EU Sugar Regime (EUC Report)

My Lords, I congratulate my noble friend Lord Renton of Mount Harry as chairman of this committee and thank him and all the members of the committee who worked so hard to deliver a thorough and detailed report. It has dealt with complex and, in many cases, emotive situations. The debate has shown clearly how the committee was concerned about what would happen to producers within the UK and the EU, and particularly the implications for the ACP countries. Although it has been a little while since Lady Young passed away, she would have taken part in this debate, because she clearly strove to ensure that the ACP countries’ interests were considered every time. If it was not bananas, it was certainly sugar. Some of the comments that have come from noble Lords tonight have reflected our continuing concern as to how we can sustain and encourage those countries to develop in different ways. The committee has highlighted this particularly well. The committee is to be thanked for its robust conclusions and for highlighting some of the areas that will need further attention. My noble friend Lord Renton of Mount Harry, in introducing, challenged the Government on the job loss figures. The Minister has slightly clarified that, but if he could refer to it again when he winds up, that would be helpful. In other words, how many job losses does he see within the UK and how many within the EU. The noble Lord, Lord Renton of Mount Harry, raised the question of the ACP countries, as did other noble Lords. He referred in particular to Oxfam’s forthcoming pamphlet, which will look at the whole question of the future work within those countries. I was extremely grateful for the contribution of my noble friend Lord MacGregor, because he looked at and was concerned in particular with the way in which British Sugar, as a company, is taking a responsible stand and trying to respond to the changes within the sugar regime. We are delighted to hear of the Whissington biofuel plant investment of £20 million. We look forward to that coming on stream. Several noble Lords have spoken of their anxiety to ensure that, within the UK, the sugar-beet growers should get that share of compensation. It should not be divided across all other farmers, growing whatever other crops. Again, I would be grateful if the Minister would clarify that when he responds because I do not think that it is clear at present. My noble friend Lord Eccles asked what would happen to the world price of sugar. That is a big challenge for the Minister to respond to. I suspect that he has no idea what will happen to the world price of sugar, but I am confident that he will have a stab at it. The world price of sugar is a huge problem. Will it go up? Will it go down? What will happen? My noble friend Lord Eccles asked what would happen with the restructure plan of the ACP countries. My noble friend Lord Plumb characteristically hit the nail on the head as regards UK producers. I shall not go through all the points that he raised but I shall pick up on one or two. My noble friend mentioned the spring planting of crops and said that the payments should go to all farmers. My noble friend and I are both concerned that whatever we do in the UK should be done throughout Europe because otherwise, clearly, some beet farmers in Europe could benefit whereas some UK beet growers could end up getting less support. I have often laboured the next point hard and strong in other debates. My noble friend said that we must recognise that the United Kingdom is not an exporter of sugar. In fact, we produce only 55 per cent of our sugar requirement. It is strongly suggested that those who export more should take the bigger share of cuts. I totally agree with and underline my noble friend’s resolve in that regard. Brazil has come in for a lot of comment in the House. If I lived and worked in Brazil, I might well ask, ““What has Brazil done and why are they so against us?””. Brazil has an enormous capacity not only as regards sugar production but also other farming outputs. As my noble friend highlighted, the threat posed to the European and, indeed, to the world market is that Brazil will double its output. It is a question of where that goes. Obviously, it will come back on to the world market. In looking at Recommendation 133, the noble Lord, Lord Livsey, rightly asked which directorate would be responsible for taking aid to the ACP countries. The Minister should be able to answer that question. Very valuable points have been raised. The Government’s response is welcome although I am concerned that, as regards the areas where they still have room to act, they should do so with a number of responsibilities in mind. The aid packages for both restructuring and diversification must be ring-fenced so that they are not simply assimilated into, for example, regional budgets, as my noble friend Lord MacGregor said. I say that partly because the effect of the reduction in sugar beet cultivation will be territorial, as we have heard. A third of it is produced in Norfolk. Farmers in Norfolk raised that concern with me when I visited Norfolk last Friday. The aid packages should also be negotiated so that growers, British Sugar and the Government have an equal influence on how they are used. I would like the committee and the Government to envisage a situation where the processors are involved alongside the farmers to determine what will happen in the future. The Government have stated more than once that a full regulatory impact assessment is in preparation. Can the Minister give us a firm date by which it will be available, if it is not already? How will it affect job losses? What are the implications for other agricultural production and, possibly, alternative end-term usage? I was pleased to note that the Government have confidence in the ability of the competition authorities both here and in the rest of the EU to take action against unfair practices in the restructuring of the EU market. I wonder, however, how long those authorities will take to agree that there is a problem before they actually address it. Will the Government ensure that the UK industry, from soil to spoon, is protected from unintentional disadvantage through perhaps an interjection by the Office of Fair Trading which acts well in advance of its continental counterparts? It is not an issue that was raised, but I am raising it with the Minister now, because the OFT sometimes intervenes. One of the less acceptable by-products of sugar reform is the threat to European wildlife caused by the gap in crop rotation if sugar beet is withdrawn. Other noble Lords have already spoken about the importance of that, particularly my noble friend Lord Plumb. Last July, in another place, my honourable friend Keith Simpson MP read out a letter from a farmer who grows sugar beet, linseed and spring barley in rotation. They are all grown in the spring. His farm is financially viable, and over the winter stubble supports a number of grey partridge, brown owls and other wildlife. If he can no longer earn a profit from sugar beet, he will have to change his crop rotation and start winter sowing of winter wheat, oilseed rape, and beans. As the Minister is aware, stewardships schemes are welcome, but they are unlikely to compensate adequately if many farmers face the loss of sugar beet as a basic crop. What have the Government done to further its use as feedstock for the production of bioethanol for fuel? Others have touched on that today. What was the outcome of the research at the Central Science Laboratory at Rydale? It was noted last July in another place that it was virtually complete, and I wonder whether he can bring us up-to-date information on that. Yesterday’s Budget does not appear to have included anything specific to encourage the production of bioethanol in the UK from UK feedstock. Returning to the report, the committee expressed great concern about the effect of price cuts on the ACP countries. I note the Government’s response that the assistance of some €40 million is for the remainder of 2006, and that there will be help for the period beyond of 2007 to 2013. The implication is that there will be more, both in the sense of further assistance and in the sense of more generous assistance. Can the Minister give us any indication of the sort of levels for which the UK Government will be pressing? The granting of unlimited access to sugar from the least developed countries from 2009 rings alarm bells for me, in that it would appear that Australia will enter the list as well. It was third, after Brazil and the EU, in the list of top 15 sugar exporters in 2000. How will the Government act to ensure that once the EU is open to Australia it will not simply clean up at the expense of the really disadvantaged less developed countries, particularly the ACP countries that we talked about earlier? A lot of comment has drawn attention to the problems in Brazil, and of its capacity. That is a real problem and we need to address it. Finally, the agreement to end the EU export subsidies by 2013 is most welcome, especially in the case of sugar beet, as it will not affect the UK position. I would be glad if the Minister could tell us whether the agreement is balanced by any form of prohibition that will prevent other countries subsidising exports into the EU. It would be a most unwelcome development, were the ACP countries to find themselves pushed out by further unfair competition from third parties.