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Mr. Fabricant: Would not it emphasise my hon. Friend's valuable point if he made it clear to hon. Members and the public that farm incomes have fallen by 72 per cent. since their peak in 1995, and that they doubled between 1990 and 1995? Does not that illustrate the difficulties that farmers faced even before the onset of foot and mouth disease?
Mr. Green: My hon. Friend is right. The accountants Deloitte & Touche published an analysis of farm incomes last October, before the outbreak of foot and mouth. I shall illustrate my hon. Friend's point with the stark figures. An average-sized farm of 500 acres, which earned £80,000 in the mid 1990s, earned only £8,000 in 2000. Almost no other business sector has suffered so much in the past few years. Deloitte & Touche also estimated that in 2001, such a farm would incur losses of £4,000.
My hon. Friend the Member for Lichfield (Mr. Fabricant) mentioned the five-year figures. In 2000, total income from farming fell by 27 per cent., with the consequences that we have witnessed. That is why the crisis is spreading throughout rural businesses. The National Farmers Union estimates that 47,400 farmers and farm workers left the industry in England and Wales in the past two years. Even before that, the industry shed almost 20,000 jobs between June 1998 and 1999.
Inevitably, the position has worsened since because of foot and mouth. A survey shows that more than a third of the farmers hit by the disease plan to scale down their businesses. Part of the problem is that the crisis is all-embracing in farming: the fall in farmgate prices and incomes is affecting every sector of the industry.
Mr. Bercow: Given the visceral hostility of most Labour Members to farmers, and their habitual tendency
to depict British farmers as the unwarranted beneficiaries of public funds, would my hon. Friend care to re-emphasise the fact that thousands of pig farmers who might benefit modestly from the Bill--I stress the word "modestly"--receive absolutely nothing from public funds, and that 24,000 have gone out of business over the past three years?
Mr. Green: My hon. Friend makes his point eloquently. He is right: although some sectors of agriculture are subsidised, others are barely subsidised at all or, indeed, unsubsidised. The crisis in agriculture is all-embracing, so the unsubsidised as well as the subsidised are being hit.
Even more important, however, is the fact that the current crisis is spreading far beyond agriculture. It is affecting all the essential services that provide the lifeblood of local communities. We welcome the fact that the Bill recognises that by including provisions for village shops. The daily customers of many such shops are precisely those whose family incomes are being hit hard, which will be a severe additional problem for businesses that are already in crisis.
In many areas, village shops normally rely for survival on another great source of income--visiting tourists. Again, the effects of foot and mouth will be targeted on the shops that can least afford them. Whatever overall drop in tourist numbers is taking place--and there can be debate about that--urban destinations will probably be hit less hard than rural destinations. Trips to country areas, whether by British or by overseas tourists, are most likely to be cancelled. The summer uplift on which many village shops rely will be less this year than ever before. The Countryside Agency has estimated that rural tourism losses will rise to £2 billion, and I am happy to accept that figure: it comes from a Government agency. I am sure the Minister will recognise that, whatever percentage of that £2 billion loss falls on village shops, the help that the Bill will give them should be judged in the context of the sheer size of the losses that they face. The House should consider this Bill in the context of a terrible overall crisis.
The Bill gives rise to a number of issues, not least the amount by which diversification can help farmers, and the effects on farms and shops. We shall want to make some proposals of our own. At the outset, however, let me urge the Government to consider whether their actions, including the Bill, are adequate to deal with a crisis of this scale. For many businesses in the countryside, these measures are not enough. To thousands of people who are struggling to hold on to their livelihoods, the Government seem to be offering an umbrella in a hurricane. The rural taskforce is meant to be coming up with wide-ranging solutions, but the Minister for the Environment has produced nothing new since he made what he described as a preliminary announcement fully six weeks ago.
Perhaps the Government would command more respect in the countryside if we were discussing a comprehensive package of measures to help rural businesses; but they have not produced such a package, so instead we must consider the details of what they propose in the Bill.
The first big issue that the Bill raises is the scale of possible diversification and the effect of diversification on preserving the long-term health of British agriculture. I do not think that any hon. Member would deny the
importance of diversification for farmers. Nevertheless, I hope that Ministers do not believe even for one moment that, in the long run, if it remains unprofitable, farming will be preserved by greater diversification. Ultimately, the long-term economic health of farms depends on farming, not on non-farming activities. Farmers will have the capital to diversify successfully, and to take advantage of the diversification that the Government are seeking to encourage in the Bill, only if the underlying farming business is producing a profit.Seizing on new opportunities is, of course, a good idea for businesses, but businesses will seldom be able to do so successfully if they act out of a sense of desperation. Currently, desperation is affecting far too many United Kingdom farmers.
Mr. Fabricant: Does my hon. Friend agree that speculation on the very future of the Ministry of Agriculture, Fisheries and Food is causing considerable concern in the farming community? Does he also agree that many farmers believe that their function in life is not to serve as mere stewards of the countryside or as "park rangers", as some farmers have described it? Do not those facts support his point that farmers wish to remain as farmers, and that although diversification can help farming, diversification should not be used simply as a means to an end?
Mr. Green: I agree with my hon. Friend that, in shaping the control of farming, and by its very nature, diversification must remain essentially a side issue. As for his point on farmers wanting to be farmers, the key fact is that the English countryside--the environment that many of us love so much--is so attractive precisely because it has been farmed for hundreds of years. Our countryside has not grown up naturally. If farming declined, the countryside would not return to a more desirable state of nature; it would become environmentally worse.
Too often, if diversification is undertaken for the wrong reasons, the wrong type of diversification emerges--that fact has long been known. As long ago as 1987, David Richardson--who is one of the more insightful commentators on agriculture, and currently writes for Farmers Weekly--wrote that farm diversification tends to attract publicity out of proportion to its potential. He said that many ideas
- "enjoy a brief period of intense interest and high profits for their originators before the necessarily limited new markets become oversupplied. All over Britain there is a scattering of failed worm farmers; deserted pick-your-own fields; empty farm house holiday bedrooms; and rabbit farms which seemed like a good idea once but proved unprofitable when the animals failed to breed like rabbits are supposed to do."
Mr. Gray: I am sorry to have to correct my hon. Friend, but, as the £16 million would be provided over five years, the figure could be as low as £3 million annually.
Mr. Green: My hon. Friend has caught me out for being generous to the Government. I apologise and assure him that it will not happen again. Even with those caveats, however, there are other important questions. For example, if we accept that farm diversification is desirable, how many diversification projects will be helped by the scheme?
The Countryside Alliance has welcomed the Bill's principles, as do the Opposition, but it has asked some key questions. How many diversification projects will be eligible for the scheme? Is the £6,000 rateable value threshold appropriate? The alliance also rightly says that the rateable value must be realistic if it is to promote diversification, and that, if is not, the Bill will simply be an empty gesture. I am afraid that empty gestures are exactly what the countryside does not need in the current state of crisis.
The Countryside Alliance also made the correct point that the rateable value for similar premises will vary across the country. Indeed, the recent Green Paper on local government finance uses a rateable value of £8,000 to determine a small business. We are entitled to ask, whatever happened to joined-up government if the limit under this Bill is £6,000 and the limit in an extant Green Paper on local government finance for small business is £8,000? As the Minister said, during the foot and mouth crisis relief has been given for premises with a rateable value of up to £12,000.
There appears to be no coherence in the Government's thinking about where the limits should apply. Will the Minister explain the reason for the apparent plethora of limits on rateable value that the Government are scattering around? As we are anxious to ensure that any relief reaches businesses throughout the countryside as fast as possible, we hope that the Government can act quickly to address those concerns.
The Government need to address a number of other worries if this measure is not to be merely an empty gesture. One of the most important, still under the heading of diversification, is that the relief proposed will apply only to farmers and not to third-party occupiers. Many farmers convert or construct buildings to be let to others as light industrial units or storage. If the rate relief were made available to farmers making such conversions and others, it would help not only farmers but the wider economy by providing affordable business premises.
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