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19 Jan 2005 : Column 871

Farming and Rural Communities

Madam Deputy Speaker (Sylvia Heal): I inform the House that Mr. Speaker has selected the amendment tabled by the Prime Minister.

4.16 pm

Mr. James Paice (South-East Cambridgeshire) (Con): I beg to move,

For 57 years, successive Governments of Britain have encouraged British farmers to produce more of our food. By 1997, those farmers, together with those responsible for the genetic improvement of our crops and livestock and for pesticide development, had almost tripled domestic food production. Of course, there has been a price to pay for that success. In parts of the country, the landscape changed as hedges were removed and fields were drained, and some of the early pesticides proved to have serious consequences for our wildlife. However, almost all of that stopped at least 20 years ago. Indeed, since 1980 the woodland area of this country has increased by 29 per cent. and many species of birds have recovered, although I accept that not all have done so.

There has been a further price to pay, involving money. We now have higher food prices and higher taxes. Since the early 1980s, there has been an increasing clamour from all political parties for reform of the common agricultural policy. That reform began in earnest in 1992, but the changes that came in on 1 January this year are far more dramatic. Before I address those changes, I want to reflect on what has happened in the past seven years under this Government.

After that tripling of farm output, it has now fallen by 5 per cent. Farming incomes have fallen by 8 per cent. in real terms and the labour force has decreased by 15 per cent. Self-sufficiency is down by 4 per cent. We have had an outbreak of foot and mouth disease, but we still do not know how that disease got to Burnside farm. Apparently, it arrived in swill, but there has been little or no effort to find out. Bovine tuberculosis has rocketed by 65 per cent. and is destroying our cattle herds in many parts of the country while the Government sit on their hands paralysed. Only last week, the Minister said that this did not affect dairy profitability. It was this
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Government who broke up Milk Marque, and the dairy industry is now on its knees with an income last year of just half the minimum wage.

Mr. John Greenway (Ryedale) (Con): I am grateful to my hon. Friend for giving way so early in his speech. Is he aware that more than a dozen major milk producers in my constituency have stopped production in the past two years? Almost every month, there is a dairy herd for sale. On self-sufficiency, we have a balance between sugar production and sugar consumption in this country. Does he agree that that should be the target for any negotiations on the reform of the sugar regime?

Mr. Paice: I am sure that virtually any Member who represents a rural constituency will be able to tell a similar story about the decline of dairy herds. It is happening across the country. Of course, all of us understand that things must change and, as I shall say in a few minutes, they cannot go on as they were—

Mr. Lindsay Hoyle (Chorley) (Lab): Will the hon. Gentleman give way?

Mr. Paice: In a moment.

The dramatic decline of our dairy industry poses potentially huge problems for our rural communities and the rest of the country. Later, I shall suggest measures that a Government with a real interest could take to try to improve things.

Mr. David Heath (Somerton and Frome) (LD): Will the hon. Gentleman give way?

Mr. Paice: In a moment.

I also want to touch on the issue of sugar, which my hon. Friend the Member for Ryedale (Mr. Greenway) raised, and which I had intended to raise later. He referred to it in the context of self-sufficiency. He is absolutely right that the sugar regime needs to be reformed, and I made it clear in the House last week that we accept that. That reform, however, must allow the most efficient producers and processors in Europe, which includes British farmers and British Sugar as an organisation, to compete with the less efficient producers in Europe. He referred to the fact that we only produce 50 per cent. of our requirement in this country. Traditionally, we have imported the other 50 per cent. from the African, Caribbean and Pacific countries, which puts our market roughly in balance. There is no reason why our sugar beet industry should be forced to take unnecessary quota cuts if those cuts are not first imposed on those responsible for the surpluses that are dumped on the world market.

I was extremely disappointed, and I believe that the whole sugar beet industry will have been disappointed, that when I asked the Secretary of State in the House last Thursday whether she would stand up for British sugar producers and oppose the change in the mechanism that the Commission has proposed—which would mean that quota cuts would hit British farmers unfairly, instead of attacking those who produce the surplus
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—she categorically refused to confirm that the Government would resist those proposals. That was a derogation of responsibility for the British industry.

Mrs. Gillian Shephard (South-West Norfolk) (Con) rose—

Mr. Heath rose—

Mr. Paice: I will give way first to the hon. Member for Somerton and Frome (Mr. Heath).

Mr. Heath: The hon. Gentleman is extremely fair. He knows that I and many other Members who represent dairy farming areas have spoken repeatedly about the difficulties that dairy farmers face and the loss of profitability. I had thought that he entirely agreed on that, and I think that he has indicated that he does. I am surprised, however, to read that one of the proposals in the Conservative party's James review is to recover the entire costs of the Rural Payments Agency from hard-pressed farmers. How will that help dairy farmers in my constituency?

Mr. Paice: I am not often fair to Liberals, and perhaps that will teach me a lesson for being so. The short answer is that the hon. Gentleman has misunderstood the proposal in the James review, which is that the whole of the Rural Payments Agency should be outsourced. The responsibility for managing the whole framework of payments is ridiculously expensive and complicated, and I shall refer later to the bureaucracy that is now involved. That needs to be outsourced, and it will be.

Mrs. Shephard: I had thought that my hon. Friend was going to be fair to everyone else, and now he is just being fair to me, for which I am grateful. I want to refer back to his remarks on sugar. It is one thing, of course, for the Government, as the Secretary of State apparently did in the House last week, to stand by while the sugar industry goes to wrack and ruin, but it is quite another not to plan some kind of strategy for the future of those farmers who, in the past, have successfully grown sugar beet. Will my hon. Friend comment on what might be put in place so that the land could still be farmed and people still profitably produce a crop, in the light of the Government's total inaction?

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