Examination of Witness (Questions 1 -
19)
TUESDAY 23 MAY 2000
RT HON
NICHOLAS BROWN,
MP
Chairman
1. Minister, we may well be more delighted to
see you than you are to see us.
(Mr Brown) It could not possibly be the case!
2. Thank you very much for coming. You will
be on the Internet at 3.30 tomorrow afternoon. No doubt that makes
you feel greatly reassured but I am obliged to tell you that.
We may not be allowed to use computers in Committee in the House
of Commons, the modernisation tide has stopped short of anything
as useful as that, but you will be happy to know that you are
on the Internet at 3.30 tomorrow.
(Mr Brown) Chairman, life is full of excitement.
3. We wanted to discuss the Action Plan with
you because it is clearly a significant document and there is
a lot in it and we need to find out what it adds up to. If I may,
I am going to start by asking you a question which you will probably
have anticipated because I have asked it of you in the past, but
I think it will be very helpful to have it on the record again
because in the debates in the House you intervened. My question
is as simple as this: is it now the Government's policy that in
the interests of sustaining competitiveness amongst our farmers
in relation to their competitors that regulation both in terms
of its extent, intensity and timing, and the cost which is passed
back to the industry whether to the farmers or the abattoirs,
should all be measured and imposed in relation to those faced
by competitor producers in the competitor industries?
(Mr Brown) It has always been my viewalways
been my viewthat we should not gold-plate the regulatory
regimes that are common throughout the European Union. When I
became the Minister I examined a whole range of issues and largely
because of representations from the National Farmers Union and
others as well, I have to say, including individual Members of
Parliament, I set up three industry-led bodies to review the administrative
regime, the three key ones IACS, the CAP and the Meat Hygiene
Service. We are also across the Department looking at other regulatory
regimes to see what we can do to help the industry. My very strong
view is that everything the Government does, not just in my Department
but in other Departments as well, should be proportionate.
4. May I ask the second part again, if I may,
in slightly different terms. There is something called "full
economic cost recovery" because the Government of which I
was a member introduced it, as I recall. Under that the Treasury
does seek that where the service is delivered for example to farmers
that they pay the cost of that service. There has always been
a slight argument as to what it constitutes but the doctrine is
in place. In the Action Plan you have alleviated a series of charges.
Is it now the Government's policy that full economic cost recovery
cannot be applied if the effect of it is to place charges on British
farmers significantly greater than the charges faced by their
competitors?
(Mr Brown) The Government have not abandoned the doctrine.
Nevertheless, given the prevailing circumstance in the industry,
we have had three years of depressed farming income as the whole
Committee is very well aware, and given the effect on competitiveness,
the Government, considering all of the issues in the round, felt
it right to alleviate charges that would otherwise have fallen
on the industry. The cost is being borne by the public purse.
You know and I know because we argue about it that there is this
debate whether the alleviation of the charges is new money or
a burden not imposed on farmers that would otherwise have been
imposedit is effectively a semantic debateand if
the burden was due to fall on farmers and I wish to alleviate
it, I have to fight for that money within government. If I get
the money to carry the cost that is won in competition with other
public expenditure bids.
5. You will perhaps be reassured that when we
had Mr Timms in front of us looking at the integrated pollution
control programme, we asked him the question directly, "Does
the Government believe its purpose should be to help industry
to be competitive?" and he replied monosyllabically "Yes."
The implications are, I am afraid, uncomfortable in the sense
that either the farmer pays or the public purse pays but that
is a choice we all make. If we look across to the Continent we
find competitors who clearly are not going to be facing charges
as a matter of policy and quite legally under the regulations.
(Mr Brown) That is of course something we have to
bear in mind when we are framing our policies because of difficulties
in the domestic sector, and for these broader reasons of fairness
I have fought the farmers' corner as sturdily as I can within
government.
6. Finally, Minister, could I ask is the Action
Plan a collection of emergency policies in response to a crisis
or is it a strategy?
(Mr Brown) It is supposed to sit alongside the Government's
strategic approach to the industry which we have discussed here
before and in particular to complement the announcement I was
able to make to the House on 7 December regarding the very ambitious
plans we have for rural development regulations, the Second Pillar
of the CAP. I believeand it is a view shared by my colleaguesthat
there is a need across government to look at what more we can
do to help and also to look at how we can do things better. A
lot of work was put into preparing for the Prime Minister's summit
right across government and by the private sector and by the organisations
representing farmers as well and I think the approach the Prime
Minister adopted is the right one, to try and pull these different
strands together and come to some conclusions which are set out
in the Action Plan. I think it is quite a significant package.
Mr Jack
7. The plan before us this afternoon was borne
out of the present crisis in agriculture and the need to respond
to it as far as the Government was concerned
(Mr Brown) Can I just say I think it would be right
to do some of these things anyway but you are right the present
difficulties in the sector do set the background to this. We are
trying to do what we can to help the industry get through.
8. You have quite clearly thought very carefully
about the range of programmes which are part of the plan. I wonder
if you could share MAFF's vision for agriculture over the next
decade and perhaps tell us, in your view, what sectors are going
to expand, what sectors are going to contract and what you see
the role of MAFF being in the new world that you have created.
(Mr Brown) This is a very important question because
the industry is going through a period of transition and many
of those who own and operate farm businesses will be asking themselves
how far the current difficulties in the different agricultural
sectors are cyclical and how far they are due to structural changes
taking place in international commodity markets and world trading
conditions. I believe the answer is a combination of factors but
there are some trends that are absolutely remorseless including
a decline in total numbers employed in agriculture domestically,
an increase in the size of farm businesses
9. Can you quantify it for the Committee?
(Mr Brown) This is the summation of a whole series
of private sector business transactions. I do not want to quantify
it. You asked me where I think we will be in ten years' time.
We are clearly going through a process of change. I believe the
outcome, provided the Government's policies are pursued in the
way that they are being, will be that we will be able to assist
the smaller and medium-sized farm businesses to have a range of
income streams, not necessarily just conventional agricultural
production, and that we will have been able to assist all farm
businesses to get closer to the market-place but the overarching
instrument here is not one over which I, or indeed any of us,
have complete control; it is of course the Common Agricultural
Policy.
10. This particular plan, Minister, includes
a series of expenditures and you will have had to have battled
very hard with the Chief Secretary to get this money.
(Mr Brown) I do not think I am revealing any great
secret if I say, yes, that is true.
11. From the way the Treasury operates, I know
you will have been required to have quantified some of the benefits
that were going to result from this because I am sure you will
want to be able to measure the success of what you are doing.
Could you tell us a little bit more about what you think the quantified
results are going to be because you will have had to work these
things out otherwise you would not have got the money from the
Treasury? How are you going to measure the success of this plan
because the Chief Secretary will be no doubt calling you in and
saying, "I have given you all this money, are you doing better
or worse than you were before?"
(Mr Brown) We have a range of targets
12. Such as?
(Mr Brown) For the success of our environmental stewardship
policies we are intendingI am not sure if this is in the
public domain or not but I am quite happy to share it with the
Committeeto use the varying number of birds that flourish
in the schemes as a measurement of the success of the intervention.
13. What about the sectoral impact because you
deal with dairy, sheep and cattle? Can you not tell us what the
impact of this strategy/plan is, I am sure people would like to
know what arguments were put forward to say this was the right
and proper place to spend this money. There must be some quantifying
output that you are expecting from all this?
(Mr Brown) You cannot quantify it as easily as that.
14. I know it is difficult.
(Mr Brown) The purpose of the immediate assistance
we are providing is to help farm businesses get through what we
acknowledge are difficult times and in particular to get through
to the time when the Rural Development Regulation comes on stream.
Just remember this is our principal instrument for achieving farm
diversification and non-farming solutions for the problems of
some farm businesses.
15. Just one last overview question. The theme
running through this plan is to suggest in the changed nature
of farming that not all farm income in the future will be derived
exclusively from agricultural activity. Can you share with the
Committee any results of studies or work that you have done to
show us how the ratio will change over, say, the next five or
ten years between income that is derived from wholly farming activities
and income going into farmers' pockets that will be derived from
non-farming activities?
(Mr Brown) The broad trends are clear.
16. What are they?
(Mr Brown) The trend for the size of farm businesses
is for them to steadily increase in size. As I said before, the
total numbers employed directly in agriculture is steadily in
decline. Because these are all private sector decisions made individually
business by business, I think it would be difficult to provide
an objective forecast.
17. Your Ministry has done no modelling to tell
us whether it is 90 per cent agriculture and ten per cent other
now and, say, 50/50 in five years' time? You have got no feel
for that? Yes you have, no you have not?
(Mr Brown) Yes, I can see the general direction in
which things are going and we want to help but there are a range
of possible solutions for farm-based businesses and ultimately
the choice is for the farmer. The government is there to help
and to assist and to
18. But what do you think? You are the Minister
of Agriculture, what do you think is going to happen?
(Mr Brown)To candidly explain the way we think
trends in the market place are going. What it is not for us to
do is take direct responsibility for all these private sector
decisions and somehow to assert the outcome. The overarching point
of course is the reshaping of the Common Agricultural Policy.
19. To sum up, you have spent a lot of money
against a range of uncertain outcomes without a clear idea of
how income streams are going to develop over time?
(Mr Brown) No, I would not accept that as a fair summary
of what the Government has done or why. It is a party political
point and if you want to make it, it is your right to do so but
it is clearly not what we have done. It is a series of very targeted
measures designed to meet current difficulties and to help farmers
get through to better times. I say more than that: on the regulatory
side I think it is right for government to address these questions
anyway regardless of the actual circumstances in the industry.
I think it is a fair point to make that current circumstances
throw these issues into sharper relief.
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