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Lord Monro of Langholm: My Lords, my colleagues have put the case so well that little need be added. I wish to raise a problem that was not discussed in great detail, bearing in mind my support for most of the recommendations in full—even if most are very obvious practices that we have been carrying out for generations, as my noble friend Lord Plumb said.

My concern relates to paragraph 18 on ear-tagging. I do not know whether the noble Baroness has had the opportunity to be on a farm when inspectors call and wish to see every ear tag—two per beast. To bring 500 cattle in from a hill, say, where they have not been confined for some time, is quite a performance, particularly given that farms now run on the absolute minimum of staff. The department is asking a great deal of farmers by expecting them to get all the beasts in to be looked at by inspectors before it will consider giving them any production grants. We must have endless contact with the BCMS at Workington, which looks after all ear tag numbers. It is an extremely complicated and time-consuming operation.

I want to support my noble friend Lady Byford on the issue of fallen stock, which was raised also by my noble friends Lord Plumb and Lord MacGregor of Pulham Market. Article 5 cannot be allowed to stand. It should not be allowed to go out to the general public. Burial, even in certain circumstances, will be out, and we are gravely concerned about the knacker's yards. Yesterday, I listened to the Secretary of State, and I read in Hansard what she said. She said that there was adequate capacity. Like the noble Lord, Lord MacGregor of Pulham Market, I ask where that capacity is. I am sure that many farms are a hundred miles or more from a knacker. Could the noble Baroness publish a list of knackers, giving their location? That would be of some benefit to farmers, who are in a desperate position.

There are particular problems with incineration. There is great difficulty in knowing the exact legal position. Farmers may club together and buy an incinerator—at 10,000 or more, they are expensive—but they cannot take dead stock from one farm to another. The Minister should have produced some derogation that would make that possible. Farmers cannot share an incinerator, because the law says that they cannot take a dead animal from one farm to another. That is the sort of problem that we face.

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I must press DEFRA to go for a derogation for six months or more. It is all very well to say that there has been consultation, but, as my noble friend Lady Byford explained, there have been 17 or so meetings but no positive result. We can meet for ever, but, unless we get a solution, we will achieve no satisfactory result. There are only three weeks or so to go, and there is so much up in the air. The NFU is pressing as hard as it can on behalf of farmers. It is the Government's duty to go to Europe and get a derogation for at least six months to resolve a problem that the Government created for farmers by their failure to achieve proper negotiations in Europe. If they had done that, we would not be in the situation that we are in now.

Lord Higgins: My Lords, I intervene briefly and with considerable diffidence. I apologise to the House for not being here right at the beginning of the debate.

I speak with some diffidence, as there is probably no Member of your Lordships' House less qualified than I to speak on agriculture and so on. I imagine that several former colleagues from another place will be surprised to see me rise on this occasion. That may be understandable, as my former constituency, Worthing, had no agriculture whatsoever. However, people there were passionately concerned about the export of live animals for slaughter. They were desperately concerned that the conditions for transport in this country were not the same as those in other European Union states.

At the time, we were told that, because of European Union rules, it was impossible to ban such exports. I cannot help noting that, the moment there were health problems such as BSE or foot and mouth disease, it was miraculously possible to impose such a ban. Given that the code includes reference to transport off farms, I would be grateful for some assurances from the Government with regard to whether the same conditions are likely to exist, once an animal is exported. It is a matter of considerable concern.

I will make a final point. I was shocked to discover recently that there is a considerable trade in horses exported for slaughter. I am not sure whether that comes into the category of cattle, in this context, but the horses are used for meat, once they have been exported and killed. That kind of export trade ought not to exist at all, but we should, at least, have some assurances about the conditions in which such animals are kept, once they are exported. We should be concerned at the prospect of aged horses being exported live into conditions in respect of which regulations may not be as tightly enforced as they are for cattle generally. I would be grateful if the Minister could give me some assurance on those points.

12.45 p.m.

Baroness Farrington of Ribbleton: My Lords, I am sure that all noble Lords who took part in the debate will have noted that there is a Question on this matter on the Order Paper for 8th April, so there will be an opportunity for a further discussion. I also refer to a letter to individual farmers that is due to be sent out. I

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will happily ensure that a copy of the letter goes to the Library and is sent to all noble Lords who spoke today.

The regulations have not come out of the blue. As the noble Baroness said, we have discussed them for over a year. The Government began with a stakeholder meeting on 18th September 2002, at which the industry presented a joint proposal for a national fallen stock disposal scheme. The farming unions also presented a paper on funding and argued for 100 per cent funding, at least for the first years. The Government cannot agree to that. The answer to the questions raised is that it would not be allowed.

The situation regarding government funding in other member states is complicated. On the basis of data provided by each member state, the European Commission issued a paper on 20th November 2001, showing that the level of government support varied throughout the Community, with farmers in some countries paying the full cost of disposal, while, in other countries, the government or the local authorities provided support. In some cases, government recoups the cost. In France, for example, a tax is levied on retail sales of meat. New Community guidelines for state aid allow member states to fund 100 per cent of collection and disposal costs only if the aid is fully recovered from the meat sector—for example, by a levy. Otherwise, member states may—I stress "may"—grant state aid of up to 100 per cent of the cost of collection and 75 per cent of the cost of destruction.

The industry estimated that, with full utilisation of its scheme, the collection costs could be 40 per cent lower than is currently the case for adult bovines and 60 per cent lower for ovines. We estimate that there are approximately 200,000 livestock holdings in the UK. A registration fee set at 100 per annum per holding would raise an additional 20 million. The current cost to individual farmers of disposing of sheep and cows is thought to range from 5 to 15 for sheep and from 50 to 80 a cow.

The noble Baroness, Lady Byford, asked about statutory obligations. Although the testing of all fallen cattle aged over 24 months for BSE is required by the EU TSE regulation, the regulation does not require member states to pay for the collection or disposal of the carcasses. DEFRA decided to provide Exchequer funding to ensure that all the required carcasses would be tested.

I thank the noble Lord, Lord Elliott of Morpeth, for his welcome for the measures on the welfare of animals. He was slightly out of kilter with the noble Lord, Lord Plumb, although I am sure that they both have experience of the best of farming practice and good husbandry. I think that neither would deny that just occasionally people fall below the required standards in any profession or industry.

I understand the point made by the noble Lord, Lord Monro, about ear-tagging. But, surely, of all counties, Cumbria will welcome anything that can be done to remove the lack of knowledge of, and

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movement around of, stock when that movement contributed to the rapid spread of the disastrous foot and mouth disease.

I shall write to the noble Lord, Lord Higgins, on the subject of exported animals. I am not prepared to comment on whether cattle can be read as including horses in this order. That subject has an awful feeling of deja vu. The position is clear. We should prefer a trade in meat, but we cannot ban the transport of animals.

As I said, there have been detailed discussions for more than a year. The Government are writing to individual farmers. We accept that there are some regional variations in the provision of disposal facilities. We are aware that people are making applications to establish those facilities within regions. I commend the animal welfare code to your Lordships.

On Question, Motion agreed to.

Farm Waste Grant (Nitrate Vulnerable Zones) (England) Scheme 2003

12.51 p.m.

Baroness Farrington of Ribbleton rose to move, That the scheme laid before the House on 10th March be approved [14th Report from the Joint Committee].

The noble Baroness said: My Lords, I beg to move that the House approves the extension of the Farm Waste Grant Scheme (Nitrate Vulnerable Zones) (England) Regulations 2003. Noble Lords will be aware of the Government's longstanding and ongoing commitment to farmers demonstrated in their Strategy for Agriculture: Action Plan for Farming in March 2000, which included the commitment that the Government would do,

    "everything it can, consistent with its legal responsibilities, to minimise the extra burdens of new Nitrate Vulnerable Zone designations on farmers".

Extending the Farm Waste Grant Scheme beyond April 2003 is entirely consistent with this commitment. Under the EC Nitrates Directive, farmers in nitrate vulnerable zones are restricted in the type, amount and frequency at which manures and slurries can be applied to the land. This can cause difficulties for farmers who have little or no storage capacity for manures.

Extension of nitrate vulnerable zones following implementation of the Nitrate Vulnerable Zones (Additional Designations) (England) Regulations 2002 to approximately 55 per cent of the land area in England will require many farmers to upgrade their existing manure storage facilities or install new ones. In recognition of this mandatory capital investment, the scheme focuses assistance on a range of storage and fixed handling facilities.

Since its introduction in 1996, uptake under the scheme has been relatively low. There were only 58 claims between 1996 and 2002. This has been due to a number of factors, including low farm incomes, the swine vesicular disease and foot and mouth outbreaks

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and the ability to "export" manure to farms outside of the NVZs. The extension of NVZs in England will make it more difficult for farmers to continue to export manure as the number of farmers subjected to the restrictions increases.

It is proposed that the Farm Waste Grant Scheme, which provides a grant of 40 per cent on eligible projects, should be extended in England until October 2005. As this is a demand-led grant scheme, it is not possible to forecast accurately the total number of annual claims. A sum of 3.8 million has been profiled for each of the next three years, commencing on 17th April 2003. Based on previous claims, it has been calculated that this will be sufficient to cover the newly designated NVZs and new claims from farms in the original zones that are no longer able to "export" their manures. However, the regulation contains a provision to close the scheme in the event of funds being exhausted before the closing date.

The scheme restricts grants to,

    "fixed disposal facilities for slurry and silage effluent".

It has been suggested that the Government should extend the scheme to support the adoption of specialised application machinery—for example, band spreaders and shallow injectors. Storage is a specific action programme measure which stems directly from the directive. Improved application equipment would not provide a direct solution to the restrictions in the action programme.

Spreading is frequently undertaken by contractors rather than individual farmers. The Farm Practice Survey 2001 indicated that 38 per cent of farmers that had manure or slurry on their farms, including arable farms that had imported manures, used contractors. The need for more specialised machinery could increase this trend which suggests that extending the FWGS to cover individual purchasing of machinery by farmers is unnecessary. While there are environmental benefits, such equipment is more expensive than conventional tackle and cannot be accommodated within the budget.

This scheme represents real assistance to farmers in NVZs and demonstrates the Government's commitment to balancing the needs of an efficient agricultural industry with the need to protect water sources from pollution. I commend it to the House.

Moved, That the scheme laid before the House on 10th March be approved [14th Report from the Joint Committee].—(Baroness Farrington of Ribbleton.)

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