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Mr. Brown: My hon. Friend is absolutely right. As we go into the detail of these matters, we must not lose sight of the fact that the CAP is the overarching policy instrument for agriculture and farmers. The case that my hon. Friend makes for reform is also the Government's case. He is right to put it. Not only does the policy impact
on how farm business decisions are taken, but it is bound to influence our ambitions for enlargement of the EU. It favours those who produce most because it is essentially a production subsidy. About 20 per cent. of farmers receive 80 per cent. of CAP subsidies. That is logical because of the way the system is structured: it is intended to be a production subsidy.
The case for reform and for moving away from the crude link with production towards the second pillar of the CAP--the rural development measures--as a way of getting moneys to farm businesses and the rural economy is clearly the right way forward. The Government have made a start on all that. In our negotiations, we secured the largest ever reform of the CAP and, more than that, we got each and every regime moving in the right direction. Should we have done more? Of course, I would like to do more, but I am in the vanguard on all this and I have to carry others with me.
Mr. Lembit Öpik (Montgomeryshire):
Will the right hon. Gentleman give way?
Mr. Brown:
I shall have to call a halt soon, but I will take some interventions and curtail my speech.
Mr. Öpik:
Some of the changes to Milk Marque may not be helpful in achieving the Minister's goal. Does he agree that, for a long time, Milk Marque has defended the interests of the small farmer?
Mr. Brown:
I worked closely with the Milk Marque leadership through what I acknowledge has been a difficult time for it. I also met representatives of the dairy processing industry and tried to act as an honest broker through a time that was difficult for both sides of the industry, but particularly difficult for the producer side when producer incomes have been low. I yield to no one in my support for farm and producer co-operation in the dairy sector. The leadership of Milk Marque, given the Competition Commission report, which I know farmers do not like, has been right--indeed, brave--to respond in the way in which it has. This is the right way forward for dairy producers.
Mr. John Burnett (Torridge and West Devon):
I am delighted to hear that there is to be a review of bureaucracy in agriculture. Will the Minister assure the House that it will consider the introduction of an appeal mechanism against the decisions of the Ministry of Agriculture, Fisheries and Food, which currently acts as judge, jury, prosecutor and defender in giving decisions to individual farmers?
Mr. Brown:
It is not for me to tell the review what response I want from it. My understanding is that that issue is being considered, and certainly I have considered it within the Department. The difficulty is that the rules are very rigid and there is a risk of disallowance with substantial penalties if they are not rigidly followed. In our country, there is a tradition, in most aspects of our administrative life, of being tolerant of genuine errors. The European Union rules are much more rigidly drawn because they have to apply across the whole European Union. Within the constraints that the rules place on us, we are looking at what could be done and, in particular, whether it would be possible to operate a workable
I said that I would curtail my speech because I have taken interventions. I think that that is what the House wanted. I do not want to eat into the time of other hon. Members, but it is right to respond to some of the key points made by the right hon. Member for Ross, Skye and Inverness, West and to the specific ways forward advocated by the Liberal Democrats. They are right to identify the overarching importance of the CAP and the case for reform. The motion is light on advocating specific remedies, although the right hon. Gentleman advocated some in his speech. He mentioned the calf disposal and cull ewe schemes.
I looked hard at the representations that I received from the Meat and Livestock Commission, among others, on the cull ewe disposal scheme proposition. It is being considered by Ministers in other Agriculture Departments, in Scotland, Wales and Northern Ireland. Alongside that is the request for a modified calf disposal scheme. Both schemes come up against a difficulty with which many of us will be familiar: the Commission's attitude to extra and unlawful state aids--state aids additional to the CAP. As a general point, we all want to help agriculture to get through what are acknowledged to be difficult times, in some sectors more than in others. It would be better to put our efforts into devising workable schemes on the demand side--I shall say a little about that in a moment--rather than trying to supplement the supply side of the CAP. That is the hurdle at which these ideas have fallen.
The only alternative would have been to reopen the whole calf-processing aid scheme in abattoirs in parts of the country, or perhaps throughout the whole country, until the end of the year. I thought carefully about that, and listened carefully to the representations that I received from the NFU when the scheme was due to close last November, because that was the position that I inherited. Hon. Members will know that I managed to obtain money from the reserve to continue the scheme until April, when I used moneys that I was able to draw together within the Department to continue the scheme, at a reduced rate, for as long as I could. I would have liked to reduce the rate further and to continue the scheme for longer in order to provide a market signal and a period of transition towards the eventual ending of the scheme EU-wide. That will happen at the end of this year. Some EU countries have closed the scheme; others still use it.
The Commission took the view that it could allow only a modest variation in the EU-wide scheme for any individual member state. It relied on the figure of 20 per cent. It would be difficult to get the Commission to agree if we tried to introduce a scheme with a variation of more than 20 per cent., but, in any event, any EU scheme, under the CAP, must be open to all. Under the CAP, it is not possible to bring in partial schemes unless they are specifically permitted. Of course, the calf-processing aid scheme is not such a scheme.
I pay tribute, as I have done before, to the Ministers with responsibility for agriculture in Scotland, Wales and Northern Ireland for trying to help the industries, in their Administrations, through difficult times. It is wrong for parliamentarians to criticise them for trying.
I have already dealt with other matters that were mentioned by the right hon. Member for Ross, Skye and Inverness, West--supermarkets and the regulatory burden. I intend to say something about labelling soon; I am currently considering the regulations. In relation to standards abroad and at home, it is not legal to offer for sale goods, whether produced at home or imported, that do not meet our health and hygiene standards. I warn the whole House against trying to go down a protectionist road, with the use of instruments such as article 36--the example that is usually quoted by the Conservatives--as somehow allowing us to ban the import of produce from abroad that does not meet domestic welfare standards. I have sought the best possible available advice on that point, and I intend to put it in the Library so that we can all share it. However, it is clear that article 36 will not serve for that purpose. I intend to put the evidence in the Library; more than that I cannot do.
The right hon. Member for Ross, Skye and Inverness, West raised the issue of genetically modified materials.
Mr. Tom King (Bridgwater):
Will the right hon. Gentleman give way?
Mr. Brown:
I really must come to a conclusion.
Mr. King:
Will the right hon. Gentleman give way?
Mr. Brown:
I am a soft-hearted character; I shall give way to the right hon. Gentleman.
Mr. King:
Everyone understands the Minister's difficulty in trying to impose a ban on imports from countries that do not share our animal welfare standards. Although we want the highest welfare standards to apply in this country, when any new requirement is introduced is it not important to bear in mind the fact that that requirement cannot be imposed on other countries and that we are unable to prevent imports from countries whose producers do not have to bear the same costs as ours?
Mr. Brown:
I made exactly that point in almost the same way at the Council of Ministers meeting that discussed that issue in relation to the poultry sector. I was one of several Ministers who advocated taking forward the trade aspects of animal welfare in the coming World Trade Organisation round, and I received the support of other Ministers in that. Moreover, we got the toughest ever statement from the Commission on the subject of farm animal welfare.
The right hon. Gentleman has correctly identified one of the dangers, which is that we insist on the highest standards, but find that, by so doing, we have exported the industry and so end up with neither a victory for animal welfare nor an industry. In my view, that would be a foolish course of action and I said so at the Council of Ministers. However, I do not conclude from that that we should resile from our ambitions for farm animal welfare. We should fight to obtain a premium for higher
farm animal welfare standards in the domestic marketplace and take a hard look at how farm animal welfare issues can be accommodated within the CAP. The matter will inevitably come up for discussion during the WTO round. It is early days yet, but no one should doubt the line that I shall pursue. In the meantime, I am alert to the impact on the domestic market, especially in a time of difficulties.
The right hon. Gentleman will remember that, in 1991, when we introduced changes in the pig sector, including the stall and tether ban, we allowed an eight-year conversion period. I make no political point: those, including myself, who voted for those measures believed that what we were doing was right in terms of animal welfare and that the industry could accommodate the changes. If we had asked pig farmers in 1995 and 1996 whether the industry could accommodate the changes, they would have said yes, of course, in part because, for a range of reasons, the new production systems were better than the old ones. Now, when margins are pinched or non-existent--producers in the pig sector now sustain losses--the effect of those changes on those who invested and are carrying debt is hard to bear. I want to find a way forward that specifically addresses the circumstances of the pig sector.
The right hon. Member for Ross, Skye and Inverness, West raised the subject of genetically modified organisms. He is right to emphasise the scientific impact and the need for the Government to stick to the science and to ensure that we are professionally advised. He is also right to say that consumer confidence has been badly shaken. We are setting up the Food Standards Agency to ensure that the professional advice given to Ministers, including me when I attend policy meetings of the Council of Ministers, is seen to be independent of ministerial or departmental government and to have been cast in an independent and scientific setting. I accept that it will take time, but I hope that the creation of that agency and the drawing together of the public protection work undertaken within government will have an impact on consumer confidence and trust. That trust has been shaken, and it is the duty of Government to restore it.
I have been generous in giving way and I do not want to take up other hon. Members' speaking time, so I shall draw my remarks to a close by drawing the House's attention to some of the ways forward. As I said, we should look more at the demand side and less at the supply side when trying to help the industry through difficult times. There are good prospects for farmers' markets, a movement that is in its infancy in this country. I lay great personal emphasis on the farm assurance schemes, such as the Meat and Livestock Commission's British meat pork mark, which give the consumer the opportunity to purchase goods that have been produced to the higher United Kingdom standards. I should be willing to give my support to marketing schemes that emphasised the advantages of farm-assured produce.
The recent growth in the organic sector, prompted by support from my Department, is welcome. So popular is the scheme that not only is it oversubscribed for the current year, but the waiting list for next year is now oversubscribed. I am considering how we can take that forward. We doubled the support given to the sector, and even that has proved insufficient to meet demand.
There are great possibilities in making use of regional speciality food endorsements and in trying to link the food industry, especially the farmgate food industry, with regional tourism. There are opportunities there, and we can also make use of the European Union legal protection of registered names.
Diversification will continue to be important. About 40 per cent. of all farm businesses have a significant non-farm-based income stream, and I expect that to continue. I do not want to see the eastern part of the country turned into a prairie or the western part into a single ranch, but the trend for farm businesses to merge and grow larger is remorseless, and I expect that to continue. However, we must ensure that it does not become the dominant outcome.
I believe in producer co-operation, and everything that I have said about the dairy sector underpins that. I believe in producer clubs, too, and the joined-up food chain with producers, processors and distributors recognising their community of interest and the long-term nature of the investment that they put into their businesses. In summary, the future is with the demand-side measures, rather than struggling to supplement the common agricultural policy on the supply side.
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