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Family Farms

8.38 p.m.

Lord Beaumont of Whitley rose to ask Her Majesty's Government what measures they intend to take to alleviate the economic hardships, both present and forecast, of those involved in family farms.

The noble Lord said: My Lords, in asking Her Majesty's Government what measures they intend to take to alleviate the economic hardships, both present and forecast, of those involved in family farms, I should like to thank all those noble Lords who have indicated, by putting their names down to speak, that they are equally concerned by this question. I thank also those Peers who are not able to attend but who have written to me on the subject, such as the noble Earl, Lord Lytton. I take this opportunity to welcome my noble friend Lady Miller of Chilthorne Domer to her new position, responding for the first time from our Front Bench.

I am the secretary of the All-Party Family Farms Group. I also serve on the executive of the Family Farmers Association. For the purposes of this debate, we are talking about farms of less than 125 acres which make up no less than 66 per cent. of all agricultural holdings in the United Kingdom. It goes without saying that a serious reduction in their number would make an enormous difference to the look and character of the British countryside and to the number of people living there.

These farms and those who work on them are under immediate and drastic threat. All farmers are doing badly and are likely to do worse. Family farms are doing worst of all. When one says "doing badly" it does not sound very terrible. However, we are talking of large numbers of people leaving the land; of mass bankruptcies; and of a rate of suicide well above the national average. I do not wish to become too emotive, although I certainly feel it, but we are talking about the destruction of the "Yeomen of England", a politically incorrect expression which I take these days to include yeowomen and Scotland and Wales.

Such a plight for any industry would demand action by government. The destruction of heavy industry, whether shipbuilding, steelworks or mining, has demanded action, if only of an ambulance nature. But what we are asking for is not ambulance but preventive action. Mr. Oliver Walston, whose father many noble Lords remember as a speaker on agriculture in your Lordships' House, has been asking on television for the past few weeks what it is that makes farming a special case that we should interfere to stop the inexorable laws of classical economics from working. I do not agree with a number of his conclusions or his premises, but they were good programmes. Time after time he met the

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answer from the people he interviewed that at stake was the whole existence of the countryside as a living, breathing, populated entity.

So my Question, as framed, includes an associated one. What are the Government going to do to save the rural countryside? It may be too late. If the Government act as quickly as possible, they may stem disaster. But they are unlikely to find another generation to take the place of this one without really drastic action. The chronicler par excellence of the small farm between the wars was Adrian Bell whose trilogy, Corduroy, The Cherry Tree and Silver Ley is shortly to be serialised on BBC television. His son, Mr. Martin Bell, did not follow in his footsteps but became a journalist and an MP and is a member of our all-party group. The children of family farms are voting with their feet. If the Government cannot save the countryside perhaps they can at least put together a parachute for retiring farmers. I am reminded of the RSM's despairing shout as the officer cadet marches his troops over the cliff. He said, "Say something, sir, if it is only goodbye".

What has caused this disaster in which we find ourselves? The underlying reasons are low world prices coupled with a world economic system which means that the hungry have not got the money with which to buy food. With most commodities we are inclined to shrug our shoulders and let the iron laws have their way. Even with the misery which it will entail, a government which has very few roots in the countryside might well do the same with agriculture and until very recently that appeared to be what was happening. But with a new Minister of Agriculture there appears to be the dawn of hope.

Addressing the Oxford Farming Conference Mr. Nick Brown said:

    "A more competitive industry does not and should not mean ever-larger and more specialised farms. Although the long-term trend towards larger farm size will continue, there should remain a place for the whole range of farm structures and farm business organisations".

That may seem a small candle to light, but, believe me, it is a beacon compared with the black future family farms have been facing. I look forward tonight to some answers as to how it is to be achieved because, on the face of it, it looks impossible. But government must achieve it, not least because the problems for them of neglect of the problem will be horrific. The already high suicide rate will go up; and the countryside will suffer from depopulation, which will increase the problems of rural poverty, rural transport and rural shops apart from the cost of supporting families on social security.

Why are the small farmers the worst hit? It is not because they are inefficient. It is true that by the classical measurements of efficiency per pound invested they are not very efficient. But in terms of efficiency per unit of labour, food produced per acre, the preservation of biodiversity and the welfare of animals, which comes from knowing them all by name, they are immensely efficient.

The fact is that they are the worst hit because the immense cornucopia which comes from the common agricultural policy flows, as we heard on Mr. Walston's programmes, to the big farmers who are often not so much

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farmers as insurance companies. The belief held by the NFU, and until recently by the British Government, that the future of agriculture is agribusiness, has led to the encouragement of bigger and bigger farms and more and more rural depopulation. That is the way of the future, they say; that is the way of the great food producers such as the US. But it is not. The United States pays lip service to free trade and to the World Trade Organisation, but its behaviour is otherwise. An article in the Farmers Weekly of 9th October revealed that Congress is pumping 9 billion dollars into its farming sector this winter. Why? It is because the US Department of Agriculture has published a report of its National Commission on Small Farms entitled A Time to Act which says that it must. I imagine that MAFF has studied that report in depth. I certainly hope so.

There is not the same electoral power in this country for family farms nor quite the mythical--and by "mythical" I do not mean false--American sentiment stemming from,

    "The bridge where once the embattled farmers stood and fired the shot heard round the world"

or the log cabin in which Abraham Lincoln was reared. But there is here wide public sentiment and sympathy towards the countryside as bodies like the CPRE and RSPB testify. A British or Royal Commission on small farms might well come to conclusions similar to those of its American colleagues. And we would not necessarily find our European colleagues unsympathetic. France has recently been moving to rescue what remains of its peasant sector. Can noble Lords imagine the problems of enlargement if we are going to insist on driving people off the land?

There is plenty the Government can do. Stop opposing "modulation" for a start. Insist on food security to go on with, and a country's right to ensure its own safety by growing its own food, if necessary, with a subsidy. There was a time, as many Members of your Lordships' House will recall, when that was important here. We should eliminate or at least limit the buying and selling of quotas. Other steps will be found in that admirable document of the Family Farmers Association, A Contract Proposed. Alternatively, I could commend the Liberal Democrats' policy of individual contracts between government and farmers. But what is needed most of all is a change of heart and mind across government, particularly in MAFF. The root of the problem is that the Government are indissolubly wedded to two incompatible beliefs. The first is that they would like--I put it no higher--to preserve the British countryside and to persuade people to go on living there. The second is that they feel that they must not interfere in any respect with the principles of free trade. They cannot continue to hold both these beliefs. There is no doubt which they must choose. Free trade is a political construct. The British countryside is our most precious heritage and family farms are at the heart of it.

This is not a chauvinist demand. I was a member of the British delegation to the International Parliamentary Union Food and Agriculture Organisation conference on How to Feed the World held in Rome recently. It was

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tremendously well attended by all except the very rich countries. There were only two representatives of the United States present. One was a delegate who came for less than an hour--the time it took him to deliver his speech. The second was a keynote speaker, an economist, who told us that there were no problems and that if there were, big business, science and conventional economics would solve them all. The overwhelming majority of the delegates disagreed.

I made much the same speech as I am making tonight, and I received enormous support in the room and all over the world. There is not a country in the world which does not know the importance of family farms. I ask our Government to make sure that we are not moving suicidally away from that belief and to outline just what they propose to do about it.

8.48 p.m.

Lord Hardy of Wath: My Lords, perhaps I may first commend the noble Lord, Lord Beaumont, for his initiative on securing this debate. I do so partly because I strongly support the Family Farmers Association in which he served, as I did for a very long time the Small Farmers Association. The matters raised by the noble Lord are both serious and timely. That they are serious is beyond all doubt: that they have been serious for quite some time is also certain. I recall in the last parliament being deeply concerned about farmers and particularly small farmers in my constituency. I made a number of speeches about that to very little effect. I still live within my former constituency and I still know the same farmers. I am aware of the deep anxiety which they feel. For many years politicians across the spectrum were quite happy to encourage people to enter farming. Unless they were among the financially fortunate few, they became small farmers and necessarily they then became livestock producers; and in order to remain livestock producers they had to be very caring of their stock, as the noble Lord, Lord Beaumont, has told us earlier. They had to practise careful husbandry. I know many of them who had to devote enormous labour and dedication and toil to keep their heads above water. Many of them now face a desperate situation and they wonder if they can survive.

As I said, some of the farmers that I know are superb stockmen. For example, there is one friend whom I know very well indeed and if my wife or I go to his farm we know the names of some of his cows. We also know that we would need to have a pocketful of nuts to feed them, because they would come up to be rewarded for the recognition. That man does not know whether he can survive. People like that are desperately needed if the fabric of the British countryside is to be safeguarded.

There is another penalty on size, which I hope the Government will look on with some compassion. That is, that if there is a pursuit of de-intensification then it is possible that many small farmers could be kicked beyond the levels of survivability. But they have to survive. The countryside has to be cared for. It has to be managed. Rural areas have to be serviced; they cannot be left simply as a featureless prairie or for the benefit of weekend residents. There has to be a viable population there.

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Of course the continuing agricultural evolution means that we have the capacity to produce more and more food, but we can only do so if we continue to damage the environment and the ecological wealth that is still important in Britain but which has been far too badly damaged in recent years. However, if we are to allow the production of food to continue in ever-increasing--perhaps unnecessary--levels, then we do have to consider whether it is economically sane.

Is it economically sane for four-fifths of the money spent on agricultural subsidy and support to be paid to 20 per cent. of the farmers? That is a very important factor which has to be considered. Is it sane to see the rural areas depopulated and to look at all the damage that has been perpetrated in order to enable a large number of farmers to face ruin, while the very fortunate minority may survive? It is a factor which I hope the Government will take seriously into account.

I would suggest that if we are to see the new responsibility for green issues which the present Government have proclaimed we will have to look at the whole approach to agriculture with very real care. May I illustrate my view in one other way? I have for many years sought to serve the cause of conservation. Seventeen years ago I presented a Bill to Parliament to protect hedgerows. The then government blocked it because, they said, the destruction of hedgerows had virtually come to an end. They maintained that block year after year after year, while thousands of miles of hedgerows were destroyed. They maintained the block and they disregarded the facts which emerged that thousands of miles of hedgerows had been destroyed even though they were legally protected under the Enclosure Acts of pre-1840.

However, they brought in grants to plant new hedgerows; and that was welcome. Nevertheless older hedgerows of ecological importance continued to be destroyed, and then in 1992 they promised to protect hedgerows and in 1993, 1994, 1995 and 1996 they maintained the block on efforts to secure the protection that had been promised. Finally in 1996 we had the hedgerow regulations. I will not labour the point because I hope to introduce a debate into your Lordships' House at some future time when I can talk about some of the absurdities which those regulations contained.

If we are to care for rural Britain, then the small farmer is really at the very frontiers of sanity--and not merely the small farmer in the truly rural areas but those within and upon the fringes of the conurbations. They face enormous challenges and, in particular, they face squalid dumping, nuisance and crime. Their lot is sometimes a desperate one.

I live in Wath-upon-Dearne, which is my birthplace, and a man called Tom Williams lived there for a while before he became a Member of Parliament in 1922. He gave me a lot of good advice when I was a very young man, which was based on the fact that as Minister of Agriculture in the 1945-50 government the enormous challenges which that administration faced did not lead that government to neglect agriculture. It was historic and had historically consequential importance. I accept

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that the challenges faced by this Government are very considerable, although no more considerable than those which faced the government in 1945. I hope that in the next year or two we shall see the wisdom and the sensitivity which was applied then. The present plight certainly demands it.

8.55 p.m.

Lord Inglewood: My Lords, I shall begin my remarks this evening by thanking the noble Lord, Lord Beaumont, for asking this Question. I must declare an interest, for I am a farmer and a landowner--not, it is true, a small farmer by any definition that can reasonably be used in this context, although in the current economic climate I sometimes wish I was a small farmer because it would mean I would lose money less quickly.

The remarks of the noble Lord, Lord Hardy, made it quite clear that the figures which are available show without any argument the current economic plight of the family farm. I should like to take slight issue with the noble Lord, Lord Beaumont, in his definition because, particularly in upland areas, a farm of, say, 120 to 150 acres on bad land can be as impoverished as any small smallholding on lower ground. It is probably true that in thinking about this issue there are in fact other sectors of the economy which might be comparable. I think, for example, of the corner shop, which faces very similar difficulties in the current world. However, it is particularly important to focus on the family farm because, as has already been said, for many years it has been the central building-block of British agriculture. Small farms matter. After all, they have been the core of rural employment. They have been major contributors to domestic food production, and even in the kind of trading and inter-dependent world in which we now live, that matters a lot to our economy. They have been responsible for the use and management of a very great deal of the surface of our country.

It seems clear that if one looks carefully at agrarian history in England--I would not wish to speak for Scotland, although I am sure the same principles apply there--over the years there has been pressure upon the smaller farming units in the countryside. One has only to go back and look at the history of the enclosure awards to see how the changes affected by that legislation led to the leaving of the land by the smallest proprietors. Throughout the last 200 or 300 years of British history, the family farm has been under pressure, with all the social and other consequences which flow from it. One has only to look at John Clare's eulogy on the Northamptonshire countryside to see how those changes were perceived all those years ago.

It always seems to me a slight paradox that, while farmers pride themselves on being independent, they are in fact part of an industry that may perhaps be more regulated by government than almost any other. If we look at the framework of British agriculture since the war we see quite clearly that this is so. Domestically in the post-war settlement alluded to by the noble Lord, Lord Hardy, in his references to Tom Williams, a strong defined framework by government was put in place, which was superseded by, though in many ways it was

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essentially similar to, the kind of regime that followed it when we joined the European Community and accepted the provisions of the common agricultural policy under the Treaty of Rome.

What we have heard tonight, and no doubt what we shall hear later this evening, makes it quite clear that it is not working. Many small farmers are working for an amount well below the minimum wage and also no doubt working outside the terms of the working time directive. That cannot be right. We are also seeing a change in the capital structure of farming where, increasingly, outside money is coming in and the traditional family business is being transmuted into something much more akin to traditional capitalism. Against this background, if the family farm is to continue and provide a basis for family businesses in rural Britain--in a Britain where the very nature of the rural economy is changing and will continue to change--we shall have to address this problem most carefully. If we do not do so, it will simply go away because the family farm will have ceased to exist.

There are those who say that diversification provides the answer, but that requires extra capital and, in an era of financial stringency, that is most difficult to achieve. Equally, going back to the 1947 Act, the planning system is based on a policy where the countryside was essentially a single land use area; namely, farming. There are still problems in the way of diversifying farms into other rural businesses. Quite rightly, where diversification is an option, planning authorities insist on expensive materials and their use for obvious environmental reasons, but that simply puts up the cost of diversification. Part-time family farming is sometimes said to be the answer and it can be in many circumstances. However, I am not sure that many traditional farmers are ideally suited to, shall I say, tele-working. Finally, there is the need for training and, if one looks at the colleges around the country, it is encouraging to see an increasing range and availability of appropriate training programmes.

However, perhaps most important of all, agriculture in this country and in the rest of the Community--and, for that matter, across the entire globe--faces serious change as a result of World Trade Organisation talks and, within Europe, the proposed enlargement to the east, together with Agenda 2000. This, understandably, is often seen as a threat but it could be a wonderful opportunity for, as we all know, the CAP is inherently economically inefficient.

I remember my noble friend Lord Plumb saying in the European Parliament that the key to understanding farming policy is to focus on profits not prices. That should be the theme which runs through our negotiators' considerations in these important talks. I hope that the Government will be able to assure us that, in the latter, there will be no tolerance of discrimination against this country which may possibly arise because we are not inside economic and monetary union. It must not be allowed to be a reason why we should be discriminated against in Britain. Equally, modulation will hit even the smallest farms in this country. That is also something that we must not allow. If we look to the future, I

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believe that farmers and small farmers have an increasingly important multi-functional role in the rural economy. But they cannot play that part if they go bust.

9.2 p.m.

The Lord Bishop of Hereford: My Lords, I should also like to thank the noble Lord, Lord Beaumont of Whitley, for initiating this short but very important debate. Anyone with a salary or a stipend, or even anyone on the dole, can hardly imagine the extreme insecurity of many small farmers today. There is no certainty of income at all for those who are not in dairy farming; and, for them, it is but a small income. Their livestock may be unsaleable, except at derisory prices which simply add to the burden of debt and to the overdraft.

The family farmer who has invested a lifetime of skill and very hard work sees his livelihood melting away and his standard of living and that of his family falling well below the poverty level, let alone the dignity level. It is a truly desperate plight for many small farmers in many parts of Britain. Prices are too low, demand is unpredictable, the supermarkets are powerful and sometimes ruthless, and the public, by and large, indifferent.

Within farming families there are often bitter tensions--the older generation hoping that the farm can continue, the younger generation seeing how bleak the prospects are. In Oxfordshire half of the farmers will be retiring within 10 years. More than half of them see no way in which the farm can be taken on. Farmers who plan to retire cannot afford to do so. They, and sometimes their widows, struggle on, unable to cope properly, especially with the handling of large animals which leads to real problems with animal welfare on top of the social isolation and the deep unhappiness of the farmer or his widow. The debts rise remorselessly. Total income from farming has fallen by 64 per cent. over the past two years. But the burden of bureaucracy and red tape increases, often for good reasons, to levels which small farmers find quite intolerable.

This is not an industry which can be allowed to go to the wall; it is different, as the noble Lord, Lord Beaumont pointed out. It is our primary industry and that on which all life in fact depends. It is not the case that ever-larger holdings are the answer. That is certainly not so if we take seriously the social and environmental characteristics which make the survival of the family farm so important in many parts of Britain.

This problem has been described many times in your Lordships' House and debated on a number of occasions. I believe we all recognise that there are no simple answers. However, I want to suggest that action on three fronts could make a real difference--that is, action by government, by the public and by the farming community itself. First, government must be fully committed to CAP reform which redirects available European money from farmers who do not need it to those whose very survival can be assured only if there is carefully targeted support. We do not want to subsidise more production, nor pay headage payments for livestock, which leads to serious over-stocking and

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environmental degradation. As one local farmer put it to me, we need headage payments for people; that is to say, people who will manage the land wisely and in the interests of bio-diversity and make that vital contribution to the survival of small rural communities and their fragile infrastructure of schools, shops and small businesses, all of whose livelihoods are closely linked to the fortunes of the farmers.

Restructuring and diversification are happening. Value is being added by enterprising farmers to their primary products. Farmers' incomes are being supplemented by spouses and family members' earnings outside the industry. I believe that 60 per cent. of farmers now depend upon money coming in from outside sources as well as from the direct income of the farm. However, more government help is vital. What has already been given this year is much appreciated, but it is too little to make much difference and not sufficiently targeted towards our smaller family farms.

I should like to renew the plea that I made when I spoke about this topic in the debate on the gracious Speech in your Lordships' House two months ago. I ask for a policy of national modulation within an envelope of money which we and the Government can use to help our own farmers on the scale which is appropriate in this country. Modulation cannot work across the European Union on one basis because farms are so different in different countries. If we are allowed to practise our own form of modulation, I believe that it can really work. That is a matter for government.

Secondly, the public could do much more by learning and caring about our farming community and understanding the crisis which confronts it, by developing an informed taste for local produce, by shopping at local butchers and greengrocers, at pannier markets and farm outlets rather than at supermarkets. A real growth in demand for organic produce would encourage our United Kingdom farmers to expand our present small scale production and eliminate the need to import the 70 per cent. of organic food which at present comes from overseas.

Thirdly, I believe the farming community could take some important steps to develop a more co-operative culture with the kind of machinery rings and retail co-operatives that work well and make good sense in other European countries. We need to see a more generous attitude on the part of the larger farmers and a readiness to accept reductions in their own subventions in order to divert resources to the small family farms. As small farms struggle with complex form-filling and with intractable difficulties of gaining access to social security benefits, such is the unpredictability of farm accounts from year to year that there must be more scope within the farming community for mutual help with these bureaucratic burdens.

Finally, I wish to share briefly with noble Lords the experience of one Herefordshire family farm. The farmer and his wife are immensely hard working, cheerful, skilful and efficient. They have slowly built up their tenanted farm over many years. Not long ago they bought in 12 week-old pigs at £34 each. Suddenly the market crashed and 12 weeks later the fattened pigs

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were offered at market. The price was £9 each. Fortunately, thanks to the existence of a local abattoir and a friendly butcher, those pigs could be slaughtered and butchered locally, and the pork joints and the sausages sold in the small farm shop. The total return with value added in that way was about £100 per pig, which represented a small profit after rearing and butchering instead of a massive loss.

But not all small farmers live near an abattoir or a friendly butcher, or have their own outlet. We should spare a thought for pig breeders unable to dispose of the litters produced by their 50 or 60 sows and who have to destroy at birth 500 piglets instead of seeing them sold, reared and consumed in preference to imported pork.

The changes of the past two years have been bewildering in their intensity and devastating in their effect. But I believe that wise and concerted action by government, by the public and by farmers themselves can make a difference and change the prospects for family farms for the better. That change is urgently to be desired.

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