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7.24 pm
Mr. Cynog Dafis (Ceredigion): I wish to speak briefly from a Welsh perspective. We have been provided with documentation of various sorts for this debate, but it is important to remember another report, which was published yesterday: the Welsh Affairs Committee report entitled, "The present crisis in the Welsh livestock industry". I shall give three quotations from it to emphasise the extreme gravity of the situation.
The report states:
The Welsh view of CAP reform is, in many ways, different from the positions of the UK Government, of the Conservative Front-Bench spokesman and of the Select Committee report. There are two points. First, there is the idea that too much is being spent on agricultural support in Europe. Less than 1 per cent. of European GDP is being spent. If much of that is being spent inefficiently and untargeted--as it is--and on persuading rich farmers not to grow corn, that is unacceptable and must be changed. We agree that there must be radical reform. If that sum were spent to guarantee food security by maintaining Europe's capacity to be self-sufficient in food, which is an issue for the longer term, to provide wholesome food and high animal welfare standards, to maintain the natural environment, the landscape and the richness of natural habitats and biodiversity, and to strengthen rural communities and create a lively rural economy and culture, it would be well spent. That range of benefits, for both rural and urban dwellers, is well worth paying substantially for. It would be irresponsible not to pay substantial sums for such benefits.
Secondly, the Welsh view of modulation is different from that expressed in many quarters tonight. The Farmers Union of Wales supports the Commission's proposal to vary direct payments according to the amount of labour employed on the farm, on the understanding that moneys released in that way would be allocated within the member state for agri-environmental schemes. Modulation within a member state and according to that state's priorities, but within the framework of common European rules, is an appropriate way to proceed. The
flexibility in the Commission's proposals overcomes the issue of discrepancy in farm sizes between different countries, of which much has been made.
Modulation to strengthen family farms is justified; it is not a way to prop up the weak and uncompetitive, which is the language commonly used. In many ways, small farms are not weak and uncompetitive, and they are certainly not inefficient. Such modulation is justified to maintain adequate human resources in the countryside to deliver the benefits that I have mentioned. I strongly dissent from the view of the Select Committee that modulation based on labour units is contrary to promoting competitiveness.
The documents that we have been given emphasise integrated rural development--linking food production, processing and marketing. That is very much in keeping with the analysis of the Welsh Affairs Select Committee report, which emphasises not only the severity of the present crisis, but the opportunities for Welsh agriculture--in common with other sectors of British agriculture--to meet consumer demand for quality, traceability and sustainable methods of production. The right kind of CAP reform, with an attractive agri-environmental scheme, could assist strongly in that.
Mr. Steve McCabe (Birmingham, Hall Green):
If there is one European policy that is designed to undermine confidence in the European Union, surely it must be the complex, expensive, fraud-ridden and inefficient support systems of the common agricultural policy. That is why the Government are right to press for reform of the CAP.
We have heard a lot about farmers in this debate, but is it not the case that British consumers are the losers under the present policy? Should we not be at least as concerned about them as we are about farmers? Is it not also the case, as my hon. Friend the Member for Cambridge (Mrs. Campbell) pointed out, that reform of the CAP is now essential because an expanded European Union simply could not afford it?
As we have heard, the current reform proposals could save British consumers as much as £1 billion a year, and I welcome that. Surely after years of butter mountains and wine lakes, any sane person must welcome a shift from the current system of production-related support. Is it not much better that we move to environmental subsidies, which encourage protection of the land and safety for consumers?
I welcome the idea that member states should be allowed to withhold up to 20 per cent. of payments from farmers who fail to meet proper environmental standards.
I hope, particularly in the light of the BSE scandal, that we might use some of that money to encourage grass-reared beef.
If there is a criticism of the Agenda 2000 proposals, it is that they do not go far enough. We must press for a steady reduction in the level of subsidy paid through the CAP. We must move to income support compatible with the requirements of the World Trade Organisation, which will encourage exports as world markets grow. Of course, no system of support can be totally cost free, but a policy based on lower prices and income support is in the interests of the British consumer.
I am somewhat concerned at the suggestions by Commissioner Fischler that present member countries should continue to receive support, but that new entrants should not. That could lead to the situation in which two farmers grow an identical crop on the same number of hectares, but one receives a subsidy and the other does not. That is a recipe for discord and for continual difficulties as the European Union expands.
The right hon. Member for Fylde (Mr. Jack) called for more agrimonetary compensation for farmers. I am sure that he knows that 70 per cent. of that money must come from the British taxpayer, which means that we have a choice. We can have more handouts for farmers, but at the expense of pensioners, hospital patients, school children and many other people in our society. Is that what he wants? Is that fair?
Mr. McCabe:
I will not give way on this occasion because in a similar debate in 1995, the right hon. Gentleman told the House:
I recognise that some small-scale farmers have problems, but I am simply not convinced that the majority of farmers are that hard done by. They may shout about the strength of the pound now, but did they not enjoy tremendous gains during the early 1990s as CAP payments increased rapidly to compensate for weak sterling? Also, is it not the case that, after 1992, EU farmers continued to receive price compensation even though world grain prices had risen rather than fallen? Is it not also true that the Conservative Government's intervention in the 1992 reforms of the CAP, far from producing a fairer system, allowed a small number of fat cat farmers to receive arable area payments ranging from £500,000 to more than £2 million per year?
Mr. Drew:
Does my hon. Friend agree that the way in which that Government set up the milk market, so that dairy processors had a vested interest in driving down the
"It is no exaggeration to suggest that much of Welsh agriculture will be destroyed within a decade unless urgent action is taken to reverse the decline."
It also says:
"The collapse of Welsh family farming would be a disaster for Wales as a whole--culturally, environmentally and socially, as well as economically."
Thirdly, it states:
"unless immediate action is taken to assist farmers, there will not be a livestock industry in Wales left to develop."
There will be nothing left to build on, to change or to make more competitive--to use the language that has been used commonly tonight. I hope that the Government note carefully what the report says and recognise that their credibility is on the line in Wales. They need to think hard about that.
"I . . . have first-hand experience of what it is like to operate in a sector that . . . has no direct intervention. I know what it is like to live on my wits to serve the needs of customers."--[Official Report, 21 March 1995; Vol. 257, c. 237.]
The Conservatives are now calling for compensation for farmers which they never once applied for when they were in government. Should we not also recognise that, far from being hard done by, farmers are receiving £85 million of agrimonetary compensation from the Government and can expect to receive about £3 billion in subsidies this year?
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