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10.37 am

Mr. Cynog Dafis (Ceredigion): It is important to emphasise that the present crisis in farming is temporary and intense, arising from BSE and the export ban, and the strength of sterling. The Government have shown themselves slow to respond--indeed, in the autumn they intended not to respond at all. Their response now has been inadequate.

The Ministry of Agriculture, Fisheries and Food is on the record as arguing that it would be wrong to maintain people in farming who should not be there. The retirement scheme has been proposed in that context, to take people out of farming and reduce the numbers in farming in Wales. The proposal has been linked with the issue of environmental sustainability, and I have two comments on that.

First, environmental sustainability requires not fewer people in agriculture, but more. Fewer people in agriculture will lead to environmental loss, not environmental gain. People are needed to maintain and restore hedges, to create natural habitats and to maintain biodiversity. Moreover, cattle as well as sheep are needed on the uplands to promote environmental gain. If we lose people from farming in significant numbers, the countryside will fall into neglect and decay, and we will all be impoverished, including town dwellers who want to visit and walk in a living countryside, not in a decaying countryside.

Secondly, if the Minister wants to see an example of unsustainable agriculture, he should look in the direction not of cattle and sheep producers but of the intensive

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industrialised systems that produce much of the pig and poultry meat that is so popular. Such systems convert grain to meat in conditions that are very dubious in terms both of animal welfare and of environmental impact. It is astonishing that the output of that production is advocated as being representative of healthy eating.

The awful thing about the present situation is that the most sustainable systems with first-rate animal welfare standards that produce meat from grass in mature animals are being undermined. It is high time that consumer choice was informed with an understanding of those issues. We must project those realities in order to encourage the consumption of healthy meat.

We should bear in mind the fact that BSE and the strength of sterling are temporary phenomena. We all agree that the agricultural policy should be reformed fundamentally--and it must go well beyond what is in Agenda 2000--but it would be wrong to pull the plug on farming when the industry is facing its worst crisis in living memory. The extra money that has been provided will do no more than meet the extra costs imposed on farmers.

If the Government intend to introduce the early retirement scheme, I appeal to them to link it with a scheme for new entrants, as occurs in other EU countries. Those two measures must combine to enable us to begin the process of reconstructing rather than reducing the number of people in agriculture.

By and large, the Minister did not make many enlightened comments at the Oxford farming conference. However, I was pleased to see reports of his remarks vis-a-vis CAP reform that he would consider modulation proposals that could be controlled by member states. He seems to have shifted from his previous blanket opposition to that measure. I hope that the Minister is listening to voices other than those of the NFU in England and the Country Landowners Association. He must heed also the voices of the Farmers Union of Wales, the Sustainable Agriculture, Farming and the Environment Alliance, and the Family Farmers Association.

As to modulation, it would be sensible to link agricultural support with labour units. That would assist the family farm and encourage employment. The policy would be in keeping with the fundamental principle of sustainable development: resource productivity is every bit as important as labour productivity. That will be an increasing policy trend generally, and we could start in the area of agriculture in the near future. If the United Kingdom Government were to take the lead in advocating policy change along those lines, it would be welcomed by the public at large and certainly welcomed in Wales where the family farm, which is largely owner occupied, remains the bedrock of our rural communities.

10.42 am

Mr. Nigel Evans (Ribble Valley): I congratulate the right hon. Member for Caernarfon (Mr. Wigley) on gaining this debate. I have tried several times to secure a debate on this issue that examined the whole of the United Kingdom. As the right hon. Gentleman said, this crisis affects all farming and all aspects of farming in the United Kingdom--from dairy and beef farming to arable, poultry and sheep farming. The crisis has spread down a long chain, affecting suppliers to the industry: suppliers of capital goods, including buildings and machinery, and even feed merchants are suffering.

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Farm incomes have dropped dramatically--some estimates put the fall at more than 50 per cent. The Government's figures are also alarming, and that has an enormous knock-on effect. Farming is in need of life support and the meaningful existence of the rural economy depends on the industry being given the intensive care that it deserves and needs. As farmers have less to spend, incomes in local areas, local shops and other rural businesses that are dependent on farming suffer. Those incomes will drop also. This is an urgent and dire emergency and, by their inaction, the Government are fast becoming an undertaker to an essential industry that does much more than provide food for our nation.

We have seen farmers in Wales and in other parts of the country moved uncharacteristically to demonstrate at ports, outside supermarkets and in fields around the United Kingdom where our armed forces usually conduct manoeuvres. Farmers want to know whether the Government understand the industry. A farmer in the Ribble Valley wrote recently to a Welsh Labour Member of Parliament about hunting, and received a reply that was more than she had bargained for. I shall not mention the name of the Member of Parliament concerned as I have not written to him, but I hope that the letter is a one-off. It begins:

The hon. Member then goes on to address the hunting issue. What an arrogant and totally unnecessary introduction to a letter that displays abundant uncaring prejudice. The letter concludes:

    "Time makes it impossible for me to take up your kind invitation to visit your farm. But I will spend a day at the Welsh Agricultural show next week where I expect to meet many farmers."

My constituent should consider herself lucky with that response. Farmers who live in the constituencies of Labour Members should be aware that, if they want sympathy from their Members of Parliament, they had better ensure that their addresses ooze poverty.

The reality for many farmers is that, despite the level of wealth or prosperity their farm addresses may suggest, the evidence will show an industry facing bankruptcy. Some farmers are in daily contact with their banks. That has led the National Farmers Union to initiate an unprecedented campaign. These are unprecedented times, and a petition will be presented shortly to the Prime Minister at 10 Downing street on behalf of the NFU.

The BSE crisis was an appalling body blow to farming initially, and the previous Government responded with a package that gave security and, importantly, time. However, that time is now running out. A recent Welsh NFU press release stated:

for the BSE crisis--

    "put in place during 1996 helped considerably".

We all know how difficult it has been for hill farmers recently. According to a recent NFU survey, that has led to more than 55 per cent. of farmers deciding that hill farming is not an attractive career option.

An impressive farming lobby came to Parliament before Christmas. We held three sittings in the Grand Committee Room off Westminster hall, and we still did

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not see all the farmers present. NFU chiefs told us that if the Government's package was not sufficient to help Welsh farmers, they would be back. That package was announced, and the NFU will return on 20 January. We have rehearsed the problems facing the industry so many times that it is fast becoming a mantra. What is the use of repeating those problems if the Government refuse to provide any meaningful help? Will the Minister tell the House today that the industry is receiving enough assistance? Will he say that he has nothing to add to what has been said already, and that that is that? Will the Minister's words be a death sentence for thousands of farmers who will go bust--in effect, will the Government nail down the coffin lid on the industry?

Several hon. Members have mentioned problems with the compensation package and the green pound revaluation. There have been five interest rate rises since 1 May, and further increases are threatened. That has led to the revaluation of the green pound, the sucking in of imports and the depression of domestic prices. The Government must tell farmers why they refuse to apply for money to help the industry out of this problem.

The £85 million aid package for beef farmers, which was announced just before Christmas, is simply not adequate. It is a one-off payment which is insufficient to counter the lifetime charges and costs that the industry has heaped on it--including hygiene costs, renderers' charges, double tagging, traceability imperatives and measures necessary to assure suppliers and consumers. Those measures are adding to farmers' costs, while prices for the end product are falling through the floor. If the farming industry dies, many other industries will fail as well. As a result, communities will die. It is estimated that every direct farming job generates five others--the chilling reality is that the reverse must also be true.

Lifting the beef ban, which is now 21 months old, would assist the industry greatly. The news today that the Commission will ask for a partial lifting of the ban in Northern Ireland is a step forward. However, before the cheering starts, we must recognise that the Commission is only one hurdle and that many others must be cleared over many months before we see light at the end of the tunnel. The issue of specialised herds with traceability throughout the rest of the United Kingdom must also be addressed.

United Kingdom farmers want to see parity among farmers throughout Europe. The same standards should apply so that United Kingdom consumers know that the quality of the meat that they consume is assured, and that imported meat is of the same high standards as United Kingdom meat. Meat labelling must be examined. As the hon. Member for Monmouth (Mr. Edwards) said, if consumers have information about where their wine comes from, what is the problem with clear labelling of meat? That must be logical. The conning of the public by using fancy words--for example, regarding British minced beef or British beef which has been minced--must stop. There are many forms of misleading labelling. Supermarkets must listen to the plea that is made on behalf of farmers in terms of labelling and the price at which the product is sold in supermarkets. Farmers are receiving lower prices, and that fact should be reflected in supermarket prices.

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Another area of grave concern is the over-30-months scheme. In March 1996, before the BSE crisis, the average price reported by the Meat and Livestock Commission for a grade 1 cull cow was 95.3p per kilo live weight. That made an 800 kg cull cow worth about £760. Following successive revaluations, cuts imposed by the Government and the introduction of a maximum weight limit of 560 kg, the value of the same animal is now only £311, a loss in value of about £450. Farmers are selling their meat at a loss, and that cannot continue.

I do not understand why the Government cannot take the simple step of lifting the imposition of the maximum weight limit in terms of the compensation that is payable under the over-30-months scheme. A realistic valuation must be placed on the animal.

The beef-on-the-bone announcement, which was made just before Christmas was a disgrace. The Government's handling of the matter was completely over the top. There was no consultation with the industry, and that was quite wrong. Many consumers are asking to be able to buy beef on the bone because they have made a judgment about the risks of catching anything from eating such meat. We must listen to those consumers.

The problems that have been aired during the debate are hitting every part of the farming industry. I shall not repeat what other hon. Members have said, but they have drawn attention to the problems facing the dairy and sheep industries, where prices have collapsed. Imports are increasing and depressing domestic prices, and farmers cannot export their goods. The crisis is hitting everyone.

As has been said, farmers are the custodians of the countryside. If they go, the impact will be felt by everyone. The rural economy is under threat.

The Minister has come to the Dispatch Box three times so far to respond to concerns similar to those that have been expressed today that have been raised by Members throughout Wales. We have heard the words before, and farmers will be listening for something that will help them to deal with the problems that they are now facing. Let us not just have words now, Minister; please may we have action?

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