wanted.

This is of critical importance to us all. If the main driving force in Brussels, where I have been for the past 48 hours, is to continue improving the CAP far beyond the state reached in 1992, it will be disastrous if we talk about the status quo settling in. The last thing we want is that it should settle in. We must improve on it. I do not know the contents of the report prepared for the Commission, to which the Minister referred earlier. She apparently does not know the contents either, although it is extraordinary that such a document could be produced at such a high level for the Commission with no input from the British Ministry of Agriculture-- or, indeed, from Britain. Someone, somewhere, must know what is in the document. I hope that the Minister will be able to produce it soon. In any event, if the document says that the answer is repatriation, I must point out that there are major dangers in that. Fulll repatriation of farming policy may be politically seductive in the short term, but in the longer term it could be damaging and dangerous to British agriculture, to the environment of our countryside and to the economy.

Under repatriation, who would be responsible for ensuring that member states did not move even further the boundaries that they have been asked to adopt for their subsidiarity ? Who would be responsible for future GATT negotiations ? It was difficult enough to stand up to the Americans in the last GATT talks, but if there is no central European Union strategy in future, what will happen ? Would we have to have a whole army of Euro- snoopers to make sure that the increased subsidiarity did not wholly undermine the rules of the single market ?

British farmers in particular might find themselves in extreme difficulties. Our holdings are generally larger--hence, proportionate to the electorate, the farming community is smaller in our country than it is in most member states. As our farmers know to their cost, that could mean their having a much reduced political impact. Secondly--this would have a lot to do with public opinion--subsidiarity could easily push up the costs of regulation and control. This has happened in the past. There might be a corresponding reduction in the costs of other member states which take these matters much less seriously, however.

I suspect that all hon. Members receive a great deal of correspondence about animal welfare issues. I suggested to the Minister a few weeks ago that the pressure from the

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--chiefly urban--public to increase standards in this area would increase costs, thus making the competitive position of British producers even more difficult.

Mr. Clifton-Brown : Does the hon. Gentleman agree that one of the consequences of repatriating our agricultural policy would be the ensuing damaging effect on animal welfare ? We would then have little influence over our EC partners, whose standards are much lower than our own.

Mr. Tyler : That is a fair point, and a useful warning, of which I hope the Minister will take note.

Mr. Campbell-Savours rose

Mr. Tyler : I want to make progress, and I am conscious that other Members want to speak.

Other countries of the European Union are investing to a very considerable extent on the border of support systems : in marketing, in forms of assistance of all sorts--this has been particularly true of horticulture, to which several references have been made--in pigs and, indeed, in potatoes. Those forms of support at the national level and at the regional level in most other member states reflect yet again the importance that these states already attach to the promotion of agriculture.

They do so in a way that I doubt would be found easy by our Minister, who has to deal with a more urban country. There is a grave danger that, if subsidiarity is pushed to its logical position--if we totally repatriate whole elements of the policy--the uneven playing field will be made a great deal more uneven, that it will be tilted even further to the advantage of our competitors.

Where do we go from here ? This direction is something that I and my party have made very clear. I was interested in the Minister's comments. Clearly she has not been briefed by Conservative central office. Our party documents contain great detail on these matters. We have so much policy that it seems that central office has a whole team permanently poring through it. I am delighted with this interest--and I say so as someone who was a Member of the House at a time when such views were not taken nearly so seriously.

I have very little doubt that, when the Agriculture Ministers get round the table again, as they will have to do within the next two or three years, to review the success of the common agricultural policy package and its compatibility with the general agreement on tariffs and trade, the points that have been raised in this debate will have to be uppermost in their minds. That being the case, those of us who come from rural areas must try to indicate the criteria by which we shall assess the proposals.

It is clear that there will have to be a strong element of decoupling, as most hon. Members will recognise. But the decoupling must be used to promote a sustainable, richly diverse, viable rural economy. Indeed, we must recognise that diversities within the United Kingdom, and not just in relation to other member states, will have to be sustained. I hope that, as a result of the National Farmers Union initiatives of this week and, indeed, of our having a different Minister, it will be possible to achieve more consensus with regard to these objectives.

Many people are now talking about a common rural policy. This is something that my party and I were promoting many moons ago. Now, it is a truism that such a policy is desirable. Clearly the objective must be the

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protection and enhancement of rural communities, as well as food production. Agriculture will, of course, play a core, but not an overwhelming, role. In these circumstances, we must ensure that the public can see clearly what they are getting for their money, in terms of environmental, social and employment benefits, as well as of production.

In debates such as this one, contributions from farmers are always welcome. We have heard from that quarter today that help might take the form of the provision of access or the replacement and renovation of landscape detail-- stone walls, hedgerows, Cornish banks, and so on--or full extensification. I share the view of the hon. Member for Lincoln about help for those who are already promoting organic husbandry. Such people may even be propagating rare breeds. All such projects are entitled to support.

But the essential point is that the farmer must be given an element of choice. It is not right that he should be forced into a particular type of husbandry. There should be a menu approach, as in the pilot Baden Wurtemberg scheme in Germany--the MEKA system. That system has the huge advantage that it provides a degree of continuity at the regional as well as the national level, and relative security for the industry.

I should like to refer briefly to the unsung issue of the afternoon--milk marketing. It is very significant that not until the right hon. Member for Westmorland and Lonsdale (Mr. Jopling), a former Minister of Agriculture, raised this issue did the Minister spend any time on it. It is quite extraordinary that it has taken so long to digest the milk marketing boards' proposals--to the extent, it seems, that the proposals for the residuary body were not prepared and ready at the time of the original submission.

Setting that matter to one side for a moment, I have to say that it is quite extraordinary that we should now be told that those producers who have signed up with Milk Marque will have a cooling-off period--they will have time to break the contract--whereas those who have signed up with anybody else will find that they are locked in, or, according to the Minister, that legislation may be brought forward to allow them to break contract. Either way, it is an extraordinary situation. This seems to my hon. Friends and me to be yet another attempt to hamper what could be the last real chance of achieving a power block of producers in the market, with a real producer co-operative.

I should like to give voice to a new concern--a matter that has been drawn to my attention within the last 24 hours. Representatives of the Agricultural Development Advisory Service seem to be entering the fray, taking up a position between the competitors for the new contracts. ADAS is an executive agency, but the buck must stop with someone, and presumably that person is the Minister, who is responsible to the House of Commons.

I have been told that ADAS officials have appeared on the same platform as people setting up milk selling groups. It seems to me that this constitutes a withdrawal from the position that ADAS has always adopted--the provision of unbiased advice on a non-commercial basis. I hope very much that, at the end of the debate, the Minister will be able to assure us that there is no new question mark over the impartiality of ADAS officials. This matter is causing great concern in milk producing areas all around the country, and especially in my area of Devon and Cornwall.

It is clear that there will be drastic changes in the CAP. It was clear during my discussions in Brussels, and it is clear every time the Minister comes to the House, as it is

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clear in the contributions of hon. Members on all sides. But reorientation of this huge investment in rural areas, to ensure that in future it is selectively targeted to support the most vulnerable sectors, communities and landscapes, will require the attention of all of us. I hope that, to this end, the Minister will build on consensus, and not simply occupy the position of a puppet on a Treasury string.

6.56 pm

Sir Roger Moate (Faversham) : I apologise to the House for having missed the opening speeches, especially that of my right hon. Friend the Minister of Agriculture, Fisheries and Food. I should like to take this opportunity of recording my admiration for the very robust way in which my right hon. Friend is leading British agricultural policy, and I thank the Minister of State for the robust way in which he has been helping the fruit industry.

I am very glad that I did not miss the speech of my hon. Friend the Member for Wantage (Mr. Jackson), although he--sensible chap--is missing mine as he is temporarily out of the Chamber. His eloquent presentation of the argument for the repatriation of much of agricultural policy was music to my ears. For many years such a speech in this House would have been regarded as sheer heresy when uttered by someone like my hon. Friend who is supposed to be a passionate believer in the European cause. How refreshing it is that, these days, we can have a sensible, open debate without people being accused of being anti-marketeers or pro-marketeers.

My hon. Friend is clearly right to say that the price support mechanism and the intervention system are obsolete and need to be replaced. He is clearly right to suggest that as the Community enlarges and other nations such as Norway and the Visegrad Four are brought in, no one in their right mind would refuse regions in those countries with very special needs the right to sustain agriculture in those regions.

If that argument is to be upheld, however, we shall have to move to different form of support. I think that my hon. Friend suggested that we should have to move to a proper regime for national aids. This answers the point made by the hon. Member for North Cornwall (Mr. Tyler). Already we are seeing real threats to many sectors of agriculture--particularly horticulture, with which I shall deal in a moment. It is clear that the system is not working. In a European Union of perhaps 20 nations we shall have to have mechanisms to prevent distortions of intra-Community trade.

The Minister of State, admirably, leapt to his feet to say that of course he would vigorously challenge any evidence of unfair state subsidies. But very often the distortions of the market are not caused by overt state subsidies or even by covert state subsidies. Very often, dumping can be carried out by commercial organisations trading simply for cash flow. If they do it at a particularly vulnerable moment, when another country is marketing its product, it can be extremely damaging.

The European Community, or Brussels itself, will have to move away from being a great machine for recirculating money ; it will have to become a more sensitive organisation, trying to monitor trade distortions within the Community and operating an orderly marketing system. It

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