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12 Dec 2002 : Column 451—continued

Mr. Hayes : I have met Mr. Tinsley, who is one of my constituents. My right hon. Friend is right about his concerns. He may be interested to know that Mr. Tinsley told me that he particularly regretted the lack of vision for horticulture, the lack of a willingness to invest in its future in terms of research and development, and the lack of Government support, by which he did not mean payments but some sense of direction.

Mr. Jack: I am grateful for that information and will build on my hon. Friend's comments. The Government have not formulated a proper strategy on how they will help the research side of horticulture. Horticulture

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Research International awaits the Government's response to the quinquennial review. The Select Committee produced two reports highlighting the management and business failings of HRI, but instead of telling us what they were going to do, the Government sat back, twiddled their thumbs and waited for the quinquennial review. We still do not know what will happen to the only place in the United Kingdom where the Government can help the unsubsidised sector of horticulture. It is lamentable and shows a complete abrogation of responsibility. If the Government want successful food and farming in an unsubsidised world, it is vital for them to attend to matters connected with research and development.

Mr. Tinsley is making zero or negative returns on his capital, and people are working harder just to stand still. The directors of his company have even taken a pay cut. Yet the Government have seen fit not to make a clear statement about the research needs of the horticulture industry. That part of the farming sector was one of the first to embrace an assurance scheme and to deal with the costs of that. When one talks to Mr. Tinsley about some of the problems that he faces, it becomes clear that there is still an imbalance in the power between the buyer and the seller, and that goes to the heart of the matter.

In the Government's response to the supermarket code of practice, they made the lukewarm suggestion:

What are the Government doing about the mismatch between the pious words of supermarket chairmen who tell farming conferences that they are backing the United Kingdom and looking after the farming industry and the actions of their buyers on Wednesdays and Thursdays when prices are agreed? How are they going to make certain that, through their buying policies, supermarkets do more than pay lip service to the needs of British food and farming? There is a great deal that supermarkets can do to help—respecting seasonality, for example. When we have the produce, we should buy from the UK, not simply take advantage of cheap offers from the continent.

To conclude, I shall say a few words about north-west England. The comments of representatives of the National Farmers Union on the state of the milk industry apply to rest of the country as well. There is an acceptance of the need to co-operate and of the need for value added. However, I remind the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Scunthorpe (Mr. Morley), of the need to look again at competition policy and our milk industry. The Government must make certain that they give it every encouragement so that it is strengthened in Europe—we are competing against powerful players with a dominant position in the domestic market. However, the competition is not just European but worldwide, and our dairy sector is currently battling for survival with one arm tied behind its back.

Farmers in the north-west are worried about bovine TB, about which the Minister is deeply knowledgeable—I understand that he recently met Cheshire farmers to discuss it. If it is Cheshire today, it will be Lancashire tomorrow, and there is a real fear that little is happening to check the spread of that

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debilitating disease. We are still awaiting trials but, in farmers' minds, practical action is needed to stem the spread of the disease.

DEFRA is a big Department and, at times, seems to be struggling both to recognise its priorities and to deliver. I urge it to show leadership, passion and commitment to our food and farming industry, and note the points made in our debate.

4.2 pm

Mr. Alan Hurst (Braintree): When I was a novice political candidate for a partly rural division, I thought that it would be useful to gain some knowledge of the common agricultural policy, parts of which are impenetrable, particularly the language. I went to my first farm meeting armed with a passing knowledge, so I thought, of modulation, and I survived. I had no idea of the language that I would have to learn afterwards—we started talking about cross-compliance, various coloured boxes, first and second pillars, coupling, uncoupling and decoupling. It is not surprising that the wider public find it difficult to enter fully into the debate about the CAP and the future of farming.

There is now a tendency to argue that we should not have price support subsidies. There may be a case for that, but it is worth reflecting on how we reached the current position. Members who have met people who farmed in the 1930s will know of the terrible agricultural depression at the time. We are now in a recession, but that long-term depression lasted the best part of two decades. The price of land was so low that in practice it was almost given away in many areas, and was certainly rented at a low price so that it could be kept in cultivation or under stock. Many people from Scotland came to East Anglia and farmed the land because it was available at such a low rate. That was the sort of depression that existed before the war.

With the coming of the war, we realised how crucial our farming industry would be to us because we could not import foodstuffs from the rest of the world, as we had done. Following those two experiences, the Attlee Government after the second world war, under that great Minister of Agriculture, Tom Williams, began to introduce extensive price support and protection for British farming, which was the foundation of British agricultural prosperity until we joined what was then called the Common Market. The national policy of protection and support was taken over by the common agricultural policy.

It is not for me to give a simplified version of history, but it is sometimes worth recalling how we have come to be where we are, and the problems that have occurred since we have had the common agricultural policy, rather than our own policy. The CAP involves the expenditure of 44 billion euros. I am not immediately able to translate that, as the exchange rate changes regularly, but an awful lot of money is being spent on the support of agriculture across Europe, yet there is a feeling among farmers, the public, consumers and environmentalists that, notwithstanding all that money, nobody is getting a very good deal.

British agriculture needs support and protection. It suffers from a number of fundamental disadvantages, not all of which are replicated elsewhere. The right hon.

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Member for Fylde (Mr. Jack) mentioned the strength of the pound. A former Member of the House would have used the vulgar phrase Xa double whammy" to describe the double detrimental effect on farming. It reduces the value of a farmer's subsidy, support or payment, and it increases the competitiveness of imports from abroad. The farmer loses in both respects.

The Government may at some stage make a decision about whether we should join the euro, but it is not a matter that can be dealt with in isolation from a range of other matters. It is not an issue peculiar to agriculture. We cannot make a decision to join the euro based solely on agriculture. That decision must be taken in a wider context, but while the euro is so weak and the pound is so strong, British farming will continue to suffer.

Our climate is not the most perfect in the world. Manchester has been mentioned. Manchester may have a perfect climate for some things, but not necessarily for agriculture. There are other countries that will always be able to grow farm produce more easily than we can because of their climate. The other thing that we do not have is land. A cursory look at the map of Europe reveals how much bigger France and Germany are, let alone the Ukraine or parts of eastern Europe. Such countries have land in abundance and the possibility of farming on a scale that is difficult to contemplate even for East Anglia. They therefore have the great advantage of economies of scale. The further east and the further south one looks, the more likely it is that in addition to cheap land, there is cheap labour. That wonderful combination enables such countries to compete on easy terms with the the UK.

Foot and mouth has been discussed, so I shall not deal with that, or with BSE, classical swine fever or the other scourges that have afflicted parts, or in some cases all, of British agriculture over the past few years. All those matters have a damaging effect on our ability to compete in a free market. Beyond that, we insist on extremely high standards of animal welfare, pollution control and environmental protection. I shall not elaborate on the argument about gold-plating—I have never been certain what that meant. However, it costs British producers money if they are obliged—rightly so—to observe higher standards of animal welfare, environmental protection and pollution control. The suspicion is that not all other countries follow the same route. A major turkey farmer in my constituency is Mr. William Grove Smith of Shalford, who produces very fine turkeys. He believes that turkeys are coming here from Italy in particular and being sold for less than the cost price in this country. I do not want even to contemplate the sort of conditions in which turkeys, pigs and other products are being produced in Brazil and brought to this country. What possible check any supermarket could have on the welfare standards or effects of pollution in such countries is beyond any reasonable calculation. We are therefore at a great disadvantage.

I come now to a word that I learned a number of years ago—modulation. In essence, in the context of this discussion, that means talking about whether to shift support to environmental and conservation schemes that will benefit the fabric of the countryside and take some money away from the price support system that has appertained hitherto. I do not think that anybody

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can object in principle to taking that route. We all want an improved countryside and more vital wildlife, and we are mindful of some of the things that took place in the past, such as the destruction of hedges, filling in of ponds, enlargement of fields and all the other factors that radically changed the appearance of the countryside and did great harm to the preservation of our wildlife in certain parts of the country.

All of us should support moves to ensure that farmers are paid for preserving the countryside, as the exercise is not cost free. If one wants to plant a hedge, coppice a wood or plant trees, one must employ a labourer to do the work. Farming in an environmentally sensitive way clearly requires much more skill in mowing, harvesting and any other activities to ensure that no damage is done to the very environmental treasures that we are seeking to protect. Therefore, any environmental scheme will be much more expensive in practice than farming in the normal way.

I do not want us to move in that direction if the consequence will be yet another cut in farming incomes. If we are serious about doing so—we should think about it long and hard, although I think that we probably should—we must ensure that there are sufficient funds. First, they must pay the farmer for the work that he has to do, bearing in mind that so few people now work on the land. The right hon. Member for Fylde suggested that that was the Government's fault, but the number of people working on the land has declined at a colossal rate since 1945 for a range of reasons outside the present situation. In winter time, workmen on farms would do ditching and all sorts of preservation work on the land, but those people are not employed any more. If we want environmental schemes, we must therefore bear in mind that it will cost us money to ensure that farmers can carry them out, whether profitably or even at a cost.

The money that is provided for an environmental scheme must also go directly to the people who are carrying it out. There is a fear that too much money may be frittered away on the side in paying for the administration of such schemes or projects. We want to see the benefits of the money in our countryside as it is spent. We do not necessarily want to hear that 40, 50 or 60 per cent. of a programme's budget has been spent on its administration.

My penultimate point is that we need to remember that farming will remain the core business on the land. I do not think that anybody is suggesting that we are seeking to end farming and introduce a national parks service. Farming will remain the core of the agricultural business, and we must keep it supported by environmental schemes that are properly paid for and that the farmers can administer. We must always remember that farming, if it is to survive, must be profitable. If necessary, support schemes must be in place to make that possible in the long term.

My hon. Friend the Member for Luton, North (Mr. Hopkins), who is in his place, has talked about the effects of the common agricultural policy, and whether ultimately it is possible, as things stand, for there to be radical and far-reaching reform. There is a case—it is one that the Government should argue—for bringing farming policy back home so that member states of the Union can implement their own policy outside the common agricultural policy. In that way, each member state could react to the changing circumstances of

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farming and the food situation much more rapidly, and change and adapt as appropriate. In other words, we would return to the schemes that we had but with the environmental overlay that had pride of place in the post-war Labour Government.

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