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15 Oct 2008 : Column 313WH—continued

Albert Owen (Ynys Môn) (Lab): The hon. Gentleman has made the important point that the proposal might be applicable to other countries. One of the problems with traceability in the food chain is that much imported food comes from countries with far lower standards.
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Should Europe and the UK not concentrate on those other countries, rather than on a system that works within the United Kingdom and Wales?

Mark Williams: I am grateful to the hon. Gentleman for that intervention; he is, of course, right. The trials and the intuitive work undertaken confirm that point—in other words, there is a target that does not need to be targeted.

The trials introduced have encountered serious—perhaps even insurmountable—problems. Chief among those concerns are the problems with the technology itself. First, it should be pointed out that there is no one system of standardised technology to carry out EID, rather there are several systems that each have their own problems. Even if the technology is working, there will potentially be problems when one sheep switches from one system to another. That will obviously compromise the effectiveness of the scheme from the start.

Several problems have been identified during the trials—for example, interference affects the readers at markets and abattoirs. That, obviously, would be a serious downside, given that one of the most important aspects of tracking is to record movements between farms. There have also been difficulties with something as basic as the weather. In my constituency, the equipment will not work in cold or wet conditions. The equipment is useless and worthless, and undermines what is being proposed.

Mr. David Jones (Clwyd, West) (Con): The hon. Gentleman is making an important point about the technology. Does he agree that that is a particular problem in relation to auction sales? I understand that the requirement will be for every single sheep to have its tag read before it is sold at auction. In an auction, such the one at Ruthin, 5,000 head of sheep might be sold in a single session. The proposal will render the process of auction almost impossible.

Mark Williams: I thank the hon. Gentleman for that intervention. He is, of course, right. That situation is replicated in Tregaron, Aberystwyth, elsewhere in my constituency and across the United Kingdom. I will return to that point later on and discuss the issue of the wider rural community and the implications of this policy.

The trials have also indicated that 90 per cent. of farmers using the system have had to have IT training to use the readers. Hon. Members in this Chamber will be well versed in the many meetings we have had with our farming unions about red tape and bureaucracy. The idea that our farmers will go down to the nearest IT centre to receive training when they have other work to do is, frankly, ludicrous.

The upshot of these myriad technical concerns is a practical one. If the electronic system is fundamentally flawed, technically, a manual record system will have to be kept as well. In effect, it is not simply one new system of identification and tracking being introduced, but two. When we cannot trust the technology to work reliably in our constituencies and on our farms, it seems ludicrous to introduce compulsion.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy) (PC): I congratulate the hon. Gentleman on securing the debate. One of the pilot projects has been run in Trawsfynydd, which is in my constituency, where the person involved
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is totally familiar with IT, but could not get a single reading on the scanner of the machine—try as he might, he could not do it. It is not the hilliest place in Wales and there will be other places where it is even worse, but he has completely failed, despite being something of an expert at IT.

Mark Williams: I thank the hon. Gentleman for that telling intervention. That situation has, I know, been replicated throughout Wales. Regardless of the constituency we represent, that is the reality of this technology. The whole process is rendered useless and costly, and that is not without a certain willingness among farmers to at least try.

Lembit Öpik (Montgomeryshire) (LD): As my hon. Friend the Member for Ceredigion (Mark Williams) lists that and other problems, does it strike him that the Government have perhaps not done a regulatory impact assessment? If they have, they certainly have not taken it seriously because there have been problems in markets, such as Welshpool, and pressure has been put on my farmers in Montgomeryshire and elsewhere. The completely unnecessary nature of the process seems to suggest that the costs far outweigh the benefits. Does my hon. Friend think that the Government need to talk about cost and benefit more considerately and that if they did so, they would abandon the scheme?

Mark Williams: They would certainly reach that conclusion if an adequate appraisal had been undertaken. Most hon. Members in this Chamber have certainly reached that conclusion.

I would like to return to the practical difficulties with tagging. Farmers are not just worried about the electronic system itself, but the need for individual tagging. On a small scale that might not be deemed a particular problem, but when we are talking about farmers with flocks of 1,000 sheep or more, it is suddenly a much more difficult task. I am not convinced that that has been fully appreciated by the Commission or, indeed, by the Government.

There are numerous difficulties for hill farmers, and I declare an interest as the secretary of the all-party group on hill farming. I understand that some of those who have trialled the technology have found that when the time has come to bring sheep back down from the highlands to the lowlands, as many as 20 per cent. of the tags have gone missing. Clearly, both the cost—estimated at as much as £1.50 per tag—and the additional labour required to refit the tags will be a further burden that our hard-pressed farmers can ill afford.

In Wales, 80 per cent. of farms are in less favoured areas, which inevitably means that we are more dependent on moving animals from the high to the lowlands. That means we will have to invest more in the technology. I know that the Minister will be unable to comment specifically on Wales—I think it is right that she should not—but I hope she will acknowledge that because of the nature of the agricultural industry of some parts of the UK, those areas will be particularly badly affected by the regulation.

Tim Farron (Westmorland and Lonsdale) (LD) rose—

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Mark Williams: I give way to the chairman of the all-party hill farming group.

Tim Farron: I thank my hon. Friend for giving way. In my area—like in his—the farmers need no lessons in the importance of being secure against the threat of disease. The trauma and tragedy of foot and mouth still hangs very heavy in Cumbria, as it does in other parts of rural and, particularly, upland Britain. He talked about weighing benefits earlier on. Is it not also important that the Government understand the importance of weighing risk? The risk posed by foot and mouth and other diseases to the farming community is huge, and we must be vigilant, but is it not also important that we weigh that against the risk of crippling the sheep industry and putting those people out of business by way of an excessive, costly and, it appears, pointless regulation system?

Mark Williams: I am particularly grateful to my hon. Friend for raising that point; it is the next one in my speech. At this time, farm incomes are falling, so the additional burden is particularly unwelcome. In less favoured areas, incomes for the year ending February 2008 were forecast at £5,900 for sheep and cattle farms, and for non-LFA sheep and cattle farms the figure was £8,700. Bearing in mind that the scheme is expected to cost farmers thousands of pounds—I have seen figures suggesting that 18 per cent. of those amounts would need to be diverted towards compliance with the scheme—it is not difficult to envisage yet more farmers leaving the industry. I hope that even if the Minister cannot promise to lobby for a derogation for the UK from the regulation, she will be able to outline what the Government plan to do to assist farmers to be able to implement the regulation without it costing their livelihoods.

Sheep farmers are struggling to stay in business without these additional concerns. One example raised in the excellent report by the Country Landowners Association and the Scottish Rural Property and Business Association was that of fertiliser. In 2006, that cost £160 a tonne, but is going up to £450 a tonne now. That was contrasted with the average price of fat lambs, which has increased only to £55 from £40. The economics of sheep farming has become more problematic in recent years—indeed, in recent weeks and days. By introducing the regulation, we are reducing our farmers’ competitiveness relative to other nations that do not have that burden, which is a very dangerous route for us to go down with a very vulnerable industry.

Last year, I asked questions about the exact financial cost that farms would face in implementing the regulation. At that time, I was given a figure of about £1,900 for a 1,000-ewe farm and about £1,000 for a 200-ewe farm. Has the Minister reviewed that figure in the intervening time and in the light of intervening experiences?

We should not forget that the debate is not just about farmers. They are my main concern this afternoon, but the issue goes much wider, as the hon. Member for Clwyd, West (Mr. Jones) said. Markets and abattoirs will have to take expensive action to ensure that they comply with the regulation. We are talking about the viability of rural communities as a whole. Abattoirs face an additional cost in the form of the new meat hygiene regulations. I know that that is not a responsibility of the Minister or her Department and that it is outside
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the remit of this debate. However, I will ask what consideration the Government are giving to ensure that regulation as a whole is not designed in such a way that it becomes inevitable that farmers give up their livelihoods and communities lose vital amenities. I have only one abattoir in my constituency, but if it was forced to close as a result of the regulation, that would have all sorts of implications for local sourcing and attempts to reduce food miles, as well as the obvious economic effect on the broader community.

That is the problem. It is a big problem. I hope that in delaying implementation of the regulation until 2010, the Government have at least accepted some of the arguments that I have made. I surmise from the fact that the Government have pursued that course of action that they recognise that there are real problems facing farmers, and I hope that they will continue to make representations on those concerns.

The Minister’s predecessor, Lord Rooker, was quoted as saying after a recent meeting in Limoges to discuss the scheme:

I hope that the new Minister will echo those sentiments when she responds to my speech.

I acknowledge that the concerns raised so far have come largely from the UK and Ireland—particularly vocal has been the National Assembly for Wales—but increasingly it is becoming apparent that some other countries that will come under the regulation are growing anxious about whether that is appropriate. I appreciate that the Minister is new to her job, but I urge her and her officials, if they have not done so to date, to meet the Governments of other European countries that may be coming round to our point of view.

One difficulty that we face on the politics of this is that more member states will not be subject to EID than will. A national flock of 600,000 or more, or 160,000 for goats, is required before a member state becomes subject to the full extent of the regulation, thus 16 member states will not have to introduce EID. That is not to say that they will not be affected by it. I wonder what discussions there have been with member states that will not be required to introduce EID and whether there has been any attempt to persuade them of our concerns.

I have not secured the debate on the basis that farmers are luddites, that they are refusing to change or that they have not expressed concerns about security. I believe that the farming community would be happy, with support, to implement regulations that brought benefits and were cost-effective, but EID is ineffectual and expensive and the burdens that it will place on farmers are extremely onerous. I strongly urge the Minister to do all that she can to fight the corner of our farmers and rural communities as a whole. I hope that she will tell us that she will continue to fight this all the way. There is consensus among hon. Members on both sides of the Chamber who are concerned about the regulation. I hope that at the very least she will work with us to ensure that the extent of the burden is reduced and that we help the farmers in some of our most deprived communities as much as we can.

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Joan Walley (in the Chair): Order. I understand that the Minister is happy to speak at 4.18 pm to allow the hon. Member for Brecon and Radnorshire (Mr. Williams) to enter the debate. I will be watching the clock carefully.

4.16 pm

Mr. Roger Williams (Brecon and Radnorshire) (LD): I thank the Minister for her generosity in allowing me to speak, as I sought a debate on this subject as well.

We welcome the Minister to her post. The Department for Environment, Food and Rural Affairs has done sterling work in securing derogations in the past, and we are here today to encourage the Minister to continue that work on behalf of the sheep industry. I want to impress on her the sheer scale of the issue. There are 33 million adult sheep in the UK and 9 million in Wales. With no derogation or allowances, 20 million new tags every year would have to be fixed to sheep in the UK and 6 million in Wales. That gives some idea of the complexity of the project. The Government know something about how difficult IT schemes are to deliver and the difficulties that one can get into—I need only mention the Rural Payments Agency. I am not sure whether it was on the Minister’s watch that the IT scheme for the health service was introduced.

On this occasion, it will be not a Government project, but an industry project. DEFRA has already said that it will not implement a central database. DEFRA has called for cost sharing in animal health and disease programmes, but actually the cost is just being dumped on the industry; it is not sharing in any way. It would be in DEFRA’s interest to ensure that the industry does not have to bear that extreme cost. I call on the Minister to reflect the views of the industry most vigorously in Brussels, with the support of colleagues from Wales, Scotland and Northern Ireland, and rule out compulsory EID and, indeed, individual farm records for sheep.

4.18 pm

The Minister of State, Department for Environment, Food and Rural Affairs (Jane Kennedy): It is a pleasure to serve under your chairmanship, Ms Walley.

After I had spent a year as Financial Secretary to the Treasury, it was obviously deemed that the financial markets needed a rest from my exertions, and I am delighted to be here in my new role, with such a diverse brief. I am very pleased to be learning today about the difficulties that sheep farmers face. I congratulate the hon. Member for Ceredigion (Mark Williams) on securing the debate and giving me the opportunity to examine the issue early on in my tenure as Minister responsible for farming and the environment.

Let me share with hon. Members the words of my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs in a discussion at Chatham house last week. He said:

I hope that it will give those who are, quite properly, defending the interests of sheep farmers some comfort to know that we share many of their concerns, although we believe that there are benefits from the system. I give credit to my predecessor, Lord Rooker, and to my
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ministerial colleagues in the House of Commons who responded to such debates and who have been working very hard to defend and protect the interests of sheep farmers, with particular reference to the directive that we are discussing today.

In 2007, the sheep industry was worth £628 million overall. However, the events of recent years have shown that the sheep industry is vulnerable to the incursion and spread of disease. The outbreak of foot and mouth across much of the country in 2001 had a major impact on the industry—and on the taxpayer. The cost of the epidemic was in the order of £6 billion, and it was estimated to have reduced the United Kingdom’s gross domestic product by about 0.2 per cent. One of the difficulties that we faced in trying to control the disease was knowing where potentially infected sheep had been moved from, and to where. As with other species, disease control in sheep is not something to be taken lightly.

The rest of Europe saw the problems that we faced in 2001 and, like us, started to develop their own systems. Different solutions emerged in various European countries. The UK has the largest sheep population in the European Union. We have traditionally used a stratified production system. Hon. Members will know more about it than I do, so I shall not dwell on the detail, but under that system the sheep are born on the hills and then moved to lowland pastures. The more sheep we have, the more often they are moved. Even those sheep destined to be slaughtered before they are 12 months old are moved from farm to farm at least once. Not only do we have the largest sheep flock in Europe, but each sheep tends to be moved more often.

Lembit Öpik: Is the Minister is aware that there are 500,000 sheep in my constituency? The loss of 20 per cent. of tags means that about 100,000 tags a year will be lost in my constituency. Aside from the pollution that it will cause on the hillsides, surely she agrees that unscrupulous farmers, none of whom live in Montgomeryshire, could use the claim of a lost tag to subvert the system, making it pointless for those who might chance the system and making it inconvenient and expensive for those who are law-abiding?

Jane Kennedy: What the hon. Gentleman says must be true. We have to implement the directive, as not to implement it would put at risk the payments upon which sheep farmers depend. We have to go forward, and I shall tell the House of some of the steps that we are taking.

Following the 2001 foot and mouth outbreak, we and Ireland concluded that although we did not need to give each sheep an individual identity, it was essential to know when and where batches of sheep were being moved. We set up a system, and put in place identification arrangements for batches of sheep, and a central database was developed to record how many sheep had moved from A to B and on which date. Hon. Members know better than I that it was known as batch recording.

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