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Mr. Andrew Hunter (Basingstoke): Before my hon. Friend leaves the CPAS, will he extend his comments to embrace the point made by the Select Committee--that it was an indirect means whereby the United Kingdom was bearing the brunt of the restructuring of the European beef industry?
Mr. Luff: Indeed, that is a point to which I wish to return later. It was a matter of considerable concern to the Committee that there seemed to be some kind of agenda in play among our colleagues on the mainland of Europe to ensure that we bore the brunt of that restructuring. Clearly, that is unacceptable. There is over-production throughout Europe, and Britain must not bear the whole burden.
The rendering industry took a bit of a knock in the recent report by London Economics for Tesco. Indeed, I believe that at least one renderer is considering legal action against one or other of those bodies for what was said about it. However, whatever the rights and wrongs of rendering, we cannot duck the fact that the renderers' products have either collapsed in value or lost their markets altogether. For tallow, according to a Meat and Livestock Commission report, there are some opportunities for renderers at £70 per tonne, whereas before the BSE crisis they were getting up to £400 per tonne for the same products. I think that it is fair to say that the Government dismissed our suggestion of additional aid for the rendering industry, but I am not sure that that was the right response, and I shall be interested to hear what the Minister says about it.
As for restructuring, what exactly is happening? The Committee expressed its reservations about the EU scheme, and I know that the beef industry would appreciate some clarification by the Minister today. We were sceptical about the applicability of the EU scheme in the UK context, and there are also concerns about how far it can help tenant farmers. As my hon. Friend the Member for Basingstoke (Mr. Hunter) said, we are all concerned that the EU may be seeking to force the necessary restructuring of the Europewide beef industry on this country alone--perhaps as some kind of punishment for BSE. That remains intolerable and unacceptable, and I am sure that the Minister will resist it.
My Committee is currently considering rural development issues and the future of hill livestock compensatory allowances--a crucial issue in that debate. Alternatives to hill livestock rearing will not sustain many remoter rural economies, and traditional grazing patterns are crucial to the local environment. Again, some clue to the Minister's thinking in that area would be welcome.
Now I come to what is perhaps the most important issue. The success of the selective cull appears, after all, to be an important consideration for our partners in
Europe before they will move on from lifting the ban on Northern Irish beef to implementing the date-based export scheme.
Reports in this week's farming press suggest that Emma Bonino's consumer affairs directorate has concerns about the success or otherwise of the selective cull, and also wants all cattle bones classified as specified risk material. Mrs. Bonino also appears to be concerned about the effectiveness of our traceability systems. The muddled mailing from the British cattle movement service has probably impressed neither farmers nor the Commission.
None the less, I should be interested to know what the Minister's assessment is of the prospects for the implementation of the date-based export scheme. The best guess for the House now appears to be that it will not happen until early next year. Moreover, it is important to recognise that even then, there will not be a full lifting of the beef export ban, only of the ban on exports of beef from cattle under 30 months old. Exports of over-30-months beef will remain banned even then. Again, the Minister's clarification would be welcome.
The Committee noted that the Government considered expenditure on promotion to be a matter for the industry, but in the context of the beef export ban it said:
My final specific point is something to which I shall not devote time, because it is too complex--the reform of the beef regime within the common agricultural policy. The Minister may be able to give us a clue as to how things are developing there.
In conclusion, the four big themes are: ending the beef export ban; improving the industry's competitiveness; the problems caused by the strength of sterling; and the need for a clear Government strategy for the industry. That is not a criticism of this Government--the Select Committee was careful to say that successive Governments had failed in that task. Even within the constraints of the common agricultural policy and the World Trade Organisation, the Government can set a course for our beef industry. If, as they attempt to do so, the Government think about those four themes in all that they do, they will not go far wrong.
As we say in our report,
Mr. Geoffrey Clifton-Brown (Cotswold):
Increasingly, the Commission comes up with schemes that involve more national discretion. Did the Committee address the question whether the Government would apply for that discretion, and, if they did not, whether other competing countries that did apply, such as France and Germany, would then be competing in our market from a lower cost base?
Mr. Luff:
We did not do that in the context of the beef industry report, but it is a matter that we are keeping under constant review in our discussions about the future of the CAP reform and Agenda 2000. Many farmers are expressing precisely the concern raised by my hon. Friend, so it is important for the House to bear that in mind.
There are grounds for long-term optimism in the beef industry, but for the short term it will be very difficult indeed. One local farming business in my constituency wrote to me last week:
Mrs. Diana Organ (Forest of Dean):
When I meet beef farmers in the Forest of Dean, they tell me that they are just holding on. They have had a terrible time as the cash value of a finished steer or heifer has dropped 30 per cent. from 1995 values. They put the situation down to three factors--the high value of sterling, the dominance of the multiple retailers and the devastating effects of BSE leading to the beef ban and the loss of their markets and consumer confidence.
My beef farmers are a realistic lot. They tell me that, although Government policy has played a part in the strengthening of sterling, they recognise that European monetary union is a major pressure in that process, and they rather begrudgingly accept that, for the time being, the strong pound is a fact of life. However, they expect the Government to behave with the utmost sympathy during this difficult time--a point made during the Select Committee's inquiry, which was published earlier this year.
The hon. Member for Mid-Worcestershire (Mr. Luff), the Chairman of the Agriculture Committee, said that we do not want to go over history, but history is important if we are to understand the present. My beef farmers know that the single biggest factor in the present situation has been the BSE crisis; they are having to cope with the terrible legacy of it.
We have heard that the Conservative party has set up a shadow Cabinet sub-committee on the countryside and rural affairs. The right hon. Member for Fylde (Mr. Jack) said that the
"This position may have to be modified when the export ban is lifted to assist the UK beef industry in the difficult task of regaining sales in its previous export markets outside the EU."
I feel, as does the Committee, that when that time eventually comes, the Government will have to assist in the drive to recover lost markets. After all the money that has been poured into the beef industry in recent years, to fail to do so would be to spoil the ship for a ha'p'orth of tar. The Government appear to have found £2 million for Northern Irish beef following the lifting of that ban, so something pro rata for the rest of the United Kingdom would seem appropriate. A precedent appears to have been set.
"once the industry is through its present serious difficulties, its future will be bright. We wish to see a prosperous and thriving UK beef industry, and we have confidence in the resolve of the industry to re-establish itself as a leading force in global markets."
We said that the industry's economic revival should be built on the foundations of quality, safety, traceability, our comparative advantage as a nation of beef production, an end to market-based support mechanisms and the industry's own desire to set high animal welfare standards. We also spoke of the need for Government assistance for industry initiatives to improve marketing
and management skills in the farming community--something to which the Select Committee attaches special importance.
"Our future as an industry looks bleak. Agriculture is standing on the edge of an abyss and if we are not thrown a life-line soon, it is only a matter of time before we all fall in and disappear forever."
However, Don Curry, chairman of the Meat and Livestock Commission, said, when introducing a report which predicts 2.4 per cent. annual growth in world meat consumption:
"all is not doom and gloom. There are long-term opportunities, but there are challenges too, and the British industry needs to improve competitiveness, particularly in relation to other EU countries."
The opportunities are there, and the Select Committee believes that the Government can play their part in seeing the beef industry through to the time when it can take advantage of them.
5.32 pm
"Committee's priority would be to act as whistleblowers on Government policy which would be harmful to the rural economy or way of life."
The Government do not need such a committee to act as whistleblowers; the National Audit Office does the job much better in its report, "BSE, The Cost of a Crisis", published on 8 July.
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