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Dairy Industry

4. Richard Younger-Ross (Teignbridge) (LD): How many dairy farmers have left the industry in the last 12 months. [180207]

The Secretary of State for Environment, Food and Rural Affairs (Margaret Beckett): We do not hold figures for the number of dairy farmers who have left the industry. The agricultural census for England shows that between June 2002 and June 2003, there was a net reduction of 786 holdings where dairy farming is the predominant activity.

Richard Younger-Ross: May I suggest that the Secretary of State should hold such figures? At the beginning of this week, the Western Morning News reported that many farmers in the south-west are losing up to £24,000 a year and that more than 3,000 dairy cattle a week are being sold off. My constituent, Anthony Rew, questioned me the other day about how he could continue in the dairy industry when last year he received less than 17p a litre. What action will the Secretary of State take to preserve the British dairy herd from decimation?

Margaret Beckett: I am sure that the hon. Gentleman is well aware that there is overcapacity in milk production. He will also be aware that the Government have taken initiatives through the Food Chain Centre and through my noble Friend Lord Whitty and the Dairy Supply Chain Forum. Through those means, a considerable amount of advice is available to the industry. The hon. Gentleman will also be conscious of
 
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the fact that there are genuine problems in dairy and that they are not necessarily resolvable at the wave of a ministerial wand.

Mr. Lindsay Hoyle (Chorley) (Lab): I know that my right hon. Friend is very concerned about the future of farming in the UK, but dairy farming in particular has suffered. We can see that the monopolies of the supermarket are not fair. There should be a fair price at the farm gate to ensure that dairy farming continues and that we can attract young people into dairy farming. If we cannot do so, we will see the end of such farming in the UK. We need help and protection, and I will welcome whatever support she can give.

Margaret Beckett: I understand the concern that my hon. Friend expresses. The latest milk price, the April price, was the highest April price since 2001, at just under 18p a litre. He rightly said that this is a long-running saga. There is concern in the industry and there are difficulties, but he will know that the Office of Fair Trading has recently undertaken a compliance audit of the supermarket code of practice in order to try to address some of the concerns that have been raised by hon. Members in all parts of the House.

Andrew George (St. Ives) (LD): Following on from the question of the hon. Member for Chorley (Mr. Hoyle), does the Secretary of State accept that dairy farmers in the UK are among the most efficient in Europe? She must reflect on the fact that they are being paid less and going out of business in their droves. What discussions has she had with the Secretary of State for Trade and Industry? Does she accept that now is the time to strengthen the supermarket code of practice to ensure that dairy farmers and other farmers are given the proper protections in the market that they richly deserve, now?

Margaret Beckett: I can only repeat that there are, and have been for a very long time, genuine problems in the dairy industry. The Office of Fair Trading has considered the position and reported on a number of occasions, but it has responded, as we hoped that it would, to the concerns that continue to be expressed by producers. For that reason, it has undertaken a compliance audit, and we await the results. I am afraid that there is no point in hon. Members continuously saying, "Let us look at it again." We have many conversations with my right hon. Friend the Secretary of State for Trade and Industry and, through her, with the Office of Fair Trading. I can only say yet again that, however often the matter has been looked at, the Office of Fair Trading has up to now been unable to find the sort of distortion of competition that I know many in the industry suspect exists. I repeat that it is presently undertaking a further compliance audit, and we await the results.

Mr. David Drew (Stroud) (Lab/Co-op): My right hon. Friend will have seen the report from the Select Committee on Agriculture, which highlighted the level of distrust in the industry. One of the recommendations made by the Committee was that the Government
 
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should remain in the chair in the supply chain initiative to ensure that the sector pulls together. Will she ensure that that continues to happen?

Margaret Beckett: Yes, indeed, I will. Many people welcome the Dairy Supply Chain Forum's work, and we will continue to keep up the pressure. That includes, for example, our acceptance of the Select Committee's recommendation, which I warmly welcome, that the OFT and the Competition Commission should do more to convey the fact that the dairy sector understands that they are not opposed to vertical integration in the sector. The Select Committee report, to which we shall respond in due course, is interesting, and it confirms the existence of considerable, long-standing problems.

Mr. Michael Jack (Fylde) (Con): I am grateful for the Secretary of State's acknowledgment of the importance of the Select Committee report on milk pricing. Can she assure me that one of the priorities for the Dairy Supply Chain Forum will be to establish a proper dialogue about openness and transparency in the milk industry, because different sections of the industry seem not to engage in such a dialogue? Will she also ensure that Lord Whitty understands what the forum is about? When I asked him what it does, he said:

"I am not sure of the precise terms of reference".

Margaret Beckett: First, I share the right hon. Gentleman's view that greater openness and transparency are required, and, secondly, I share the Select Committee's view that many of the sector's difficulties are issues for the industry, although it is important for the Government to do what we can to help the industry to help itself. I was slightly surprised by the right hon. Gentleman's remarks about my noble Friend Lord Whitty, because most people know how well my noble Friend understands the difficulties and how much he has done to help.

Single Farm Payment

5. Mr. Andrew Robathan (Blaby) (Con): What assessment she has made of the amount of administration and form-filling that will be involved in ensuring compliance with the single farm payment. [180208]

The Secretary of State for Environment, Food and Rural Affairs (Margaret Beckett): Common agricultural policy reform will bring significant benefits for our agriculture industry. It will introduce a new freedom to farm and will release our producers from a significant burden of bureaucracy associated with the old CAP.

Mr. Robathan: I hope that that is right. I must declare that I am a farmer, and that I consider myself to be relatively—I stress "relatively"—well educated and intelligent, but filling in the integrated administration and control scheme form is one of the most mind-numbingly complex things that I do each year. The Secretary of State should spend an hour trying to fill in that form, which is extraordinary.

Although I broadly welcome the single farm payment—I would welcome the scrapping of the CAP even more—farmers throughout the country are
 
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concerned that it will impose heavier burdens, particularly with regard to soil management plans and the like. Can the Secretary of State reassure farmers that the bureaucratic burden and the cost of compliance will not be heavier than under the CAP, which involves filling in a ludicrous number of forms?

Margaret Beckett: I assure the hon. Gentleman that nobody will be more disappointed than Labour Members and me if CAP reform does not result in substantially greater simplicity. At least two of the 10 schemes that are being replaced involved up to 12 claims a year. Although the complexity is greater than if we went straight to the new scheme, the transition period is unfortunate but inevitable. In the long term, it is better to provide an adjustment period, and the new scheme, which involves one form, one payment date and one application, should make a huge difference.

Diana Organ (Forest of Dean) (Lab): The overwhelming majority of farmers recognise that administration and form-filling are necessary to avoid fraud, to create a healthy and safe environment and to allow the meat that we eat to be traced. Although farmers endeavour to fill in forms promptly and correctly, they may be overwhelmed by farm tasks during busy periods. That happened to a farmer in my constituency, Mike Manning, who forgot to register a couple of his calves because he was silaging. The British Cattle Movement Service helpline informed him that he could register his animals by phone or fax. That was new to him and to many other farmers in my constituency. Will my right hon. Friend ensure that farmers are made aware of the facility whereby they can register their animals not only on the website but by phone and fax—

Mr. Speaker: Order. I think that the Secretary of State understands the case.

Margaret Beckett: I take my hon. Friend's point entirely. I am sorry to learn that her constituent was not aware that we are trying to make it easier for people to meet the requirements. I share her view that it is important to make farmers aware of that, especially as we can move increasingly towards easier methods of access to schemes. The introduction of the new scheme will give us a good opportunity to do that.

We hope that, in future, the Rural Payments Agency can build up a bank of information. That ties in with my hon. Friend's question and that of the hon. Member for Blaby (Mr. Robathan). It will mean that only changes need to be notified, which will be an enormous help.

Mr. David Curry (Skipton and Ripon) (Con): The right hon. Lady will appreciate that, before the single farm payment can take effect, it will be necessary to define precisely where the moorland line lies. Does she also appreciate that farmers want to know what machinery will be set up to adjudicate that, who will man it and the sort of information that has to be supplied? Clearly, there is great uncertainty and farmers are anxious to be able to see their way forward as soon as possible.

Margaret Beckett: I entirely appreciate the right hon. Gentleman's point. He knows that we are conscious of
 
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the fact that, when the moorland line was established, no specific payment was associated with it because there was no perceived need at the time and there was therefore no appeal mechanism for individual decisions. We are now considering as a matter of urgency what process we can introduce to ensure that people have the opportunity to make representations about exactly where the moorland line should run. I hope that we can make an announcement about that in the not-too-distant future, because I share the right hon. Gentleman's view that it is important that farmers know where they stand.

Sir Nicholas Winterton (Macclesfield) (Con): Although I am reassured by the Secretary of State's reply to my hon. Friend the Member for Blaby (Mr. Robathan), does she share my concern and that of many of my marginal land farmers and hill farmers and members of the Peak park authority that there may be far fewer farmers to fill in the forms under the single farm payment scheme? That is damaging to those who farm on our marginal land.

Margaret Beckett: I am not sure what leads the hon. Gentleman to that conclusion, but there will inevitably be losers as well as winners. That applies to every change that is introduced. However, breaking the link between production and subsidy will generally benefit farming and allow for economic improvement. People must make the decisions that are right for the future of their businesses, but they will have considerable stability from knowing what they will receive for some eight years. People in many other industries would welcome such a business-planning horizon.

Mr. John Whittingdale (Maldon and East Chelmsford) (Con): Does the Secretary of State know that the proposal to require a 2 m uncultivated buffer strip as one of the cross-compliance measures to obtain a single farm payment may cost many farmers up to thousands of pounds? How do the Government justify the fact that the farmers who have done most for the environment by creating hedgerows and habitat will be worst affected by that proposal?

Margaret Beckett: We have only just reached the closing date for the consultation process on cross-compliance. The idea of a 2 m strip was raised during it. Although some people expressed great concern, others take a different view—either that the proposal is welcome or that it does not present great difficulty. We shall study all those responses with great care before we reach our decisions.

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