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Mr. Bill Rammell (Harlow): It is a pleasure to follow the hon. Member for Ludlow (Mr. Gill). Given the enormous damage that divisions on Europe did to the Conservative party at the election, I am pleased to hear that such divisions are clearly still very much alive. Long may that continue.

I shall make a brief contribution to our debate, prefacing my remarks with a criticism of all parties involved in it. Regrettably, our debates on fundamental issues affecting the governing of our country through the European Union are ill attended by all political parties. Everyone should take that criticism on board.

Anyone interested in the issues that we are discussing knows that farmers throughout the country face real problems. For three years, there have been substantial falls in farming income. Despite farming's image as a prosperous industry providing for prosperous communities, such a reduction in income is bound to have a lasting and disastrous impact on farming communities. I have talked to local farmers, and those in their 30s and 40s say that they regret going into the industry, and would not choose it if they were starting out today. That is a serious cause for concern.

The problems that we are experiencing are by no means unique to this country; in many ways, they are a worldwide phenomenon. Low world commodity prices are the result of over-supply, following the collapse of import markets in Russia and the far east. There is nothing that this Government--or, indeed, any other--can do directly to manage that position more effectively.

However, farming problems are worse in Britain than elsewhere for two principal reasons. First, the BSE crisis is having a continuing impact on the livestock sector. Whether that crisis was the result of accident or error--the inquiry will throw light on that question--it is indisputably having the single most serious impact on any part of British industry, probably since the second world war. We are still suffering the consequences.

The second factor peculiar to Britain is the sterling-euro exchange rate, which has resulted in cheaper imports, especially food, being sucked in and our own food exports becoming more expensive and less competitive. CAP payment rates are calculated in euros, so there is a further impact on farm incomes.

We are experiencing both a worldwide phenomenon and particular problems in Britain, and the Government have responded exactly as we would expect a responsible and sensitive Government to respond. From the Downing street summit emerged the action plan providing more than £200 million in additional support for the pig industry and dairy farmers. That package includes all the agri-monetary aid permissible under EU rules, and it is worth contrasting it with what happened under the Conservative Government. The Conservatives criticise us, but since entering office the Labour Government have, under those rules, granted £551 million of aid through that mechanism, That aid was not provided under the Conservatives. Additional support is being given to hill farming, where some of the worst problems are experienced. Rural development plans, with matched funding of £472 million, have been drawn up. All that adds up to short-term assistance that provides a breathing space and sensitive support for longer-term restructuring and diversification in farming.

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During debates such as this, the Government say that they are responding to the problems, and the Opposition say that the situation is dreadful and the Government are doing nothing. It is therefore instructive to listen to those who are directly affected--those working in farming. After the Downing street summit, Ben Gill, president of the National Farmers Union, gave due recognition to the import of the decisions that had been made. Even the Country Landowners Association--not one of the Government's natural supporters--said that the summit and the resulting aid package provided the short-term help for which it and the industry had been asking.

Mr. Hayes: To cut across the partisan interpretation of the aid packages, will the hon. Gentleman tell us precisely what the Government have done to support arable farmers such as those in my constituency, especially tenant arable farmers? He talks about hill farmers being helped, but tenant arable farmers are in at least as bad a position as they are.

Mr. Rammell: I throw back the question: what did the previous Government do? To pretend that farming does not face major long-term problems does a disservice to farmers, and to pretend that any Government, past or present, have to hand all the solutions to those problems and the money to implement them is false and does a disservice to those whom we represent. When I talk to farmers in my constituency, I find that although they have been traumatised by the changes that have occurred and are concerned about the future, they are realistic: they know that there is no quick fix to the problems and they respect and support the Government's course of action.

It is instructive to contrast the Labour Government's actions in respect of the problems facing farming with the Conservatives' actions in similar circumstances. Processes of economic restructuring and change are always going on in all parts of our society, and the role of Government in those circumstances is to help and support people through that process of change. Under the previous Government, we experienced restructuring of the mining industry, in which a process of economic change and industrial transformation was taking place. To say that that Government stood on the sidelines gives them too much credit; they exacerbated the process and made it more damaging to and difficult for the communities it affected. Contrast that with the Labour Government's actions and we see a very different, far more sensitive, approach to change.

The crisis in farming causes us to reflect on the purposes of agricultural support, specifically in the context of the CAP. The CAP was created in the post-war years, when a wholly different set of circumstances prevailed. The system of production subsidies was established to insure against food shortages. That was a legitimate reaction following the war, but we have different problems now.

The modern justification for agricultural support is founded less on the need for food security and more on the environmental, social and economic role of agriculture in rural areas. The Government are right to focus on that and to support the process of change and diversification.

Some progress was made at the Berlin summit, where we secured a package of reform worth about £65 a household to Britain--about £500 million. That was a

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new achievement, but it is clearly nothing like enough. There would be cross-party consensus on the fact that we need to go much further, especially in the context of the challenge of European Union enlargement. All parties are signed up to that and, on the face of it, support it, but the major problem is that the common agricultural policy was certainly not designed for 27 different countries--indeed, there is a question mark over whether it was designed for 15.

Under the current rules, if Poland joined tomorrow, according to the most recent figures that I have seen, it would soak up 60 per cent. of CAP funds. That statistic clearly underlines the absolute necessity, if we are serious about enlargement--which we should be, for a whole series of reasons--to reform the CAP further.

We must ask ourselves seriously and honestly how we are to achieve that reform. About a year ago, I went on a European Scrutiny Committee visit to Germany and talked to the German ambassador and German politicians. I was struck by the significant consensus between British and German politicians on the reforms that are needed. As Conservative Members have said, the French Government appear to be especially conservative in their attitude and actions on such issues.

From those discussions, I got a real sense that we had missed an opportunity over the years because we were not fully engaged in the European Union and were not the active partners that we are now. We missed the chance to build bridges, especially with the Germans, and to move away from a Franco-German axis directing the Union's affairs towards the more broadly based leadership in which Britain plays a part and can secure the significant changes that we need.

I agree wholeheartedly with my hon. Friend the Member for Monmouth (Mr. Edwards) about the problems with the byzantine complexity of the current common agricultural policy rules, the forms that farmers have to fill in and the processes through which they have to go. That criticism could be made of many European Union funding programmes. One almost needs a degree in form filling to get through the process.

I do not for a minute minimise the problems of fraud in the European Union, but a careful reading of the report of the Court of Auditors shows that often we are talking not about fraud but about genuine mistakes, because people do not understand the system and have an honest problem with the forms. Liberal Democrat Members seem to agree with that. We constantly debate the issues and highlight the fact that the processes are far too complex and difficult and cause honest people to make honest mistakes, yet we never seem to be able to resolve the problem. The Government are arguing for the changes that will help us to achieve that.

We need also to focus on the changes that are needed in farming generally, and on organic farming in particular. My hon. Friend the Member for Monmouth commented on that subject. Consumers want more organic farming. I do not pretend that that is a majority view, but increasingly consumers want wider choices in the food that they eat. The Government have made some progress. In the last year of the Conservative Government, only £600,000 was spent on supporting conversion to organic production. We are spending £11 million a year, and there are indications that that will double in the next four years.

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