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10.50 pm
Mr. Martyn Jones (Clwyd, South-West): What we are discussing this evening will not improve Britain's agriculture one iota. Deregulation of potato marketing is another example of the Tory policy of removing the steering wheel in the blind hope that that will make the car lighter and more efficient--ignoring the vehicle's susceptibility to crash.
I remind the House that the horrendous effects of BSE on the beef industry are a direct result of deregulation. Allowing the rendering industry to lower its temperature and solvent extraction standards to save a few pounds resulted in an epidemic that has cost the taxpayer over
£200 million, and has cost farmers dearly.
Deregulation of the crop acreage of potatoes will allow for increased encouragement of precisely the unsustainable, monocultural and intensive agriculture that we are trying to move away from, buoyed up by the boom and bust cycle of an unordered market. That benefits the processor in the short term, but not in the long term. There is a vicious circle: the unordered market increases acreage, thereby increasing pollution and possibly ruining
productive land. By encouraging this monoculture, we are shooting ourselves in the foot, as our growers are caught up in a spiralling risk of crop and/or market failure.
An unordered market leads to an increase in acreage devoted to potatoes, an increase in pesticide and fertiliser use, an increase in processor power over UK growers, and an increase in farmers' vulnerability. We need to be sustainable; we need to be fair. We must not cut farmers adrift and leave them in a sea of market distortion. Other EU countries are allowed to subsidise their potato production.
We are becoming increasingly sceptical of subsidising over-production and waste. Labour policy seeks to redirect regulation to encourage good, not bad, practice. Regulation under a light regime could allow us to move toward sustainable and efficient practices. The NFU is absolutely right in its reasonable desire to compete on even terms with our EU counterparts. We have heard a lot about level playing fields; perhaps we should refer to level potato fields for a change. Secondly, the NFU wants common rules governing competition--for example, not allowing other member states to provide state aid for their producers while British growers cannot enjoy similar support.
Thirdly, funding--if the Government are to go ahead with this daft idea--must be provided for winding up. Such transition funds should be used to smooth the path of farmers and producers alike towards a lightweight EU-wide regime.
The stakeholders have contributed to the potato marketing scheme, so it would only be right and proper for the Government to foot the bill for the producers, who do not want the change in the first place. The Government have expelled a lot of hot air about all the things they have done in the past six weeks. They have had three years to consider the matter, but are acting only now because they cannot think of anything better to do. They are panicking as they realise that they have not done enough work. Tory Members with rural constituencies know that, as some of their interventions--not their speeches--have shown.
Mr. D. N. Campbell-Savours (Workington):
May I say one or two words, and perhaps ask a couple of questions of the Minister? My hon. Friend the Member for Newcastle-under-Lyme (Mrs. Golding), who spoke from the Opposition Front Bench, and the Liberal spokesman, the hon. Member for North Cornwall (Mr. Tyler), raised an important issue in this debate, which is that, in Standing Committee on the Agriculture Bill, Ministers gave us clear assurances about what would happen in certain conditions. We sought those assurances because the industry--in the form of the National Farmers
I sensed that the Minister had not considered the speech made by his right hon. Friend the then Minister in Committee when he spoke tonight. My first question-- perhaps the Minister can give us a clear answer--is, did he read that speech, and does he believe that he has met the undertakings given to Parliament in 1993?
Secondly, to what extent does the Minister have complete access to all Commission reports on state aids to the potato processing industry and potato producers throughout the European Community? Can he give us an assurance that he has an unfettered right to all the reports that the Commission produces?
If the Minister intends to take the British potato producers into a free market without undertakings on subsidy--to which the hon. Member for North Thanet (Mr. Gale) and I object anyway--surely he must have some mechanism for being made fully aware of what subsidies are being paid within the Community, so that, when they are being paid, he can immediately raise the matter with the Commission with a view to those national aids being removed.
Finally, the scheme was devised in such a way as to reduce the potential for volatility in price. As I understand it, the mechanics of the scheme are such that potato producers take decisions on what to plant in any particular year within a quota system and target areas, and are guided not to over-produce. They have to guess to what extent they would be prepared to plant up to quota. If I remember rightly, some research done by Nottingham university in 1992 proved that there would be considerable price volatility in the market if the scheme were removed.
If that is the case, what will happen in the event that, let us say for two or three years in succession, there is a glut in the United Kingdom potato market? In those conditions, growers will totally lose confidence. Having lost money in successive years, they will worry and wonder whether it is worth their while planting potatoes in a third year, not knowing what the price is likely to be and not being able to assure their bank managers, who may well be lending them money, what will happen to their loan repayments.
As a consequence, we may be faced in one, two or three years with a sudden drop in the area planted in the United Kingdom, and a scarcity in the marketplace on an unparalleled scale, which might well lead to the importing of potatoes.
I wonder what will happen--
Mr. Bellingham:
They will put up the price of soup.
Mr. Campbell-Savours:
The hon. Gentleman should know. The plant in his constituency is taking jobs from mine in two months' time. I cannot say that I would look favourably on anything that would help Campbell's Soups at the moment.
Mrs. Ann Winterton (Congleton):
I shall detain the House only briefly. I have a simple political philosophy: if it ain't broke, don't fix it. Cheshire farmers and growers believe strongly that the Potato Marketing Board has not only served them well by ironing out the peaks and troughs of production, but has served the consumer well. The reforms--the removal of quotas and so on--have benefited growers, processors and consumers.
My only worry is that, after we have got rid of the potato marketing scheme, the industry may face unfair competition from our partners in Europe. Surely we are not so naive that we do not remember examples in the past, when we played the game as it should be played and removed subsidies, and other countries used subsidies from their national Governments to undermine our success.
Mr. John Home Robertson (East Lothian):
It is extremely unusual for East Lothian and Congleton to be in agreement, but that is the case tonight. I represent some hundreds of potato producers in East Lothian. I also represent 68,000 potato consumers. It is surprising that more has not been said about the interests of consumers, who are also important.
I hope that the Minister will acknowledge that for many years the Potato Marketing Board has served the interests of consumers and producers very well. It is a complicated commodity and matters could become difficult for producers and consumers. Over a long period of years, the board has ensured a reasonable balance between supply and demand. I share the concern of my hon. Friend the Member for Workington (Mr. Campbell-Savours) that if we do away with the quotas and regulations, as the Minister is doing tonight, in a future year there could be a glut, the price could collapse and there could be a serious shortage in the following year. That would be bad news for all concerned in the United Kingdom, and our neighbours in mainland Europe would certainly take advantage of that. That brings me to state aid to industry on mainland Europe. I am anxious that today we are doing away with one scheme and creating a vacuum that could be completely against the interests of our producers and consumers.
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