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House of Lords Hansard
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30 January 2001
Volume 621

2.45 p.m.

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asked Her Majesty's Government:

How soon they expect the extra public funds being made available to the Ministry of Agriculture, Fisheries and Food to lead to positive improvement in the financial position of farmers.

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My Lords, while farm incomes in the United Kingdom have been severely depressed by global factors such as world commodity prices and exchange rates, and the aftermath of BSE, the Government have taken a variety of measures to assist farmers financially. Since 1997 we have injected some £1.2 billion into the sector to provide agrimonetary compensation, assistance to hill farmers and offset SRM inspection and cattle passport charges. This supplements the £3 billion paid annually in direct CAP payments.

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My Lords, I thank the noble Baroness for that Answer. I declare an interest as chairman of the Sussex Downs Conservation Board. Does the Minister agree that despite all of that there is still no sign of a "positive improvement in the financial position of farmers"? Does the noble Baroness recall the observation of the chairman of the Hills Task Force last week in the West Country that there remain a number of barriers to farmers who cannot find their way through the system? Is not the first task of MAFF to try to make all the new green schemes (for want of a better expression) more easily comprehensible to the ordinary farmer and see the money allocated to them more quickly?

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My Lords, I have sympathy with the point raised by the noble Lord, although there are some sectors of the industry, particularly pigs and to a lesser extent poultry, where there are signs of an upturn. Overall, the industry has had a terrible time over the past few years. However, the very substantial individual grants and assistance provided by the Government, particularly agrimonetary compensation, have helped the financial position of individual farmers. As to the availability of straightforward information about schemes under the rural development plan, for example, assistance to those who seek to diversify, or advice to small farmers, all those matters are in hand and we shall continue to take them forward.

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My Lords, will the Minister do her best to ensure that there is an end to stop and go in the assistance given to farmers who convert to organic methods? Will the noble Baroness bear in mind that more than half the organic food consumed in this country is imported and that conversion normally means a reduction in total production?

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My Lords, we have put a considerable sum of money into support for organic farming in recognition of its environmental benefits to the country. That sector has expanded. For example, in 1996–97 support for organic farming amounted to about £374,000 a year. This year we plan to spend £18 million on organic farming, which is 50 times as much as before. That steady expansion will continue under the ERDP.

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My Lords, can my noble friend say more about the Government's rural development programme and the likely future financial benefits which will flow to farmers?

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My Lords, we put great emphasis on the rural development programme. We have an ambitious programme that involves expenditure of £1.6 billion over the next seven years. That allows us significantly to expand existing schemes and introduce new measures to aid rural enterprise, vocational training, processing and marketing, and energy crops. All of that allows the industry to be sustainably redirected in future. One of the sadnesses is that the historic underspend on agri-environmental and rural development measures is responsible for the very low allocation of EU funds to this particular budget.

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My Lords, does the Minister acknowledge that pig farmers are likely to lose £26 million unless it is claimed under the outgoers and ongoers scheme by the end of March? Further, will the Government ensure that the necessary legislation is passed in time to claim that sum and that it is used in advance of the pig levy scheme to compensate pig farmers whose livelihoods have been affected by swine fever or related restrictions?

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My Lords, two different issues have to be separated. One is the implementation of the levy that will add 25 per cent, 25 pence in every pound—the industry levy—for those who are affected by swine fever. The MLC has finished its consultation. We have every intention of taking that matter forward quickly. The other is the pig industry restructuring scheme, announced in the action plans for farming. It has taken much longer than we wanted to get EU approval. However, the outgoers element was open for applications on 4th December last year and the ongoers element was opened on 22nd January 2001. We have £40 million available for the scheme in the next two financial years. We are determined to ensure that the scheme achieves its objective.

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My Lords, are the Government considering a pension scheme for the many small farmers who will go out of business? I have in mind a bond scheme—a bond issued for a certain number of years which can be cashed by the farmer. And what are the Government prepared to do to help the marketing organisations improve their position against the buying power of the supermarkets and others? It is important that the marketing position is improved to the level of, say, that in Denmark.

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My Lords, there is a difference between bond schemes for people who are going out of an industry and pension schemes per se and, indeed, the outgoers scheme in the pig industry restructuring scheme where, obviously, the financial consequences have to be considered. As to marketing, one of the main thrusts of policy with Nick Brown as Minister of Agriculture has been to try to join up the food chain in particular sectors and to recognise the impact on producers right through the chain to retailers. As the noble Lord will be well aware, because I know of the close interest he takes in milk-related issues, we have set up the Milk Task Force as part of the Government's action plan, which includes representatives of producers, purchasers, processors and retailers. That will report at the end of March.