Mrs. Gillian Shephard (South-West Norfolk): I am glad to have the opportunity to raise an important issuethe state of farming in Norfolk. As hon. Members can see, the debate is genuinely an all-party occasion. I am delighted to see in their places Members from all parties who represent the county. I am sure, of course, that we are all happy to make an exception for the right hon. Member for Norwich, South (Mr. Clarke), the Minister without Portfolio; he is a Cabinet Minister and is extremely busy, and his wife is unwell, so we fully understand his absence. However, his very supportive attitude at meetings with the Norfolk chairman of the National Farmers Union, Tony Williams, led Mr. Williams to believe that he is pushing at an open door in his discussions with the right hon. Gentleman.
Hon. Members from all parties have had the opportunity during the past year to discuss with farmers and others in rural Norfolk the current farming crisis and its effect on the county's economy. Our discussions with the farming community, including with the NFU, have majored on topics that will be dealt with by my hon. Friends. Those topics are economic issues, including world prices, modulation, and the United States farm Act; and biofuels, water matters, imports, genetically modified crops and planning and regulation.
I shall set the scene by describing farm incomes in Norfolk. For that purpose, I use the well-respected annual survey conducted by the accountancy firm of Larking Gowen, based in Norwich, a copy of which I shall hand a copy of the survey to the Clerk. The survey is based on 102 farms and involves a study of 60,000 acres. I believe that it is the largest farm survey undertaken. The 2001 harvest farm survey found that, during the past six years, farm turnover in Norfolk has fallen by 25 per cent., and farming incomes have declined by more than 75 per cent. The average farmer now earns about £3.60 an hour; the Minister will be aware that that is well below the minimum wage.
The survey points out that as a result of the halving of UK commodity prices during the past six years, the increase in bureaucracy and regulation imposed on the sector by the Government, the higher welfare costs and the increased pressure from retailers, farmers feel a growing sense of isolation. I feel sure that the Minister is aware of that, but he should be extremely anxious about it. This morning, we are talking about Norfolk; however, the 400,000 people who marched through London a few weeks ago did not do so because they were happy with their lot or with the Government's understanding of it.
What are we to infer from that survey? We cannot draw much comfort from it, certainly. Larking Gowen, whose clients farm about 300,000 acres in Norfolk and north Suffolk, predict that, for the foreseeable future, there will be low farm-gate prices, increased borrowing by farmers to stay in business and a further fall in the number of active farmers. It also suggests that there will be a further reduction in the number of farmers employed, increasing social isolation, older farmers delaying retirement because of low incomes and an increasing alienation of the agricultural and rural community from Government.
There are, however, glimmers of hope, because the survey reveals that Norfolk farmers are looking for ways to generate additional income to keep their farm businesses afloat. That can be done, given the right combination of location, capital and training. Indeed, off-farm income has risen from £72 to £100 an acre over the past five yearsa clear improvement. That includes leasing land for vegetable production, rent from property, and contracting.
There is a keen interest in scientific advances among farmers in Norfolk. We are fortunate enough to have important scientific research institutes in the county and a lot of exchange of information between farm businesses and scientists. I know that the hon. Member for Norwich, North (Dr. Gibson), who is uniquely well placed to do so, will be talking about Norfolk farmers' enthusiasm for genetically modified crops.
The survey is based on the 2001 harvest, but at the time of its publication it was possible to make predictions for this year, given that the corn harvest was complete and the prospects for the sugar beet harvest were becoming clear. Larking Gowen predicts low commodity prices; continued upward pressure on direct costs; problems arising from the ageing equipment base as machinery replacement continues to be deferred and cancelled; reductions in working capital and increased borrowing; and further alienation of agricultural and rural communities from Europe. Small wonder that the Eastern Daily Press headline, when it published the survey on 30 September, was "Farming Crisis Getting Worse".
The survey calculates the effect on the Norfolk economy of the fall in agriculture-related incomes at about £0.75 billion. The Minister will be aware of the national implications of such a figure. Certainly, the people of Norfolk are aware of it. This summer there
Disaster loomed, too, for hauliers, packagers and labellersand ultimately for the environment. The retailers would, we think, certainly have imported replacement crops from Europe, or possibly from much further afield. However, thanks to the vigorous efforts of my hon. Friend the Member for North-West Norfolk and the hon. Member for North Norfolkhelped a little by methe situation was saved. We were all somewhat amused by a letter from the East of England Development Agency, which told us that it was on the caseseveral days after the problem had been solved. That crisis was averted, but it illustrated beyond doubt that disaster in agriculture is not ring-fenced in rural areas. Norfolk people understand that the problem affects them all.
Earlier this month, at the invitation of my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) and myself, the Select Committee on Environment, Food and Rural Affairs held a chairmen's seminar at Easton college, as part of its inquiry into the future of British agriculture. Again, it was an all-party occasion, although the timing was unfortunate. Labour colleagues would have been happy to attend, but the seminar coincided with the end of their conference, and one hon. Member was on a parliamentary visit. Nevertheless, the spirit of the occasion was entirely all party. The Minister may be impressed, as we were, by the fact that nearly 300 people attended the seminar, which will be part of the Select Committee's inquiry into the future of British agriculture.
Farmers and growers were of course present, but there were also major employers, councils, charities, the Broads Authority, the Country Landowners Association, the National Trust and the Norfolk Rural Community Council. Some of Norfolk's biggest employers were there, including Bernard Matthews, Bowes of Norfolk and British Sugar. Representatives of the Salvation Army, the Methodist Church, the health service, the Women's Institute and the Norfolk Association of Town and Parish Councils were also present. The seminar's findings will be annexed to the final Select Committee report in the form of evidence and they will present grassroots opinion. The Minister will be interested to hear that they also suggest solutions.
I began by saying that colleagues would cover some of the specific concerns that were raised in our meetings with the Norfolk National Farmers Union and others. I shall touch briefly on three of them and conclude with a series of questions, which I hope that the Minister will be able to answer. First, there is the question of conservation. Those of us on the Select Committee are becoming over-used to the repetition of the meaningless term "the public good" in debates on the future of farming. I do not know who coined the phrase, but, like most jargon, it can be defined according to the interests of those who use it. That said, most people would agree that the population as a whole benefits from the fact that 80 per cent. of Britain is farmed.
So far, we have been spared most of the visible effects of the crisis in the agriculture sector. It is probably not possible to quantify the visual and conservation effects of the wholesale restructuring that is taking place in farming as a result of increased contracting, sharing of farming and so on. However, those effects will eventually become evident. A study that Strutt and Parker carried out for the university of Exeter in 2000 found that 92 per cent. of farmers carried out conservation work, to the value of £150 million a year. When farmers can no longer afford to do thatI think that that time is nowwhat will be the effects on the countryside and tourism? Will the Minister give his view on that?
Secondly, there needs to be some kind of settled view on planning issues. Local farmers are told by Ministers that they must diversify. They attempt to do so and are then frustrated by local planning authorities, who have views on the use of barns, infillings, redundant farm buildings and highways access. One of the conclusions at the Select Committee Chairmen's seminar was that it was time for joined-up thinking on rural issues. May we see some, please?
Mr. Henry Bellingham (North-West Norfolk): That is a crucial issue. I do not think that farmers are asking for help from the Government, yet they do not want them to make things any worse, as they often do. If one drives around my right hon. Friend's constituency or my constituency, one often sees extremely ugly 1960s barns, Dutch barns and large buildings that probably would not have got planning permission had they come under planning law. Yet it is ironic that when those same farmers try to convert, say, an 18th or 19th-century barn, every obstacle is put in their way.
Who has overall responsibility for water use? Some 60 per cent. of the country's unsupported crops, such as vegetables, are grown in East Anglia, many of them in my constituency. Many farmers have switched or are switching to those crops, often investing in irrigation systems, reservoirs, piping and so on. In accordance with ministerial exhortation, they are diversifying and getting closer to the market.
Mr. Anthony D. Wright (Great Yarmouth): I thank the right hon. Lady for giving way, as I have to attend a meeting shortly. There is another problem connected with diversification. Many of the farmers in my constituencyRichard Hirst from Hirst Farms in particularhave diversified into other crops that do not attract common agricultural policy area funding. There is a proposal that there should be an average area payment based on the previous three years. That would actually discourage some farmers from diversifying into other crops. Would she care to comment on that?
Mrs. Shephard : That excellent point illustrates the difficulty of achieving joined-up thinking when there are EU directives to reconcile with what is required from the market locally. I agree with the hon. Gentleman that that is the most extraordinary disincentive to the kind of diversification investment that farmers might otherwise be considering. If he must leave soon, we can report back to him.
I am sure that the Minister knows that the necessary permissions for water abstraction must not only pass muster from a number of statutory agencies, but are commented on by quite a lot of non-governmental agencies, whose interpretation of, for example, the habitat directive, can be variable to say the least. Farmers think that they have leapt over one hurdle, only to find English Nature and a whole galère of organisations with whom they have to pass muster. Who is in charge? Does the Minister understand the frustrating and sometimes impossible position in which farmers find themselves?
In addition, there is the issue of bureaucracy. I know that others intend to deal with the late payments from the Rural Payments Agency, but I can give an especially gross example of failures in the slaughter premium scheme. As the Minister may know, that scheme requires applicants to return a postcard to the British Cattle Movement Service when an animal has been slaughtered. Does he know that the cards stick together? If the BCMS claims that they have not arrived, the applicant can do nothing about it even if a slaughterhouse has given a certificate to say that the animals have been killed.
I am sure that the Minister knows of a side irritation; one really could not make it up. The postcards bear the applicant's name and address on one side and the BCMS address on the other, and applicants often send the postcards only to find them returned to them. The problem is simple. The Minister may think that trivial, but it adds to farmers' frustrations as they try to make a decent living.
Farmers and rural communities have a right to know the answers to the following questions. What is the Government's vision for the future of agriculture, and of the countryside, which I have tried to explain are inextricably linked? Do Ministers believe that food production should continue in Britain? Was it a good idea for the Secretary of State to appear to shun British beef while in France?
If Ministers believe that food production should continue in Britain, how can they help to make the sector viable in an enlarging European Union and given the challenges of, for example, the United States farm Act? Do they believe that that combination of contemporary circumstances gives British farmers a fair chance? If most of Britain's food were imported, what would be the consequences for employment, and for the balance of payments if it is still a consideration?
If Ministers do not think that food production in Britain should continue, to what use would they put 80 per cent. of Britain's land? Do they think that if land is not farmed it will look good enough to encourage tourism? If not, how do they propose to make good the obvious shortfall? If they believe that alternative non-food crops should be encouraged, what incentives do they propose? Do they understand the impact on rural economies of the continuing downturn in agriculture? Is the proposed reduction of Government grant to rural councils in the support grant review merely an unhappy accident?
Farmers and rural communities can do a great deal for themselves. I hope that I have explained that Norfolk has a highly skilled farming and agriculture sector, highly developed science and plenty of get up and go. Strong as that combination is, it can do little against a Government who sometimes give the impression that they think it expendable. The Minister could do something to put that right this morning.
Mr. Deputy Speaker : In the format to which we have become accustomed in these debates, Front-Bench speeches begin at 10.30 am. That leaves 37 minutes. I think that five hon. Members are seeking to catch my eye, which, as a guide, gives a voluntary limit of about seven and a half minutes.
Dr. Ian Gibson (Norwich, North): It is a pleasure to join colleagues in playing a part in the debate, and I congratulate the right hon. Member for South-West Norfolk (Mrs. Shephard) on obtaining it in the ballot.
People often tell me that I have little justification for talking about farmers, because there are not many in Norwich, North. There was one at the last count, however, and I must check whether his farm still exists. Nevertheless, I am a Norfolk man through and through. I find time to go out into the county and enjoy the pleasures of the countryside, and I am aware of the deep
The Norfolk agricultural show is a highlight of Norfolk county life, and many people enjoy a day or two there to find out what is happening in the agriculture industry. It is part of the way of life, and long may it continue. Those who have lived in Norfolk as long as I have will be aware that many Norfolk MPs attained their positions as a result of the votes of thousands of agriculture workers who lived in that part of the country during the 1960sBert Hazell, George Edwards, Edward Gooch and, of course, great trade union leaders such as Wilf Page all fought hard to defeat the tied cottage and poor-wage system. We should pay tribute to them for establishing that great tradition in Norfolk agriculture. The rich history of struggle against poverty remains part of the culture, but enough of such nostalgia.
I welcome the work begun by the cross-party group in integrating the farming community and others so that they think about and prioritise issues and agitate determinedly at political level. No doubt others will talk about biofuels, the use of which is one of the ambitions of many Norfolk farmers, and we all support that. There is innovatory zeal in the Norfolk agriculture and farming community, and we must play on that strength.
The Norfolk farming community has always taken on board new technologies, as a result of which a lot of people have lost their jobs. Many left the land and went into the factories in King's Lynn when new technologies came along. It burns in my memory that jobs have often disappeared as part of the development of science and technology.
Let us consider the new technologies that will be taken on board. I make no apology for referring to GM technology, because the issue will be raised again and againindeed, it has never really gone away. Sugar beet, peas, maize and oilseed rape are all common crops in Norfolk, and genetic modification of such crops is being considered to improve their herbicide tolerance and yield.
Scientific advances in plant breeding have been conventionalcross-breeding, back-crossing and in-breeding, for exampleand we do not often hear about them in the way that we hear about Dolly the sheep, animal cloning and sex cell selection. However, they have all been introduced in the plant world, quietly and effectively, bringing us better crops and food. Norfolk was once regarded as the bread-basket of Great Britain, and I believe that it should still be regarded as such. Crops have been improved in respect of resistance to infection, better yield and growth parameters.
In the 1960s, the amazing political decision was made to bring the John Innes research institute from Hertfordshire to Norwich. That was a great move, promulgated by two or three people who thought that if good science and technology research were conducted in a county enriched with agricultural law and advance, we would become one of the world leaders. Soon, that institute was joined by the Institute of Food Researchthose organisations grow in stature almost weekly with support from industry and the Governmentand new technology is being developed there.
There are other centres of academic, scientific and technological progress, such as the Easton college of agriculture, the Maudley research institute and, indeed, the university of East Anglia, where research into the organisms that attack willow trees has saved the cricket bat industry. I see that we have a new Deputy Speaker in the Chair, but I am sure that Sir Alan would have welcomed that fact, as he is so endeared of the game and Essex county cricket club. Excellent work has been done in world-class institutes, which have developed many ideas that have benefited the food industry throughout the world.
Those institutes also produce the food and plant scientists of the futurethe ones who go out into the world. The new vice-chancellor of Lancaster university, whose career began at the university of East Anglia and who has spent his life researching aphids, visited me recently. He was headhunted and went to Australia to solve the problems of aphid biology and aphid infestations. Through those institutions we produce brilliant people, who become part of Norfolk agricultural life. Norfolk agriculture has taken those institutes to its bosom, and they are very much part of the farming and agriculture community.
Norfolk has been in the spotlight over the GM crop trials. Norfolk farmers took the full blast of the Greenpeace onslaught, as its members trudged their way though the fields in their green welly boots, knocking out the crops. The farmers stood firm, in the belief that the trials would end in the development of better food crops. They still play a part in the Government field trials.
The Norfolk agriculture industry is huge and has expanded into other areas. On Sunday, I was looking at the Norwich "Yellow Pages". It is a big book, but on a quick flick through I noticed that it contains 10 full pages in small print of farmers and those who offer agricultural services. Thousands of people are involved in the industry and depend on farming, and not only farmers, although they often bear the brunt and take the lead. That is my answer to those who say, "Farming represents only 1 per cent. of gross domestic product, so it doesn't really matter. Tourism is what is importantthere are many other important issues." That is true to a certain extent, but it is also true that farmers devote their lives to the countryside and to providing the food that we all eat.
The GM debate is returning to the fore, and the Government will conduct a public debate on the matter shortly. It is said that public confidence is low, but confidence is not low in the Norfolk agriculture community, although it was caught in the onslaught of
Recently, I saw a letter to The Guardian from an old colleague, which surprised me, as I did not think that he knew anything about GM issues. He pointed out that, even with conventional breeding, a new crop that has been bred through in-breeding or by another means is put next to the wild species. Pollen moves acrossit always has and it always willbut that does not mean that super-weeds are produced. The biology is well understood, because of the science and technology base in the farming community. That is probably why GM is accepted in our farming community: Norfolk farmers understand that the problems associated with GM, when GM crops are planted next to non-GM crops, are not new, and that those problems have been resolved.
A lot is being done. There are many other areas of GM, but I shall not go on about dwarf crops, malting quality, herbicide tolerance or starch quality. Through science and technology, all those things have improved our crops. I have a list from the Agriculture and Environment Biotechnology Commission of the huge number of GM technology applications, even for such things as garden plants. That technology does not produce only crude herbicide tolerance, as is often asserted. Indeed, even such crops as plums and prunes can be improved through it. A huge industry is involved in improving resistance to viruses and bacteria, all of which will be to the advantage of the agriculture industry in the long run.
Incidentally, Norfolk farmers are not anti-organic. There are organic farmers in Norfolk who are as passionate about their work as those involved in other types of farming, such as conventional breeding, GM breeding and so forth.
Norfolk is at its best when at its boldest. Hon. Members may have heard that phrase before. I cannot remember when I first heard it, but I heard it recently at Blackpool and it is true: we in the Norfolk agriculture industry are best when at our boldest. At a recent meeting in the House of Commons, I was heartened to hear from Professor Julia Goodfellow, chief executive of the Biotechnology and Biological Sciences Research Council. In a recent article in the not-so-well-read but widely quoted Science in Parliament she states:
Norfolk agriculture workers and farmers know that. Sustainable agriculture ensures the continuing availability to the consumer of adequate supplies of wholesome, varied and reasonably priced food produced in accordance with generally accepted environmental and social standards, as well as, among other things, respect for a high level of animal welfare.
Mr. Deputy Speaker (Sir Nicholas Winterton): Before I call the next speaker, I remind hon. Members that my predecessor in the Chair urged self-discipline to enable all hon. Members who wish to do so to participate in this important debate. The hon. Member for Norwich, North (Dr. Gibson) stretched that advice, and I shall be grateful if the remaining speakers who wish to catch my eye show self-discipline so that we can fit everyone in. We must start the winding-up speeches at 10.30 am.
Mr. Keith Simpson (Mid-Norfolk): I shall bear in mind your very good point, Mr. Deputy Speaker, about keeping speeches short. It is a great pleasure to follow my right hon. embattled Friend the Member for South-West Norfolk (Mrs. Shephard) who initiated this debate and the hon. Member for Norwich, North (Dr. Gibson), for his particular scientific contribution.
I reinforce the points made by both my right hon. Friend and the hon. Gentleman. This is a cross-party approach to solving problems that relate to the future of farming, the environment and rural affairs in Norfolk, and we have come to the debate in a positive rather than negative sense, which is important. The Norfolk farming community has highlighted five major areas of concern: biofuels, water issues, illegal meat imports, GM crops and planning and regulation. We could add half a dozen others such as the business of broadband, which is now a major problem in terms of finding alternative businesses within my constituency of Mid-Norfolk.
My first point is specific: I wish to take this opportunity to raise concern about the European Commission's decision to cut the sugar beet quota by 3.54 per cent. That is crucial to the 1,788 beet crop growers in Norfolk, including the 382 in my constituency. As the Minister knows, the quota cut was imposed for the current year only, to comply with European Union regulations and World Trade Organisation agreements. However, can he answer my constituent, Mr. James Keith, who grows 25 hectares of beet at Hoe near Swanton Morley? He asks:
On the future of biofuels, many Norfolk farmers, business men and members of the public believe that biofuels offer a great opportunity to farming and the community. As the Minister knows, biofuels can be divided into two groups: biodiesels, which are made from oilseed rape seed, or other vegetable oilsthat
Presently, Mr. Thouless produces about 4.5 million litres, but he has the capacity to produce 10 million litres and he hopes to develop a factory at Lowestoft that could produce 60 million litres. Mr. Thouless has said that he welcomes the 20p cut in duty, but he does not think that that is sufficient. Nevertheless, he sees great potential in the development of biodiesel from rape seed oil. That is a very exciting development for Norfolk farmers, but we need more encouragement. I urge the Minister to go for a zero rating on bioethanol as well as biodiesel in his discussions with Treasury colleagues. There is a great opportunity for Norfolk farmers because sugar beet and other root crops will be a real alternative in the future, if bioethanol can be developed. That would be environmentally friendly.
I raise a slightly more negative point that is based on the concerns of Norfolk farmers about illegal meat imports. I was a member of the Sub-Committee that was appointed by the Environment, Food and Rural Affairs Committee to consider illegal meat imports. The Minister has replied to the report that that Sub-Committee published. We are, however, still concerned that not enough is being done to prevent such imports. I know that the onus must also be on farmers at the farm gate, but I believe that there are still many other things that we could do. For example, I do not believe that enough joined-up agency work is being done to prevent the kinds of illegal meat import scandals that have occurred in the past. That matter has had a major impact on my constituency. In Norfolk in 2002 there was a swine fever outbreak, the origins of which were undoubtedly illegal meat imports.
I urge the Minister to consider whether there should be greater co-ordination between Departments, to consider the stop-and-search powers of environmental health officers and to employ a robust information campaign on inward flights at ports of entry. Such information is not presently as in-your-face as it is in New Zealand and America. I believe that there is a lack of resources with which to implement such measures.
I welcome the debate. We have heard some positive proposals for the development of farming in Norfolk. There are great opportunities for biofuel development, but there are still great concerns about illegal meat imports.
In my time as the representative for North Norfolk, I have found that the farmers with whom I deal are an enlightened group of people who are willing to contemplate change and take new ideas on board. The hon. Member for Norwich, North (Dr. Gibson) has mentioned that tradition and we must do everything that we can to promote it. It is clearly in everyone's interest to map out a viable, economically and environmentally sustainable future for agriculture. Farm incomes are pretty bleak. The right hon. Member for South-West Norfolk has already made that clear in her remarks about the survey.
Two farmersMr. Roberson from Catfield and Mr. Almey from Antinghamhave told me about their concerns and experiences. Mr. Roberson mentioned the suckler cow premium scheme, which relates to sales of cattle during the six-month retention period. He was concerned about the lack of clarity in the guidance notes provided by the Rural Payments Agency. The chief executive of the agency, in response, accepted that the reduction was "severe". He said that there had been no attempt at fraud, but that discretion could not be used. That system is crazy, and must be re-examined.
Mr. Almey had problems with four movement cards posted to the British Cattle Movement Service. He has been asked to prove that he sent them. Those who receive the cards have failed to record them properly, and that has resulted in him losing out financially. It is not acceptable that hard-pressed farmers should have to wait ages while they try to prove their case to the agency. Christopher Deane from the National Farmers Union in east Norfolk says that the examples that I have mentioned are:
He says that, to date, nearly all the errors that the NFU has come across have not been of the farmers' making. It is time that the Department got to grips with the agency's problems. I hope that the Minister will provide some reassurance on that.
Norfolk fruit-growers have concerns about the impact of changes to the Agricultural Wages Order 2001. I agree with what has been said about the history of low payment in rural areas, but the changes to the order present a problem. The casual worker's rate will effectively be scrapped; it will be limited to the first 12 weeks only, during which the rate will be £4.30. That is more than the national minimum wage.
Place UK, which is in my constituency and is one of the country's leading suppliers and processors of soft fruit and vegetables, has raised concerns about foreign students who arrive each summer to pick fruit. For such students, that is holiday work. However, after 12 weeks, they will receive the same rate as experienced Norfolk workers who operate machinery and who have a great degree of skill that has resulted from years of experience. To such experienced workers it must seem unfair to lose the wage differential between themselves and those doing holiday work. That will place an impossible burden on the farming community.
I understand that the change to the Agricultural Wages Order has come about because of the imminent implementation of the fixed term work directive. As an employment lawyer, I am sure that the directive was not intended to produce such a result, and I ask the Minister to consider the matter.
I strongly endorse the comments made by the hon. Member for Mid-Norfolk (Mr. Simpson) about biofuels. Norfolk, as an arable county, could make a massive contribution environmentally and contribute to the fight against global warming. I was interested to hear the speech made last week by the Minister for Europe, in which he highlighted the importance of securing supplies of affordable energy. That is vital for Europe's security and competitiveness. He called for urgent action to reduce our long-run dependence on oil as our principle transport fuel. He referred to the need to develop renewable sources of energy, and said:
Trickle irrigation, which has been brought to my attention, yet again, by the fruit farmers, is an environmentally attractive means of irrigation, but the new licensing system means that there is a risk that their interests will not be protected. It is essential that DEFRA provides reassurance that they will get their licences on a level playing field. I am grateful for having had the opportunity to contribute to this important debate.
I congratulate my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard) on her excellent speech. She mentioned Fisher Frozen Foods. When the Albert Fisher Group plc went into receivership, Fisher Frozen Foods closed, but the plant was taken over by Pinguin, a Belgian company. I am pleased to say that all of the staff who were taken on again by Pinguin have now received their full redundancy entitlement. That is very good news. Of course, the staff who were made redundant from Fisher Frozen Foods and left to get other jobs received their full redundancy package, but there was a big question-mark over whether those who
There is also a question with regard to the Transfer of Undertakings (Protection of Employment) Regulations 1981. The Department of Trade and Industry redundancy payments office has said that because the staff at Pinguin are getting their full redundancy entitlement there can be no entitlement under those regulations to, for example, various rights, holiday pay, bonuses, and so forth. I know that that matter is not this Minister's responsibility, but perhaps he could have a word with the Minister at the DTI who is dealing with this matter, so that we can resolve these few remaining outstanding issues. This is one way in which the agricultural sector has a profound impact on the wider rural economy; my right hon. Friend was right to draw attention to that.
Unfortunately, in Norfolk, we are seeing the demise of the family-run farm. Many farmers are going out of farming; they are not selling their farms, but they are doing less farming. They are contracting out; they are getting farming companies such as Bookers to take over their farms. That contributes to the decline of the family-owned farm as we know it, and I am concerned about whether their sons and daughters will go into farming. I submit that they will not, unless the tide turns dramatically. We know that agriculture is cyclical, but I fear that it will take a long time for this decline to be turned around, and we do not want Government to make matters worse.
A Government can do various things to prevent the situation from getting worse. My right hon. Friend mentioned planning, red tape, bureaucracy, and the local government grant regime and the fear that money will be directed away from the shire counties to the inner cities. I would add the sugar beet regime to the list of things that the Government must not make worse. Fifty per cent. of the nation's sugar beet is grown in Norfolk; two out of the six factories are in Norfolk. The UK is only 52 per cent. self-sufficient in sugar production, whereas France is 76 per cent. more than self-sufficientor 176 per cent. self-sufficientGermany is 124 per cent. self-sufficient, and Denmark 176 per cent. self-sufficient. That means that the UK is importing the vast majority of the sugar that is coming into the EU85 per cent. of it. The EU sugar regime is not part of the common agricultural policy mid-term review; it is part of the anything but arms initiative. When the regime is reviewed next year, it is vital that every conceivable effort is maintained to keep the status quo because, otherwise, there might be an effect on Norfolk farmers' one crop that is currently profitable. Grain is obviously giving most farmers a good yield but the price has gone right down. Potatoes are a disaster and every other crop is making a loss. Sugar beet is the one bright light on the horizon. I hope that the Minister will take that on board because if the sugar beet regime is changed, Norfolk farmers will suffer adversely.
I take on board the point made by my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) about biofuels. It is vital that the Government act. He and I visited Global Commodities UK last Friday. The potential of bioethanol is considerable but the potential of biodiesel is even more exciting. As Dennis Thouless pointed out, the oil fields of the future could be in Norfolk as fields of oil seed rape that would produce environmentally friendly biodiesel to power this country's diesel vehicles. The Government must get a grip of the situation and embark on joined-up government. They must act and seize the opportunity, which would give farming in Norfolk a slightly brighter future.
Mr. Richard Bacon (South Norfolk): I join my hon. Friends and others in congratulating my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard) on securing this important debate. I also congratulate her and her colleagues on the Select Committee on Environment, Food and Rural Affairs on visiting Easton college in my constituency to listen to local people from Norfolk who are involved in the farming and food processing industries. The information is still coming in, as my right hon. Friend mentioned, and I shall refer to some of it, and especially to points about the pig farming industry, which is enormously important to my constituency.
I do not want to dwell on biofuels or sugar beet, which were mentioned extensively by my hon. Friends, but I endorse what they said. I hope that the Minister will tell us what the Government plan to do because biofuels and sugar beet are important to farmers throughout Norfolk.
When considering the regime for food imports to which my hon. Friend the Member for North-West Norfolk (Mr. Bellingham) referred, few people have complete confidence that food imports meet the stringent requirements that are placed on our own producers. That applies especially to poultry and pig farming, which are not subsidised by the taxpayer. People in those sectors have no confidence that the Government have taken on board the need to ensure that food imports meet our standards.
We must do more about food labelling and labelling food with its country of origin. We are currently discussing cigarette advertising and it is worth noting that the size and shape of health warnings on cigarette packets are determined statutorily. There is no reason why simple labels giving a food's country of origin that allow the consumer to support the British farmer, if he or she wishes, should not be determined in a similar way. The fact that there is no such statutory labelling of a food's country of origin allows people to get away with what most people would regard as tricks importing food from overseas, putting cellophane around it and calling it Norfolk sausages. Neither we, nor our constituents, want that. I want the Government to make progress.
My hon. Friend the Member for Mid-Norfolk (Mr. Simpson) mentioned illegal imports. The Government might have done something about thatI have been discussing it with the Minister for nearly a year since we both served on the Committee that considered the Animal Health Bill. It is perceived that not enough is being done, although every report from the Curry report to the report by Devon county council on foot and mouth has mentioned the problem. I recently made two flights from abroad to United Kingdom airports, and to use my hon. Friend's description, the information campaign was certainly not in-your-face. We need more action.
My final point relates to gold-plating regulations. At the meeting at Easton college, Mr. Philip Richardson, a distinguished and well-known pig farmer from my constituency, said that people in his industry had identified 20 areas in which the Government were gold-plating pig industry regulations. One example relates to the directive on the welfare of farm animals, which requires that sows and gilts shall have permanent access to manipulative material. The Department of Environment, Food and Rural Affairs version is:
The Department should have asked a vet whether it is sensible to have peat anywhere near a pig. Peat is full of bugs, so are we seriously suggesting that the Government will require farmers to sterilise their peat before they make it available to their pigs? We can avoid such situations in 20 subject areas, and I will happily provide a full list to the Minister if he wishes.
I did not think that I would have time to mention planning, but it is worth stressing that vacant farm buildingsa main asset for farmersneed close attention from central Government if planning authorities are not to get in the way of promoting our farming communities.
Matthew Green (Ludlow): I join others in thanking the right hon. Member for South-West Norfolk (Mrs. Shephard) for securing the debate. I shall keep my remarks as short as possible, and I hope that the hon. Member for South Holland and The Deepings (Mr. Hayes) will too, so that we can hear the Minister respond to the concerns raised by Norfolk Members.
I want to reiterate some concerns, in particular the removal of the casual workers category from the agricultural wages board. That will have a major impact, on fruit farming especially, and, as my hon. Friend the Member for North Norfolk (Norman Lamb) said, I do not think that that was the European Union's intention in introducing the directive. We have been perhaps too keen to see its implementation, and we must consider its potential effects.
The Liberal Democrats support the overall move to decouple subsidy paymentsfrom production base to land managementbut as always in farming, the details are critical. We know that details matter in farming. As we heard from the hon. Member for Norwich, North (Dr. Gibson), one problem is that basing the decoupled payments on historical subsidy payments of the previous three years will discourage some moves into new crops. The Government must find a way that does not discourage initiative from farmers.
My hon. Friend the Member for North Norfolk mentioned trickle irrigation. There is evidence that the Government are not yet using fully joined-up thinking on that, and we must ensure that the licences for water are available to the farmers who need them. They should not be told that all licences have been taken up by conventional irrigation.
Biofuels have been mentioned a lot, and I do not want to add to what has been said other than to give support for more action and for further reducing the duty on them. We have also heard about problems in the pig industry, one of which is historic and derives from when the Government introduced early an EU directive that had a huge impact on the industry. There is a danger that the egg-laying hens directive could go the same way, so will the Minister confirm that the Government have no intention either to gold-plate or add to the directive?
Members have spoken about meat imports, and I welcome the fact that the EU is considering a ban on personal imports. We have already heard some concern about the lack of Government action to ensure adherence to any new regulations that may be introduced on meat imports. What checks and measures would be taken at airports and ports to enforce a personal import rule?
We have also heard about the rural payments scheme. The Rural Payments Agency has clearly examined the bovine schemes, and both the beef special and suckler cow premium schemes have had numerous problems, of which we have heard several examples. Overall, the Rural Payments Agency is slower in making payments now than it was last year. When agriculture incomes are falling and many farmers are in debt, payments that are two, three, four or five months behind the time that they came last year are having a major impact on the viability of farms as businesses. We want the Minister to make a commitment that the Government will enhance the Rural Payments Agency, which is understaffed and overworked and needs extra resources if it is to work properly. There are genuine anxieties that the BCMS data base is flawed and not fully operational. I seek reassurance from the Minister that anxieties about that data base are being investigated.
Something that is still floating around the agriculture industry, and about which the Government have not yet made a definitive statement, is the future of livestock markets, which affects agriculture throughout the country. I would like the Minister to make a definitive statement that the Government have no plans for the widespread closure of livestock markets.
Mr. John Hayes (South Holland and The Deepings): This has been a useful debate; I congratulate my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard) on securing it. Her opening remarks displayed her typical combination of diligence and perspicacity; she speaks with enormous authority and experience about these matters. In the short time available to meit is longer due to the generosity of the hon. Member for Ludlow (Matthew Green), for which I am gratefulI hope to cover about 10 points that have been raised in the debate. I cannot cover them all in detail, but I will end with a series of questions to the Minister by which I will reinforce some of the points made by my right hon. and hon. Friends.
There is no point in understating the simple fact that agriculture in Norfolk, as in the whole of Britain, is in crisis. That has been reflected in all contributions to the debate, and I welcome the fact that it has been a cross-party effort. Many of the comments made have been non-partisan; we have not descended into party-political rancour because people's concerns, in this Chamber and in Norfolk, are cross-party concerns and not matters for party-political banter. They are of great significance to everyone who lives there, not just those directly involved in farming.
My right hon. Friend the Member for South-West Norfolk has made it clear at the outset that the knock-on effects of the crisis in agriculture are felt throughout a rural county such as Norfolk. I speak with some experience in that respect, as Norfolk is the neighbour of my county, Lincolnshire, and many of the problems that farmers and rural communities face in Norfolk are shared by those in my constituency. The nature of farming in Norfolk is similar to that in south Lincolnshire; there is a heavy dependence on the arable sector, the topography is similar, and the knock-on effects of the crisis have created some of the same pressures on the delivery of local services and so on.
I shall deal with the points in the order in which they were raised, rather than in the order of priority, but it is appropriate to start with farm incomes. My right hon. Friend mentioned the 75 per cent. decline in incomes in Norfolk. The Minister's figures, which are reinforced by the Library, show a significant decline in farm incomes and suggest that in the arable sector that decline has been extraordinarily profound. The decline in arable sector incomes is sometimes understated because, due to foot and mouth and other problems that existed before the epidemic, much of the emphasis has been on the livestock sector and less favoured areas such as upland farms. In the large arable farms in the east of England, the decline in agriculture has had a real impact which should not be underestimated. According to DEFRA figures, incomes are as low as 10 per cent. of those in the early to mid-1990s. That decline is having a dreadful impact on farmers, their families and local communities, and it crosses all sectors.
It is appropriate to emphasise thatagain according to Library figures average farm incomes are now around £7,500. If that is an average income, one can imagine the situation for farmers with the lowest returnsfarmers on small farms and relatively difficult land, perhaps tenant farmers, could be earning £2,000 to £3,000 per year. That is nonsense, and anyone considering the matter objectively would say that that situation could not be allowed to continue. I am sure that the Minister is aware of those issues, but it is important to emphasise and amplify them and to ask him how he intends to respond.
In considering the economic state of farming, we must also examine product prices. We know that farmgate prices have declined across the industry, but it is important to emphasise the impact of that on arable farmers. The Minister will know the cereal price situation. Across the arable sector, farmgate prices have reached a point at which it is difficult for farmers to make money at all. A few days ago, a potato grower told me that current prices are equivalent to those when he entered the industry 30 years ago. Cereal prices, at just over £50 a tonne, are such that no one can make a profit. There is almost no product now that farmers can grow profitably and rely on as a steady source of income.
There are massive problems with product prices, with incomes and also with input costs, because the overheads for farmers are steadily increasing. That is not true across Europeas I pointed out to the Minister last week in the debate on those issues. In Europe overheads, or input costs, are falling by approximately 1.2 per cent. a year. In Great Britain they are rising by about 0.6 per cent. a year. Thus this is not a European or worldwide phenomenon, but one specific to the United Kingdom.
What are the consequences of the decline in incomes for employment and for local communities? That fair and proper question was posed at the beginning of the debate. What are the implications for land use? The environment that we enjoy in the countryside is a manufactured one, made and serviced by farmers.
During this debate, a number of hon. Members have asked about the Government's approach to biocrops and biofuels. A confused picture emerges in relation to that issue. There is a very different regime of tax and regulation in the United Kingdom from that in France and Germany. Will the Minister address that issue in his remarks? He looks confused, but he should know the detail of that issue. I repeat that France and Germany have a different tax regime, and different restrictions on the production of those products. I would like the Minister to address that issue.
The question raised by my hon. Friend the Member for South Norfolk (Mr. Bacon) and by other hon. Members about the distortion of the food chain by supermarkets must be addressed. What is the Government's approach to the relationship between the retailer, the producer and the consumer, and to the need to examine seriously the distortion that supermarkets create in that relationship? We heard yesterday that some 30 per cent. of fruit production is wasted because of the facile concentration of major retailers on products being of the same size, the same shape and the same
As to the Rural Payments Agency, we know about the beef suckler scheme; the problems emerge from cross-checking with cattle movements, and from the new European direction in that respect. That has caused enormous confusion, inefficiency and delays, resulting in real problems for an industry that is already under pressure and that was expecting those payments as part of its budget.
The question of the availability of broadband must be addressed. If we are interested in diversification and the springing up of new small and medium-sized enterprises, we must make broadband available, as my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) said. What incentives are there for diversification? As my right hon. Friend said, it is difficult for farmers to diversify and reinvest in their businesses if they do not have the money to do so. If they are not making money, they cannot spend it on diversification. The Government must address that serious problem. Fair food labelling is another critical issue that was raised by my hon. Friend the Member for South Norfolk.
I emphasise two questions that emerged in our debateone at the beginning and one near the end. The latter was raised by my hon. Friend the Member for North-West Norfolk, who said that any change to the EU sugar regime must protect the interests of those farmers for whom sugar beet is possibly the only profitable crop.
As my right hon. Friend the Member for South-West Norfolk said, morale in the industry is at an all-time low because farmers no longer believe that the Government are committed to food production in the United Kingdom. Farmers believe that the Government do not have a long-term vision for growers and farmers.
At the beginning of the debate, my right hon. Friend spoke about a long-term plan for agriculture. It should not be beyond the wit of man to produce a balance sheet showing the true value of growing and farming in the UKone that takes account of its effect on employment and the wider rural economy, of the benefits of land use and conservation and of the proper stewardship and management of our countryside. However, that would require the Government to take a long-term view. They would have to say how many producers were needed over the next three, five and 10 years, how much production they envisaged and what sectors they believed we should be seriously involved ineven what sectors they thought should be reduced or run down, and how and when it should happen.
Such a long-term view, strategy and plan are essential to reinforce the morale of farmers and give them something to plan for and work to. That is missing at the moment; and while it is absent we will not regenerate farming and growing in Norfolk or the rest of Great Britain.
The Government recognise that times are tough for farmers, for which there is a range of reasons that I shall explore. I shall deal with all the pertinent points that have been raised, and the helpful and sensible suggestions that have been made in the context in which they were put.
I want to set the scene in relation to farming in Norfolk because, as my hon. Friend the Member for Norwich, North (Dr. Gibson) said, the county has much of which to be proud. It has innovation and drive, and it is currently recognised as one of the fastest growing and prosperous regions in the United Kingdom.
Unemployment in Norfolk is 2.3 per cent. and in the east of England, it is 2.2 per cent., and that is below the national average of 3.1 per cent. Unemployment in the constituency of the right hon. Member for South-West Norfolk fell by 54.1 per cent. between 1997 and 2002; in North-West Norfolk, it fell by 50.6 per cent.; in Norwich, North, it fell fallen by 51.6 per cent. Mid-Norfolk has had the highest fall of 58. 4 per cent.; North Norfolk has seen a fall of 52.4 per cent.; and South Norfolk a fall of 53.9 per cent. Most European countries would give their right arms for such economic figures. However, that is not to be complacent or to say that there are no issues of importance in the Norfolk economy in general or real problems in agriculture there.
I welcome the fact that the Environment, Food and Rural Affairs Committee visited Norfolk. It did a good job and I am sure that farmers appreciated the chance to put their problems to the Select Committee. We recognise that agriculture is an important part of the rural economy, although I remind the hon. Member for South Holland and The Deepings (Mr. Hayes) in particular that it is not the whole of the rural economy. I do not think that he would want to claim that.
To tackle a problem properly we need to know where and what the problem is and to put it in perspective. The Government want to do that, which is why we have obtained independent reports, such as that of the policy commission on the future of farming and food, chaired by Sir Don Curry, with a view to examining the long-term structural problems for agriculture. There are, of course, many. The work deals with the exchange rate, the increasing effect of global trade and the oversupply of world commodity markets.
In discussion, hon. Members have advanced sensible ideas about issues that need to be identified and addressed, including how to encourage diversification, questions of transport and infrastructure in the county, support for marketing and, of course, planning. Those can all contribute to the encouragement of agriculture.
The right hon. Member for South-West Norfolk made some remarks about conservation, which has always been a matter of great interest to me. Agriculture and farmers have an important role in conservation. Farmers are land use managers with expertise and skills. Our approach to CAP reform is to move away from production subsidies to the so-called second pillar,
I accept that planning is important. Farmers often raise it with me and it was raised during the regional meetings to discuss the findings of the Curry report. The Government have studied the planning policy guidance in relation to rural areas. The item relevant to diversification is PPG7. As far as we can see, it gives quite adequate guidance to planning authorities on encouraging local businesses and farmers in diversification and conversion of buildings. Much of what happens comes down to local interpretation of the plans.
The right hon. Lady rightly said that the bodies concerned are elected. Of course, that is the idea. They must examine planning applications on their merits, and take into account matters such as vehicle movements and potential disturbance. We do not believe that there is necessarily an argument for new planning guidance. We believe that what is important is interpretation locallyworking with and encouraging local businesses. However, I appreciate that people feel that that is not happening. We will continue to talk to our colleagues in the Office of the Deputy Prime Minister about how to encourage appropriate support for farming diversification. I do not think that we disagree with the right hon. Lady.
Several hon. Members raised the issue of water use. We accept that agriculture is a major user of water. I have responsibility for water policy in the Department of Environment, Food and Rural Affairs, which has brought matters together. A new water Bill is proposed, to address many of the water usage problems that exist.
I understand the point that was made about trickle irrigation. It is an efficient and sustainable way of using water, and we want to encourage it, but we cannot ignore the fact that it is a water user, so that there is a strong argument for bringing it within the licensing regime, in relation to water management in its broadest sense. However, I can give an assurance that we recognise agriculture's legitimate role as a water user. That will be recognised in future measures and policies. As a vice-president of the Association of Drainage Authorities, I should mention that those authorities play an important role in impounding winter water for summer abstraction. Their valuable role, and the way in which they have changed, will be recognised.
On the slaughter premium, I recognise that the problem of the cards is important. It is a small, but practical issue, and I assure the right hon. Lady that it will be examined. It is a small irritation, but I do not underestimate such irritations, which I am sure that we can rectify.
Agriculture's role should not be underestimated. In 2000, the UK was 67 per cent. self-sufficient in all food and 80 per cent. self-sufficient in food that could be grown in the UK. That is not a bad record, although the figure dipped a bit in 2001, mainly because of the effects of foot and mouth on the livestock industry. None the less, we have a good record on food production and we want to promote farmers' role in that.
We recognise that the central tenet of the Curry commission is that farmers must move closer to the market, from which they have become disconnected. The Government want to encourage that and to assist farmers in addressing market needs, market changes and the structural changes that have taken place in recent years.
Mr. Hayes : The Minister generously acknowledged that the strategy is an important part of Government policy. Will it, however, take account of the different needs of different parts of the country in a way that reflects the following issues? Modulation will affect the east of England quite differently from other parts of the country because of the concentration of arable farms and the difficulties that farmers will have in replacing production-led income with environmental income. That is as important for Norfolk as it is for Lincolnshire and other parts of the east of England, and the strategy must take account of those issues.
Mr. Morley : It will certainly recognise the issue of modulation. Modulation should be seen as a transition; it is being applied only because of the production-subsidy regime that we find ourselves with under the CAP, which, it is widely accepted, must be reformed. That is not a party-political point, but a cross-party issue, and the farming industry itself recognises the need for reform.
My hon. Friend the Member for Norwich, North is an acknowledged expert on GM crops and he made some important points, which the Government accept. The approach to GM crops must be science based. We must be cautious, but we must not completely disown the science; we must have field-scale trials to examine some of the legitimate concerns that have been raised. We must go forward on the basis of science.
I understand the point made by the hon. Member for Mid-Norfolk (Mr. Simpson) about sugar beet, and there is a problem because of the WTO challenge. The market is very protected, which is not popular with our food-processing industry because it must compete on world terms with sugar that is three to four times cheaper than in the UK. None the less, we are addressing the issue.
The poultry and pig industries are important. We understand the role that they play and we are sensitive to the directives. I can assure the Chamber that the laying hens directive will not be gold-plated. We are consulting on the issue of enriched cages. The pig industry is encountering some problems, but we are working closely with the industry to see how we can assist it in future.