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Earl Ferrers: My Lords, does the Minister agree that modulation, which involves removing money from the growing sector and putting it into land management, worsens the position of traditional farming?
Lord Whitty: No, my Lords. The bulk of the support would be to allow farmers to produce food and rear livestock in an environmentally sensitive way. Modulation does not stop them doing that and make them take a lawnmower to mow the hillside instead.
The aim is to ensure that their production methods meet certain standards. The point of the broad and shallow system that Curry advocates is that if they meet those standards, they will qualify for support. As many noble Lords have said, including the noble Earl, current environmental schemes often have a high overlay of bureaucracy and administrative costs to farmers. The broad and shallow scheme will be much more accessible and will relate to methods across all sectors of farming. Many smaller farms would benefit from that and there would be a decrease in the over-intensive areas of farming, such as over-grazing.Besides modulation, there are other existing mechanisms. The noble Lord, Lord Kimball, attacked one of those—the more flexible use of the national envelope under the sheepmeat scheme that was negotiated in December. As well as a more stable figure for the overall price of sheep support, flexibility was given back to each nation on how it could use roughly 2 euros of that support. The Welsh and Scottish administrations have already decided to add that to the existing premium. We are looking, immediately or in the longer term, to use that flexibility to ensure a better structure and a more environmentally sensitive form for sheep farming. We shall make that decision within the next few weeks. That mechanism already exists.
We have been criticised under the CAP head for not picking up all the available agrimonetary compensation to compensate for the major problem of the sterling-euro exchange rate, which is a large part of the reason for the relative decline in income in the British livestock industry in recent years. Again, that is three quarters paid for by the British taxpayer and any call on it has to be judged against other forms of public expenditure. Your Lordships should recognise that since this Labour Government came to power, a total of £785 million has been drawn down in agrimonetary compensation. The system will no longer exist after this year. That is a substantial level of support, mostly financed by the British taxpayer.
The second area that the noble Lord, Lord Haskins, identified was the specific role of the UK Government, over and above their European responsibilities. Much of that is epitomised in the Curry report. We have broadly accepted that report and have already announced a number of measures covered by it, including the establishment of a food chain centre, which will look at the problems of producers getting such a low proportion of the value added in the food chain and of the price that the consumer ultimately pays. That involves relationships all down the chain. As my noble friend Lord Fyfe and others have pointed out, it also involves collaboration within the industry and a change in the balance of power between the farmers and the other economic movers to whom they sell and from whom they buy. That must be an important part of reversing the decline in farm incomes over recent years. If we can restore some balance to the farmers and have some fair trading in that system, we can achieve a lot.
We also need to ensure that farmers address the other problem referred to by my noble friend Lord Haskins—the relative spread of efficiency within farming. We want to get the poor farmers up to the average and the average up to the good. The Government still take responsibility for advice and support to the farming industry on productivity and production methods that we do not take for other industries. For example, we are establishing a fourth agricultural development scheme with £5 million of government money to improve marketing performance and competitiveness. There are other schemes on the production side. We are already moving rapidly on some of the measures in Don Curry's report. The central measure, as the noble Baroness, Lady Byford, and others said, is modulation and the CAP, which will be addressed over the summer.
I deny some of the suggestions about what we are trying to do to the structure of the industry. If I understood him correctly, the noble Lord, Lord Geraint, suggested that we were against the market system. That is not the position of the Government, although we believe that a greater proportion of markets will probably be dead meat markets rather than livestock markets. Nevertheless, both play an important part in the industry. Beyond the market, the farmer must look more at the ultimate consumer, both directly through direct selling and by getting further down the food chain to get more of the profit.
Another responsibility for the Government relates to imports. A number of comments have been made about the adequacy of the present import checking system. Sometimes people confuse the level of imports with their quality. We are not in favour of going backwards on trade. We believe that the figures for self-sufficiency that people are talking about—66 per cent and 80 per cent—are pretty good achievements for the agriculture sector in an increasingly globalised economy in which trade is likely to be more liberalised rather than less. The question is not whether liberalisation will occur, but on what terms and how rapidly. We cannot go backwards on that.
We accept that the Government have a responsibility for doing more to check the quality of imports, particularly with regard to disease. My right honourable friend Margaret Beckett has taken further initiatives in that respect, although a considerable amount of additional intelligence gathering and co-ordination of checks has taken place on the commercial and passenger trade in recent months. We also need a proper overall assessment of the risks posed by illegal imports of meat. We need greater co-operation between the various agencies involved—the public enforcement agencies and the private sector, such as airlines and port authorities. We need greater enforcement powers, some of which we are already enacting, and we must ensure a tighter and more co-ordinated approach at European level on regulations such as the 1 kg maximum import allowed for passengers.
Baroness Byford: My Lords, what progress has been made on that subject? The Minister is talking about generalities. Where have we got to now? How many meat imports have been stopped? It would be helpful if he could share that information with the House.
Lord Whitty: My Lords, there is a high level of checking of the commercial container trade. That has stopped a number of imports. The higher profile issue is passengers at Heathrow and other airports. Much of the trade that has been stopped and identified by recent checks could not carry FMD. There were other problems in those cases relating to bush meat, endangered species and probably organised crime, but they do not relate specifically to the diseases that have broken out in Europe. Several hundred tonnes have been identified, indicating that there is a bigger problem that needs to be addressed.
Whenever we discuss imports, I also point out that there is a tendency for some in the industry to argue that tighter import controls are the totality of what we need. We need tighter import checks, but that is not an alternative to surveillance, internal biosecurity measures and controls on internal movements. All countries, even Australia and America, have some imports of illegal meat, despite their substantial checks. The point is that, in Australia and New Zealand in particular, if something gets through it is rapidly stamped out. The problem in the recent foot and mouth epidemic was that we did not cut it out as quickly as we could.
I have talked about responsibilities within the CAP and the responsibilities of government. There is also a huge responsibility on the industry itself to face up to some of these problems. For those coming to it from outside, it is a strange industry in many respects. It is a mixture of huge self-reliance and individualism, with a great desire to work as hard as possible and not to be dependent on others. In reality, however, when the industry is in difficulty, there is an awful degree of dependence on government and a tendency to come to government for help and money. We have to change the psychology in that respect. That means both greater co-operation, as my noble friend Lord Fyfe said, and, as my noble friend Lord Haskins said, a reduction in the degree of dependence on government to sort out the industry's problems.
The industry itself can deal with most of the problems of structure such as the need for a shorter food chain, more value added and greater co-operation. Nevertheless, the Government will endeavour to support those changes and to help in other matters referred to by noble Lords, such as labelling. Labelling is partly a Government and EU responsibility. It is also a matter of farm assurance. The Curry report made a very substantial recommendation on boosting the awareness and effectiveness of the red tractor scheme, to ensure that consumers understand that meats and other products produced to British standards are not only high value but meet high environmental and safety standards.
The Government are therefore acting in Europe and in relation to our own responsibilities on trade and the internal structure. We are ensuring that we facilitate changes that the industry itself needs to make.
I shall use my remaining time to make a few points on the disease, which has cast a shadow over the debate and about which a number of points have been made. The noble Lord, Lord Carlile, said, "Never again". I think that we would all say amen to that. However, we have to ensure that it does not happen again. We have initiated an unprecedented level of inquiries into the disease. I do not really want to go into the public inquiry issue now; the noble Earl, Lord Onslow, correctly said that I get slightly irritable on that point. However, we have an inquiry into the science, an inquiry into the organisation and the logistics, and an inquiry into the finances. We have answered to the Select Committees of the UK Parliament. We have answered to the Temporary Committee in the European Parliament. We also answer questions time and again in your Lordships' House. We could not be more open, nor could we have a system that will deliver anything closer to the truth.
The proof of the pudding—for those who are still highly sceptical, which I appreciate includes a number of noble Lords—will be in the quality of the reports from the Royal Society in June/July and over the summer. The Government already accept that we would do some things differently; I have made that clear to the House and elsewhere. There will be more recommendations to the Government and to the industry during the course of those inquiry reports.
Various issues were raised in the debate, the most acute of which was the legality of the cull. I shall cite just two cases: MAFF v Winslade, which we won in the English courts; and Westerhall Farms v Scottish Ministers, which we won in the Scottish courts. The British courts' and the EU endorsement therefore fully support the comments that I made in Strasbourg and have repeated today. The legality of the cull is not in doubt.
We do, of course, recognise that the powers that we have are not necessarily sufficient. That is why we brought the Animal Health Bill before your Lordships' House, and why I very much regret that, for whatever motive, your Lordships voted down that Bill. The Bill would have given us powers effectively to deal with an outbreak of the disease before a full reassessment of the situation following all the British and European-level inquiries. However, the Bill was defeated. We recognise that, in terms of the procedure of the House, that decision cannot be directly overturned. Nevertheless, the consequence is that, were there to be an outbreak of the disease over the summer, the British Government would not have the powers that we believe we need. In such circumstances, the responsibility would therefore be shared by all noble Lords. I think that we should face up to that responsibility.
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