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Mr. John Hayes (South Holland and The Deepings): Will the hon. Gentleman give way?
Mr. Heath: No, I do not have time. We have had hours of the Conservatives in this debate.
Our pig and poultry sectors are suffering to the same extent. Pig producers are losing £12 per finished pig and poultry producers are losing £2 a bird. Those losses are not sustainable. Analysing the reasons is not simple; manifold reasons are evident to anyone who looks at the problems. There is BSE and its consequences, such as the lack of confidence. There is the strength of the pound and the imports that displace home-produced material. There are still serious question marks over the attitude of the supermarkets.
On occasion, Government action, not necessarily in the Minister's Department, has made matters worse. We need only consider the delay at the Department of Trade and Industry in producing the Milk Marque report and the conclusions that were reached. That was extraordinary and had a serious effect on the dairy industry in my area. When the newspapers talk of the possibility of the agriculture industry being absorbed by the DTI, we must say, "Nick, please tell us it ain't so." That would be a desperately disadvantageous position in which to put agriculture.
There is also unfair competition. Farmers often tell us about that, and they are right because different welfare and health standards apply in other countries--but there are few barriers to such products reaching our supermarket shelves. We heard earlier about the move away from antibiotics in chicken production in this country and the openness of our markets to birds from Thailand, Brazil and around the world that are not produced under the same amount of regulation.
We have a great deal of regulation in our industry. I hear what the Minister says about the working party that has been set up. It is a welcome approach to the problem,
but it would be more fundamental and useful if the Ministry applied tests before making regulations to determine whether they would have a negative effect on the competitiveness of our industries and could be justified by their result.
We have had a brief discussion of the common agricultural policy. I make no bones about it: the CAP is a disgrace and needs complete remoulding and drastic reform. What happened in the intergovernmental conferences was a very small movement. It is welcome and, as the Minister said, it goes across several sectors, but we have only to look at the results in the dairy sector to see that it is unsustainable. It will not survive the World Trade Organisation round, let alone anything else. It must be returned to time and again.
Further problems with the WTO were mentioned by the hon. Member for Stroud (Mr. Drew): bovine somatotropin and its American corporate backers. I have a long history of battles with Monsanto, whose representatives I met back in 1986 to complain about bovine somatotropin. Nothing seems to have changed. The Americans are determined to foist upon European markets products with which we are not happy.
There is also the Government package. We have not had sufficient debate in this Session on its parameters. I join other hon. Members in saying that it is welcome that the Minister has responded. Equally, few pints of cider were drunk at Frome market on the day of the announcement when people worked out what it meant for areas such as mine. Much of it was deferred gratification, or whatever the reverse of that is, in that it prevented something awful from happening that the Government had had in train. Its prevention was welcome, but it would have been better still had it not been there in the first place. Examining the consequences for lowland farmers shows that there is very little that is of direct benefit in the here and now.
I want to use my remaining five minutes to discuss positive suggestions about what might help. I do not want to deal in the hyperbole of political argument, because that is not the point of today's debate. We are looking for ways in which we can help the agricultural industry and the rural economy. We need what the Government often boast about in other matters--joined-up Government. We are dealing with a crisis of the rural economy that cannot be handled within MAFF. Other Departments must pay the same attention to the rural economy. They must converse with one another and produce cross- departmental thinking that will address the issues.
We need to deal with some of the immediate problems. One matter not mentioned today was the over-30-months restriction. The scheme is reaching the end of its life, but the restriction is still in place. I question the logic of that. If it was right that cattle over 30 months old eight months ago should be caught in that net, surely the limit should now be 38 months. Any logician applying his mind to the matter would accept that. There are dangers in that approach. We could flood the beef market with culled dairy cattle. That is not a sensible solution, but the matter should be examined.
We need to reconsider calf slaughter, which many hon. Members mentioned. The Minister of State, Ministry of Agriculture, Fisheries and Food, the right hon. Member for Gateshead, East and Washington (Ms Quin), attended the south-west dairy industry dinner with me a few weeks ago.
I do not think that it was an entirely pleasant experience for her. There was widespread surprise when she appeared to say that everything was now all right with calf slaughter. I do not think that she meant it, but that is how it was taken. As the hon. Member for West Dorset (Mr. Letwin) said, some people understand the desperation and futility of their industry when they have to spend all night calving a bull calf only to shoot it in the morning. There is no method of disposal and we must address that.
On the pig and poultry sectors, we have already discussed why we do not use the latitude that the Belgians are happy to use in dealing with dioxin to deal with the animal welfare and health restrictions placed on those industries as a result of BSE and other matters. I agree that we need to test the parameters of what is permissible within law. We are far too well behaved in this country on such matters. We do not take a sufficiently rigorous view and so do not find out what we can do to support our industry. I also accept that if, two years down the road, it is proved to be an unlawful act, it is a great shame, but we would have saved our pig industry, and that is the primary responsibility of the Government and this place.
We have mentioned the cull ewes scheme, for which we will continue to argue, but we should also consider specified offals in cull ewes. Was there a scientific basis for that or was it part of the package put together to convince others of the safety of British meat? If there is no scientific backing, let us reconsider whether we are putting an irreducible cost on the industry that bars export possibilities.
We need to deal with the whole question of bureaucracy. I agree with my hon. Friend the Member for Torridge and West Devon (Mr. Burnett) about the need to be able to challenge MAFF decisions. We need an agricultural ombudsman who can deal with the issues sensibly.
We need to deal with some of the over-officious regulation that we sometimes see. There is a strong suspicion that, having given green-top milk the all-clear rather banning it, there is now an alternative move to kill it by over-regulation and additional cost. I invite the Minister to examine that matter.
We have already talked about the essential element of labelling in relation to imports. With exports, we must of course lift the beef on the bone ban at the earliest opportunity, but we then have to do far more on marketing. MAFF will not do that well; indeed, MAFF should not do it at all. We need to use marketing experts for generic marketing and for regional and brand-name recognition. In Somerset and the south-west, we have extremely good names for our produce, which are recognised as meaning good produce. We do not make sufficient use of them. We need to examine the corporate structures--to make co-operatives work better so that they are more suitable for the job we want them to do. We need to reconsider agricultural credits.
Finally, if we are to make progress in reforming the CAP in the direction that we want, we need allies; we need a coalition of interests. I invite Ministers to set aside the domestic agricultural aspect and establish bilateral relationships with countries that have similar agricultural profiles to our own--perhaps the countries of northern Europe, for instance, the Swedes--so that we can arrive at a commonality of interests that will win us some of these arguments. One could bet one's life that the
mediterraneans are doing just that in their councils, but we have always failed to do so. It is essential that we make progress.
Mr. Colin Breed (South-East Cornwall):
We have heard wide-ranging and thoughtful contributions to the debate. I am especially pleased that we have been able to initiate a debate on agriculture so soon after the recess. I do not want to repeat what has been said because I agree largely with all of it; there is much consensus in the House.
We have not touched on one small part of the farming industry, and although it is small, the people in it will not want to be left out. That is the free range egg industry, which has also had its income slashed enormously--up to 25 per cent. The producers have met, continue to meet, and often exceed Government demands on welfare, food safety and traceability, but those farmers now face operating losses. It is not difficult to understand why.
There are no imported free range, farm-assured eggs sold in the supermarkets. There is no evidence of a significant over-supply, yet the contract price for a dozen free range medium eggs with a typical packer has dropped from 69p to 43p in a year. In an industry with capital inputs of about £20 a bird, to meet the high standards that we require, that price cut is absolutely devastating and cannot be sustained. A medium egg, for which the farmer receives less than 4p, can sell for up to 19p in the local supermarket. A mark-up of 475 per cent. between a packer and a supermarket on the sale of an unprocessed product is unbelievable. When the Minister meets industry representatives and the supermarkets, perhaps they could explain where that mark-up goes and who receives it.
These debates are often characterised by what farmers want and by farmers' demands. Perhaps we could concentrate on what farmers do not want. They do not want a continual diet of subsidy and grant to sustain their businesses. That is all right in an emergency or for the short term, but it is now almost continuous. Farmers do not want that. No self-respecting business man wants to be dependent for his whole livelihood on a hand-out, subsidy or grant. Farmers do not want to have to compete with their hands tied behind their back all the time--sometimes even with their legs tied together. They do not want to see a joint of meat with a whopping great union jack on it in their local supermarket, knowing that it has not come from a British animal. That is abhorrent to them.
Farmers do not want any more interest rate rises. The Chancellor may support the tough action of the Monetary Policy Committee, as we read in today's papers, but not only will interest rate rises increase the costs of farmers' bank borrowing, they will further strengthen the pound and there will be another round of uncompetitiveness. Farmers do not want any more regulation or costs in the immediate, foreseeable future; they cannot cope with what they already have.
Farmers do not want to continue in business, getting up every morning in fear of what will come in the post--a letter from the bank or a bill from a supplier--and living from day to day, with their whole livelihoods, their homes and their families under threat. That is what drives so many of them to suicide.
I agree with the Minister that we need to concentrate more on what we should do on the demand side. The industry will improve and will give a secure future by providing a demand side commensurate with what can be produced.
First, we talked about the promotion of farmers markets, which should certainly be considered. However, they are fragile and fragmented--run voluntarily in village halls and so on. We need to be properly organised and licensed so that we can set up farmers markets in appropriate places. What could be more appropriate than many of the markets that are falling into disrepute in our market towns? They would often provide an ideal location. Not long ago, in my town, we tried to set up a market, but we were told that, because of a charter of 1760-something in a nearby city, we were not allowed to do so. That is wholly ridiculous. We need concerted action to provide a framework within which farmers markets can flourish. We need to strengthen co-operatives and farmer-controlled businesses.
Secondly, we need to restore premiums for the quality of the products. At one time, they existed in pigmeat, but they have gradually been eroded. We must find a way to restore those premiums--perhaps as a part of education--for all the hard work and investment that has gone towards attaining the quality that we have.
Thirdly, we rightly referred to the beef ban, but we sometimes tend to forget that our special-relationship friends across the Atlantic still have no intention whatever of lifting their ban on our beef. I should like some pressure to be put on that part of the world market. Instead of suffering their genetically modified products and goodness knows what else, we should push our good beef into their markets.
Fourthly, we talked about labelling. That is a difficult issue, but there must be labelling for ready identification by the housewife, the purchaser and the consumer. It does not need legislation; the supermarkets dictate what is on every part of every label. They can be made to ensure that what is on the label demonstrates what the product really is.
Fifthly, we talked about the organic side. There is no doubt that the organic sector is the one sector that is receiving premium prices for its products. I cannot understand why we cannot expand what is clearly a successful scheme--there is a waiting list. If so many people want to go into it and it is a demand-led route, providing premiums for the work, surely that is something that we can do.
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