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Mr. Nick Brown indicated assent.
Mr. Luff: I am relieved on that score. In our report, we highlight the fact that cutting research and development expenditure seems a perverse reaction when we are fighting to increase British competitiveness, maintain food safety and reduce animal disease. I am concerned by the rumours of the break-up of MAFF, or at least the transfer of its functions to other Departments. We need a strong voice for farming, especially in order to address the WTO negotiations effectively.
I draw the House's attention to paragraph 17 of our report, which deals with the Ministry's attitude to competitiveness. We recommend an audit of regulatory activity, and I came under some pressure from Labour Members to include that recommendation. It is essential that we regulate carefully the burdens we impose on British agriculture, and the Committee is not convinced that MAFF has always been effective in doing so.
I must address the subject of beef exports. I have talked to several farmers in my area recently and they are not very keen on the idea of a trade war. They say simply that the French are better at them than we are and that we have a lot to lose. We must prevent the import of products only when we are on the surest scientific ground. A trade war could undermine our claim to be behaving with absolute integrity in the beef dispute. If France is to be made to play by the rules, we must do so too. Trade wars are also likely to be counterproductive. If the French farmers took to blockading other British exports, such as sheep, the effect could be disastrous for British farmers, as my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) made clear.
I think that the Government could have done a bit more. I know that the date-based export scheme is about de-boned beef, but Lionel Jospin said on television that the ban on beef on the bone was one reason for the behaviour of the French. Ministers must accept that it is a real factor in the current dispute.
If the Minister has scientific advice that the ban on beef on the bone can safely be lifted, I wonder whether he is on safe legal ground in continuing it. Devolution arguments have also been advanced, but devolution is about the differences between countries. That is one reason why I was worried about it in the United Kingdom context, but in this respect I say, "Vive la difference."
My second complaint is about the Government's confused response to the crisis. The word "confusion" has appeared in many press reports describing the Government's response. My hon. Friend the Member for South Suffolk (Mr. Yeo) dealt with that in his opening remarks, so I shall not labour the point now, save to say that it is regrettable that there has not been greater clarity.
It is important to emphasise that the economic significance of the beef export ban must not be overstated. Of course we must lift it and of course the French are
wrong, but the Ministry has set a very modest target for the recovery in beef exports. There is a risk that the Franco-Britannic squabble could obscure the truth, which is that farming faces much more fundamental problems than this little local difficulty. The Minister is optimistic about the matter, and I hope that events will bear him out. I look forward to discussing that and other matters with the Minister when he comes before the Agriculture Committee the week after next to discuss the crisis in the livestock industry.
A great deal more should be done to safeguard the future of British farming. It needs a more strategic approach than has been managed so far. That approach should be based on securing added value for the farmer, developing new skills in farmers, freeing farmers from production-related support, maintaining competitiveness by avoiding regulation, moving away from commodities and into brands, encouraging co-operation among farmers, and on empowering consumers to make better informed choices. That is the sort of agenda that needs to be developed for farming.
Mr. Desmond Browne (Kilmarnock and Loudoun):
I, too, congratulate the hon. Member for Eddisbury (Mr. O'Brien) on his by-election victory and on a very fluent maiden speech. Like my hon. Friend the Member for Waveney (Mr. Blizzard), I also visited that constituency for a couple of days before the by-election. It is an interesting part of the world, and there is a remarkable coincidence between the geography of Eddisbury and that of my constituency in Ayrshire. I listened with some care to the hon. Gentleman's remarks, and was not surprised to realise that his constituency and mine have similar rural economies. The people of Eddisbury are friendly and welcoming, and I am sure that the hon. Gentleman will enjoy his time there. I look forward to many more interesting contributions to our proceedings.
I shall keep my contribution brief. I trust that Opposition Members will be able to stand yet another Scottish voice in the debate. I have become used to the little Englander mentality of some Conservative Members, but I was shocked at the nadir that that mentality reached today, when a Scot who represents an English constituency--the hon. Member for North Wiltshire (Mr. Gray)--sought to undermine another hon. Member's contribution on the basis of the geographical origin of the person who made it rather than on its content.
I welcome the announcements that my right hon. Friend the Minister made today with regard to the agriculture industry, as will many farmers in my constituency. I also congratulate him on the law-abiding stance that he has adopted with regard to the beef dispute. The Opposition
spokesman, the hon. Member for South Suffolk (Mr. Yeo), was asked for legal advice by the hon. Member for Vale of York (Miss McIntosh). Remarkably, he was unable to cite the legal advice that apparently supported his position. If I understood correctly what the hon. Gentleman told the House, he said that he had received no such legal advice and that no such advice existed to support the position adopted by the those on Opposition Front Bench.
In any event, I know that the approach adopted by my right hon. Friend the Minister enjoys great support outside the House. Only yesterday, I had one of my regular conversations with a certain constituent of mine. He was at his home back in Scotland, and we were discussing the Government's handling of the current beef crisis. I asked him what his views were on the confrontational approach advocated by the Opposition.
My constituent said to me that the last thing that we needed was a trade war banning any French food or livestock products. He recognised that that would be illegal, and said that it would inevitably lead to reciprocal action. As other hon. Members have pointed out, the French are better at such action than we are.
My constituent is a knowledgeable individual, and said that a ban would do no good. Scotland exports about £3 billion of manufactured goods to France each year. A total of £316 million of that amount is accounted for by food and drink exports, and two thirds of that consists of exports of whisky. He added that it was obvious that Scotland and its agricultural economy needed this trade, and that any move to jeopardise it would be madness. That constituent is Ian Kerr of Woodhead farm. He is particularly knowledgeable about agriculture because he is the milk committee chairman for the Scottish National Farmers Union.
As my hon. Friend the Member for Dumfries (Mr. Brown) said, we cannot overestimate the importance of agriculture to the Scottish economy. In fact, about one job in 10 in Scotland relies on agriculture. The landscape, traditions and rural way of life--[Interruption.] I wish that the hon. Member for North Wiltshire would contain himself instead of making observations from his sedentary position. Perhaps if he listens, he will find out what this has to do with this place. The landscape, traditions and rural way of life are sustained by our agriculture industry. Agriculture has shaped and managed the Scottish environment, which in turn is the bedrock of a £2.5 billion Scottish tourism industry.
Farming is important to the economy of my constituency. Dairy farming alone contributes about £58 million a year to the Kilmarnock and Loudoun economy. Our 200 dairy farmers produce about 10 per cent. of the total Scottish dairy production. Over the past few years--stretching back beyond the tenure of the current Government--they have had it hard. There were a few good years because of pricing, but they have had it hard, as they knew they would. Dairy farmers have suffered a further milk price reduction of about 8p a litre, a decline in the value of their animals when they are sold off at the end of their productive life, and a fall in the value of calves to nil from £120 per beast in 1996.
The cumulative effect is to reduce total farm income in my constituency, by £12 million, which also removes that money from the local economy. Farmers short of cash have no money for repairs, and that has a detrimental
effect on all other rural businesses. One agricultural engineer in my constituency has seen his annual turnover drop from £600,000 to £100,000 in just three years. The loss of secondary business has particularly affected the town of Galston and the villages of Newmilns and Dunlop.
When farmers have money they invest it, and that is obvious when one drives through the rural environment. In Kilmarnock and Loudoun, it is obvious that dairy farmers are no longer able to invest in the upkeep of their farms. The storm damage of last year remains unrepaired. Many farmers had made savings and were uninsured.
The countryside environment is deteriorating. The countryside premium scheme was introduced to help farmers--for example, to fence off ditches and make other environmental improvements to the countryside. Many local farmers considered the scheme and were attracted to it, but, as it involved a considerable capital outlay, shied away from it.
Dunlop is a typical example of a village significantly affected by the slump in agriculture. The major employer in the town, an agricultural contractor, is doing so badly that few jobs remain. That affects not only the economy of Dunlop but the whole life of the village.
Behind every one of these facts are individuals and families who are struggling to cope. I meet these farmers and their families regularly. They are not unappreciative of what the Government and the Scottish Executive have done for them. The additional aid that has been secured for them has been welcome, and despite the fact that dairy farmers still face immense problems, they do not hark back to the past. They realise that they live in changed circumstances, and they welcome the challenge that that brings. They want to work with the Government in creating the environment that will allow them a sustainable future. In the context of both Scotland and the United Kingdom, they tell me continually that it is a change to have Ministers who listen to them and respond to what they say. Tory Members may shake their heads at that, but they are welcome to come with me to meetings with farmers who tell me those things.
Dairy farmers know that circumstances have changed. Perhaps they could have coped with a strong pound, and perhaps they could have coped with a market dominated by strong buyers who effectively dictate the price, whatever the Competition Commission may say about the sale of milk; but they find it impossible to live with a combination of the two.
On behalf of those dairy farmers, I ask the Minister to hear the following points. First, if the exchange rate remains as it is until the end of the year, the dairy sector will be eligible for agrimonetary compensation thereafter. The dairy farming community expects that the Minister, who has a full appreciation of their current plight, will, when the time is right, ensure that they receive every penny of their entitlement.
Secondly, since the calf-processing aid scheme ended, dairy farmers in Kilmarnock and Loudoun have been left with calves and no market for them. Ironically, the scheme itself killed off that market. However, there are potential markets in the east of Scotland and in England where there are farms that have the ability to rear those calves. There needs to be some development of this
market. The farmers have spoken to the Meat and Livestock Commission, and they want assistance with that.
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