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12 Mar 2003 : Column 95WH—continued

Fruit Farming

11 am

Hugh Robertson (Faversham and Mid-Kent): May I begin, Mr. Deputy Speaker, by saying what a pleasure it is to sit under your chairmanship? Unless I am much mistaken, I note from your curriculum vitae that you are vice-chairman of the National Wildflower Centre. It is a particular privilege to be under the chairmanship of someone who is clearly such a horticultural expert.

I thank the Minister for the Environment for taking the time to respond to the debate on behalf of the Government. I am particularly pleased to see him here today. I say that in all honesty, because his knowledge of, and concern for, the environment is well recognised. Fruit farming makes an important contribution in that regard. This is also the first debate to be held in Westminster Hall on that important subject.

I have asked for the debate to highlight fruit farming and the wider horticultural sector and to raise a number of current issues. I do so both as secretary to the all-party group on the fruit industry and as one of the few Members who represents a constituency in which fruit farming predominates.

My starting point is that we should all support fruit farming. The industry is wholly unsubsidised, produces high-quality produce close to the marketplace and is good for the environment. It is largely thanks to fruit farmers that Kent enjoys its reputation as the garden of England.

Fruit farming also has a disproportionate effect on the local economy in those areas where it is the main type of agriculture. In my constituency, it is a key employment provider on farms and associated industries such as packing and transportation. Shepherd Neame, the oldest family brewery in the country, is based in my constituency and exclusively uses Kentish hops. As I have hinted previously, jobs in the tourist and leisure industries also rely on fruit to shape the landscape.

Fruit farming is a significant contributor to the agricultural sector as a whole. According to figures produced by the National Farmers Union, horticulture accounted for 13 per cent. of agricultural output in the year 2000. If direct subsidies to other sectors are disregarded and packing is added, the figure rises to 19 per cent. However, the growers are deeply troubled; their sector is in decline, and they are voting with their feet.

Figures from the Department for Environment, Food and Rural Affairs, revealed to me in a parliamentary written answer on 23 October 2001, show that 10.8 per cent. of the national orchard has been lost since 1997. That is a staggering figure, and one that would not be tolerated in any other sector of the economy, particularly when the environmental impact is taken into account.

So, what has caused the decline? The answer is, of course, a variety of factors. The actions of supermarkets, increased regulation, climatic changes and a huge increase in imports have all played their part, but there are several areas in which we could offer the sector worthwhile help. Before I outline those, however, I want to thank the Minister for the Government's help

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to the sector, even in the short time that I have been a Member of Parliament. The climate change levy rebate for horticulture has been a considerable boon, and it is vital that it continues.

The increase in the seasonal agricultural workers scheme to 25,000 this year, and the move to an open bidding system next year, provides the key to the whole sector. I want to flag it up to the Minister that any proposal to widen employment opportunities under the scheme would be the death warrant for fruit farming. Proposals to amend the EU marketing standard for apples and pears have disappeared off the radar—and long may it remain that way. Finally, having debated the issue with the Under-Secretary of State for Environment, Food and Rural Affairs, I want to express my gratitude to him for securing an exemption for orchards from the environmental impact assessment.

I should like to enlist the present Minister's aid on several fronts. First, what do the Government want from horticulture in general, and fruit farming in particular, over the next five to 10 years? What is their strategic vision for the sector? Many growers were deeply concerned by a letter, written on 12 February, from DEFRA's horticulture division to John Breach, chairman of the British Independent Fruit Growers Association. DEFRA states:

DEFRA's red book on horticultural statistics shows that home-produced marketed apples account for 31.2 per cent. of total supplies and the figures for pears and plums are 24.6 per cent. and 13 per cent. In all honesty, that is hardly a niche market. Will the Minister deal with that problem and articulate his vision for the sector's future?

Secondly, I am concerned about the activities of the agricultural wages board and it is difficult to overstate its importance to growers. Wages account for between 40 per cent. and 60 per cent. of the average grower's cost base, so when profits are tight, any increase will have a disproportionate effect. This is not the time to reprise the events of last summer. Two independent members of the board, who each attended only one meeting in four last year—the critical year—and the chairman have now resigned, and a new settlement will be on us next month.

May I ask the Minister to take home the following three points? First, the key figure for growers is not the headline rate but the casual workers' rate, which rose from £4.30 an hour last October to £4.91. Any repeat would simply break the sector.

Secondly, the agricultural wages board looks increasingly anachronistic. We rightly have a national minimum wage, and it should provide the basis for future wage settlements. As the Minister will understand, when farm profits are at rock bottom, growers feel increasingly discriminated against because only the agricultural sector is treated in this fashion. If abolition is politically unacceptable, will the Minister consider offering some special treatment for casual workers in the horticultural sector, who are, after all, increasingly from eastern Europe? The scheme that brings them here is terrific and is vital to the horticultural industry, but it is clearly daft if the price of implementing it is grubbed orchards.

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Thirdly, I am concerned about the future of Horticulture Research International, East Malling. The Minister will understand that a vibrant research base is crucial if horticulture is to have a viable future. HRI East Malling has an unrivalled reputation worldwide as a provider of high-quality and commercially relevant research. It is a national treasure, and we should do everything possible to ensure its survival.

Many of those points, and other more detailed ones, were discussed in a separate Adjournment debate sponsored by my right hon. Friend the Member for Tonbridge and Malling (Sir John Stanley). The quinquennial review has reported, and DEFRA is considering its position. The Government's plan, in outline, is to transfer the research station to the East Malling trustees, who will run it on a commercial basis. That will work only if the Government are prepared to back that outcome and, at least initially, to provide hard cash to ensure that the transfer and start-up costs of the new East Malling are met in full. Unless a proper business case is presented, the East Malling trustees cannot, under their agreement, agree to the proposed transfer. However, if it can be achieved it is perfectly possible that a new, independent East Malling will emerge to continue the best traditions of the current station.

I should add that there are several specific concerns about DEFRA research grants. The quinquennial review group recommended that at least 40 per cent. of income for research should be provided as a core grant to ensure that core skills are retained and developed. Will DEFRA provide that? Will it continue to place DEFRA-commissioned projects at the new East Malling? Will the new East Malling still be able to bid for open competition funding from DEFRA and for competitive funding from the Biotechnology and Biological Sciences Research Council?

It would be unfair of me to expect the Minister to answer those detailed questions today, but perhaps he could relay the contents of our debate to his noble friend Lord Whitty, the Minister responsible.

I hope that the Minister will not consider me churlish if I say that considerable offence was caused by the review team's decision to define East Malling's commodity base too narrowly as top and soft fruit. East Malling's work encompasses all perennial crops grown in the UK, and it would be reassuring to know that that wider role is recognised, particularly at a time when such serious structural change, with its impact on jobs and livelihoods, is being undertaken. However, the key point is that horticulture needs research as never before if it is to succeed. In East Malling, we have the world's foremost research station. I therefore urge the Government, in the strongest possible terms, to provide the transitional funding necessary to allow its tradition of excellence to continue.

Fourthly, the Minister is aware of the controversy about the French grubbing and replanting scheme. I understand that France applied for, and got, state aid for the scheme, which allows French farmers to claim a grant for switching from other agricultural sectors into horticulture. That means that they can replant orchards in such a way as to give them an unfair competitive advantage over their English counterparts. At the risk of

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giving the Minister too much homework, I ask him to look into that to see whether any protection can be offered to English growers.

Finally, I want to flag up the industry's concerns over the new Water Bill. Trickle irrigation is of particular importance to many growers who have previously been exempt from the abstraction licensing system. That will change under the new Bill. The Government have signalled their intention to consult the industry about the issue, which is greatly welcomed. It is important that trickle irrigators are treated equitably within the system.

Time constraints have necessarily resulted in a fairly rapid canter through the main issues affecting the fruit farming sector. It is right to finish where we started: fruit farming is an activity that we should all support. It is wholly unsubsidised, produces high-quality food close to the marketplace and is good for the environment. It also has a disproportionate effect on the rural economy in those areas where it still predominates. However, it sits on the cusp; some of the reasons for that are outside our control, but others definitely are not. I hope that the Minister will confirm the Government's commitment to the future of East Malling and reassure me that they fully understand the difficulties caused to growers by the recent agricultural wages board settlement. I hope that the Minister will be able to articulate his vision for the future of horticulture and that he will take note of the detailed points on East Malling, the Water Bill and French grubbing and replanting grants.

Growers in my constituency want no more than to run their farms as small businesses, free from over-regulation with an achievable vision for their future. In my part of Kent they also have a vital role as guardians of the countryside. I hope that the Government will help them to achieve those aims.

11.14 am

The Minister for the Environment (Mr. Michael Meacher) : The hon. Member for Faversham and Mid-Kent (Hugh Robertson) made a thoughtful and serious speech. He made an important case, which is of great concern to the Government, and I will certainly try to satisfy the hon. Gentleman on the points that he raised.

The hon. Gentleman is quite right to say that there has been a marked decline in our orchard fruit area in the past few years, and he gave some of the reasons for that. The market for English apples has faced tough competition from imports for many years. I regret that our climate does not allow us to grow high-yielding varieties such as golden delicious, which have the advantage of storing well and being cheap. Costs have risen, but prices have not, and that has led to many growers leaving the market. We are not satisfied with that, and I am as determined as the hon. Gentleman to deal with it.

The hon. Gentleman asked several questions that I shall try to answer. First, I would like to say something about the Government's strategic vision for horticulture. Eighteen months ago, in response to a Select Committee report on Horticulture Research International, DEFRA commissioned a report from Sir Colin Spedding on the objectives of horticultural

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research and development in the UK. He called his report, which was published early last year, "A Vision for Horticulture", and it identified a need for

That was to be produced by a forum made up of people who were capable of taking a broad view of the needs of horticulture. The Government are pleased that such a forum was set up by key horticultural bodies towards the end of last year and that it is working on some of the issues that Sir Colin identified.

Sir Donald Curry's report on sustainable food and farming is equally relevant. It too articulated a vision of a profitable and sustainable farming and food sector that can and does compete internationally, is a good steward of the environment and provides good food and a healthy diet for people in England and around the world.

That is the vision. However, I am the first to say, "That is fine, but how do we deliver it?" That, of course, is exactly what my Department has spent a great deal of time and effort on over the past year, and it will continue to do so. That vision forms the basis of the sustainable farming and food strategy that we published before Christmas. To answer the hon. Gentleman, it informs our approach to agriculture just as much as it does our approach to horticulture.

Our vision of the future does not involve Government in prescriptive control of the production industry—not that the hon. Gentleman was suggesting that for a moment. That is not a policy that we would support. It is not for Government to decide what will be produced or where. Instead, with Sir Donald Curry, we envisage a Government who support the industry and who facilitate the business decisions of others by improving the implementation of regulation and by clearing the path if anything blocks the functioning of the market. We want that to be achieved as smoothly and as effectively as possible and to be in no way burdensome.

I do not have the time to go into detail on the vision, but the essential document is the strategy for sustainable farming and food. If the hon. Gentleman has issues that he wants to raise concerning horticulture, the Department and I will be more than pleased to work with him.

The hon. Gentleman expressed concern about the agricultural wages board for England and Wales, about the wages that it sets and about the effect of the recent rise in certain aspects of those wages. We consulted on the future of the board in 1999–2000, and that provided an opportunity to see how the national minimum wage, the working time regulations and the agricultural minimum wage were working alongside each other. In general, the review concluded that the current arrangements were working well.

The hon. Gentleman asked about the continuing relevance of the board. The close link between job and home evidenced by the fact that 60,000 agricultural workers or managers are in accommodation provided by the employer reinforces the view that it is difficult for agricultural employees to conduct meaningful direct negotiations with their employers. I do not say that they are in hock to their employers, but they do not have the

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degree of independence that most other employees enjoy. That is why we believe that there is still a rationale for retaining the agricultural wages board.

The hon. Gentleman also asked me to consider the points that he made about the wages of workers recruited from eastern Europe. I accept that that is an important point. He said that the scheme was good, but that it undermined the future of horticulture in the UK, and we should take that into account.

We are committed to the programme of modernisation that we announced following the review of the board in 1999. My noble Friend Lord Whitty will take the matter forward and will arrange further discussions with the employers' and the workers' sides on the scope of any changes to be introduced. Those discussions will also provide an opportunity to consider the NFU's suggestion that changes to the negotiation process should be introduced as part of the modernisation package.

At this point, that is all that I can say about the agricultural wages board. However, I understand the significance of the points raised by the hon. Gentleman, and they will be pursued during the current review process.

I will address the question of research and development and the future of East Malling. In horticulture in particular, research and development plays a vital part in determining future possibilities for the sector. As part of DEFRA's work on a science and innovation strategy, we have invited industry stakeholders to help us to identify, evaluate and prioritise opportunities for and threats to future competitive production, storage and distribution of horticultural produce. We seek to commission work that will make a real difference to our industry and that will be complementary to the work funded by the industry through the levy bodies.

The East Malling research station, which is currently part of Horticulture Research International, has, as the hon. Gentleman said—and I would be the first to endorse it—a proud tradition of work that is highly relevant and valuable to the fruit industry. The station was originally set up by far-sighted growers who knew that an effective research programme was vital to a successful future. The East Malling site is still owned by the original trustees and, following the quinquennial review of HRI, we are discussing the future of that site. The review concluded that HRI was not sustainable in its present form and that the East Malling research station should either close or, preferably, be established as an independent research station under the aegis of the East Malling trust for horticultural research. We very much hope that negotiations with the trustees will result in a positive outcome that combines DEFRA funding for strategic research, industry funding and work from other sources.

Like other bodies, East Malling will be able to bid in competitions. We recognise its role, particularly in relation to hardy nursery stock. Details of the work to be done and of the funding are being examined as part of the negotiations, and we will be happy to contact the hon. Gentleman about that.

The hon. Gentleman raised a couple of other issues, and I shall deal briefly with them before saying a further word about the sector's future. First, he mentioned

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French grubbing grants. I do not carry knowledge about that issue around in my head, but he was good enough to give me advance notice that he was going to raise it, so I can give a slightly more informed reply than I might have done.

My Department is aware of the French orchard grubbing scheme, which provides national aid of 74.5 million euros over four years to producers of apples, peaches and nectarines. That aid is for grubbing up orchards and planting new varieties that are better adapted to market needs. As the hon. Gentleman rightly said, the scheme has been submitted to the European Commission for approval and has been approved as consistent with the objectives of the common organisation of the market in fruit and vegetables. It is designed to deal with a particular problem of over-production in France. The hon. Gentleman's point is that that is all very well but that the extra money could be construed as giving French growers an extra advantage over English growers. I am happy to take his point that we should consider the problem to see what, if anything, we can do about it.

The last issue that the hon. Gentleman raised was trickle irrigation and the Water Bill. We accept that future arrangements for licensing trickle irrigation are a matter of concern to growers. The Bill is going through Parliament and is needed to implement our commitments under the water framework directive. It contains new powers, which are necessary to manage water resources effectively and to prevent environmental damage. We expect new controls on trickle irrigation to be introduced in 2005 at the earliest. Again, however, we will consult further before new regulations set out detailed licensing arrangements. We are well aware of the concerns, which are justified by the

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overriding need to protect the environment. We are prepared to consult further and to listen to those who have concerns.

Let me conclude with a few words about the state of the sector. The present review of the common agricultural policy is geared towards making agriculture less dependent on subsidy. The horticulture sector, of course, receives very little subsidy and already relies on efficient and competitive production to meet its customers' needs.

The industry is to be congratulated on the work that has gone into developing the assured produce scheme, which now covers the majority of UK fresh produce. The scheme provides traceability and the assurance that production has met high standards of quality and safety.

From May, the organic farming scheme will be amended to provide conversion aid of £600 a hectare for top fruit production. That will help English growers meet consumer demand for organically grown fruit.

The Government are working with their own procurement agencies—I chaired one of two seminars on sustainable food procurement for the public sector—to identify opportunities to supply more English produce under public contracts. Under EU procurement rules, the Government may not specify local or UK sources. However, such sources may be able to play a greater role in meeting UK needs as part of a sustainable procurement strategy. That is certainly our wish.

I congratulate the hon. Gentleman again on expressing the concerns of his constituents and of this important sector of agriculture. The Government are as keen as he is to support it.

11.30 am

Sitting suspended until Two o'clock.

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