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Baroness Amos: My Lords, I interrupt the debate for one moment to remind noble Lords that their allocation is six minutes and if they speak for longer they take time away from other noble Lords.

9.10 p.m.

The Earl of Clanwilliam: My Lords, I must immediately thank the right reverend Prelate the Bishop of Herefordshire for his wonderful speech, and especially for his references to organic farming, which may reduce the length of my speech as I intended to speak on that subject. I am indebted to the noble Lord, Lord Beaumont of Whitley, for this interesting debate and particularly to the Family Farmers' Association which produced the document, A Contract Proposed. I ask the Minister to take immediate account of that document as it is relevant to our discussion today.

Family farmers are the core of the farming community. As the noble Lord, Lord Beaumont, said, they are the yeomen of England. Some two-thirds of the 240,000 agricultural holdings comprise fewer than 125 acres and they employ proportionally more farm workers than the so-called prairie farmers. The effect of the CAP has been intensification; that is, less labour and more chemicals. For instance, the number of full-time males employed has halved since 1979-81. While regular part-time employment has remained steady, overall, 90,000 farm workers have lost their jobs since 1979-81.

There is a vital need to bring more people back on the land, to regenerate village life and to provide more care of the land and the environment. Modern methods developed since the war have made intensification the order of the day. The development of the agri-chemical business has combined with support prices and the development of ever larger machinery to create a culture of large scale production with ever greater yields, ever larger herds, battery chickens in their tens of thousands to a shed, and pigs and calves in pens. Much of the latter

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practice has been outlawed recently. However, this has created problems for farmers who have to compete against the odds of imported competition.

Meanwhile the market in the UK has itself undergone a radical change. The advent of the supermarket has destroyed the age old market system through which the small and family farmer sold his livestock, not to mention the European Commission which has made regulations that have eliminated many abattoirs upon which the markets depended for survival. That has in turn eliminated the farmers' local market. The right reverend Prelate referred to that. The supermarkets in their need for consistency of supply have contracted the large farmers and overseas producers to supply their needs, leaving the small farmer with nothing but an over supplied local market to service at rock bottom prices. As a consequence, the small farmer has been deprived not only of his market-place but also of a place in the queue to supply the supermarket. That is a double whammy if ever there was one. We can see the consequences. Small farmers are going broke and are unable to meet present or future commitments. The noble Lord, Lord Hardy of Wath, referred to the viable population that is needed in the world of small farmers. That viable population is rapidly disappearing.

There are two major problems with the hill farmer. One is that he cannot afford to retire and the other is that he cannot afford to sell his stock. There is a solution that has been suggested to me to propose for discussion which has, incidentally, already been proposed and discussed in your Lordship's Sub-Committee D. It is that the ministry should buy out the hill farmer's headage payments in advance for five or six years future payments in return for selling his stock and leaving his land fallow. Perhaps he would get four out of five or five out of six. That would provide the farmer with a sum upon which he could retire or start up a business and provide the ministry not only with a breather in the production of unwanted beef or sheep but also with a profit of one year's headage payment as well. It would be particularly useful as a source of providing a new young farmer with the means of a clear start in the future. In particular, there would be an environmental benefit of land being given a breather and prepared, as noble Lords will no doubt expect me to say, for organic production, which I would particularly favour. The sums are variable, but let us assume a farmer with 100 cows and a headage payment of £150 a cow, four years in advance. That would give him £60,000, which I suggest is a considerable inducement that even the Treasury might look upon kindly. I ask the Minister to reconsider this proposal and promote it.

Agenda 2000 needs to address these points--at least our interpretation of it does. We need more extensive farming, particularly an interest in the organic area with increased subventions to encourage and increase some tenfold the organic area under cultivation. Such increased subsidy can come from the reduction in CAP subsidies.

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Finally, I wish to quote from my excellent brief:

    "Small and medium sized farms may not be the most cost effective way to produce food, but they are the most cost effective way to run Society".

9.16 p.m.

The Earl of Carlisle: My Lords, it is a pleasure to follow the noble Earl, Lord Clanwilliam. He raised many of the points I had intended to make. I thank my noble friend and kinsman Lord Beaumont of Whitley for introducing this timely and important debate.

I declare a financial interest. I am enormously reluctant to speak in any debate where I have to declare a financial interest lest it be perceived that I am trying to make a personal gain. I am not. I own a hill farm of 420 acres called Triermain near Gilsland in Cumbria. Noble Lords who know their Walter Scott will be aware of the ballad of Triermain. The farm has been worked for the past 50 years by one man, who took over from his father, and his sons. The farm consists of 420 acres with 100 acres of fell. So in acreage it falls into the category of larger family farm mentioned by the noble Lord, Lord Inglewood. It is less favoured land, much of it being marginal.

The farm has been consistently improved. In the past 20 year about £200,000 has been put into it from my earned income, from the rent of the farm, from tenant profits, when there were profits, from government grants, and through loans from the bank. The farmers, the Armstrong family, have obeyed all the regulations and have farmed in line with the policies of successive governments. I mentioned the three generations who have worked the farm. I was there last weekend. I told the family that I hoped that long after I had gone there would be a fourth, fifth and sixth generation. They said that that was unlikely if the situation did not improve.

The Government Chief Whip, the noble Lord, Lord Carter, replying to a debate on agriculture on 9th December 1998, quoted A.G. Street who once observed that for farmers everywhere the most important and urgent question every day was not what the politicians would or would not do for them, but whether it would rain tomorrow. As the noble Lord, Lord Inglewood, who also lives in Cumbria, will know, it has been raining there since September. On top of the BSE problems, which have been compounded by the beef on the bone regulations--my farmers have never had any problems over the years with BSE--and assisted by a very poor harvest, the farmers have had to keep their cattle inside since September. As a result they have had to buy over £5,000 worth of bagged silage. The not over-generous compensation payments per head of cattle--140 calves per year are bred on the farm and 600 sheep--produced a mere £4,000. That highly successful farm could shortly go bankrupt, and it will be on my hands.

What suggestions can I make to improve the situation? First, pray, remove the beef on the bone ban immediately. Secondly, mount a second rescue package, based, as the right reverend Prelate and the noble Earl suggested, on a headage payment. Thirdly, introduce a scheme to give a cash payment to older farmers who retire based on a retirement grant for every year that

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they have served on the farm. When Her Majesty's forces were cut by a third, officers, NCOs and soldiers were given, as it were, a retirement payment to start afresh elsewhere.

Fourthly, I hope that we shall join the European currency. That will lead to a reduction in the pound. I agree with the right reverend Prelate that livestock farmers should be closing ranks and selling their livestock through the livestock auctions system so that they receive a realistic price for the product.

Of course farmers must diversify. How can that be done? I have five ancient monuments on my hill farm of such rarity that I have to be extremely careful not to damage them in the farming process.

Then there is red tape. I visited some farmers near Allendale called the Gibsons. I asked them, if I were the noble Lord, Lord Hoyle, who is to reply to the debate, what they would expect from me. They told me that they are inundated with forms to fill in. They are often visited at most inconvenient times by over-worked civil servants who are occasionally impatient with them. I ask the various ministries dealing with hill farmers in less favoured areas to be more sensitive and patient with them.

Finally, what can I do? I have refused to reduce the rent as yet--it is a low rent--because I have to maintain and repair the buildings and fencing, and that is expensive. What I have done for my hill farmers is allow them to sign a post-dated cheque. There is an old saying that farmers drink to a bad harvest and a bloody war. At present it is impossible even for them even to do that, because the cup is empty.

9.23 p.m.

Lord Wise: My Lords, I thank the noble Lord, Lord Beaumont of Whitley, for raising this important issue. While allying myself with all the concerns raised by other noble Lords, I wish to take this opportunity to voice some of the concerns that I have regarding the horticultural sector.

Many of these enterprises are family based or led, sometimes specialising in niche crops with a high capital base and risk. Their commitment is equal to that of the more obvious family farm. Let us also bring to mind the social infrastructural benefits that these enterprises bring to local employment. They are generically relatively labour-intensive, often employing many part-time staff working flexible and sometimes anti-social hours, as the demands of multiple retailers for seven-day supplies of fresh produce have removed the traditional Saturday time off. The sector also provides high levels of seasonal employment on a localised scale--for example, hop, top and soft fruit picking.

Let us also remember that horticulture is an unsupported sector in aid terms. Many would argue that should be remedied in the CAP reform measures under consideration, but today's debate is on what government support can be given to the smaller units to maintain their ability to remain competitive against imports from outside and within the European Union. I accept that in certain areas the Government's hands are arguably

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somewhat tied, but there are examples of where they can act by relieving bureaucratic burdens or not imposing regulatory measures unilaterally.

In a debate last year, initiated by my noble friend Lord Rotherwick, I spoke of the downstream and direct consequences that possible "green taxes" in the shape of a pesticide tax would have on horticultural businesses. Again, I draw the Government's attention to the fact that they will be prejudicing the commercial viability of many horticultural units if they elect to introduce such measures unilaterally. The margins are so thin that this would be the proverbial last straw, so why consider it? The potential job losses in the field and packhouse industries would soon outweigh any exchequer gains.

On a related pesticide issue, I also urge government to consider carefully the results of their regulatory actions. Last summer, they announced a review of all acetylcholine esterase inhibitor pesticides, which tend to be the older insecticides in the OP class. I have no problem in appreciating their thinking behind this initiative--only the timing. The likely end result of this review will be the revocation of approval for use of certain products later this spring. The invidious element for growers is that this will not apply to their overseas and continental competitors.

Regrettably, the horticultural sector is quite dependent on these older products for a variety of technical and commercial reasons. If they are to be removed from the armoury of products available to growers, then surely this must be pan-European at the very least. Why should the beleaguered British grower lead with his chin yet again?

Many of these products are technical linchpins or backstops to certain crops--for example, the loss of malathion would leave the watercress industry with no insecticide measure available--and surely insect-damaged product is just not acceptable to the consumer. This industry could quite easily be lost to overseas--and so wider goes the "food gap" and wider still the balance of payments.

These pesticides are due for EU review, but this process is, I fear, progressing at a lamentable rate, probably due to lack of funding for the programme. Surely the Government would be better placed to be forcing the issue in Brussels rather than embarking on a review programme of their own. I quite agree that these pesticides should be reviewed according to modern day safety criteria, but not at the expense of United Kingdom horticulture.

There is precedent to support my argument. About two years ago the international agrochemical company Bayer withdrew an insecticide called Folimat from the United Kingdom market in a commercial response to a requirement from the United Kingdom review. This requirement will need to be fulfilled when Folimat comes up for EU review. Bayer has stated it will not be supporting the pesticide and will withdraw it from the full EU market at that time, but until then it will continue to market it. Folimat was the sole efficacious product approved for narcissus fly. Now bulb growers in the fens and the south-west have to watch their Dutch

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competitors enjoy a production advantage not open to them. They are investigating alternatives, but all research costs money, which the industry does not have.

I urge the Government to consider the indirect consequences of their actions more closely and, wherever appropriate, consult bodies like the National Farmers Union on such steps before they act. By so doing they will be less likely to shoot their own industry in the back, especially the smaller enterprises upon which this debate has centred.

9.30 p.m.

The Earl of Shrewsbury: My Lords, the noble Lord, Lord Beaumont of Whitley, deserves both our praise and gratitude for bringing to the notice of the Government the economic hardships faced by traditional farming families in these desperate times for the whole farming community. I must declare an interest as a small farmer who breeds excellent pedigree sheep near the Peak District National Park. I shall be very brief.

It is well known that the farming industry in the United Kingdom is suffering its most difficult times since the depression of the 1930s. Some industry pundits believe the present circumstances to be far worse than that. In the main it is the livestock farmer who has seen the end price of his stock plummet, be that stock for the store market or the butcher. In a nutshell, when I farmed in Shropshire 15 years ago my finished beef cattle regularly made more than they do today, without allowing for inflation. Feed barley off the field was £100 per tonne 15 years ago; today the figure is about £80, without taking inflation into account. In my part of the Peak District, which is a major sheep-producing area, store lambs last autumn made £20 each. Eighteen months ago they fetched over £35 apiece. The market value of my ram lambs has fallen by over £100 per animal on average in the past 15 months, and there is little, if any, sign of improvement.

Meanwhile, costs increase and the consumer wants ever-better products and has higher health requirements and standards. I have no problem with the latter. My sheep are monitored from almost a cough or sneeze to an ingrown toenail because I firmly believe that quality pays in the long run and I intend to strive to be the best. Last week's front page in the Farmers Guardian suggested that farm incomes had fallen by over 48 per cent. in the previous 12 months alone. I believe that the figure is considerably larger. In my part of the Midlands the average farm is about 150 acres and very much family farmed, as it has been for generations. The majority of these farms are livestock-based with both husband and wife, and probably one offspring, working on the unit. Very long hours and low incomes are the order of the day--circumstances that would make the average working man or woman in this country very cheesed off with life, and pretty rapidly. However, there is no cause for complaint. People do not go into the farming industry to make vast piles of money or for an easy life. They do it because it is their way of life and a job at which they are expert. Families have been doing it expertly for generations. They are the best and most efficient farmers in Europe. That is a fact of which we

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should be very proud. But in very many cases the family business provides an income that is well below the average wage of a farm worker, who does not himself make a fortune.

Today it is a tragedy of vast proportions that the rug has been pulled from under the feet of these farming families through a complex and wide variety of causes. The present situation in agriculture drives many farmers to despair and, in increasing numbers, suicide. I believe that last year in Shropshire alone 12 farmers--perhaps the figure is even higher today--took their own lives. Real biting poverty becomes more and more prevalent. Farming charities are inundated with requests for help from farmers and their families. These people are extremely proud and do not ask for help lightly.

Unless more is done to arrest the situation--it is now a matter of great urgency--in only 10 years from now the country will reap the results and the consumer and the Exchequer will pay dearly. This is not a threat but a promise based on fact. If the current tragedy continues young people will not go into the farming industry. That is happening already. The whole fabric of the countryside community will be damaged irreparably.

I and many in the farming community applaud the Government on the recent announcement of a £120 million package for farmers, and in particular hill farmers, who are very deserving of it. It is just what is needed, but, sadly, it is a mere drop in the ocean.

I appeal to the Government to help the farming community in every way possible to help it to survive and prosper in years to come. That investment will be well rewarded over the longer term. I appeal to the Government to stop the endless migration of young people--the seedcorn of the future--out of the industry; to stop the misery which hardworking farming families are experiencing on a daily basis; and to stop the tragic human cost of the worst depression the farming industry has seen in living memory. Something must be done.

9.35 p.m.

Lord McNair: My Lords, I, too, am grateful to my noble friend for asking this Question. My locus for joining this evening's debate is that for about 11 years my father ran a small market garden. It was not quite a family farm but close enough for me to understand the precariousness of a life in agriculture at the smaller end of the scale. He specialised in early and, for those days in the early 1960s, exotic fruit and vegetables such as melons, green peppers and aubergines. He specialised in flowers too. I remember a very cold night in the early 1960s when the temperature dropped to 1 degree Fahrenheit. That was 31 degrees of frost. The heating in the glasshouse could not cope and he lost a glasshouseful of chrysanthemums. Yes, my Lords; earning a living from the land is a precarious business. I wish today to talk about one way in which the financial effects of these uncertainties could be mitigated.

I am not sure how many noble Lords are aware of this, but my noble friend Lord Beaumont has written a thoughtful and thought-provoking book called The End of the Yellow Brick Road. It is well worth reading, as I am doing at the moment. My noble friend is too modest

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to blow his own trumpet, but I am sure if any noble Lord asked nicely he would sell him a copy. It is well worth the modest price. The book has a lot to say about the issues that we are discussing tonight.

In that book my noble friend refers to,

    "contemporary suggestions that a Citizens Income should be funded out of a land tax".
The idea of a citizen's income is excellent although I would not suggest that it be funded from a land tax. I shall touch briefly on how I believe that it should be funded. But what I really wish to do is to explore the changes that a citizen's income would bring to the way we live.

I know of three ways to achieve that. One is the land tax proposed in the early part of this century by Henry George. Another proposal includes several variations by such people as Bill Jordan of the Citizen's Income Trust, and Hermione Parker. All require careful adaptation and fine tuning of the existing tax mechanisms as well as a significant further amount of redistribution.

My suggestion--I do not wish to labour it; it is my noble friend's debate--is that we adopt the mechanism of the resource economics proposition which is to replace income tax, corporation tax, national insurance contributions and value added tax with one tax on unprocessed energy resources. By doing that we could sweep away a lot of form filling and make our lives much simpler. But not only that, the mechanism of a unified national indirect taxation (UNITAX) enables the Government to pay, on present calculations, a citizen's income of £117 per week per adult--£20 at birth rising by equal amounts to £117 on the citizen's 16th birthday.

Just think what a difference that would make, in particular to the family which farms. I shall not emulate the noble Baroness, Lady Hollis of Heigham, and rattle off detailed figures for many different family circumstances. The figures are simple enough to work out. A family with children of different ages could well find themselves about £400 a week better off. The mathematics of the arrangement are unassailable. It just needs a leap of vision.

A citizen's income would have benefits for other citizens. Three homeless people could pool their resources and rent a flat. Students would have enough to live on while they studied; and 16 and 17 year-olds could afford to stay on at school, help on the family farm, train or even undertake an apprenticeship.

I hope that the Government will look at the various ways in which a citizens' income could be achieved. If we want our farmers to be custodians of the countryside, the development would be made more possible and palatable if my suggestion were adopted.

I have one more suggestion as I see I have another minute. We often run into time difficulties in debates. They might be avoided if the clock started at 1 instead of 0.

9.40 p.m.

The Earl of Stair: My Lords, I begin by declaring an interest. Not only am I involved in my local farming community, but I farm my own farm in a less favoured area in south-west Scotland.

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Tonight's Question tabled by the noble Lord, Lord Beaumont, follows previous debates and Questions in this House on agriculture which in the main have addressed the business implications of the current agricultural crisis. This Question relates to an equally important aspect of the impact of the crisis on family farms, in particular in the light of the recent release from the Scottish Office that Scottish agriculture has shown a 45 per cent. decline in profits in the past year.

At a time when we are still waiting for the proposals on Agenda 2000 and related rural development policy to be confirmed, I would like to take this opportunity to remind the House of three brief points which uniquely affect the family farm in comparison with other small businesses. First, in terms of small business, most farms are highly capital-intensive in relation to the number of employees, discounting family labour, and as a result they tend to be asset rich but with a high dependency on the bank. Secondly, the livestock sector in particular is increasingly susceptible to the buying policy of big supermarket chains and abattoirs, which in turn trade on currency fluctuations and do not always buy British. Thirdly, it is about the only industry where the weather affects not only the quality of the end product but also the cost of production.

There is a favourite word often used as the easy escape for family farms in the present crisis. This word is "diversify". And the question which faces families wishing to bring in non-farm related income is: in which direction should they go? Very often niche food products and tourism and leisure are seen to be the best options.

However, with increased requirements in health and hygiene and other regulations, the capital required to diversify into the food industry tends to make it prohibitive. Tourism and leisure are the easiest diversification for a farm business. However, it should also be remembered that tourism in many parts of the country is a very seasonal harvest and many outdoor leisure activities can be influenced by the weather. There is also a limit on how many bed-and-breakfast or similar businesses each region can support without flooding the market.

The present Government are often not perceived as being generally farmer friendly. However, they are very keen to improve access to the countryside for the remainder of the mostly urban-based population. There does not appear to be an appreciation of the part played by the farming community in the maintenance of the countryside; and if the rural economy is allowed to degenerate there will not be the same countryside for people to enjoy.

A recent survey in south-west Scotland revealed that although the majority of current farmers intended to remain in farming and continue with similar enterprises, they intended to cut inputs into new machinery, capital investment and feed and fertiliser. Of the total surveyed, one third intended to cut their own personal drawings from their businesses. This does not suggest a very bright future for Britain's countryside or for the many businesses which rely on a successful agriculture industry.

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Under Agenda 2000, subsidy payments in the less favoured areas are likely to be land or quota based rather than headage related. While this will help some fragile environments, the consequent reduction in livestock and output will have a considerable knock-on effect on supporting industries and employment in rural areas.

Following the Agenda 2000 proposals, the current Rural Development Policy Objective 5b status of rural areas is likely to be replaced by a new Objective 2 status. While many rural areas with a population density of fewer than 100 persons per square kilometre will be eligible for Objective 2 status, some areas will miss out under the current proposals because there are not more than twice the EU average of persons employed in agriculture. Though the average farm size in the United Kingdom is considerably larger than in the remainder of the European Union, it does not mean that the requirements and benefits to the rural economy under Objective 2 are any the less.

Finally, can the Minister give an assurance that when Agenda 2000 and the new rural development policy are published the implications of both on British agriculture will be considered separately for their effects on small farms as opposed to the industry as a whole? Also, can the Government endeavour to ensure that as many less favoured area farming communities as possible qualify for new Objective 2 status in order to maintain a sustainable rural economy?

9.45 p.m.

Baroness Miller of Chilthorne Domer: My Lords, first, I thank and congratulate my noble friend Lord Beaumont of Whitley on tabling this Question. He has long been a champion both of a more environmental approach to life generally and of the small farmer. Noble Lords this evening eloquently made the case of what is important about small family farms, both environmentally and in terms of the rural society as a whole.

I should like to share some of the results of a survey commissioned by the National Farmers' Union in the South-West last year. It was one of the largest surveys of its kind ever carried out. It especially addressed two questions: first, how do farmers feel about their future in farming--the threats and opportunities? Secondly, what do farmers need over the next five years to secure their future? The answers show clearly that farmers are more realistic than to expect a large pot of money to bail them out; in fact, they are still willing to take chances, to create business opportunities, to look at off-farm work, at how to add value to their products and to look at more training to cope with all the regulations and red tape already mentioned this evening. But to do that they will need this Government's help. They need a clear message that the Government will commit themselves to some basic measures which are on offer from the European Union. If we take up the offer of a national envelope, it will start to turn the tide in rural areas.

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CAP reform and Agenda 2000 for small farmers and the so-called second pillar contain important measures which would address many issues mentioned this evening. Those measures are optional for member states and require substantial co-funding. But they are the key step in achieving the sort of farming methods in rural society and the "living, working countryside" that successive governments have espoused but done little or nothing to create up until this point.

First, the UK needs to subscribe to the scheme of set-up grants for young farmers. After listening to the debate this evening, not many people would encourage their children to go into farming where, certainly in my region last year, 70 per cent. made a loss. We also heard the downside of not much leisure time, few if any holidays and so forth. So young farmers will need encouragement. At the moment in the UK we are very much the exception in not participating in that scheme. It would encourage new entrants from the younger generation into the industry and compensate for those farmers' children who, understandably, choose a different way of life for themselves. New entrants would allow member states to pay a lump sum of £17,500 and an interest rate subsidy on loans. Besides encouraging new entrants into farming, the scheme would stem the flow of small farms being bought up by larger farms. Such a scheme would also help those who cannot even take the first step on the farming ladder by renting a county farm because the set-up costs are too high.

The second measure at which I hope the Government will look addresses the other end of the spectrum. Just as the industry needs younger, energetic entrants, it also needs an early retirement scheme to enable the older farmer to retire. Many tenant farmers, because their house is tied to their job, cannot afford to retire. So far the Government have chosen not to take part in the existing early retirement scheme, but the conditions of the new scheme are less restrictive and the Government should see that as a constructive part of the package. It would also apply to farm workers. Allowing retirement from a physically demanding job for some older people and opening up those opportunities for the young is a more logical step for rural areas than spending large sums of money moving the unemployed youngster to the town under New Deal.

The third measure, as the noble Lord, Lord Inglewood, highlighted, is the need for training. That is crucial. In the National Farmers' Union survey that I mentioned, training opportunities were one of the key conclusions. The more training that farmers received, the more confident they felt about coping with the challenges and threats. Business management becomes even more critical if we are expecting farmers to diversify, take part in local produce schemes, tourism and environmental protection work. There is a deficiency geographically and in terms of curriculum. That certainly needs to be addressed.

Many noble Lords have mentioned the fourth measure which ties in with several concerns. It is a measure that would grant-aid farmers to help them process and

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market their produce. We have heard a great deal about the supermarket mark-up of produce. The farmer should earn a decent proportion of what the consumer pays for food. Shortening the food chain has many benefits that speak for themselves: fewer food miles, added employment in small-scale rural businesses and filling a public demand for local fresh produce.

Similar measures address forestry and would allow diversification into processing and marketing the timber. That is equally useful for rural areas.

Finally, we cannot regard farmers and their farms in isolation. We need younger generations to want to farm and to succeed. They are often the fixed points in an increasingly mobile rural population. As such, they take a long-term view of their rural communities; for example, in my village chairing the parish council, starting the youth club and running the Sunday school. The relationship is symbiotic. It will be no use bringing in measures to help farmers if the community of which those farmers are a part is on its knees with no school, no transport and no post office. Reform of the CAP and the introduction of rural development plans offer a real chance for a comprehensive approach, if it is done properly. People who work in those communities, within a supportive framework, can look forward to a bright future. Will the Minister say whether the Government mean to adopt the measures that I have outlined as a first step on that road?

9.52 p.m.

Baroness Byford: My Lords, I too thank the noble Lord, Lord Beaumont of Whitley, for making this evening's debate possible. I also want to congratulate the noble Baroness, Lady Miller of Chilthorne Domer, on her first response from the Front Bench. It has been a joy to listen to her. We look forward to debating with her in the future.

I also thank the noble Lord, Lord Hardy of Wath, for his contribution. He is the only Member who has spoken from the Opposition Benches, for which we are sorry, but his contribution, as always, was pertinent and to the point.

We can all agree on one fact: that the farming industry has gone through, and still is going through, a very difficult time. MAFF statistics published on 28th January confirm that situation. They show that in real terms last year farming income fell by 32 per cent. Over the past two years total farming income has fallen by 58 per cent. The situation is dire. The reasons given for that fall include the reduction in commodity prices, economic difficulties in Russia and Asia, high interest rates and the strength of sterling. Whether big family farmer or small, all have had to cope with drastically reduced incomes.

Figures produced by Martin Turner at Exeter University showed that in the South West, to which others have referred, income has fallen heavily. Those on mainly cropping farms have also been hit, with average incomes falling to only £439 per farm.

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In Scotland, figures released on 29th January showed that in 1998--also referred to by other noble Lords--output was down by more than 8 per cent. and income from farming at £187 million was about one-third of the level it was two years ago. The Scotsman reported that,

    "every farmer is different, but for a year's work the average farmer in Scotland can expect an income, the difference between what comes in and what goes out, of £416".
Incomes of £439 in the South West and £416 in Scotland make chilling reading.

Tonight's debate has covered many issues and, sadly, with the restriction on time, I cannot mention them all, but horticulture, young people, retirement schemes and market gardening are all very important. However, one of the most striking issues is the current plight of many of our farmers who are in dire straits. One organisation, the Royal Agricultural Benevolent Institution, the only national charity in England and Wales devoted to agriculture, has altered its provisions and now gives help to current serving farmers. In March last year the institution put an emergency fund together. It has received more than 300 calls and, as a result, has given £130,000 to 140 currently farming families. This morning the National Trust announced that it has launched a £400,000 package to help tenant farmers hit by the present crisis. That money will help to fund projects, including turning redundant farm buildings into holiday accommodation or light industry. Such financial help is welcome and I do not belittle the measures given, but they do not solve the problem.

Having recently visited farmers in Wales and having spent the past two mornings at the NFU conference here in London, I know that the one thing that all farmers recognise, and for which they are pressing, is a level playing field or common standards between countries. Farmers recognise that customers want high value and good quality food. British farmers can, and do, produce that food. However, they need to be able to compete with their counterparts from other countries, but they must compete within a fair system. British farmers have always been leaders in achieving higher welfare standards, but they must not be penalised in the market place, particularly with imported food from countries where food production is insufficiently regulated. That is where the rub lies and is an aspect that the Government have failed to address.

The noble Lord, Lord Beaumont, referred to the speech made by Nick Brown at the Oxford Conference. I was much encouraged by the speech yesterday by the EU Commissioner, Franz Fischler, who, when referring to animal welfare issues, said in reply to a question that higher welfare standards were required. He indicated that extra payments would be made to farmers who sought to farm to those new standards. Such agreements would be voluntary, but those willing to undertake such work would receive help with the additional costs. Sadly, that will come too late for our pig producers who have already spent thousands uprating their housing systems, whereas producers in other countries do not have to bear such costs. I hope that the Government will take that point on board.

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This is the third farming debate in your Lordships' House in the past two months, underlining the great concern felt by those in the industry and by your Lordships who are present tonight. It is surprising and sad that the Minister, the noble Lord, Lord Donoughue, has failed to attend any of the three farming debates and has therefore not had the opportunity to listen at first hand to many of the concerns expressed.

Our farming industry needs to be profitable for, without profit, many of the environmental schemes that we want to see will not be possible. We want to produce good quality food. We want our Government to fight for a fair deal for our farmers. We look forward to the Minister's response.

9.58 p.m.

Lord Hoyle: My Lords, I too must thank and congratulate the noble Lord, Lord Beaumont of Whitley, on tabling this important Unstarred Question. All noble Lords who have spoken have been entirely sympathetic to, and supportive of, small farms and farming. However, before I go any further, I too must welcome to the Liberal Democrat Front Bench the noble Baroness, Lady Miller of Chilthorne Domer. I look forward to hearing from her on many occasions in the future. I am sure that we shall.

I shall deal first with four of the issues that have been raised. The issue of beef on the bone was mentioned. My right honourable friend the Minister will be making an announcement very shortly on that subject. As regards red tape, a great deal has been said about the NFU conference today. The Minister said today,

    "We have been trying to help farmers by reducing and simplifying forms; reducing census and survey demands and providing forms with information already pre-printed on them to save farmers time".
He went on to say--and I believe that this will help--

    "We are continually looking for a way to improve how we deal with unavoidable paperwork".

I shall also deal with the question of retirement schemes. We are sympathetic to what can be done in that regard. We have to look for a flexible scheme. My right honourable friend has said that he will certainly do that. I share the views expressed in relation to suicide. I assure the House that this matter is taken very seriously by MAFF. We are concerned about the high incidence of suicide. A MAFF official has been seconded for two years to the Rural Stress Information Network. Working on that basis, we shall do all we can to help to alleviate rural stress. I agree with what has been said--that the more we improve the farmers' lot let us hope that we shall also reduce the number of suicides.

The decline in the total income from farming has been outlined tonight. It amounts to 32 per cent. in real terms. I agree with that. There is also some good news in that there have been four reductions in the base rate since October 1998. They are worth about £700 per full-time holding. There have also been the recent green rate devaluations which will be worth about £100 million to UK farmers in a full year. Finally, although no firm figures are available, we hope that farm rents will fall when they are re-negotiated--to reflect the decrease in

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incomes. I am putting these forward as factors that could possibly help farmers. We are also expecting the Commission's price fixing proposals in the near future.

We take very seriously not only the debate tonight; we are also listening to the views of farmers. That is what we have been doing with farmers and farmers' representatives across the UK. We shall continue to do so. We have taken a series of steps to help agriculture, both for the present and the future.

My right honourable friend sent a letter to all farmers in the country. I say to the noble Lord, Lord Beaumont, that the Family Farmers' Association attended the associated conference in London. In addition, there are regional visits taking place seeking views on the CAP reform proposals. What is being said by farmers is being taken into account.

We are interested in family farmers and also in small farmers. There is scope for our strong stand opposing the Commission's proposal for mandatory EU-wide ceilings to be misinterpreted as the Government supporting only large farms. That is not true. The reality is that it would discriminate against many ordinary UK farmers as well because, as has been said tonight, our farms are larger and more efficient than most of those in Europe. In addition, any moneys would not be returned to our budget but would go back to the Community.

Noble Lords will also be aware of the measures taken by the Government to ease pressures and to encourage developments such as the aid package of £120 million which we announced on 16th November. It will particularly help many in the hard-pressed livestock sector which has been referred to tonight.

The introduction of the euro has led to major changes in the agri-monetary system--that has been referred to in our debate--which converts payments under the common agricultural policy into national currency. The old system had its adherents, and the green rate freeze has protected farmers' incomes to the tune of around £400 million during the two years it has operated. However, it is now time--and this has obviously been realised tonight--to move nearer to market realities. I believe that the new system which has been negotiated by my right honourable friend achieves that and also provides a smooth transition from the old to the new in the form of compulsory compensation.

I should now like to consider current and future measures to help the farmers we have been talking about tonight. All of us realise what a very difficult year it has been for livestock producers. For beef producers there has been the continuing effect of the structural surplus, as we have heard, together with falling market prices and demand. For sheep producers there have been two consecutive years of delayed finishing and poor market prices. In addition, the strong pound has made beef imports attractive while, on the other side, it has made sheep exports unattractive.

In the beef sector, one of the most important things for this Government to achieve is the lifting of the beef export ban in Europe. I am sure that all your Lordships were delighted to hear, as I was, about the European Union agreement to the Date-Based Export Scheme in

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November last year. After two-and-a-half years, British beef will soon be back on the world market. We are now putting the Date-Based Export Scheme into place. After the Commission inspection, which we expect to take place in the next couple of months, a date will be set which will enable exports of de-boned beef and beef products to begin. Of course this will be from a small base--

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