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The Minister of State, Ministry of Agriculture, Fisheries and Food (Ms Joyce Quin): The hon. Gentleman may be referring to the agricultural development scheme, for example, which is up and running. I remind him that marketing is part of the rural

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development regulations. The demand for marketing in the different regions can be reflected in some of the regional priorities under rural development plans.

Mr. Breed: I thank the right hon. Lady for that clarification but I do not think that it changes what I am saying. The annual report of a large public company will set out the moneys that are being spent in promoting its brand, product and everything else. The sums are extraordinary. We are deceiving ourselves if we say that we shall see a significant improvement in both domestic and foreign demand for farming produce, given the budgets that the Government are suggesting.

The industry does not have the money to market its produce. It is to be hoped that those that sell it--for example, supermarkets--will be prepared to put some money into marketing for their own reasons. The moneys that are now available are clearly not sufficient.

In December 1999, the Minister announced the introduction of a limited form of modulation at a flat rate of 2.5 per cent., rising to 4.5 per cent. in 2005-06. The process of going into modulation was controversial, but we on the Liberal Democrat Benches had supported it for quite some time. However, the flat-rate modulation has some drawbacks, which we need to identify. It hits hardest those farmers who can least afford the loss of subsidy. That is much to be regretted because the farmers concerned feel rather hurt.

The low level of 2.5 per cent., although I accept that it is a starting level, is too low to free up sufficient funds, even on a matched basis, to provide a significant boost for rural development schemes. I know that modulation will roll on, but when it came to an up-front boost it was not significant.

The way in which modulation will be introduced was not among the models that were agreed by the Commission. I assume that a flat-rate scheme would need the specific approval of the Commission. Perhaps the Minister will clarify whether that approval has been received or has been applied for.

We believe that the present modulation scheme, although welcome, is flawed. It is a new model scheme but there are other options available, which already have Commission approval. We would promote a tiered structure of modulation, which would ensure that those in greatest need of aid would continue to receive it, while freeing up more significant funds to deal with the important business of rural development and environmental protection. However, the Government seemed to allow that system to pass by. Perhaps they considered it and decided against it. Perhaps also they will tell us why they came to that view. Many smaller farmers would have felt that such a method of modulation would help them.

I do not know whether the representatives of small farmers were present at the summit or whether their views were represented. However, it seems that the system of modulation that is to be introduced does not suit their circumstances.

The pressures of World Trade Organisation and European Union enlargement mean that the supply subsidy is finite, but to what extent I do not know. We need to work on the product of which our farmers and we are rightly proud. We must add value to the product and then market it with force, both here and abroad. That initiative needs additional financial support, among other things, to get the demand side moving.

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We have raised previously the early retirement scheme. The Minister was frank some months ago when he said that the Government had considered it closely and carefully. It had been costed and he said that it was deemed not to be value for money. We took that to mean that many farmers would be retiring anyway, and thus to provide them with an additional sum in those circumstances would not be a good use of taxpayers' money.

The truth is, however, that many farmers are not retiring. That is not because they do not want to but because they cannot. They are locked into a progressively more miserable situation. They cannot extricate themselves, and that applies particularly to tenant farmers. A growing number of farmers of increasing age want to retire but simply cannot.

Remarkably enough, many other people would like to go into farming, but are being locked out. They cannot find a way into the kind of unit--a small farm or a tenancy--that they could take on. I hope that the Government will reconsider an early retirement scheme. It need not be so broad as to include everyone who the Minister suggested would benefit unnecessarily. It could be targeted at those who are locked into circumstances from which they would wish to extricate themselves. It could also offer opportunities to new blood coming into the industry.

A retirement scheme that could tackle those twin objectives would not be enormously expensive. A targeted approach would provide an opportunity to revitalise farming, bringing in people likely to be able to diversify, use the land for different purposes, employ new techniques and go into organic production. Unless we change the personnel in our agricultural industry, we shall not see quick enough change. The industry will grind slowly on.

An early retirement scheme is an essential part of the Government's master plan. I agree with their medium and long-term strategies, but an early retirement scheme would allow their aims to come to pass much more quickly. It would also have the benefit of retaining more small farm units. Without that, holdings will simply become larger, preventing even more people from getting started in farming on their own account. Farmers and growers need sustained support at this critical time.

Mr. Tyler: My hon. Friend makes a persuasive case for a comprehensive interdepartmental approach to farming and rural concerns. Did he notice an answer that I received yesterday from the Minister for the Cabinet Office? She wrote:

Does my hon. Friend find it significant that there is no mention of a role for the Ministry of Agriculture, Fisheries and Food in the development of rural policy? Does he believe that the time has come for a better interdepartmental vehicle that would achieve the comprehensive approach that he is advocating?

Mr. Breed: Yes, it is somewhat surprising that MAFF was not mentioned. I suspect that that was a slip, and hope that the Minister will tackle the point.

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I agree with the Government's objectives, and we all want reform as well as protection of our environment, all of which must happen more quickly than at present predicted. I hope that the future will not charge us with delaying the improvements that we want in the CAP, in enlarging the EU, in protecting the countryside, in allowing diversification and in ensuring that agriculture remains an important part of our rural life. If we do not get the time frame right, people will drift out of the industry, our environment will not be protected and the CAP may become the means by which enlargement of the EU never takes place.

4.24 pm

Mr. William Thompson (West Tyrone): I welcome the debate on agriculture and the common agricultural policy of the European Economic Community. I go back long enough to have heard the original debate on whether Britain should enter the Common Market. We were told in the referendum debate at that time that it was simply a common market that would allow us easier access if we wanted to sell to other parts of Europe. We were told that no great change could take place without unanimity and that if Britain wanted something not to happen, we could veto it easily. That was what the people of Britain voted for when we went into the Common Market.

Over the intervening years, matters have proved not quite so simple. Europe has intervened in every aspect of our lives. It becomes ever clearer that we are heading for some kind of united Europe. The common agricultural policy probably worked in its first years, but Britain is now disadvantaged by it. Our economy does not equate with those of many other European Union countries, and that puts us at a continual disadvantage. Furthermore, when we wish to advance policies that are to our advantage, we generally find that they are not advantageous to the other countries. When agreement is required among the countries, we tend to end up at a disadvantage.

The farming industry faces considerable difficulties--enlargement of the EEC, the lowering of world prices and the pressures of the World Trade Organisation for more even competition--all of which increase pressure on the CAP. We are finding it difficult to amend the policy. The Minister has told us that progress has been made on the Agenda 2000 settlement. That may be so, but there has not been enough to allow us to deal with the difficulties that farmers face.

Northern Ireland has a greater difficulty in that it has a land border with the Republic of Ireland. For some peculiar reason, the Republic always seems to do better than the United Kingdom in negotiations. Our farmers in Northern Ireland are sometimes at a considerable disadvantage to those in the Republic of Ireland. Those who want a united Ireland always say, "Look how much better it would be if we were united so that you in Northern Ireland could have all the advantages that we have in the European common market." That does not go down well with the Unionists.

I welcome the interest taken in Northern Ireland by the Minister of Agriculture, Fisheries and Food. He has visited us several times and shown great sympathy with the plight of farmers, especially pig farmers. Of course, even though there is no European regime for pig farmers, Europe still has to agree with everything that happens. Much negotiation and agreement still has to take place before the actual money comes to pig farmers.

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I welcome the fact that there will be two forms of support for pig farmers--especially the outgoers scheme. The Minister said that there would need to be a stipulation that farmers must not go in again, but it seems unlikely that a pig farmer who had been put out of pig farming would want to go back. Those farmers have been destroyed--many of them face large debts from the banks and virtual bankruptcy. The prospect of their going back seems remote. However, I welcome the efforts being made to help them, and the fact that the scheme will go back to June 1998. Hopefully, some aid will be given. The farmers who have stayed in the industry also need help; it is necessary for reconstruction to take place. I welcome the Minister's comments on that point.

A prevalent issue in Northern Ireland is the move to designate it as an area of low incidence of BSE. I appreciate that the Minister has cottoned on to that idea and has given it as much support as he can. Originally, I thought that the matter was simple, but I have discovered its complexity. Although farmers are looking forward to that designation, in the hope that they will be able to sell their calves and get rid of their animals more quickly, there are several disadvantages. The General Consumer Council for Northern Ireland expressed grave concern that, if we become a low-BSE area, it might not be possible to import to Northern Ireland some of the products that are currently imported.

Some factories in Northern Ireland have also expressed concern. At present, they bring in meat from the mainland for processing; it is then sent back to the mainland. That may not be possible under low-incidence status. Those problems need to be researched to find a satisfactory solution.

The idea that everything in the garden will be rosy if we receive that status is open to question. At present, Northern Ireland can export cattle, but in fact there are no such exports. That is because so many rules and regulations have to be fulfilled--such as designated factories or parts of factories--that, unless there is a high output of cattle, export makes no economic sense. There is no supply of cattle for export.

Furthermore, some farmers unfortunately do not keep such accurate records as they should, so they cannot export their cattle. I support the view, expressed by the permanent secretary at the Department of Agriculture and Rural Development, that those farmers need to bring--and keep--their records up to date. If they fail to do so, they will be at a considerable disadvantage.

The over-30 months scheme has been mentioned. Will that scheme continue if Northern Ireland receives low incidence of BSE status? That proposal raises many questions. I realise that the Minister is doing his best. He has received representations from many companies and other sources. I hope that he will be able to produce a scheme that is accepted by Europe, that will disadvantage nobody and that will help farmers in Northern Ireland.

I welcome the relaxations in planning laws, so that, if diversification takes place, it will be easier to obtain planning permission.

Over the past few years, farmers have had a difficult time and they are greatly in debt. Recently, we have been encouraged in Northern Ireland by the good weather. There was a tremendous amount of rain and the ground was extremely wet. However, the fact that we have had several weeks of good weather has at last put a smile on

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farmers' faces. Perhaps things are changing and the outlook may be better than they anticipated some months ago.

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