EU Sugar Regime (EUC Report)

My Lords, it is a privilege to speak in this debate. The expertise of those serving on Sub-Committee D of the European Union Committee is immense. The noble Lord, Lord Renton of Mount Harry, has been an excellent chairman. In his remarks he cast his net very wide indeed and covered an enormous spectrum of agricultural products, as well as the situation in the UK and the content of our report. As he said, we have been very fortunate in an excellent Clerk and a very good adviser in Sir John Marsh. I confess that I was one of his students many years ago. Some of our sessions felt a bit like rewinding the video. Sir John is still a very forthright and excellent communicator, just as he was when I was a postgraduate student. I cannot match the expertise of the noble Lord, Lord MacGregor, in his description of the situation in East Anglia, nor the experience of the noble Lord, Lord Plumb. I come from a livestock area, so I can say that I have probably distributed more bags of sugar-beet nuts to herds of dairy cows and flocks of sheep than any other noble Lord here. I recall that my first foray into front-line politics was as a candidate in Perth. At my very first meeting, a journalist from the Dundee Courier asked me what I thought of the impending closure of the Cupar Angus sugar beet factory. I remember saying, ““I’m agin it because sugar beet is an excellent part of the rotation in Angus and Perthshire. It maintains the fertility of the soil and is an excellent crop with by-products for sheep””. Does that not mirror what was said by the noble Lord, Lord Plumb, in his speech? This is a vast subject. The conclusion is that there is to be a minimum price cut of 36 per cent. The two main issues are how that will affect us here in the UK from the EU vantage, and how it affects the ACP countries in the worldwide balance we have been talking about. Indeed, the issues go even wider so far as the less developed countries are concerned. The EU production cut of 40 per cent is an enormous target to achieve. Setting that against a competitive EU sugar regime and a viable future for the ACP countries will be, as we stated in our report, very difficult if not impossible. But they are certainly clear objectives. The reduction in overall EU production from 19 million to about 9 million tonnes is very large. I believe that we have to look at alternative uses for sugar beet. I do not think that we can sustain some of these cuts and keep agriculture in our arable areas balanced, to say nothing of the by-products that the livestock industry in the UK also depends on. The EU must comply with the WTO ruling, to which the noble Lord, Lord Renton, referred. It is interesting that the complaint came from Australia, Brazil and Thailand, which are massive producers. On the other side of the coin, as far as the UK is concerned, it is a bit like talking about Tesco, Sainsbury’s and Asda in relation to selling our products in the UK market. Yet those countries want access to our market. As has been said about Brazil, where I was in the autumn, the potential there is vast. It could fulfil a lot of the demand on a worldwide scale. The WTO appeals panel upheld these complaints and, of course, the result is the reduction in production and cuts to the quota, which are very important. We have to take note of the report’s conclusions, particularly as far as the APC countries are concerned—they certainly need more than sympathy. Paragraph 133 in our report, under the heading ““Effect of Reform of ACP Countries””, states:"““Witnesses from the ACP countries were understandably anxious about the precise sources of support money. We recommend that the Commission provides clarification as soon as possible to the ACP countries of which Directorate will have overall budgetary responsibility for the Action Plans””." There seem to be an awful lot of things that are not tied up tightly enough. As has been said, the anxiety expressed by the ACP countries is a result of such uncertainties. Those countries are highly dependent on sugar output and, as we have heard, they do not have many alternatives. I was fascinated by the contribution of the noble Viscount, Lord Eccles. His experience of the situation in the ACP countries has been of enormous benefit to this debate, as we got all the background. Overall, this is a huge problem, which has to be tackled, as it is being now. We support the cuts, but we must not underestimate the impact on our own producers and those in the ACP countries, particularly as far as the one-third cut in the price of the product is concerned—that is a huge cut for the ACP countries. There may be some answers that we can grasp if we are bold. If we think about it—and these are just my own thoughts—we must remember that sugar beet originates in Europe. During the First World War, the supplies of sugar to Germany were cut off. People in continental Europe researched and produced root crops—they are used to growing them—and eventually supplied a lot of their own sugar from sugar beet that they grew themselves. This spread to Britain, particularly after the Second World War, as we have heard. Particularly in the United Kingdom, it would very wise if we tried to transfer as soon as possible as much of the beet sugar as we can into the production of bioethanol for biofuels to meet the climate change objectives, as well as many other objectives. This is a very interesting time. It was very interesting to hear the noble Lord, Lord MacGregor, say that £20 million has been invested in the plant in Norfolk, particularly in relation to world standards and what the noble Lord, Lord Plumb, was saying about the number of plants being built in Brazil. Let us not forget that those plants can produce sugar and bioethanol. I would like to see one of these plants. Do you just turn a switch to produce one or the other? It seems like that, the way it is described. Given what the Chancellor said in his Budget and the need to put more biofuels into the UK fuel market, considerable investment in the UK in plant and factories to convert sugar into bioethanol is required. Given what the Chancellor is doing, this would meet carbon-reduction targets—or not meet them, but go some way towards securing them. At the same time that might enable us to import more sugar from ACP countries, where they do not have these alternatives. This would achieve two important objectives at the same time and would also reduce imports of bioethanol from Brazil. It looked to many of us on the committee that a very high price was being paid environmentally in Brazil for growing more sugar. This kind of investment in the UK would help sustain British farmers and help to solve some of these other problems.