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Agricultural Income

Volume 164: debated on Thursday 11 January 1990

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To ask the Minister of Agriculture, Fisheries and Food whether he is satisfied that the current levels of agricultural income are adequate to sustain the long-term viability of the industry.

The long-term viability of the industry can best be assured by a reformed common agricultural policy that encourages farmers to compete effectively in the market place.

Does the Minister accept that during the past two years there has been a severe decline in farm incomes? In the livestock sector in Wales, the decline has been 20 per cent. Does the Minister further accept that the 4ยท1 per cent. increase in support prices is not enough to offset the livestock support amendments, let alone the 9 per cent. increase in inflation? Will he take positive steps to end the disparity between the green pound and the pound sterling to allow farmers to compete effectively?

The hon. Gentleman is right to say that when there is a gap between the pound sterling and the green pound, British farmers are competing on an unfair basis. The Commission has made recommendations and we shall ensure, as far as possible, that we defend the interests of British farmers in the negotiations. I am sure that the hon. Gentleman will agree that, as we are about to enter negotiations, we cannot promise the outcome now; nor can I say how we can best achieve our end, which is to make a fairer Community for British farming.

I accept that agricultural incomes have risen marginally in the past year, although I hope that my right hon. Friend will agree that they have fallen substantially since the early 1980s. Does he also agree that the right way forward is for farmers to seek to add value to what they produce on their farms to make it more attractive to the consumer?

I am sure that my hon. Friend will agree that it is much more difficult to increase one's income when there is a surplus than when there is a shortage, and all farmers must face that change. We must ensure that the battle is fair, and that Britain's farmers take more account of the need to sell their products effectively in the market place. I have tried to put that message over as widely as possible, and I thank my hon. Friend for his help.

Is the Minister aware that farmers in my constituency are worried about their long-term future because of the lack of anthrax vaccine? I raised the matter in Scottish Question Time on 20 December, and was promised a reply from the Parliamentary Under-Secretary of State for Scotland, the hon. Member for Edinburgh, West (Lord J. Douglas-Hamilton); so far, however, I have received no such reply. Will the Minister have a word with his colleague and then provide me with some information, so that I can perhaps give some comfort to those worried farmers?

I shall be happy to take the matter up immediately with my right hon. and learned Friend the Secretary of State for Scotland, who, I am sure, will give the hon. Gentleman the answer that he wishes.

Bearing in mind the low level of agricultural income over the past few years, will my right hon. Friend try to bring some confidence to hill farmers by assuring them that in 1991 this country will receive at least as much in hill livestock compensatory allowance as it will in the current year, and that the same will apply to the suckler cow subsidy? Both are extremely important in rural areas.

I hope to be able to make an announcement about HLCAs very soon. My hon. Friend will know that we fought very hard against the discriminatory stand taken by the European Community against our hill livestock farmers. We won a much better result than we had expected, but we nevertheless find the Community's decision entirely discriminatory, and we shall continue to fight such decisions.

Is the Minister aware that the current value of the green pound is having a serious effect on the beef sector, especially in Northern Ireland, where producers are faced with green-pound-subsidised competition from across the land frontier?

I assure the right hon. Gentleman that I shall go to the first round of our European Community discussions very well seized of that point as it applies not only to Northern Ireland but to the rest of the United Kingdom. British farmers can do well if they compete on equal terms and our job is to ensure that we reach our 1992 goal of a level playing field reasonably and sensibly. It will be a tough battle, because other countries do not wish even the Commission's proposals to be accepted.

Is my right hon. Friend aware of the severe concern among farmers in west Wales about a green pound gap of up to 19 per cent? Can he confirm that the Government still intend to abolish monetary compensation amounts by 1992?

It is a question not of the Government's intention, but of the inevitable need for the completion of the single market. Any country that suggests that we could have a single market while maintaining a green pound system clearly does not understand what the single market is about. If one country continues to express that view, the rest of us will be forced to carry out a major conversion job very rapidly.