House of Commons
Wednesday 7 February 1996
The House met at half-past Nine o'clock
PRAYERS
[Madam Speaker in the Chair]
Horticulture
[Relevant documents: The Fourth Report from the Agriculture Committee of Session 1994-95,on Horticulture (House of Commons Paper No. 61-Iand -II), and the Government Reply thereto contained in the Fourth Special Report of Session 1994-95 (House of Commons Paper No. 778).]
Motion made, and Question proposed, That this House do now adjourn.--[Mr. Bates.]
Sir Jerry Wiggin (Weston-super-Mare):
The Agriculture Committee is deeply honoured to be the first Committee to take advantage of the new procedure, which you, Madam Speaker, kindly approved, to allow Select Committees more time to debate their reports. All of us on Select Committees agree that the former arrangements were totally unsatisfactory, particularly when hon. Members and people outside the House give up so much of their time to give evidence to our Committees, and it is a tragedy that we do not have more time to debate them. This is only the third debate that the Agriculture Committee has had in the past seven years.
We published our report on horticulture last August, and it shows that, despite the problems that the horticulture industry faces in the United Kingdom and the relatively low common agricultural policy support that it receives, horticultural holdings in the United Kingdom employ almost 10 per cent. of the agricultural labour force. Some 60,000 people, including farmers and their wives, work on holdings where horticulture accounts for more than two thirds of the total standard gross margin, and that figure does not include the substantial number of seasonal and casual workers who are employed at harvest and other busy periods. Nor does it account for those who work further up the food supply chain and those who work in the ancillary sectors.
We were left in no doubt that, in some parts of the United Kingdom, horticulture plays a role in the local economy that is much understated by mere employment statistics, and it is fair to say that the substantial attendance at what, for Parliament, is an early hour to debate what appears on the face of it a somewhat dry subject demonstrates that hon. Members recognise the importance of the industry to their constituencies. We held our inquiry at a time when the fortunes of some sectors of the UK horticulture industry were, and, I am afraid, still are, at a low ebb. A snapshot of the industry when we made our inquiry shows the problems that it faces. There has been an on-going, long-term decline in horticultural production in the United Kingdom; the value
of output has been falling; and horticulture's share of total agricultural output has also declined. Despite rising output per hectare, due largely to technological advances, incomes have also been in decline.
In addition, and perhaps amazingly, the United Kingdom runs a substantial and growing trade deficitin fruit and vegetables, which in 1993 reached£2,818 million. Even when produce that cannot be grown in the UK is discounted, there is still a substantial trade gap, and all that despite the fact that per capita consumption of fruit and vegetables in the UK is among the lowest in the European Union and is less than half the amount consumed in some of the southern member states.
We paid some visits during the inquiry, and in Almeria, southern Spain, we were astounded by the results of a latter-day "gold rush", where what was once a wilderness has been transformed into a highly productive and low-cost nursery, with not just acres or hectares but what seemed to be square mile after square mile of plastic sheeting spread along the coastline. Those vast, cheap, makeshift greenhouses, with the aid of irrigation water from the aquifers beneath, produced peppers, tomatoes, cucumbers and numerous other salad crops, all of which are transported throughout the European Union.
In Holland, we saw similar crops being grown in more elaborate and expensive systems under glass, but we should bear in mind the favourable arrangements that the Dutch created for themselves to supply gas to heat those greenhouses. Although the Dutch, like many producers in the UK, fear Spain's low-cost producers, the Spanish are concerned that there may be increasing penetration of their markets by even lower-cost producers from Morocco.
Little can be done about the climatic advantages for the salad crop producers whom we visited in Spain, although it is clear that Almeria is an environmental eyesore that would not be allowed in the UK. Nor can UK apple growers expect to benefit from the growing conditions prevalent in South Africa and other southern hemisphere countries. Even so, the UK could benefit from many aspects of the horticultural sectors that we saw in Spain, Holland and South Africa, not the least of which was the organisation of their marketing systems.
The UK has the most developed retailing systems in Europe and probably the world. The major multiples are taking a larger and larger share of the retail market, and their central purchasing and distribution systems give importers relatively easy access to outlets capable of handling large volumes of produce. It would be wrong to assume that the supermarkets are the only outlet for produce--others include independent retailers, market traders and the catering sector--but the major retailers are the potent force in the market, eager to give their customers a variety of fresh fruit and vegetables at a competitive price.
It was frustrating to hear supermarket buyers speaking of the ease with which they could purchase produce from an importing nation's growers, frequently by dealing with a single point of contact. That, we were told, is not the case with the sales of UK produce, whether it be for the domestic market or for export.
Mr. David Harris (St. Ives):
Does my hon. Friend accept that that might be the general picture, but that,in a region such as west Cornwall, local growers are
Sir Jerry Wiggin:
Needless to say, I agree with my hon. Friend. The supermarket buyer who wants to buy10 tonnes of a product can lift a telephone and be sure of getting the quality and quantity that he wants from many of those foreign countries' marketing agents. Unfortunately, despite the efforts of the British industry, large gaps still exist in our marketing system, which have been obvious for many years. Having been a farmer and worked among horticultural growers, I know that they are, by their very nature, an independent bunch. It is extremely difficult to get people to co-operate in this country. There must be a sacrifice, but when it comes to it, too often people pull out. They will not take the strain when things are difficult.
During our inquiry, we received numerous suggestions as to how the UK industry's performance could be further improved at home and abroad. In particular, we were eager to ensure that Ministers argued strongly for reforms to the European Union's fruit and vegetable regime which would not disadvantage UK producers. Other changes, however, are needed in the horticultural sector, as the Committee report's conclusion and recommendations show.
Not the least of the problems that we identified was the lack of reliable statistical information on the UK's horticultural sector. We asked the Government to discuss with the industry the means by which information can be collated and disseminated, and pointed out the need for the Government to encourage the European Commission to ensure that similar information on the horticulture industry throughout the EU is available. The Government accepted those recommendations and we should be grateful for further information on their implementation.
Of course, any industry requires skilled people to work in it and, although much can be learnt through training while in employment, it is also important that people entering the industry have access to suitable courses. The Committee asked the Government to keep a weather eye on that, to keep local education authorities aware of the need to maintain funding for discretionary grants in that sector at appropriate levels, and to consult employers in the industry on the most suitable content of courses. That recommendation was also accepted by the Government. We made it because, in these days of stringency in education, we found that it was easy for such authorities to drop horticultural courses from their syllabuses. We wish to put up a marker that that will be damaging for the industry in the long term.
The Committee recommended that the Ministry of Agriculture, Fisheries and Food should take a lead in exploring ways by which the wholesale marketing system, which faces many difficulties and a declining market share, can be rationalised. During our inquiry, it became obvious that an increasing number of retailers and producers are trading directly with each other. The Committee welcomed the new producer contracts that were being introduced by Tesco, which gave its suppliers
greater security. We recommend such initiatives to all producers and retailers in the hope that it will help to stem the growing tide of imported produce.
We also hope that retailers will realise that they will benefit from working with producers in funding near-market research, thus helping to ensure that UK customers are able to buy the type of produce that they wish from UK producers.
We were also concerned that the UK was not performing well in export markets. We urge the Government to investigate ways by which producers could be encouraged to explore and exploit the opportunities presented by the single market for their produce. We were pleased that, following our report, MAFF appointed a horticultural export promoter, seconded from industry, and to hear news of the establishment of the Horticultural Export Bureau. That bureau appears to be a direct response to our recommendation that horticultural exporters should establish a representative organisation to co-ordinate export strategies. We still, however, hold the view expressed in our report that the redirection of Food From Britain's role away from import substitution was misconceived: for fruit and vegetables, import substitution will be by far the most effective way to reduce the trade deficit.
On the fruit and vegetable regime, although in 1996 the cost of support for both fresh and processed regimes will amount to only less than 4 per cent. of the total common agricultural policy budget, it will still amount to about £1,252 million. What is more, much of the expenditure is to "withdraw" produce that is not wanted by the market. Many producers in southern Europe grow their crops solely for withdrawal. Withering criticism of the regime is contained in the 1994 European Union Court of Auditors report, which described systems for inspection and approval of producer organisations by member states as very weak and found many irregularities in the withdrawal of produce from the markets.
We were generally dissatisfied with the withdrawal system's operation, but its effects are especially damaging to the UK apple industry. The Committee was keen for the Government to pursue their policy to end the system completely for all fruit and vegetables. With that in mind, it is a disappointment, as many people have already noted, that the current proposals for reforming the fruit and vegetable regime do not give a final date for the end of the system, but simply make it slightly less attractive. The Committee's report made it clear that there would be distinct advantages to UK apple growers from ending the system completely. It is unacceptable that producers in some member states produce apples for no other purpose than sale into intervention.
We were also made aware of the way in which UK producers are disadvantaged--and would still be at a disadvantage under the new proposals--because of the way in which producer organisations are defined. The British horticulture industry has played little part in the creation of surpluses and it would be iniquitous if it was disadvantaged simply because of historical differences in the industry's structure in the UK. The definition of a producer organisation should allow for a variety of legal and commercial entities. I am sure that the Minister will wish to comment on that.
Our recommendations have been echoed by the European Communities Committee in the other place and by our Select Committee on European Legislation,
a formidable phalanx of informed parliamentary opinion.I call on the Government, who have shown their support for those views, to stand firm when the European Commission's reform proposals return to the Agriculture Council.
Besides the European marketing regime, we received evidence about other inappropriate and burdensome regulations. I stress two main problems, the first of which is the ridiculous and unscientific European Community proposals to impose maximum nitrate levels on spinach and lettuce. As originally suggested, those would have had devastating effects on the British lettuce industry,yet there is no scientific evidence that nitrates are harmful to human beings.
The Commission's original proposals have been relaxed, and the Ministry of Agriculture, Fisheries and Food says that the revised standards are achievable by British growers following good agricultural practice, and represent the best possible compromise. None the less,I still ask what the scientific basis is for having maximum nitrate levels at all.
Secondly, horticultural producers often have trouble getting hold of appropriate pesticides, because of the expense and delays in pesticide registration in the United Kingdom. Partly because of what we heard in our horticultural inquiry, we subsequently held an inquiry into the Pesticides Safety Directorate, and we are glad to report that much progress has been made in reducing backlogs in pesticide registration.
However, problems still exist concerning "minor use" pesticides--those used in small quantities, especially in the horticulture industry. We were disappointed that the Government did not adopt one or two recommendations for streamlining the system that we made in our horticulture report. I hope that they will keep the matter under close review.
I shall not detain the House much longer, but our report also dealt with the mechanisms and funding for horticultural research and development, recommending in particular that reforms of the funding and accountability of the Horticultural Development Council be considered. For example, we found that much of its money was going towards research into pesticides, which should have been funded from other budgets.
We recommended that the Government should divert some of their applied research funding towards joint funding of near-market research with the HDC. I should be grateful if the Minister would comment on any progress that has been made. We are glad to see that MAFF has retained sponsorship of Horticulture Research International--the option universally supported by those who gave evidence to us.
Finally, I shall tell the House about a large mushroom farm in my constituency. The Irish Government's market development fund was misused to establish a mushroom industry in Ireland that progressively strangled our mushroom business, and the company in my constituency has now been sold to an Irish company. The loss to the original owner is quantifiable and should be assessed.It should be the Commission's duty to ensure that repayment is made to the original owners, who suffered from the direct and unfair competition created by the Irish Government.
9.34 am
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