Tim
Farron: I, too, thank the Minister for her full responses
to our questions. She was entirely candid about the fact that she has
been in the job for only a short time. I do not wish to be patronising,
but she is doing very well.
We are
talking about simplifying single farm payments and tackling rising food
prices, both of which are good things to do. We are supportive of the
documents in so
far as they will achieve those things, but I am not entirely sure that
that will happen. I am thinking particularly of factors such as red
tape and the additional burdens that fall on producers and other parts
of the food chainall that gets passed on to the
consumerthat make it hard to do business. Indeed, they add
costs to the process.
I said
earlier that it is not only state intervention that distorts the
market; all-powerful players at the retail and purchasing end also play
an important part. This may be something of a clichÃ(c) in farming
circles, but it is undoubtedly true that if farmers received a fair
price for their produce, there would be no need for any form of
support.
Although
prices have fluctuated in recent times, I am sure that the Minister is
aware that over the past decade the supermarket mark up on a litre of
milk has increased by about 200 per cent. The average price received by
farmersyear in, year out, and taking one year with
anotherhas not gone up by anything like that. We now have the
lowest dairy production capacity on record, and that will have an
impact. The situation is connected to uncertainty and a lack of
stability.
Likewise, the
fluctuation in prices has had an enormous impact on meat producers,
with a number of farmers leaving the business. The average age of
farmers is about 58 or 59. For example, Longsleddale, which is one of
the valleys in my constituency, now has seven working farms, yet 15
years ago there were 28. Of those seven farms, only one has a line of
succession. I do not know what will happen to the other six, but I can
guess and it is not good news.
The reality
is that, although we want to avoid protectionism, we must be aware of
the food production capacity in our country. Allowing the reduction in
capacity to continue will have an upward pressure on food prices, which
we cannot afford. I concur with the Ministers comment earlier
about the food mountains in the 1980s. We want to ensure that we
produce food that is consumed rather than wasted. The latter is not
only immoral, but environmentally damaging and against all common
sense. In
recent weeks and months we have recognised that the complete absence of
regulation in the financial sector was not the wisest approach. Perhaps
allowing the unfettered free market its way in food production is also
unwise. Many assume that the more payments that farmers receive, the
more pressure there is to increase prices, but that is only partly
true, because if farm payments keep farms in business, a level of
supply is maintained and a downward pressure on prices is
exerted. It
is important to raise the issue of food security again. As has been
mentioned, we are not talking about autarchy, complete insularity from
the outside world, or throwing up barriers to producers from the
developing world. It is none the less important to recognise that there
is over-relianceand increasing relianceon imports that
we could produce at home. That has a vastly damaging impact on the
environment. We talk about moving to pillar two and encouraging farmers
and other land managers to look after our ecology and environment, so
is it not madness for us to promote a system that encourages an
explosion in the number of food miles travelled by our produce from its
place of production to our plates? We must consider that very
seriously.
I raised the
issue of projected demand over the next 40 or so years. We have been
talking about A-levels a lot this afternoon: when I studied social
history, we considered that poor fellow Rev. Thomas Malthus, who will
be familiar to some Members. He predicted, to his eternal ignominy, in,
I believe, about 1780, that we would all starve by 1850 because
population growth would outstrip food production to such an extent that
the latter would be unable to catch up. He did not take account of the
ingenuity of farmers and the industrial revolution, which enabled us to
keep pace comfortably with the increase in population. It would be a
tragic irony, to say the least, if Malthus was proved correct some 250
years later. Demand for food is going to increase by 100 per cent. in
the next 42 years, and we need to ensure that we have environmentally
sustainable ways of meeting
it. When
we look at pillar two and our desire to reward farmers for
environmentally positive thingsthey already do thosewe
need to remember that there will be no environmental benefits or
biodiversity schemes delivered if there are no people in our
countryside working to deliver them, and that the countryside will not
be maintained to the same standard without farmers. We talked about
entry-level schemes earlier, but if we set the bar so high with some of
the development schemes that we lose farmers, we will have taken a
retrograde, counter-productive step, because some areas of our
countryside, particularly uplands, will simply not be farmed. Not only
will they look ugly, they will lack biodiversity and will not be
accessible by the majority of people in this country who live in urban
areas, which will be hugely damaging. We have talked about livestock
destocking in the countryside and the uplands, but I am just as
concerned about human destocking and ensuring that we protect our
upland and rural
communities. Let
me touch on a couple of points that were made earlier, I, too, am
alarmed at the ambition when it comes to de minimis payments. That
could be problematic, as has already been mentioned, but I am
supportive of such a payment. A bottom limit of something in the region
of £200 would be sensible. Administratively, that would be
cheaper. We spend up to £10 million a year on the administration
of payments to people whoI say this in the nicest possible
wayare not really farmers. That is detrimental to the whole
process and robs farmers of funds that could otherwise go to
them.
I also share
concerns about the progressive modulation, but I noted something that
the hon. Member for Stroud said earlier with regard to the high amount
paid to a small number of people. The last time I checked,
£100 million goes to 360 recipients of single farm
payments. We have to question whether that is the best use of money.
Nevertheless, we struggle to find a way of ensuring that we deal with
such an issue fairly and not counter-productively. When hill farmers
are struggling to live on less than five grand a year, one has to
wonder whether that situation is entirely
fair. I
want to finish by saying that the Government must take account of our
own capacity to produce food in an environmentally sustainable way. I
am sure that the Minister, as a Labour MP for a Merseyside
constituency, took a similar position to me in the 1980s when we lost a
massive amount of our manufacturing base because of a temporary market
situation and the indifferenceat the very leastof the
then Government to the situation affecting urban and industrial
manufacturing communities.
Will she reflect on the fact that many of us in rural communities see
what is happening today as something not a million miles away from what
happened to manufacturing communities in the 1980s? When a country
loses its manufacturing base, even if the economic winds dictate that
that should be the casethe reality is that we get boom and bust
and things changeit cannot easily bring it back. Our concern is
that we are losing massive amounts of our farming capacity and skills
in our countryside. Should the increasing demand for food across the
world continue as we expect, things could well be rosy for British
farming, but not if our farming base has been decimated during
difficult
times. 6.12
pm
Mr.
Jack: This has been a very interesting debate. It takes me
back to June when I spent some time in Rome at the world food summit.
Listening to presentations from Heads of State around the globe, one
recognised the tremendous challenges that the world faced in feeding
itself. The picture is summarised by the need to have a 50 per cent.
increase in production by 2030. The question I ask myself is how much
does the health check contribute towards European agriculture making
its contribution to that very challenging world situation?
With regard
to what shapes the prices of our food commodities, one reflects on the
fact that drought in Australia, the growth of the ethanol market in the
United States, and the rise in the demand for food in south-east Asia
are some very big forces over which the European common agricultural
policy has absolutely no influence whatsoever. For the past two years
at least, those factors have shaped the prices and the availability of
our foodstuffs. We have effectively subcontracted the security of our
food supplies to those who run our food service industry and our
supermarkets. The central role played by the Department for
Environment, Food and Rural Affairs with respect to its principal title
is very interesting. As my hon. Friend the Member for South-East
Cambridgeshire said, if one looks at the Vision
document of 2005, one will see that words such as food
security are airbrushed out. It was all going to be down to the
international world market; everything would be all right. In a
relatively short time, things have changed. If the Minister is looking
for more antidotes to insomnia, I recommend that she read the report of
the Environment, Food and Rural Affairs Committee on the
Vision document of 2005. In March, at the time of the
National Farmers Unions centenary dinner, the Prime Minister
received a rare accolade for excellence of speaking when on two
occasions he used the words food security in his
remarks to the farmers. I recognised that as a sea change in the words
that had no doubt originally been written for him by DEFRA, as it
acknowledged that the issue of food security had to be
addressed. The
health check is relevant, as it makes a small step along the road
towards freeing up Europes farmers to make market-based
decisions about what they should produce while, at the same time,
recognising that the nature of the rural economy has fundamentally
changed since the United Kingdom perspective was driven by employment
in agriculture and horticulture, as now the activities of those so
employed are in the minority and a wide range of other activities are
in the majority. In the
England rural development programme, although the sums sound
largeabout £3 billion during seven yearswhen
what goes to environmental programmes is netted off, which is about
£2.7 billion, a relatively small amount is left over to develop
the rural economy and all that goes with
it. It
is important to try to put the health check into context. I was struck
by the some words in the Commissions document.
Preparing the Health Check of the CAP reform asserts
that for
the CAP to continue to be a policy of the present and of the future, it
needs to be able to evaluate its instruments to test whether they
function as they should, to identify any adjustments needed to meet its
stated objectives, and to be able to adapt to new
challenges. I
certainly support that as a guiding principle of what matters are all
about, which is why I asked the Minister whether she had looked at
article 33 of the
treaty. It
is against article 33 that the measure gives the legal base on which
the changes are to be made. It is interesting to note in article 33 the
complete absence of a reference to either the environment or the
sustainability issues that form part of the United Kingdoms
observations about the health check. In a press release dated 20 May
2008, the Secretary of State
said: The
Health Check should shift the emphasis of the CAP even more towards
protecting the environment. The UK is encouraging farmers to manage
their land in a more environmentally beneficial
way. That
is why I drew to the Ministers attention to the deficient
wording of the Governments motion. It invites us to improve
those Delphic words targeted public benefits, but it
does not tease out the very essence of what the Secretary of State
identified as a crucial part of the health check. I am still not
convinced that the actual proposals play into the sustainability
agenda. I
was particularly worried by the implications of what my hon. Friend the
Member for South-East Cambridgeshire brought out. For example, let us
consider the debate in France about what the future of the common
agricultural policy should be. Having had the pleasure of meeting
Monsieur Barnier, I am left in no doubt that the French will go down
fighting to hang on to any degree of flexibility that gives them the
opportunity of sustaining the status quo for as long as possible, while
looking for ways in which to slide money into their agricultural sector
to give the impression that, while the labels may have changed, the
subsidy has not gone away. That is why I asked about the future purpose
of the common agricultural
policy. The
Ministers remarks were all technically correctthe brief
could not be faulted, apart from my hon. Friends observations
on the de minimis provisionsand she enunciated very correctly
all the technical things that the health check seeks to do, but with
what purpose in mind? I ask that because the reason agriculture has all
of a sudden moved up the political agenda is that, about 12 months ago,
there was a sudden and dramatic change in the cost of basic commodities
of wheat, rice and food in general. After a very long period of falling
real prices in food, the consumer got a nasty jolt. Things started to
move up very rapidly.
Suddenly the
Government started to produce documents. The Cabinet Office was
commissioned to produce a document on everything you ever
wanted to know
about food and its security. That was followed by a DEFRA
consultation document about the self-same subject. Now, a mystical
group of special advisers has been appointed by the Secretary of State
to deal with this subject. I hope that the Minister might reveal at
long last who these great gurus are. Who are these people who will come
up with the policies to deal with the security of our
foodstuffs?
This
particular debate is somewhat sterile on the issue of marrying together
the purpose of the health check and addressing the question of food
securitynot self-sufficiency, but the security of our food
supply. It does not enmesh the two. If we are looking to see what the
impact will be on European agriculture, the ending of set-aside is to
be welcomed. However, in this debate we have not really considered one
of the implications of that change, which will be the loss of
biodiversity. In fact, the Ministers own Departments
assessment lists a number of serious impacts on biodiversity, and it
would perhaps be helpful if she might say a little now, or later in
correspondence, about how DEFRA sees the biodiversity
situation.
The hon.
Member for Westmorland and Lonsdale and my hon. Friend quite rightly
drew our attention to the decline in our dairy industry. Does that
decline not crystallise for us the essence of what this health check is
all about? At the very time that we are talking about a gradual
increase in milk quotas, irrespective of what individual member states
might want for themselves, we have the perverse situation that our own
milk production is
declining. Had
the Minister been able to levitate a little earlier in the morning, she
would have heard the quite interesting arguments made on
Farming Today as it debated the fact that about 1
million litres a week of liquid milk are being imported on to the
mainland of this country, at the very time that milk quota, certainly
for our farmers, is increasing, albeit modestly. The consumer says,
Is that securing the supply of dairy product for the United
Kingdom? Although consumers have been lucky enough not to face
a shortage, I think that they are increasingly interested in the
provenance of their food and they will be somewhat disappointed to find
that our farmers in England and Wales, and I am sure also in Scotland
where the Ministers writ does not run, are not producing in
self-sufficient terms something that we always had, which was our own
liquid milk supply.
Something
even more bizarre is happening in Europe. When I met representatives of
Fontera, the New Zealand dairy co-operative, I found that they
controlled something like 97 per cent. of New Zealands milk
supplies. I asked one of them why it was that they were doing so well.
I said, Was it south-east Asian demand that was driving the New
Zealand dairy industry? No, came the reply,
it was increased demand from Europe. That really
surprised me, because I had thought, perhaps naively, that we still
had, in a quota-driven world where there was an element of certainty
for farmers, an ability to produce the dairy products that Europe
needed, but Fontera said a different thing. Again, I think that that
poses fundamental questions about what the purpose of the common
agricultural policy is, because the current instruments are clearly not
delivering to the people of Europe, in terms of a basic
commoditymilkwhat those people might have imagined
would be the case.
As this debate
unwinds, therefore, and as the stage is set for the fundamental debate
about what the CAP will look like post-2013, I hope that Ministers,
even in the dying days of the discussion on the health check, will use
it as an opportunity to define with greater clarity what we want the
policy to do. Reading the Commissions words, I do not see that
it has evaluated and tested the worth of the policy instruments to see
whether they will deliver what European people want.
I could, but
shall not, go on at length about the food-fuel paradox. However, at the
very time when the UK Government have been encouraging the use of
biomass in the production of heat, underscoring the importance of
environmentally friendly fuels, a question mark remains over the
security of our food supply. The Select Committee is conducting an
inquiry into that. We want to make certain that it focuses on the
things for which DEFRA has a policy responsibility. We will have to
consider how to mobilise our farmers to maximise that which they are
good atthe production of high-quality, sustainable food from
within our own resources. We must also ensure that Europe exploits its
own agricultural expertise in a way that will be to the benefit of
those who live in this quarter of the
globe. There
is a worry in the publics mind about our dependence on world
marketsthere is an idea that the southern hemisphere will
provide if the northern hemisphere runs short. That is very
questionable. Brazil has 93 million hectares that it could
bring into production, but what price sustainability? The answer is
that none of us really knows. What we do know is the agriculture and
horticulture in our own backyard and our own biodiversity challenges.
We know our own farmers and food industry. That is where our focus and
that of this health check should be at the moment. The measures that we
have discussed are a modest contribution towards that, but let us not
think that we have reformed the CAP when the health check goes through,
because we will not have. The debate has only just
begun. 6.27
pm
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