| Previous Section | Index | Home Page |
5.34 pm
Mr. Cynog Dafis (Ceredigion): I appreciate many of the remarks that have been made about the milk industry. The hon. Member for Braintree (Mr. Hurst) made a compelling analysis, and I endorse all of it--except the references to the Celtic twilight; I do not approve of that kind of thing.
I want to speak about short-term measures and longer-term strategy. The start of my speech is anecdotal. At the end of August and the beginning of September, when the story about sewage getting into the food chain was hitting the headlines in the French press, I was in Brittany, on a twinning visit. I had a long conversation there with a Welsh dairy farmer--a neighbour of mine--and a Breton dairy farmer.
The Breton milk producer had anxieties about the future. He was producing about 250 litres per annum. He could see a trend towards larger units, and he was trying to decide whether he should join that trend. Despite his anxieties, the differences between his circumstances and those of my Welsh neighbour were striking. He was getting about 20p a litre for his milk; my neighbour was getting 17p. Both of those prices, of course, are now decreasing.
Why did the two prices differ? I identified two elements. The first was the strength of the pound against the euro. I am told that the pound is up by 7 per cent. against the euro since January--and the pound has strengthened 30 per cent. in the past three years. The other factor was the strength of the vertically integrated co-operative to which the Breton farmer belonged, which gave him strength in the marketplace. In addition, he had the advantage of being able to sell his calves and his barren cows for a good price, so he could say that he was making a good living, although it was a hard living. He was making about £20,000 a year. The contrast perfectly illustrates the appallingly unlevel playing field on which United Kingdom dairy farmers have to play.
The Welsh and the Bretons are cousins, and we do not want to hear any anti-Gallic xenophobia in this place--that is the last thing that we want to feed into the situation. The UK Government are far from powerless. The high pound is, to a large measure, the outcome of UK macro-economic and fiscal policy, which is hammering the north and west of the UK--not only in agriculture, but in other sectors--and most of Wales. The UK Government could, if they wanted to, change direction on that, and they should do so. Roll on the single currency, say I.
On the sale of calves, it is time to push hard for the resumption of live exports. There is no ethical justification for not doing so. That subject is not on the immediate agenda, but it is time to open that discussion. I hope that the Minister will tell us the Government's position on that. Concurrently--they are not mutually exclusive options--we need a strategy for a UK-based and a Welsh-based welfare-friendly veal production and marketing system.
The problem of barren cows is obviously intractable, but I want to hear the Government's views on when we start to make good use of, instead of destroying, that resource. On the powerful integrated co-op, the Government's action on Milk Marque has been the opposite of helpful, as has been said. That is water under the bridge, and we must try to build on what is available to us.
When, in addition, the Meat and Livestock Commission contends that UK meat inspection charges mean that the British meat industry is seriously disadvantaged by higher costs, we start to understand why farmers are so angry--why they feel that they are treated so unjustly. All that they have been saying about the unlevel playing field in recent months is vindicated by the facts.
I shall now discuss longer-term issues and the need to lay the foundation of a new sustainable farming industry, specifically in Wales. I shall be very specific about one issue. Enlightened opinion is unanimous that the way ahead for agricultural policy is the decoupling of support from production, and the use of environmental management payments to encourage good practice and strengthen family farms. Both can be done if the schemes are properly designed, with modulation. The Minister spoke about that.
Since 1992, Wales has had an agri-environmental scheme, Tir Cymen, which is widely regarded as one of the best in Europe. However, it was available only on a pilot basis and only in some areas. It has now been replaced by an integrated national scheme calledTir Gofal, which brings together and supersedes all the agri-environmental schemes, including Tir Cymen, the environmentally sensitive areas--ESAs--and others. Properly implemented and funded, Tir Gofal could, at an annual cost of £60 million to £65 million per annum--quite a lot of money--provide a lifeline for many Welsh farmers at a time of crisis, and play a key role in laying the foundation for a sustainable future.
Professor Gareth Wyn Jones, the author of Tir Cymen and one of the great experts in the field, suggests that a full-blown Tir Gofal could bring in as many as 60 to 70 per cent. of Welsh less-favoured area farmers, and somewhat fewer in other areas. It could create 1,200 new jobs, plus a multiplier effect. By bringing on-farm woodlands into management, it might help to create several thousand jobs in hardwood extraction, processing and manufacturing.
Tir Gofal could significantly strengthen green tourism strategies. It could help to improve animal husbandry and lamb quality, and be an important asset in promoting a Welsh quality product in the marketplace. Marketing quality is vital. Tir Gofal would cover part of the cost of fulfilling national--by which I mean Welsh--and UK obligations under the habitats and birds directive. It would encourage positive management of special areas of conservation and special protection areas, and protect sites of special scientific interest. With those multiple benefits, the environmental gain would be significant.
The problem, of course, is cash. The current intention is for £20 million to be allocated to Tir Gofal by2002-03. Currently, fewer than 500 farms have been accepted into the scheme for next year, when we should be aiming at 1,500 farms per annum. European funding equivalent to 50 per cent. of the cost of the scheme should reduce the cost to the National Assembly Budget from £20 million to £10 million. However, that will not happen, because the European moneys are not additional to the Welsh block; they end up in the Treasury. The money is paid from the Intervention Board to the Countryside Council for Wales, from the CCW to the Welsh Office, and from the Welsh Office to the Treasury.
Moneys that should have been available for a vital project for Welsh farming and rural areas are being appropriated by the UK Treasury and used for general Government expenditure. The same is true of all European moneys allocated for Wales since 1992 for all other purposes, and unless things change, the same will remain true of the £1.2 billion of objective 1 money allocated to Wales for the next seven years--and objective 2 and objective 3 money also. It sounds bizarre, it is outrageous, but it is true.
In relation to Tir Gofal, we could at the same cost to the Welsh Budget--£20 million--spend £40 million and double the number of farmers coming in, but the position is better, or perhaps worse, than that. From January 2000, 50 per cent. of Welsh land area will be objective 1 designated, and thus eligible for 75 per cent. European contribution to Tir Gofal.
I must cut a long story short. Gareth Wyn Jones, in his excellent paper entitled "Funding, Fairness, Farming and the Future"--which I commend to the Minister and particularly to the Chancellor of the Exchequer--calculates the potential loss to Wales of non-additionality in this single scheme, leaving aside other accompanying measures. He calculates that in 2002 the loss will be about £40 million. Over the seven-year structural funds period, it will be about £240 million.
Gareth Wyn Jones asserts that additionality would apply in most, if not all, other European countries and regions. For example, it would certainly apply in one of the German Lander, which develop such schemes, draw down European funding and thereby increase the number of schemes that they can implement. In the UK we do not have additionality for that purpose.
Additionality is certain to become a major political issue in Wales over the coming months. It is still not properly understood, but as it becomes more widely understood, it will become a more significant issue. If the Government want to retain political credibility in Wales, they must address it.
With the agricultural crisis biting ever more viciously into the economy of rural Wales, I appeal for it to be addressed urgently--
Mr. Deputy Speaker (Mr. Michael J. Martin):
Order. I call Mr. David Borrow.
Mr. David Borrow (South Ribble):
Two weeks ago, with my hon. Friend the Member for West Lancashire (Mr. Pickthall), I held a public meeting in the village of Rufford in my constituency to discuss the rural audit carried out by the Labour group of rural MPs. As one would imagine, it was a lively meeting, probably half of which was dominated by agricultural issues. However, unusually, the time discussing livestock issues was relatively short, reflecting the nature of that part of Lancashire. There is livestock production--mainly lamb and beef--and some dairy farming in South Ribble, but horticulture is dominant, particularly glasshouse and vegetable production. That particular sector does not, and did not in the past, rely on subsidies from Europe or anywhere else. It has always been driven by market forces, and many of the problems now faced by that sector are the result of those market forces.
5.45 pm
| Next Section
| Index | Home Page |