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Mr. Geoffrey Clifton-Brown (Cotswold) (Con): I am pleased to follow the hon. Member for Monmouth (Mr. Edwards), who is one of the few sincere Labour Members who really understand farming.
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I was particularly impressed by the speech of my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice). He is one of the most knowledgeable people in the House on agriculture and he made some telling points, not least of which was when he, spurred on by my intervention, criticised the overly complicated hybrid system on single farm payments that the Government are introducing. I have a table here showing that the UK is the only country introducing such a complicated system—it is even more complicated than those of Luxembourg and Sweden.

We have different systems for England, for Scotland, for Northern Ireland and for Wales. Although I concede some regional differences, that strikes me as unnecessary complication from a single Brussels directive. To introduce such complexity at a time when the way in which the Rural Payments Agency works is being reformed seems like a recipe for chaos in the agricultural industry.

Mr. Peter Atkinson: Because Scotland has adopted a different system from England, farmers in Northumberland on the border will be at a disadvantage. Initially, beef farmers in Scotland will get bigger payments and will therefore be able to pay more for pedigree cattle.

Mr. Clifton-Brown: I entirely concur with my hon. Friend's point. He has great knowledge of agriculture, and I understand the difficulties he faces living on a border between two different systems. My hon. Friend the Member for South-East Cambridgeshire held up the number of leaflets involved in this overcomplicated system. Just imagine what French farmers would do if they received so many leaflets.

In an intervention, I mentioned the balance of payments deficit in the dairy industry. The problem is that we export the cheap dairy products—milk and milk powder—and import the expensive, value-added products such as butter, yoghurt and, in particular, cheese. That is a tragedy because we should be producing those value-added products in this country, instead of which we have a £700 million balance of payments deficit in that sector contributing to this country's £33.6 billion overall balance of payments deficit. Agriculture should not be adding to that problem.

On 1 January, in a move that we broadly welcomed, the Government abolished various subsidies to the beef industry, including the over-30-months scheme subsidy. The problem is that £300 a beast in subsidy is to be taken away. When we consider that a farmer has to get £720 a beast to make a profit, we begin to see the distortion affecting the market. I am not sure how that will settle down.

I want to discuss how the Government have allowed food processing to move out of this country. Almost no pig slaughtering is left in this country because the industry has moved to Holland. A big dairy co-operative was formed in Holland recently, at a time when the Government have weakened our co-operative efforts by weakening Milk Marque's ability to maintain a broad presence in the dairy sector.
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I urge the Government to support the British sugar beet industry. We produce only 50 per cent. of the sugar that we consume, so there is no case for a disproportionate cut in European Community support for our sugar beet industry.

I also urge the Government strongly to support the biofuels initiative. The 20p per litre reduction in duty is welcome, but the present position is crazy: our wheat is sent across the channel to be processed into biofuel, which is then brought back to this country. We should be helping the biofuels industry and the jobs that it can create in this country. If Wessex Biofuels could get its useful initiative off the ground, it could use 375,000 tonnes of wheat.

In the context of sustainability, we should examine the supermarkets' actions carefully. I know that the Under-Secretary is very keen on sustainability. Tesco's biofuel is produced in part using palm oil derived from trees cut down in the rain forest. It would be far more sensible to have a home-bred biofuels industry than to rely on imported products.

The Government talk about the rural economy in their amendment, but in the past seven years I have seen in my constituency, which is highly rural, the closure of several post offices. Two Crown post offices closed only the other day, and a third, in Wotton-under-Edge, is now threatened with closure. They talk in glowing terms about their rural bus subsidy grant, but although they give £300 million to all the rural areas of England and Wales, they give a £1 billion subsidy for buses in London. Where is the fairness in that?

The Minister made a great fanfare about rural housing, but the fact is that the Government are building only half the number of affordable housing units that the Conservatives were building when they left office in 1997. They have no record to crow about there. Under a Labour Government, we have the highest number of homeless people that this country has ever seen, so there is nothing to crow about there either.

Far from farmers' morale being high, as has been asserted, they are being bogged down with unnecessary paperwork from the Government. They cannot see a sustainable future. The Government need to be clear about what they want farmers to do. Farmers ask merely to make a profitable livelihood, not to be bogged down in overcomplicated paperwork.

I am grateful to be called to speak in the debate. It is useful to be able to discuss the problems of rural areas. In my constituency morale is not high, it is sinking.

6.25 pm

Mr. David Kidney (Stafford) (Lab): It is a pleasure to follow the hon. Member for Cotswold (Mr. Clifton-Brown), and it is a pleasure to follow my new hon. Friend the Member for Wantage (Mr. Jackson), who spoke earlier in the debate.

In so far as we pose in the debate the question, "Is there a future for UK farming?", I sincerely hope that the House will unite and answer that there is indisputably a future for British farming. I hope that we will work together to establish what still needs to be done to ensure that our farmers feel secure. If hon. Members will forgive me, I shall deal only with farming in my short contribution.
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I begin with the CAP reform agreement last June. Surely the Conservatives accept that although in government they talked a good game on CAP reform, it was a Labour Government who secured an historic agreement that enables us to help farmers. The most important part of the agreement is the decoupling, at last, of the subsidy—the public payments to farmers—from production. The distortion of prices arising from that has caused many of the problems in farming in this country and around the world.

Now that decoupling has been achieved, we can press on with the recommendations of the Curry commission for reconnecting farming businesses with their markets. That is the important job for us to do. It will be a worrying time for farmers, having that prop taken away from them and having to focus on their markets. Our job in Parliament is to reassure them through the changes and make sure that they get to those markets. No more will there be butter mountains and wine lakes at public expense in the European Union.

In the agreement, the Governments of the member states had a choice of start dates. We chose the first possible date—1 January 2005. That is an indication of our determination to do the best for our farmers. Of course, implementation is different in England, Wales, Scotland and Northern Ireland, but that is the beauty of devolution. We should be glad of it, not disappointed.

The hon. Member for St. Ives (Andrew George) asked what taxpayers would get for their public subsidy. It is an excellent question, which now has an excellent answer. First, with single farm payments there will be cross-compliance, leading to some highly desirable public goods such as land management and the maintenance of rights of way, which are benefits to all taxpayers. With modulation and an enhanced stewardship scheme—the entry level and the higher level—we will be able to achieve much more in terms of biodiversity. I predict that growing attention will be paid to land management and flood defences. In future, conditions will be attached to stewardship schemes so that farmers can help the rest of us to avert floods such as those at Boscastle and Carlisle through the way that they manage their land upstream, so to speak.

I thank the officials at DEFRA who, at the end of last year, held a technical briefing for Members. I also praise DEFRA Ministers for that growing practice of the new Department. That briefing was the third that I have attended. In the past there were briefings on the control of illegal meat imports and on what the Government were doing about bovine TB. At the third briefing, Members were able to pursue in detail their questions about the new scheme for single payments, which I found extremely helpful.

Common agricultural policy reform did not harm the growing diversification of energy crops. In my constituency there is a very large biocrops scheme, which benefited in the past from grants from DEFRA and the Department of Trade and Industry, and will continue to benefit from payments under the single farm scheme and the set-aside scheme, as a result of the agreement. All those are benefits.

I want to say a word about how what we do for our farmers affects the rest of the world. At the moment, we are all paying a lot of attention to the help that rich countries can give to poor countries. Everybody knows
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about cancelling debt and giving aid, and most people are now convinced that trade is the best way to help in terms of liberalising access to markets for producers in poor countries, and agriculture forms an important market for them. However, as we learned with the EU's announcement of the "Everything but Arms" initiative, if such measures are rushed they cause great dislocation and harm to farming inside the EU. Sugar beet was a good example of jumping in and having to rescue the situation afterwards—and, as we heard from interventions during the opening speech today, it has not yet been rescued.

The sugar beet industry is keen on diversification, having seen what is coming, and bioethanol is an important by-product in which it is interested. As has rightly been said, the reduction in duty is helpful, but on its own it is not enough, and I support that industry and its calls for capital allowances and some kind of renewables obligations specific to the industry that will be helpful.

Another example of the effects on world trade of decisions taken inside the EU is provided by the egg industry, which yesterday hosted a reception on the welfare standards being set inside the EU and their effect on future imports from countries outside the EU that do not meet those higher welfare standards. It is very concerned about becoming more and more uncompetitive against people who obtain ever greater access to our markets. That is an important issue that it wants us to take into account. It is important for us in this House and in the EU to balance welfare issues with competitiveness issues for our farmers.

Just to repeat the point that I made in an intervention earlier with regard to the challenges about red tape, I accept that DEFRA's rule strategy is a great attempt to reduce red tape at every level, with more than 100 funding streams reduced to three, but basically the agreement that we have reached in the EU about the single payment scheme reduces 10 previous schemes to one, with one single system for application and one single system for inspection. If we can link that to what we are trying to achieve in Britain in terms of the whole farm approach to holding farms to account for the public subsidy that they receive, we will do a good job for farmers.

6.32 pm

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