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Mr. Stevenson: No, I would like to make a little progress. How are the Government responding to the situation? I would describe their response as nothing short of incredible. The Government motion refers to the Government's

"determination to ensure that EU agricultural spending is effectively restrained".

It goes on to say that the House should note that

"UK farm incomes rose by 6.9 per cent. over the last year". The implication of the latter claim is that Government policy was responsible, through some mechanism, for that rise in UK farm incomes. If the Minister intends to say in his reply to the debate that farm incomes have increased as a result of Government policy rather than the disaster of black Wednesday and devaluation, I shall be interested to hear his reasons. The claim that the Government have "effectively restrained" expenditure beggars belief.

Many statistics have been cited in the debate so far and I do not wish to add to them. In a letter to me, to which my hon. Friend the Member for Edinburgh, East (Dr. Strang) has referred already, the Minister sells the pass. Between 1991-92--the year in which the MacSharry reforms were agreed- -and 1995, agricultural expenditure increased by 6 billion ecu. That works out at about £4.5 billion. I do not understand how the Government can claim that they embarked on policies that "effectively restrained" agricultural expenditure in light of their own figures which show that the cost of the common agricultural policy increased by 25 per cent. over three or four years. According to the report published by MAFF, CAP costs will continue to increase. So not only do we face massive current increases, but, by the Government's own admission, we shall face even greater increases.

I should like for a moment to examine the Government's plans as set out in the MAFF report to which I referred. According to that report, United Kingdom expenditure on agriculture is due to increase by £466 million next year to a figure approaching £2.9 billion. The report states quite openly that most of the increased costs are due to devaluation. The term used was "currency alignment", but it comes down to devaluation. That devaluation has been responsible for increases in farmers' incomes over the past year or two.

If those costs result mainly from devaluation, I wonder what will happen to them as a result of the current turmoil in the European Union monetary markets. In recent months, there have been further devaluations and crises in the exchange rate mechanism. Those factors affect costs, therefore, when he replies to the debate, can the Minister give us some idea of what the additional costs will be as a result of devaluations over recent months?

Between 1990 and 1997, the Government expect United Kingdom expenditure on the CAP to increase by no less than £1.2 billion--so much for restraining expenditure. The motion is nonsense. The facts simply do not bear out the Government's claims. I know that that has not stopped hon. Members supporting the Government in the past, but I hope that on this occasion they do not fly

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in the face of the facts as presented and support the motion. We have heard much talk about fraud tonight. I believe that the Government motion is equally fraudulent.

There have been other changes in agriculture to which the Secretary of State referred. I join my hon. Friend the Member for Edinburgh, East in welcoming some of those changes, but let us not be blind to the other changes and retreats by the Government over recent years that have disadvantaged British agriculture.

The arable area payments and the direct income support are skewed in favour of small producers--in other words, they are against the interests of the larger more efficient producers in the United Kingdom. The sheep premium agreement, which imposed a limit of 500 in lowland and 1,000 in less- favoured areas, affected British flocks because of their relative size. The sugar quota regime continues to be a scandal. The milk quota regime is another example, whereby in 1984 the Government enacted to the letter a swingeing 9 per cent. cut in quota when countries such as Italy never implemented their quota. The beef premium, which imposed a 90-head limit, and the livestock unit restrictions were against the best interests of United Kingdom agriculture and, of course, the common fisheries policy has been mentioned already.

I now turn to the point to which the intervention by the hon. Member for Gloucestershire, West (Mr. Marland) referred.

Mr. Marland: I simply want to put the record straight. I did not mean that the hon. Gentleman had been a member of the European Court but a member of the European Parliament and I was hoping that his experience in that role would prove useful in this afternoon's debate.

Mr. Stevenson: I realise that the hon. Gentleman was trying to make a useful intervention, and I am grateful to him.

We need to recognise that the 1992 reforms are at best misnamed. They were forced on the European Community by budgetary crises and the GATT negotiations. Inevitably, the future will force on us further reforms, but they will be for different reasons. There is no doubt that unless firm action is taken, there will be budgetary problems. Not only will we have to consider the budgetary problems and the results of the GATT requirements, but there will also be enlargement issues, particularly involving eastern Europe. Any future reform must take a number of issues fully into account. First, there are inherent contradictions in the common agricultural policy that recent changes simply have not addressed. How can we be engaged in a policy that tries to equate growing olives in Greece with producing milk in Staffordshire? It is clearly a contradiction, so much greater flexibility needs to be brought into the system. Repatriation has been mentioned. I am not arguing for repatriation, but for much greater flexibility so that we can remove some of the contradictions that are inherent in the common agricultural policy. Mention has been made of subsidiarity. What is wrong with greater flexibility that brings with it greater subsidiarity?

The second consideration that is absolutely essential in any future renegotiation of the reform of the CAP is that agriculture is an important industry; it is extremely important for our rural areas and rural communities.

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However, it is only one factor; many other aspects of our rural areas and communities must be taken into account, not least, of course, the environment.

Three points need to be taken fully into account. First, flexibility is not just desirable, but essential because it is clear that if we continue down the present path, as outlined by the MacSharry reforms, United Kingdom agriculture efficiently operated will increasingly face problems.

Secondly, agriculture support needs to be decoupled from production and we should be removing the artificial restrictions imposed by quotas. Thirdly, agriculture policy should be seen as part of a wider rural policy. We should no longer accept that if agriculture is doing okay, then by some magical definition our rural communities are doing all right. We have enough evidence that that is simply not so. According to the Government, farm incomes have increased by 6.9 per cent. over the past year, yet our rural communities continue to decline. Therefore, agriculture support must be seen as part of a wider rural policy framework.

It is now time to lay the foundations for that reform so that we can secure the future. The European Union will be enlarged and that enlargement will not bring not only opportunities but immense challenges, and potentially serious problems. Unless we are prepared to challenge the complacency of the Commission which sees fit to argue that no further fundamental reform of the CAP is required, that future will be compromised to the detriment of us all.

6.29 pm

Sir Ralph Howell (Norfolk, North): Attacking the common agricultural policy is a popular sport, but I do not intend to play it. I welcome the speech of my right hon. Friend the Minister, who said that the CAP is an integral part of the European Union and will remain so. It must remain. However, there is no doubt that changes are necessary. In the context of my constituency, it is obvious that we should not be penalised by having to reduce our sugar beet acreage when Britain is nowhere near self-sufficient in sugar. Neither should milk production be reduced when this country has a big shortfall. Both issues must be pursued with vigour. Some way must also be found of helping our pig industry, which is in serious trouble. It is wrong for Britain to be importing so much pigmeat.

I was concerned when my right hon. Friend the Minister described the CAP as a monster. Perhaps it needs controlling, but I will return to that point later. I was worried most by my right hon. Friend's reference to cutting prices. The European Union is fortunate in having ample food at reasonable prices. The cost of the CAP is often attacked. In the 1960s, as I said in my intervention, we spent 1 per cent. of our gross domestic product on support for agriculture. The figure subsequently fell, but it was always more than half of 1 per cent. until we joined the European Community. The figure is now less than half of 1 per cent. The people who imply that, if Britain left the CAP, agriculture would not have to be supported have got it wrong and they are being mischievous.

In 1960, the people of Britain spent 25 per cent. of their net disposable income on food. That figure has regularly decreased and today it is only 10 per cent. We spend less

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on food than any other EU member state and about the same as the Americans--but their GDP per head of the population is higher.

Mr. Budgen: When a country enjoys a long period of peace and steady, albeit irregular, growth it is bound to spend less on food and more on other consumer items. My hon. Friend merely points out the advantages of economic progress.

Sir Ralph Howell: My hon. Friend makes an interesting comment. This country has enjoyed 50 years of peace and prosperity, and the common agricultural policy probably did more to bring that about than NATO. The CAP was the first policy adopted by the six original members of the EEC. One purpose of being generous to the small farmers and to the peasant population of Europe was to stave off the threat of communism which was about to sweep across the whole of Europe at that time. By being generous to the small farmers, especially those who were working for firms such as Volkswagen and continued to live in the rural areas, communism was checked and did not get a hold in France, Germany and Italy. When the history of that period is written, the CAP will be held responsible for that success.

The fact that there have been no food queues in the EC when people east of the iron curtain were suffering from shortages of all basic foodstuffs is also a great success story, and it is about time that somebody said so.More misinformation is put around on this subject than any other, especially by the Eurosceptics or Euroseptics--I am not sure which it should be. The claim has been made that the CAP costs every British family £28 per week, but there is no substance in that or in the OECD report itself, which gave a figure of £20 per head. I challenged the Treasury, which does not seem to be very good at figures these days.

Mr. Budgen: My hon. Friend is attacking everybody. He must try to find some friends.

Sir Ralph Howell: The other day, a Treasury Minister said that the CAP was costing every family £28 a week. That was too much for me to tolerate, so I went to see him. By the time I arrived, he had reduced the figure to £20 a week--and by the time I had finished with him, he had cut it to £15. But even that is not the right figure. The true UK and EU subsidy amounts to less than £3 per family per week. Part of the rest is supposed to be accounted for by food prices rising more rapidly than they would otherwise, but there is no proof of that either.

Mr. Waldegrave: Someone said from a sedentary position that my hon. Friend the Member for Norfolk, North (Sir R. Howell) does not have any friends, but that is not true: I support my hon. Friend the Member for Norfolk, North in giving a strong health warning about such figures. They are all based on the idea that world prices would not change if agricultural support were abolished in Europe, which presumably that would not happen without its also being abolished also in America. World prices would be unpredictable, but they would almost certainly be much higher.

Sir Ralph Howell: I thank my right hon. Friend for those comments. There is no such thing as a world price of food or of wheat. Nobody can give one. The fictitious figure of £20 a week was calculated on the basis of wheat at £50 per tonne, which was available for a short period

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from Australia. The world cannot live on wheat at £50 per tonne. We would all starve if that policy were adopted. We should consider the issue in a more logical and sensible way. Thorough research should be undertaken to arrive at a cost figure for the CAP which stands up and is not merely guesswork. The people who are trying to damage Britain being in Europe are making great play of the cost of the CAP, and it is time that the Government put some effort into making the true facts known.

6.48 pm

Mr. Paul Tyler (North Cornwall): As a number of hon. Members wish to speak, I shall not go over old ground but will try to break new ground. I accept the Minister's point that this debate is our annual opportunity to review agriculture and the future of the common agricultural policy. I agree with the hon. Member for Hexham (Mr. Atkinson) that there is a need to examine not only the European environment but the world context. I know that the Minister and others had some innocent fun at my expense when I spent some time with members of both Houses of Congress to discuss this very question. It is extremely important to open up discussions across the Atlantic. What happens to American agriculture is just as important to British farmers as ensuring that our continental competitors are not given an unfair advantage over us.

I agreed with hon. Members who have said that the so-called repatriation of agricultural policy would be a misguided step, not just for British agriculture but for the British countryside. I accept that in the past year there has been a modest overall increase of 4.4 per cent. in agricultural incomes. But some parts of the industry have not benefited to that extent, and it is important to recognise the difficulties that they have faced. For some of them it is a bit early to start celebrating just because they have progressed from near disaster to mere crisis. Even more unfortunately, some of the recovery happened because of black Wednesday: it had nothing to do with what the Government have done--the recovery has been despite what the Government have done.

The reform of the CAP has to take place at two levels. Strategically, we must try to persuade our colleagues around the table in the European Union that reform is inevitable, necessary and desirable, and we must maintain that pressure. That much is agreed throughout the House. That is the long- term goal. As the amendment tabled by my right hon. and hon. Friends states, however, in the shorter term there are things that we can do in this country and it is important to think about that aspect today as part of the review of what is happening in the industry.

In the short term, there can be no doubt that MAFF is making a right old pig's ear of its implementation of the CAP. Compared with those in other member states, our farmers are all too often uniquely burdened by bureaucracy and entangled in red tape. Even when they can find a way through the administrative jungle there is always some ministerial ineptitude waiting to trip them up--delayed payments, lost forms, and so on. In short, all too often Ministers have made good measures bad, and bad measures worse.

Mr. Streeter: How would the Liberal Democrat proposal for a countryside management contract help with

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red tape and bureaucracy? What the hon. Gentleman is really suggesting is that local authorities should have a say in what farmers can and cannot do. Will that not burden them even further?

Mr. Tyler: The hon. Gentleman must contain himself. He is always a bit premature and he is particularly so today. If he will be patient, I shall come to that point.

The three watchwords for any improvement must clearly be reform, simplification and targeting. We must certainly reform the unnecessary regulations which have been imposed--uniquely--in this country and which have put our farmers at a competitive disadvantage. Reforms must simplify the elements of EU legislation which have been taken in comparatively simple form from Brussels and have been expanded as they passed through the Whitehall mincing machine until they have become unintelligible and largely unmanageable. The Government must target resources at specific, good-value objectives, whereas up till now they have squandered cash and imposed inadequate controls.

Rural policy objectives of the right sort are widely supported inside and outside the House. The hon. Member for Plymouth, Sutton (Mr. Streeter), representing an urban constituency, is perhaps not aware of the support in all the agricultural organisations--the National Farmers Union, the Country Landowners Association and others--for reform measures of direct benefit to the environment and the rural economy. Across parties we should aim for a common rural policy. Clearly we must enable the farmer to have some real flexibility and choice--hence our idea of the countryside management contracts.

Parts of the industry have had a particularly difficult time in the past 12 or 24 months. The hon. Member for Hexham shares my concern about hill farmers. Over the past few years the hill livestock compensatory allowances have been reduced by one third, so hill farmers have been especially hard hit. The annual statement that the Minister put before us today states that the incomes of hill livestock farmers are expected to fall in 1994-95. They have already fallen in the past few years, and they will be falling again. That causes widespread concern in the House. Incidentally, the same statement makes it clear that the incomes of lowland livestock farmers in England and Wales are expected to drop in 1994-95. There will also be an impact from the livestock problems that were mentioned earlier.

All this comes at a time when the public are clamouring for more targeted investment in our uplands and hills, to maintain the landscape and to ensure that it is properly farmed. That is the sort of targeted investment that the public are anxious to preserve; yet these are the very payments that have been cut. Instead of maintaining a vibrant and living landscape, attractive to man and beast alike, many areas are being reduced to semi- dereliction. When I challenged the Minister of State in Committee over the HLCA cuts in real terms, he said that I had not taken into account off-farm incomes. Perhaps he can explain today what he meant, but I hope that he has subsequently noted how his suggestion has been laughed out of court by the industry. There are not a great many openings for hill farmers to become ice cream salesmen, for instance. The hon. Member for Hexham will know that there are not many diversification opportunities in his constituency. It therefore seems absurd to build such a calculation into the equation for the first time.

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Mr. Jack: I apologise for interrupting the hon. Gentleman, but I want to make it abundantly clear that, when speaking about non-farm income--not off-farm income--I in no way implied that when hill farmers' incomes are calculated and the HLCAs are determined that type of income is taken into account; it is misleading of the hon. Gentleman to suggest that such a formula is being followed, because it is not.

Mr. Tyler: I am grateful to the hon. Gentleman for making that clear, but his comments in Committee have been widely misunderstood, as he will have seen in the farming press. He said in Committee--I hope that he will be careful about what he says today--that whenever farm incomes go up, the HLCAs will fall, as happened in the past two years. But whenever hill farm incomes drop--I note that the hon. Member for Hexham is nodding--there is no compensating increase. So for the hill farmers it is, "Heads you win, tails we lose." MAFF is all too eager to save a penny or two when such cuts can be made, and the Chancellor can get the princely sum of £30 million--very small in terms of the overall agricultural budget. This is a gesture by the Ministry to display its financial rectitude to its colleagues--a small fish thrown to the sharks. For many comparatively small and vulnerable farm businesses, however, it represents the difference between viability and bankruptcy.

The pig sector has been mentioned already, and I should like to spend a moment on the subject. It, too, has been subjected to the most bizarre treatment. When Ministers decided to ban sow stalls and tethers, they claimed that they had examined each area of the UK to see whether farmers needed grants to help them make the change. First they looked at Northern Ireland; yes, they decided, the change would clearly impose intolerable costs during the transition, so Northern Ireland's farmers needed help to get through it. Then they looked at Scotland, Wales and England; no, they decided, the change would not cause farmers here any problems--they could be left to fend for themselves. So Northern Ireland gets special treatment, while the rest of the United Kingdom is left to its own devices.

What is the justification for that? No one has said. I do not want to jeopardise improving relationships with and in Northern Ireland, but this clearly is not an essential part of bringing peace to the Province. I suspect that the Northern Ireland Office used its arm-wrestling techniques to extract money from Whitehall and Brussels, even though other areas of the United Kingdom would also qualify for the grants concerned. Once again, this is no aberration on the part of Brussels: it is a product of Whitehall's double standards. As hon. Members have said, all too often in the past huge sums have gone to those in the industry who are well off, while targeted investment in the form of farm conservation grants, waste water projects and HLCAs, to maintain livestock farming, has been neglected and rural communities, the rural economy and the rural environment have suffered as a result.

In the past, the Ministry has spent a great deal of time centralising the slaughtering capacity of this country. The number of abattoirs has halved in England, Wales and Scotland in the past 15 years, during the lifetime of the Government. Significantly, in Northern Ireland there has not been anything like the same reduction because there

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the same notorious hygiene regulations have not been introduced. As a result of that centralisation, not only are there additional costs to the industry but many farms are now stranded great distances from the nearest abattoir, exacerbating the problems of long- distance transport of livestock.

I am amazed at the complacency with which the Government congratulate themselves in their motion today. I do not think that dairy farmers in particular would regard this as the right moment for such self- congratulation. The chaos over milk quota has nothing to do with tight- fistedness: it has resulted from a lethal cocktail of irrationality, ineptitude and pigheadedness--irrational in the way in which the quota was set up in this country, not taking account of the full needs of our market, and making it very difficult to ensure that it was a tradeable commodity; inept in the way in which the new arrangement has failed to process quota transactions on time; and pigheaded in the way in which the Ministry has refused to use a bit of discretion and common sense in the resolution of disputes. On the tapes this afternoon it was suggested that some 15,000 British dairy farmers will face fines of some £75 million for excess production in the current year--an average of some £5,000 per head. I do not know whether that figure is correct, but I hope that by the end of this debate the Minister will be able to tell us what sort of figures are involved.

All those factors seem to be unique to the United Kingdom. Everywhere else in the EU, competitor countries use their quota in a way that seems to be better controlled and ensure that it is not a speculative commodity. It seems to be reasonably administered. But above all, in most other member states there seems to be a system for providing new entrants and developers --the subject of the worst ministerial injustices here--with additional quota.

As Members of Parliament, we receive far more complaints about the inadequacy, incompetence or misdirection of the Ministry or its minions in the executive agencies than we do about the framework of the CAP itself.

Mention was made earlier of the integrated area control system forms. Of course they have a function, but it is extraordinary that the Ministry itself can make mistakes with IACS. The example field data sheet included in the 1995 IACS explanatory booklet, which is intended to show farmers how to do the job, itself contains two basic errors. The south-west National Farmers Union has pointed that out, but I do not think that the Ministry has yet been able to make the necessary corrections.

Then there is the Intervention Board for Agricultural Produce. I bet that not one Member here who represents a rural constituency has not had problems with the intervention board. Again, I see Conservative Members nodding in agreement. The old example that we used to give of a barefaced lie was the promise, "Your cheque is in the post." The alternative now has to be the intervention board's assurance, "Your quota forms are being processed urgently." Dairy farmers all over the country are now finding that that simply is not true. I have a memorandum here from a firm of chartered surveyors and agricultural valuers, who tell me that they

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sent a batch of 19 transfers to the intervention board in time for the deadline of 12 noon on Saturday 31 December 1994. They report: "Of the 19 various transfers that were sent to The Intervention Board in this particular batch, it seems that six have not yet been processed and all the parties involved, i.e. the lessors, lessees and ourselves, have been constantly badgering The Intervention Board to confirm the leases.

The Intervention Board contacted me on Friday of last week, March 17th, and admitted that they may have mislaid the forms and were wondering what they could do about it."

That is absurd and very expensive. Other cases have been reported in the agriculture media.

I do not have time to dwell on the Meat Hygiene Service, a new agency to be introduced on April Fool's Day, but I know that many hon. Members on both sides of the House are concerned that the introduction of the new regulations and this new service takes it out of local elected accountability. A risk-free business is being established with a turnover of some £40 million; the Government are inventing a new monopolistic quango. Is that deregulation, decentralisation, democratic accountability? Is that the clarity to which the Minister referred? What hogwash.

Ministers ask us to believe that they are a safe pair of hands, to be trusted with the long-term review of the CAP. Well, judging from the experience of the way in which they operate the CAP in this country, it is a case of "physician heal thyself". Ministers seem to think that British farmers really will put up with that standard of administration, when their competitors on the continent are obviously benefiting to a far greater extent. Is it any wonder that so many people are leaving the industry? The Minister's own figures show a 15 per cent. drop in full-time farmers in the past decade.

In a perceptive article in The Guardian on 25 February, Martin Kettle was absolutely right to identify the Conservative Government's Euro-wobble as a major obstacle both to the reform of agriculture policy and to animal welfare improvements in the single market. Insistence on dilution of the EU by enlargement--it will be interesting to hear what the Minister has to say this evening--rather than encouraging cohesion by generic growth, lessens the chance of progress in both directions. Mr. Kettle pointed out that

"the British veto sounds fine until your realise that it also means a Greek veto".

For as long as the most retrograde countries are allowed to block even the most cautious of reforms, the CAP will remain an expensive nightmare, the scale of fraud will continue, and animal welfare will be swept under the Council of Ministers' carpet. Further expansion eastwards, as the Minister hinted, where conditions are even more primitive, would simply make conditions worse. The more that Conservative politicians in this country pretend that these issues can be resolved unilaterally, the more our farming competitors on the continent will laugh all the way to the bank.

As though all those obsessions were not enough, let us consider the difficulty of the Minister and the Minister of State when they attend Council of Ministers meetings. How can they persuade their opposite numbers of British good intentions? Contrary to popular belief, Ministers in the 14 other member states are capable of reading what

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the Prime Minister and his colleagues think, not just about the need for European Union joint initiatives but about the personalities of those national leaders. People read what is said here in London. The right hon. Member for Bristol, West (Mr. Waldegrave) is surely too astute to ignore the consequences of his own party colleagues' blinkers, and I am relieved to see that he has not joined in their recent xenophobia, but they done nothing to help him or his ministerial team to achieve Europe-wide progress on these fronts. By investing sacred calves with purely British significance, the Minister's party has increased the problems that he now faces, not diminished them.

Several hon. Members rose --

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. I remind the House that Madam Speaker has placed a limit of 10 minutes on speeches made between 7 pm and 9 pm. That will still apply even though the clocks have not been too helpful.

7.7 pm

Mr. John Greenway (Ryedale): Previous debates on the agricultural price proposals have usually been characterised by rows about price changes proposed by the European Commission, and the round-the-houses view of agriculture. With the exception of the

something-for-everybody speech that we have just heard from the hon. Member for North Cornwall (Mr. Tyler), the debate tonight--I suspect that it will continue in this vein--seems radically to have changed. It now seems that the CAP is wasteful and that there are calls for abolition, for repatriation, for dismantling price support. What I find astonishing is that, through all the debates that we have had in my eight years in the House, we have been trying to argue that if only the United Kingdom farmer could compete on fair and equal terms, the United Kingdom farmer would do well. Now that he can and is doing well, everybody wants to abandon it, in a spirit of knocking Brussels, of Euro-scepticism. I regard myself as a Euro-sceptic on these Benches, but we have to have a balanced view on just what is happening within the European Community.

I have long wanted to say that what really makes me angry is the way in which an argument is developed in order to take an anti-Brussels line. When, recently, we had a row about Spanish access to the Irish box to fish, everyone said, "Pity the poor fishermen. Isn't it dreadful that Brussels is allowing this and we are powerless to stop it?" Now we have the argument about the transport of live animals and the export of livestock, so crucial to the well-being of farmers in my constituency and in that of my hon. Friend the Member for Hexham (Mr. Atkinson), as he mentioned. People say, "It's dreadful that Brussels is stopping us banning such exports." I would ask hon. Members to have the same concern for farmers as for fishermen. If they did, they would recognise that we are right to say that we must continue to support livestock exports and to argue in Brussels and in other member states for the opportunity to improve welfare standards across Europe. That is the right and consistent approach.

I do not have time to deal in detail with all aspects of the CAP which concern us. But it is clear that change and reform are needed. I intended at a fringe meeting with the

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National Farmers Union at the Conservative party conference last autumn to call for a CAP policy review, but my right hon. Friend the Minister did exactly that in his speech that morning to the conference. A proper review of the CAP and our options is long overdue. I have 10 suggestions about how we should go about it. First, the reform must be properly thought out. In the past, too many changes have been a quick fix. Milk quotas are a good case in point. They were introduced to cut the cost of supporting milk when the Community would not cut the price. Now we have sheep quotas, which are causing immense problems in my constituency where some long-established flocks have no quota because there was not enough to go round. Please, let us have no quick fixes. Let the policy be properly thought out so that we have a structure which will last us for another 40 or 50 years.

Mr. Budgen: Ah.

Mr. Greenway: My hon. Friend thinks that I have let the cat out of the bag by referring to another 40 or 50 years. I imagine that in that time we will remain committed members of the EC, but we will have shaped it in a way that suits Britain, not the rest of the EC alone, which often seems to many of us to have been the case in the past.

Mr. Marlow: Will my hon. Friend give way?

Mr. Greenway: No, I shall not give way because I have only 10 minutes.

Secondly, the change must be gradual and there must be a transitional period because things cannot be changed overnight. Farmers need to know where they stand. Growing crops and keeping livestock requires a one, two, three, four or five-year cycle. Politicians cannot change things overnight.

Thirdly, we must move closer to the market. That will bring three benefits. First, as I have said, it will help to end artificial restrictions on production; secondly, it will mean that the United Kingdom's greater efficiency will count for even more; and, thirdly, it will reflect our obligations to GATT and to the third world, which farmers themselves recognise are important.

Fourthly, the CAP must be non-discriminatory. Too often in the past, as I have already said, we have been discriminated against. I do not accept, as the hon. Member for Edinburgh, East (Dr. Strang) said earlier, that the only reason why our farmers are doing well is what happened on a Wednesday in September 1992. Another fundamental reason why our farmers are doing well is that my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer), when he was Minister of Agriculture, Fisheries and Food, went repeatedly to Brussels and said no to MacSharry discriminating against United Kingdom farmers. That must remain our watchword. We must say no to the ridiculous idea of modulation and the belief that because a farm is large it does not need support. Large estates like those in my constituency and the people who work on them are just as important as the small farm structures on the continent.

Fifthly, price support must be more closely linked to environmental benefits. One could make a speech on that alone. Clearly, much more needs to be done on that. If there were time I would make further suggestions. I agree with the concept of trying to decouple support from

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production to having some kind of contract in terms of the environment in our constituencies. Farmers themselves recognise how important that is.

Sixthly, any reform must have regard to the needs of the food and drink industry. We have talked about agriculture and the CAP, but I have yet to hear anyone mention in any detail just how vital the food and drink industry is to Britain. In many respects we are market leaders. After the huge devaluation in 1992, the price of raw materials for many manufacturers rocketed overnight and they have had a great battle in coming to terms with it. Therefore, we need fairness for them as well.

Seventhly, reform must tackle all commodities. Too many, particularly Mediterranean crops, have not yet been tackled. I want Ministers to go to Brussels and be more determined about that. There is scope for much greater reform in those areas.

Eighthly, we must reduce the overall cost of support. If I have time, I might say a few more words about that because I do not think that the cost is anything like as bad as people think. As has been said, progress has been made. But reducing the overall cost of support is essential if the central and eastern European countries are to be brought into the Community. Without that, the cost of the CAP will explode and we shall have serious problems.

Ninthly, we must retain the security of food supply, not only for now but into the future. That means not prohibiting our opportunity to grow crops and keep livestock in years to come.

Tenthly, the CAP must be less bureaucratic and we must tackle fraud. Those two objectives may appear contradictory but they are not. Much of the fraud is a result of too much paperwork. Two phrases highlight the current situation.

Mr. Deputy Speaker: Order.

7.17 pm

Mr. Jon Owen Jones (Cardiff, Central): It is worth reminding ourselves of the history of the CAP and national subsidy in Britain which predated the CAP. They arose at the end of the second world war when starvation was a reality in many European countries and when rationing was a reality in Britain. However, what began as a good project, solving that problem, has grown enormously and now desperately requires to be cut.

The CAP accounts for more than half the entire EU budget. There have been arguments about the total amount, but about £30 billion--£91 million a day--is being spent on subsidising agriculture throughout the EU, and that simply to build grain mountains of 16 million tonnes, beef mountains of 250,000 tonnes, butter mountains of 250,000 tonnes, wine lakes and so on. We are paying farmers large sums of money not to farm. It is a surreal system which should have been invented by Salvador Dali. As much as £2.5 million a day is being spent on growing tobacco that no European wants to smoke. More money is being spent on growing tobacco that no one wants than is being used by the European Union to improve our transport network. CAP spending is equivalent to the total of the rest of the EU's budget.

Fundamental reform is clearly long overdue: no party in the House should argue about that. The Government's efforts to secure changes in the package did not benefit consumers at all, but added to the level of spending. Two

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achievements of the Government's negotiation on the MacSharry package were the securing of compensation for cereal growers irrespective of the size of their farms, and the securing of annual sheep premiums on larger flocks. I am sure that those two achievements were very worthy, but they did not help to reduce the total budget.

The CAP stops farmers being more productive. Its objective should be to ensure that the true market prices of commodities are reflected in the value that the farmer gets for his product, and that efficient farmers are suitably rewarded.

A number of hon. Members mentioned enlargement of the European Union. Enlargement will double the likely bill that British consumers will have to pay: huge sums will go to Hungarian, Czech and especially Polish farmers if the present system continues. But, even without enlargement, CAP policies are bound to be challenged by future GATT settlements. Export subsidies and border tariffs are not defensible now, and certainly will not be defensible in the medium or long term. As I have said, we need to change the CAP fundamentally, if not get rid of it altogether.

I do not agree that repatriating subsidy payments is any real solution. It will only mean the absence of a real single market in agricultural goods-- and it will hardly constitute an attractive solution to countries such as Ireland, France, Portugal and Spain, which are net beneficiaries of the system. If subsidies must be paid, they must not be related to production: they must be decoupled from it. They must be paid to the individual farmer, rather than being dependent on the total level of production. The market must be allowed to determine the price of the commodity. Only in that way can overproduction be tackled without the imposition of a huge bureaucracy involving quotas, form-filling and a continuation of the inefficient and endemically fraudulent system that currently operates.

Let me say a little about the environmental impact of the CAP, and of direct subsidies to farmers based on acreage used for agriculture or on guaranteed prices for their products. The policies implemented in Britain and other European countries since the war have devastated what was a diversity of wildlife and habitat. During the past 50 years, half Britain's remaining broadleaf woodland has disappeared, as have 40 per cent. of our lowland heath, 90 per cent. of raised bogs and 60 per cent. of wet meadows. A third of our reptile and amphibian species are now in serious decline; and 50 per cent. of skylarks--a common species--have disappeared in the past 20 years. As signatories of the biodiversity convention at Rio, we have an obligation not just to halt that trend but to reverse it. The CAP, as currently implemented, does not address the issue; temporary set-aside is no solution. The present system rewards farmers for being inefficient. It should be a laudable aim for farmers to produce the maximum amount of food on the minimum amount of land, but our system does precisely the reverse. Producing more food on less land would release land for other uses --in particular, marginal land that should never be brought into production. The release of that land would allow its use for recreation and the restoration of wildlife habitats.

Marginal land can be allowed to return to its natural state. If draining stops, marshland and wetland will return; if grazing stops, scrubland will return on pasture and open

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woodland--and, eventually, mature deciduous woodland--will reappear. The process of succession, perhaps aided by farmers, will restore many of our natural habitats. We shall be able to reintroduce species that are long lost, locally and perhaps nationally.

Our national policy advocates the retention and development of wildlife to third-world countries. Why do we not have such a policy in this country? It would not have to be expensive; indeed, without our current system of agricultural subsidies, it would be cheaper to remove marginal land from production and to develop national eco-systems that could well prove economically beneficial in the promotion of tourism. Moreover, we would not have the current daft system of subsidising farmers for doing nothing.

We should have a radical agenda. We might be the first European country to discuss that agenda, but I hope that others would follow our example. Why should we not reintroduce the beaver to parts of Britain? Why not reintroduce the wild boar? Why should those suggestions be considered unreasonable? If we want African countries to set aside land on which lions can roam, and Indians to set aside land on which tigers can roam, why should we not reintroduce some of the species that have been rendered extinct in this country? It would not require a great deal of Government intervention; it would simply require, initially, the withdrawal of Government subsidy from land that is not productive and not needed. Modern farming methods allow--

Mr. Deputy Speaker: Order.

7.27 pm

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