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12 Dec 2002 : Column 462—continued

4.40 pm

Paul Flynn (Newport, West): Much of the tone of this very interesting debate has been based on an acceptance of what has happened in the farming industry since the war. My hon. Friend the Member for Braintree (Mr. Hurst) described how subsidies were originally provided for farmers. It seems unreasonable in the 21st century still to be running the farming industry on the basis of trying to secure victory in the second world war.

We need revolutionary rather than evolutionary change. The right hon. Member for Fylde (Mr. Jack) gave us the traditional image of farming as a dependent industry that seeks more and more subsidies. He complained that there was not enough excitement or leadership from the Front Bench today—however, there was #500 million. If #500 million was given to the aluminium or steel industries, I would put up with the lack of excitement or leadership.

In Wales, manufacturing industry contributes 27 per cent. to GDP, while farming contributes less than 1 per cent.—in fact, it is probably a minus figure now. I believe that the figures for England are about 20 per cent. and 2 per cent. Yet more public money is poured into farming than into the rest of the economy and the manufacturing industry. At the heart of the very valuable Curry report is a stark message. Taxpayers are handing out huge subsidies every year for a policy that is destroying economic value, consumers are paying more for their food, the environment is being degraded and farming incomes are on the floor.

Mr. Jack: I am sorry if I lost the hon. Gentleman. In talking about the subsidised sector, I wanted to provide a point of contrast with the non-subsidised sector. I picked on horticulture to point out some of the difficulties that the non-subsidised world was having, because eventually I hope that the rest of farming may

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move in that direction. I am sorry if I did not make my remarks clear, but it was to the horticultural industry that I wanted right hon. and hon. Members to look.

Paul Flynn: I understood precisely what the right hon. Gentleman was saying. He wants to make all parts of the farming industry dependent.

Let us look at another non-subsidised industry. If we had told the steel industry that we would treat it the same as farming, we would not have lost 1,500 jobs in my city in the past 12 months—instead, we would have had a set-aside blast furnace. We would have told the blast furnace men to carry on producing and said, XYou are making something which, unfortunately, for a brief period, is not competitive on the world market but if you continue producing it, we will dump it in a hole somewhere. We will pay everyone their full wages whether they are working or not and we will train people up to take apprenticeships for jobs that do not exist." However, the conditions that created the situation in the steel industry are precisely the ones that pertain in the agricultural industry, about which the right hon. Gentleman and others are complaining. The products produced in the steel industry are artificially dear when they are sold in euroland because of the value of the pound, while those produced in the Netherlands by the sister firm of the one in my constituency are artificially cheap, although the firm is less competitive than the one that has largely closed down in my constituency.

We have an industry that is in serious trouble but has been subsidised by the taxpayers for a long time. However, I have a piece of good news for the right hon. Gentleman. Something was published today, but unfortunately the Farmers Union of Wales did not issue a press release about it, nor did the National Farmers Union, despite the fact that I have had a blizzard of press releases from them throughout the year. Somehow they missed this one. Let us cheer everyone up a little. The news is that cash incomes for all dairy and livestock farms in Wales rose from #18,600 last year to #21,100—admittedly still low, but I have more good news to cheer up the right hon. Member for Fylde. Cash income from hill and upland farms, the worst-off farms, increased by #3,500, to #20,800. We should celebrate that slight amount of good news.

Mr. Jack: Before the hon. Gentleman paints me into the corner of subsidy and nothing else, let me tell him that my point about the horticulture industry was that it received no subsidy. I made my living in that industry before entering Parliament, and I solidly adhere to what the marketplace and responsiveness to customers' needs can do without subsidy.

Paul Flynn: Let me tell the right hon. Gentleman why I do not want that industry, which he knows well, to fall into the dependency culture. We should not create an industry that is subsidy-sensitive but market-blind. It is nothing new for people to be leaving the agriculture industry. Very few of those who are now leaving are going bankrupt or joining the dole queue. Those who own their farms can sell them and move into other industries, or do something else. People have been leaving agriculture for a very long time. A. G. Street wrote a book about farming in the 19th century, and

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depopulation, with the ironic title XFarmer's Glory". XThe Deserted Village", written in the 18th century, begins:

The process of depopulation in the farming industry is a continuous one. Unlike redundant steelworkers, who are not given a chunk of the blast furnace to take away, most farmers have the benefit of assets. About 15 per cent. of farmers are tenants and the rest are owners. Farm incomes have certainly dropped in recent years, although they are still in the top decile of their group, but the other assets have increased enormously: a 100 per cent. increase in real terms in the value of land from 1993 to 2000 and a similar increase in the value of farm buildings. A farmer leaving with such assets will have his prosperity assured.

The people who are left out are the tenant farmers. The right hon. Member for Skipton and Ripon (Mr. Curry) gave a definition of modulation. As I understood it, modulation was taking money from the rich millionaire English farmers and giving it to the small Welsh hill farmers—a policy that I strongly support. The Conservatives are very keen on the right to buy, so why not allow tenant farmers, after they have been farming for 10 or 15 years, say, to acquire the valuable assets on which they have been working?

The Conservatives have said that there should be an inquiry. I congratulate the Government on the way in which the reports have been published. The Anderson report was probably the most significant. I will not quote what Conservative Members said during the foot and mouth epidemic, as many of them would be embarrassed about the steps that they urged on the Government, for example on closing rural footpaths, which did the main damage to the tourist industry and proved not to have been necessary.

Everyone was wrong on occasion about foot and mouth, because the outbreak was unprecedented in scale. The Government have rightly and realistically accepted their responsibilities. We should not deceive ourselves and believe the myth that the outbreak was caused by the Government's mistake in allowing food imports. What happened here, which did not happen in the Netherlands, France, Ireland, or Scotland, was a vast spread of the disease. The Anderson report illustrates the great cobweb of movements that took place between the time of the first outbreak and when it was detected—a period of three weeks. As a result of that vast number of movements, more than 1 million animals were potentially infected. That was the reason for the scale of the calamity.

The only way to protect against that is to reduce such movements. Some of them were illegal, and most were about making the animals more profitable. Bed and breakfasting for sheep was one of a number of ways in which dealers moved animals about—ways that do not make any sense. Thanks to the courage of the Government, we now have the 20-day movement rule. They have compromised in that regard—there is a strong case for a 28-day movement rule, because of the incubation period of the disease—but it is not just foot and mouth that we should worry about. We should also be concerned about blue tongue virus, vesicular stomatitis and a great many other diseases that will almost certainly come at some time. We will have an

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outbreak of some disease in the near future. Blue tongue virus poses a particular and new threat, because of various changes that are taking place in climate, and so on. If such diseases do arrive, we will need those restrictions on animal movements. There are alternatives to such movements.

The problem is that the industry is extremely conservative. It does not like to change in any way, or to form co-operatives, and it was very slow to enter organic production. During the foot and mouth crisis, animal movements were greatly and necessarily reduced. In many cases, the industry then started to use video links, the internet and direct sales, which had all manner of beneficial effects. Such methods were very efficient and quick. They cut down on the number of journeys made by animals, which also reduced animal suffering. The industry could well return to that, if it accepts the absolutely essential precaution of the 20-day rule, which is complained of in the amendment from the Opposition.

I shall briefly mention my experience of organic farming. I vividly remember a number of friends of mine starting up organic farms in Ceredigion in the late 1970s and early 1980s. Now, they are all extremely prosperous, but at the time they were regarded as weird and strange. They were laughed at by their neighbours, who said, XThe soil is too thin, you won't be able to grow anything here." Now, it is the neighbours who are suffering privations. It was those organic farmers—sadly, as it happens most of them came from outside Wales—who had the leadership and the foresight to realise that organic farming had a great future. However, it is a sad fact for the entire farming industry that some 75 per cent. of the organic food consumed in this country is imported. We were very late entering into that market.

People still go on about blaming the supermarkets, and I am sure that there is a case to be made in that regard. The Competition Commission conducted two major inquiries into the way that supermarkets treat their relationship with farmers. Both inquiries concluded that there is nothing wrong, and that supermarkets are behaving in a reasonable way. However, there is an answer to the problem. As has been pointed out, in France and in other countries farmers combine into co-operatives, but the problem remains of the endemic conservatism of our farming industry, and the reason for that is the dependency culture.

Since the war, farmers have got into the frame of mind whereby they believe that, when a problem occurs, someone else will solve it for them. They look to the Government to come up with a subsidy; indeed, today the Government are being asked to provide solutions. Other industries do not do that—the high-tech industry is not asking the Government to solve its problems, and nor is any other manufacturing industry. Because of farming's dependency culture, it is looking to Europe, to the Welsh Assembly and to anywhere else to solve all its problems. When the farming industry decides to stand on its own two feet, we can look forward to a firmer and better future for agriculture.

I am very much in favour of the suggestion that was made about changing the nature of farm subsidies in the light of environmental subsidies.

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However, a great mythology has grown up: we have to be grateful to the farming industry for our beautiful countryside. It is as though, if farming comes to an end, the hills and mountains will fall flat, the rivers will dry up and we shall no longer have an attractive landscape. Our countryside is beautiful because of what nature has done. In northern Scotland and in Iceland, there are sites of great natural grandeur in areas that have never been farmed. In many farming areas, the blots on the landscape are the agricultural buildings and silos that have been put up without planning permission.

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