Examination of Witness (Questions 100
- 119)
TUESDAY 23 MAY 2000
RT HON
NICHOLAS BROWN,
MP
100. It implies no limit on sow numbers.
(Mr Brown) It has to be removed. There is a separate
proposal which is under consideration amongst Ministers in the
European Union as to whether there should be some state by state
overall constraints on capacity but that is a separate proposition
and, frankly, I am not sure I favour it.
101. Having gone through it with the fishing
industry, I am not sure that I would recommend it.
(Mr Brown) No, for probably the same reasons, I will
wait until I see the full proposal but I am not sure it is the
right way forward, frankly.
102. We must move on but I am going to let Mr
Paterson and Mr Jack come in with very quick ones on the pig industry
because it is important.
(Mr Brown) Yes, obviously.
Mr Paterson
103. It is the broader question of the problem
of squaring very real public demands for higher welfare standards
in this country with the need to keep our farm producers competitive.
We have seen a head-long collision with the pig industry and many
people have gone bust. How will you stop that happening in the
poultry industry where many poultry farmers believe that the cage
directive will be pursued with the usual rigour in this country
and not in other countries?
(Mr Brown) We must all move at the same pace and at
the same time. Whatever the regulatory regime is it must be uniform
across the whole of the European Union. More than that, I was
one of the Ministers, indeed I took a lead in it, in calling for
a report from the Commission on the obvious external trade implications
of imposing higher standards within the European Union. Now, Commissioner
Fischler is going to have to come back to us on that point. As
you realise, and I am sure the whole Committee realises, it is
intimately bound up with the agricultural discussions that are
taking place as part of the World Trade Organisation Round.
104. What is the timetable on the cage directive
as you see it at the moment?
(Mr Brown) From memory, and perhaps it is a mistake
to go from memory, I think there is a 12 years phase in period.
Chairman
105. I think you have plenty of memory capacity
behind you, Minister.
(Mr Brown) Sure. It is not immediate but it is remorseless.
Clearly we need to plan for all of the factors, including the
external trade issue. As you know I would like to see animal welfare
measures specifically included as Green Box measures as part of
the agricultural component of the WTO agreement but we are a long
way from that.
Mr Jack
106. Your colleague in the House of Lords, Baroness
Farrington, said in answer to a question that a restructuring
scheme contains three elements: a total exodus element, an outgoers
element and a restructuring element for those who want to remain
in the industry. It is the last part I am intrigued about. What
types of measure are you either finding or hoping the industry
will pursue and, related to that, are you giving any help to the
industry to try and become more sophisticated in dealing with
the pig cycle and the implications that has on total numbers reduced?
(Mr Brown) Your question about the classic
pig cycle is very shrewd. I think because the decisions in the
sector are individual businessmen's decision, the cumulative effect
of them is often not planned in a structural way. It is clearly
right that the industry learns to work more closely together as
an industry and to make these judgments collectively rather than
as a series of individual farm judgments. The classic economist
would always advise that as the cycle goes right the way down
you increase production, although it would take a very brave person
to do it because production might be well below the immediate
cost of production. When the cycle is at its height you get out
and you reduce numbers. Again people at the height think that
the income will be sustained forever and experience shows that
it is not.
107. With respect, Minister, that is a very interesting
economic treatment straight from Sanderson's Economics.
(Mr Brown) I was not aware of that.
108. It did not actually answer the question
I asked. The question I asked was what were you doing, if anything
at all, to help the industry deal with the scenario you pointed
out. Could I have an explanation of what Baroness Farrington meant
in the context when she talked about a restructuring element for
those who wish to remain in pig production? What does that mean?
(Mr Brown) To answer your first question. We have
encouraged the industry to get together in a new national association
and to discuss trends in the industry amongst themselves. Now,
more than that, I do not think we can do. As I said earlier on,
in answer to something Mr Curry referred to, there are considerations
amongst Ministers of the European Union whether Ministers should
go further. Frankly, I do not think it is the right thing to do.
I will wait to see the specific proposal. In the parameters that
are open to Government, in what is essentially a free market,
we have done what we can. Would it be wise to go further? I think
not. It is for the industry, essentially a collection of private
sector businessmen, to take the lead in market stabilisation,
in other words doing what they can to try to even out the effects
of the classic pig cycle. On the question as to the two components
of the ongoers scheme, it is possible, it is our intention to
spend some of the money on market orientated measures, that is
marketing, and also on supporting quality assurance schemes, that
is what is intended. In other words, in summary, to help the industry
win that premium for its product in the market place. We have
a good story to tell, we need to tell it loudly and the Government
wants to help with that.
Mr Todd
109. One last thing on that, what is the deadline
for the scheme's design and launch?
(Mr Brown) For the pig scheme?
110. Yes?
(Mr Brown) We are still in discussion with the Commission
about it. We do not want to set a deadline but we are very close.
111. The delivery of advice to farmers has already
been touched on. Defining the role of MAFF and the Small Business
Service, the relative roles and the responsibilities for providing
expert advice is problematic. How has that been addressed so far?
You mentioned MAFF were effectively subscribing to the Small Business
Service, putting some money in?
(Mr Brown) Yes. We have thought long and hard about
this. We want farm businesses to think for themselves as businesses
and to think very broadly about how they get income streams going
through that business so the business itself will be sustainable
over time. In particular we want to make sure there is not an
over-reliance on CAP supply side measures.
112. As you guess I second that view very strongly.
What expertise will MAFF contribute? They are obviously going
to put some money in?
(Mr Brown) Yes.
113. Bearing in mind the Small Business Service
would not be full of people with knowledge of farming.
(Mr Brown) No, this is a very good point. We are in
discussions now with the Small Business Service about hiring in
or contracting out the extra expertise.
114. Any idea of when that shape and precise
design will be available?
(Mr Brown) At the minute it is being dealt with by
officials but when we have the details of the way forward I will
be quite happy to share them with the Committee.
115. That will be very welcome indeed. Would
you be intending to test trial or test run some of these advice
packages in the particular areas and work out what works best?
(Mr Brown) Clearly this will roll out. They cannot
deliver it in just one go. There needs to be a time frame for
this.
116. Farmers vary hugely in their acceptance
of advice.
(Mr Brown) Yes. It is not compulsory, it is something
that farm businesses can draw on. We hope it will be of service
to them. What we have in mind is a very thorough going business
consultancy activity and a hard look at trends in the market place—of
course this will vary from farm to farm—where that market
place is going and what more needs to be done in order to ensure
a reasonable level of return on investment and frankly a reasonable
level of return to the farmer for the hours that are being put
in.
117. Led by the DTI presumably?
(Mr Brown) We are the customer, as it were.
118. The DTI leads.
(Mr Brown) They are providing a business service,
not an agricultural service, a business service to our client
group, of which agriculture is a component and not the only component.
We are using the Small Business Service because we want farmers
to think of their farm businesses as businesses.
119. How are you going to square with the possibility
or likelihood that many farmers will want a mixed package of assistance
for transforming their businesses and help with, for example,
aid packages for environmental objectives which may be administered
either by yourself or indeed in some other instances by another
agency?
(Mr Brown) It is perfectly possible that the outcome
will be a combination of measures, some potentially drawing on
the environmental schemes where the farm acts as a partner with
the public purse for securing desirable public ends, partly traditional
agricultural components and partly some non agricultural income
stream.
| 
