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Mr. Alasdair Morgan (Galloway and Upper Nithsdale): When negotiating country of origin labelling, will the right hon. Gentleman take a flexible view of the meaning of the word "country"? I can think of several quality exports from the Scottish agriculture sector, such as beef--and whisky, which is basically an agricultural product--whose producers and manufacturers would not necessarily think it to their advantage if they were forced to label them as the produce of the United Kingdom.

Mr. Brown: I mean this kindly--I think that we have a good regional food story to tell as well. The component parts of the United Kingdom--the regions of England as well as Scotland, Wales and Northern Ireland--can all tell their own tales. I want the industry to make more use of the EU regional food description rules, so that we can boast about the things that we do well. The hon. Gentleman has a fair point.

Now, I want to make progress as I have more to say and I know that the House will be interested to know that the Government are also making available an additional £10 million for organic farming. This Government have been a strong supporter of the organic movement. We have already more than doubled support for conversion since we came to office as well as providing £2.2 million this year for organic research and development. We have found demand among farmers for conversion very strong indeed--so strong that the organic farming scheme became oversubscribed. I want this new money to help to clear the backlog of applicants waiting for conversion aid. As hon. Members will already know, the Government are conducting, with representatives of the organic sector, a review of the organic farming scheme to establish how best the Government might continue their support for farmers wishing to move into organic production methods. In the meantime, I can announce the extra £10 million.

On 7 July, I announced to the House that we were consulting milk producers in England, Wales and Scotland about extending the remit of the Milk Development Council. I can today announce the result of that consultation. A substantial majority of producers who voted favoured extending the council's remit to cover the generic promotion of liquid milk. There was also strong support from the farming unions and the dairy trade. The dairy sector as a whole has chosen to spend around £10 million on an 18-month promotion campaign. I welcome this initiative and, therefore, intend to propose the necessary changes to the legislation, once we have agreed the detailed arrangements with the dairy processing industry for it to provide matched funding. I am placing the full results of the consultation exercise in the Library of the House.

I have described a very difficult set of circumstances facing the industry. Understandably, the main public focus at the moment is on beef exports. Although it is clear that

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the Government must pursue that and ensure that there is free trade under European Union rules, a solution will not solve the problems of agriculture. These are deep seated. I have described a measured, realistic, Government response to the crisis. I commend it to the House.

2.42 pm

Mr. Tim Yeo (South Suffolk): It is only eight days since the House last debated agriculture--eight days in which much has happened and much has not happened. I welcome the debate. It is the first in Government time since either the Minister or I have been in our posts. I congratulate him on his speech. I want to be as positive as I can and, certainly, I welcome a number of aspects warmly.

In essence, however, today's speech is the same speech that the Minister has made to the House half a dozen times during the past year: he is sympathetic, extremely courteous and quite understanding. We get warm words in abundance, but tangible action remains, even today, scarce. He touched on a number of long-term issues that I want to follow up because great uncertainty surrounds the future of British agriculture.

Contrary to the Minister's claim on 11 March that he negotiated:

"The most radical reform of the Common Agricultural Policy since its inception",

the reforms were so limited in their scope that the issues will certainly have to be revisited before European Union enlargement takes place, and they may barely survive the forthcoming World Trade Organisation round.

There are other issues, such as the pace of consolidation within British agriculture, the balance of power between farmers and retailers, the shift of taxpayer support away from production-related payments, and the role of farmers in looking after the environment and the countryside. Unfortunately, it is not possible to explore these important long-term themes today because British farming is engulfed in a short-term crisis. In the time available, I want to concentrate on some of the short-term issues that will determine how many British farmers survive in business long enough to be around the next time that the Government decide to call a debate on agriculture in Government time.

One such issue is labelling. I welcome the Minister's announcement of proposed new guidance, but I regret that it has taken a long time to appear. The issue has been raised in every agriculture debate in which I have taken part in the past year. The Conservative party has been calling for honesty in labelling for the whole of that time and, indeed, longer. [Interruption.] I was sure when I made that point that it would produce exactly the reaction that it did. Hon. Members intervene from a sedentary position and I name the hon. Member for Waveney (Mr. Blizzard), who never attends one of these debates without displaying his appalling ignorance of the facts of farming life. Such interventions simply underline how little the Labour party understands what is going on in the countryside. If there were a single farmer whom I had met in the past year who would say that he would rather be where he is today than where he was three years ago,

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I would be delighted. I challenge those who mock what I am saying about the urgent need for honesty in labelling to find such a farmer.

Mr. Alan W. Williams (East Carmarthen and Dinefwr): Will the hon. Gentleman remind us who, in a minority of one in the European Commission, opposed the labelling of food containing genetically modified food?

Mr. Yeo: There is an old saying: when in a hole, stop digging. The hon. Gentleman has simply reinforced my point. He fails to recognise that agriculture today is in a state of acute crisis. One way of improving matters--for once, without resorting to the Treasury because no taxpayers' money would be involved--would be to introduce honesty in labelling, which we have been calling for as agricultural incomes have slumped month after month. Although I welcome the guidance that the Minister issued yesterday, it is a pity that it has taken so long to come.

Mr. Bob Blizzard (Waveney): Will the hon. Gentleman give an honest answer to this question: is he or is he not advocating that this Government break the law by imposing a ban on the importation of French meat? If he were a Minister, would he perform that illegal act?

Mr. Yeo: I shall deal with that subject in detail later in my speech.

When the Parliamentary Secretary replies to the debate, I hope that he will explain to the House the status of the guidance on labelling, what sanctions are available against those who do not follow it, whether the Government have support for their proposal from retailers and food manufacturers--given that this is not a new issue, I am sure that there has been discussion about it--and when the guidance is likely to be introduced.

Dr. Nick Palmer (Broxtowe): Will the hon. Gentleman explain the difficulties that prevented honesty in labelling from being introduced at any time during the past 20 years? He said that he had campaigned for it for several years.

Mr. Yeo: Even the Minister understands the difference. As recently as this time last year, British pig farmers were not required to rear their pigs to standards not required of pig farmers abroad. That changed circumstance alone, effective from 1 January 1999, is an overwhelming reason for what we have been calling for. Oddly enough, even the Minister would accept that.

Mr. Ian Cawsey (Brigg and Goole): Is the hon. Gentleman admitting that when his Government were in power they did not understand that their legislation would have such an impact?

Mr. Yeo: One of those who recognised the point was my right hon. Friend the Leader of the Opposition, who made a speech on exactly that point when the measures were going through in the early 1990s. Nevertheless, if the incomes of pig farmers have collapsed, it is appropriate for us to look at ways in which the situation might be improved. I welcome the fact that the Minister

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seems to be doing that. I do not question the detail of his proposed guidance in any churlish spirit. I recognise that he is a decent man. He has travelled up and down the country listening to farmers in the past year, and he has charmed many of them.

Mr. James Paice (South-East Cambridgeshire): But not the Prime Minister.

Mr. Yeo: My hon. Friend anticipates me. However, I fear that, after two months in the job, the Minister suffers from two shortcomings. The first is that he no longer enjoys the support of the Prime Minister. The second is that, for all his decency and charm, he does not seem to be strong enough to do the job and stand up for British consumers and farmers who look to him for a lead. Recent events have made both shortcomings painfully apparent.

In our debate eight days ago, the feeding practices of French livestock farmers were not mentioned because hardly anyone in Britain was aware of them. Last Friday, however, we learned that some French cattle, chickens and pigs had been fed with sewage sludge. So that the House is in no doubt, let me explain that the term "sewage sludge" includes the solid waste removed by filters, material resulting from the chemical and physical processing of waste water and residues resulting from the biological treatment of waste water.

The European Commission inspectors found that in some French plants, not only animal and industrial waste but human waste was incorporated into the sewage sludge subsequently used in animal feed. The existence of that practice was brought to the attention of the Ministry of Agriculture, Fisheries and Food and the Department of Health on 10 June 1999. In the four months that followed, Ministers took no action whatever to warn consumers in Britain that French chicken, pork and beef sold here had come from animals fed in that way.

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