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10.21 am

Mr. Ieuan Wyn Jones (Ynys Mon): I am indeed privileged to be called to speak in a debate on agriculture in Wales. I know that the Minister is well experienced in these matters--this will be the third time since the Government came to office that he has responded to agriculture debates initiated by my party. I thank him for the courtesy he showed my colleagues when we visited him before the announcement was made; I thank him for listening to our concerns.

Farmers in my constituency were disappointed with the compensation package, in the sense that it did not compensate specialist beef producers who finish beef--in other words, farmers who bought their store cattle in the spring and summer and finished them in the autumn and winter. They are the ones who bore the brunt of plummeting market prices. They have not received a penny piece from the compensation package. Perhaps the Minister will recognise these farmers' concerns and see what can be done for them.

The Minister is fully aware of the strength of feeling in Wales, so, rather than repeating points that have been made by my hon. Friends on both sides of the House, I should like to make three or four different points today.

First, I want to emphasise the depth of the crisis resulting from plummeting prices. I want to cite figures given me by the Morgan Evans market in Gaerwen. On 28 November last year, the average price for bullocks was 83.3p a kilo, and for heifers, 83.6p. The prices in mid-November 1996 had been 94.3p and 91p respectively; and in November 1995, 114.49p and 107p. That clearly shows, as my right hon. Friend the Member for Caernarfon (Mr. Wigley) said, a reduction of way over 20 per cent. in two years. There has in addition been a large drop in the price of lamb, from 130p to about 90p--a fall of 40p a kilo. It is the twin effect of the price falls in the beef and lamb sectors which has caused this awful crisis.

Wales is primarily a livestock-producing country, so the impact has been severe. The remarks of the Minister of Agriculture, Fisheries and Food at the Oxford conference, therefore, could not have come at a worse time. He said that he wanted support for the industry to decline even further. There are times to say these things, times when these matters need discussing, but raising them when the crisis is at its deepest was probably not particularly sensitive.

The introduction of new regulations on the exporting of sheep carcases on 1 January has caused immense concern to abattoirs and others involved in the export market. The Minister is well aware that when the industry was consulted about how the regulations should be introduced, certain exporters made the point that if the spinal cord had to be removed from the animal before export, that would cause difficulties with the retailers in France, who wanted the whole carcase. I do not see why the spinal cord cannot be removed in the country where the carcase is received. That should not be a problem, because France operates the same regulations.

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So provided the spinal cord is removed in an EU-licensed abattoir or other approved establishment, I cannot see any difficulty.

One abattoir in my constituency has laid off 25 people simply because the French refused to accept split carcases. Will the Minister look into that? We need only a small change in the regulations to allow EU-approved abattoirs or cutting plants instead of UK-approved ones.

The Government have introduced a voluntary beef-labelling scheme. Farmers are concerned about the way beef is labelled in supermarkets. It is often labelled "United Kingdom packed", whereas in fact the beef has been imported. The EU is to introduce a scheme in 2000, and the Government have decided on a voluntary scheme until then--but that could let many supermarkets and other retailers off the hook. There will be no statutory obligation to inform consumers properly. If there were a statutory obligation to label beef with its country of origin everyone would know where they stood and consumers would be satisfied that they were buying properly labelled meat.

Farmers are also worried that the labelling scheme will apply only to fresh and frozen meat and to minced beef, and not to meat products. As the Minister well knows, the difficulty often arises not with fresh meat but with added value meat products which are now bought in vast quantities by consumers. I should like the beef labelling scheme for the UK to be compulsory, not voluntary.

As for the purchasing policy of public bodies, the Minister will recall that the first debate to which he responded as a Minister was on that very subject. I realise of course that it is not up to individual stations such as RAF Valley; what matters is the central purchasing policy of the Ministry.

If the Government are serious about acknowledging the depth of the crisis in the industry in the UK, they can do something positive about it. They can ask the Ministry of Defence to change its purchasing policy. The MOD buys vast quantities of beef--it is a big contract. The Minister acknowledged the point in the earlier debate and promised to raise it with his colleagues in the MOD. Can he tell us what progress has been made?

The Minister is well aware of the issues. I hope that he will recognise the depth of feeling throughout the House, and I ask the Government to respond appropriately.

10.29 am

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy): I congratulate my right hon. Friend the Member for Caernarfon (Mr. Wigley) on once again securing parliamentary time to discuss this important matter. I shall be brief, as I know that others wish to speak.

It may be obvious, but I shall restate the fact that the agriculture industry is not a marginal industry. Together with the food industry, it represents some 8 per cent. of the United Kingdom's gross domestic product and 8 per cent. of employment. That is a significant contribution.

The announcement on 22 December was a step in the right direction; it would be churlish to say otherwise. However, huge losses have been suffered by the industry and a great deal needs to be done. Hon. Members on both sides of the House have made important contributions today and offered valuable suggestions, to which I hope the Minister will respond in due course.

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The question of a retirement package for farmers needs to be looked at again. That is a long-term view shared by our party and others, and we should be working on it.

On the immediate question of the agri-monetary compensation to which such eloquent reference was made, it is a fact that sterling has appreciated by 20 per cent. against the ecu and 30 per cent. against the deutschmark. Therefore, the sum that comes to Welsh farmers is far less than it appears. The value of the output in 1997 fell by a substantial amount because of the appreciation in sterling, creating a huge disparity.

As we know, compensation is available from the European Commission. I cannot for the life of me understand why some of the £980 million is not being applied for. It is being provided in all other eligible member states, and I reiterate the call for the matter to be reconsidered.

As a result of the strength of the pound during 1997, the Government have benefited from an underspend in the sheep annual premium scheme of about £190 million, together with an additional saving of £222 million in the over-30-months scheme.

Greater efforts must be made to lift the export ban. I understand that there is to be a statement on that today, and I hope that it will be the first of many such statements.

As my right hon. Friend said, there has been a weight limit in the over-30-months scheme, which has been unfair, and compensation has been capped, to put it mildly. That is unjustified and unwarranted. I urge the Government to review the scheme and the weight limit, and to ensure that proper compensation--for compensation it is--is paid to those who need it.

On imports of beef, a number of factors are coming together to create the very low returns being experienced by beef producers. Clearly, the strength of the pound is one reason, and the effect of price imports is a major contributory factor. As a result, imports of beef into the UK are considerably up on 1996 levels.

My party believes that it is essential for the Government to ensure that all agricultural produce imported into the UK conforms with the strict conditions relating to farm assurance, welfare concerns, traceability and processing safeguards. We have in Wales and throughout the UK an agriculture industry that is second to none. The same standards should be applied to all imported meat.

The hon. Member for Vale of Clwyd (Mr. Ruane) made some telling points about supermarket chains. I agree whole-heartedly with what he said, and I urge the Minister again to reconsider the promotion of Welsh meat. That important avenue should be pursued more energetically as a means of bolstering the internal market. It could be done quickly and effectively if sufficient investment and effort were committed.

I refer to the hon. Gentleman's remarks about the purchasing policy of some local authorities. I am pleased that purchasing groups within local authorities are beginning to recognise that the matter needs to be addressed. I congratulate my own authority, Gwynedd, on having stuck rigidly for some time to a home meat policy. That should be emulated throughout Wales and beyond. It is an important step forward.

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I share the concern of hon. Members on both sides of the House at the dramatic fall in income of Welsh farmers. I share the concern, which could easily be allayed, at the delays in processing payments by the Welsh Office Agriculture Department. It is unacceptable that farmers in my constituency have been waiting since August for substantial payments. There is no possible excuse. We have had written responses about some computer or other. It is the same computer that works in England and in Scotland. Payments are made there on the due date, but not in Wales.

In fairness to the Minister, when I saw him before Christmas he took the matter up and I know that he will do his best, but he is fighting a system down at the Welsh Office that needs kicking. I hope that he will get the strength in his foot to do so, and I will assist him if necessary. That is not to say that I am a bovver boy, but action is needed.

This has been an important debate, with useful contributions from both sides of the House. We all unite in calling on the Government to address the crisis urgently. We went part of the way before the Christmas break; let us please look again and do what we can to ensure the strength and well-being of an extremely important industry.

The hon. Member for Montgomeryshire (Mr. Öpik) referred to rural stress. I was pleased to deliver a paper on the subject recently at Gregynog in his constituency. The Welsh Office and the Ministry of Agriculture, Fisheries and Food have it within their power to alleviate the great problem of rural stress, at least in part. I urge the Minister, for I know that he is sincere, to redouble his efforts to put matters right.

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