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Mr. Liddell-Grainger: The hon. Gentleman is making a valid point. That is certainly happening in Cornwall. People are selling up in London and elsewhere and buying an enormous amount of farmland. This is forcing farmers out because they cannot afford to pay for the land. Does the hon. Gentleman agree that the Government have not addressed this problem in any way?

Andrew George: I agree that there is such a trend in many parts of the country. Farmers, especially dairy
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farmers in my part of the country and the hon. Gentleman's part of the country, are leaving in droves. The Government's figures demonstrate that the number of dairy farmers has fallen from 37,300 in 1997 to below 25,000. Approximately a third of all dairy farmers have gone out of business since 1997, which is clearly a catastrophic change to the countryside. In many parts of the country, farmhouses are being sold, and a small piece of privatised green belt, if we want to call it that, is being bought with it, possibly for hobby farming. Often, if not always, a change of culture also happens.

The nature of traditional farming communities is changing. The traditional farming community thatI remember, from my boyhood and upbringing in the far west of Cornwall, was one in which farmers were engaged in the local community and in which people could walk the land, irrespective of where local footpaths were. That was an interchange between the local community and farmers because they were very much one and the same. In many rural areas, a lot more private signs are being put up, with a lot more effort to try to redirect footpaths away from areas that have traditionally been walked in the past, as new people come in who do not understand country ways. That is sending shockwaves through many rural communities and causing unnecessary and unwelcome conflict in the countryside. I agree with the hon. Member for Bridgwater (Mr. Liddell-Grainger) on that point.

The Minister rightly raised the issue of CAP reform. This is the biggest and most momentous challenge to rural communities. On balance, the Government made the right decision. Inevitably, we will have to move towards area payments at some stage, and the transitional approach taken by the Government gets the balance pretty much right. The decision taken north of the border, for example, was right for Scotland.

It is important, however, that the CAP and single farm payments be delivered with greater transparency and simplicity. With that greater transparency, and perhaps with freedom of information, I predict that taxpayers and the general public will ask increasingly what benefit they are getting from the payments being made to farmers, given that they will be less complex.

Mr. Gray: The hon. Gentleman has a charming way of being all things to all men, all the time, on almost every subject. A moment ago, he said that Ross Finnie was doing well in Scotland with historic payments, and now he says that the approach in England is also going well. Can I ask him one quick question? In the unlikely event that he were the Secretary of State—let us imagine that for a moment, although I grant that it is not very likely—what would a Liberal Government have done?

Andrew George: Perhaps the hon. Gentleman needs to go on a learning curve: devolution results inevitably in differing policy in different places. The decision taken for Scotland was therefore right for the Scottish situation and the Scottish farming industry. He asks about what I would do were I Secretary of State— I think that he and I have about the same chance of becoming Secretary of State, and our chances are possibly greater than the Conservatives' chances, given their performance in the polls. I have already told the House that I think that the Government got the balance pretty much right. Certainly, over a seven to 10-year
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period, we need to move towards area payments. Clearly, in a 10 to 15-year period, it would be absurd and bizarre to find ourselves in a situation in which farmers were being paid on the basis of what they were doing 10 or 15 years previously, and they could be doing anything at that stage. There must be a transitional period. We must move in that direction and, inevitably, Scotland and Wales will have to do the same—but at their own pace, in their own way and on the basis that they make decisions at a time that suits them, rather than their being instructed by our Parliament.

I want to remind the Minister of issues that have undermined the confidence with which the farming community views the Department. There is concern, which I think he has picked up, about the date when farmers will receive their payments under the single payments system. Confidence is not encouraged by the way in which the Government handled the release of Jim Dring's report on Burnside farm in Northumberland at the beginning of the foot and mouth epidemic in February 2001, or the way in which they handled video evidence that arrived in the public domain towards the end of last year—by the lack of knowledge of that evidence, and the fact that it was not involved in the various foot and mouth inquiries that the Government commissioned.

Nor is the industry encouraged by the way in which the Government handled the regulations replacing the Animal By-Products Order 1999, failing to lay them before the House in 2003. They promised to implement a fallen-stock collection scheme in January 2004. Following further announcements, we were eventually presented with a scheme that is only just getting off the ground now, some 18 months after it was required to start. That too does not help.

I said that I would say something about the power of the supermarkets. As the hon. Member for South-East Cambridgeshire pointed out, the supermarkets can dictate market conditions to farmers. Their actions, and those of their chief executives and buyers, are of course entirely rational: if they do not put pressure on their suppliers and their competitors do, they will be at a disadvantage. We need a code of practice that distinguishes clearly between appropriate use of power and inappropriate abuse of power in the market.

The Government have not paid proper attention to that, although they have instituted inquiries. Since the first inquiry conducted by the Competition Commission in 2000, there have been others conducted by both the commission and the Office of Fair Trading. We are still awaiting the publication of the OFT's audit of the food supply chain, undertaken since the OFT reported on the operation of the supermarket code in February last year. The farming industry, however, wants action rather than further inquiries and reports. It wants a system with real teeth to ensure that farmers have a say, and can have an impact throughout the food chain.

According to yesterday's Tesco report, over the Christmas period Tesco had 29 per cent. of the grocery market. When the OFT examined the role of convenience stores last year, it concluded that if there is a discrete market in convenience stores there will be a discrete market in supermarkets as well. That gives Tesco about 40 per cent. of the supermarket sector—a much larger proportion of the market than was held by
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Milk Marque in 1999, a year before the Government decided to abolish it. At that stage, so far as we could tell, Milk Marque had some 29 per cent. of the market.

Mr. Hoyle: There is clearly great concern within the farming industry about the way in which supermarkets react, and the hon. Gentleman is right: the problem is that when one supermarket drives the price down, its competitors have to continue to do so. What does he believe is the answer to ensuring fair play and a fair price at the gate for farmers, so that they can have a livelihood and make a profit? At the moment, that is not happening.

Andrew George: I entirely agree with the hon. Gentleman and we Liberal Democrats would deal with the problem by, for example, strengthening the code. Far too much emphasis is placed on the use of rather grey terminology, as evidenced in appearance of the word "reasonable" throughout the document. That is very good for lawyers and the courts, but the use of much more measurable language would help those using the system.

The OFT's report of last February made it clear that farmers, farmers' co-operatives and suppliers are not using the code for fear of retaliation. We need a food trade inspector—operating within the OFT—to undertake in various sectors of the food supply chain the kind of proactive inquiries that the OFT currently undertakes, in order to identify and investigate malpractice, perhaps on the basis of information provided by the industry.

Mr. Clifton-Brown: I commend to the hon. Gentleman the supermarket Waitrose, which has direct contracts with British dairy farmers and beef producers—indeed, it makes great play of such contracts—so that its sources can be fully validated. If other supermarkets were to follow the same line, the British agricultural sector would do much better.

Andrew George: That is an interesting point. I have heard from all the main supermarkets and all claim that they are treating British farmers fairly. I do not mind the hon. Gentleman's using his intervention as a commercial for a particular grocer, and it is true that Waitrose has a good name in many circles in British farming. Even so, this is a major issue across the piece, and it needs to be tackled.

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