Agriculture

My Lords, I join others in thanking the noble Lord, Lord Vinson, for this very necessary debate. Having said that I welcome it, I shall make one or two comments on things that he mentioned. He bemoaned the fact that we did not have a return to deficiency payments. I merely remind him that his Government had the opportunity between 1979 and 1997 to do something about that. Equally, when he talks about the repatriation of the CAP, were that to be desirable, the same comment applies. He also bemoaned the lack of co-operative marketing strategies. My understanding of co-operatives—and I have some background in co-operatives in other areas than agriculture—is that almost by definition they are a do-it-yourself process. If co-operatives are desperately needed, the remedy is in the hands of farmers to do something about it, not to bemoan the fact that nobody else has done it. I marginally disagree with my noble friend Lord Christopher when he said that this subject was not a natural one for Members on this side of the House. As somebody who represented the constituency of the noble Lord, Lord Plumb, in another place for five years, part of the necessary imperative for peaceful coexistence was that I had a masterclass from him at least once a month during that period. That taught me to appreciate agriculture and recognise something of its importance. This afternoon I want briefly to look at the strategy for sustainable farming and food that was launched at the end of 2002. In that strategy were several very important long-term aims for agriculture, which are apposite to the circumstances that we face today. Long-term aims for agriculture included the need to secure a more competitive and sustainable industry with a stronger market orientation. I certainly welcome that. They included, too, the aim to reduce agriculture’s reliance on subsidies based on production and reflect instead the public benefits that agriculture provides. I certainly support that, too. In addition, there is the aim of encouraging restructuring for long-term economic and environmental sustainability, which I also support. In those circumstances, the reform of the CAP is fundamental and central to the implementation of that strategy—free to farm to the demands of the market as subsidies are decoupled from production. We are now moving in that direction but what a pity it is that we have wasted so much time. For many years I served in the European Parliament and regularly in our debates and discussions on the budget and on agriculture we complained about subsidies being linked to production, about over-production and about the process of intervention—and we discussed dumping on the world markets, with concomitant damage to third world agriculture when, at the same time, the system was endemically encouraging fraud. We complained about all those things. Something is now being done about it, and I welcome the commitment of the Government to CAP reform. It is slow, but the slowness is caused not by their reluctance but by the necessity to drag parts of a reluctant European Union along with them. We should give credit to the Government and praise where it is due. We should recall, in the system that is being replaced—one hopes to the benefit of the environment—the environmental damage that was being done in striving for constant levels of production irrespective of quality and the environmental damage done. You have only to look at the costs currently being borne by consumers in the water industry to see the price that they are paying for the excessive use of nitrates by some of our grain producers to lift their production levels. Agricultural reform is extremely important and the vision has to be one in which we have a more sustainable farm sector, which is genuinely competitive in a globalised world. The CAP does, and will, so distort the European budget, that there are financial as well as agricultural and environmental imperatives in this process. If we need a common policy and not a production subsidy, does not that open up the possibility for some areas of national financing or at least some areas of co-financing of agriculture? In the debate on agricultural reform, inevitably a lot of people in the United Kingdom have focused on the problems every time the UK rebate becomes engaged in the discussion. I am somebody who believes that we should compromise no further at any point in the discussion of the UK rebate. That rebate is something that mathematically would work itself out of the system if we had the correct agricultural reforms. The rebate is a correction to the expenditure side of the budget; if we got expenditure on agriculture correct, the rebate would mathematically work itself out of the system. I believe that there should be no more compromise with that; it should be the measure by which we know whether we have got the right reform. On farm incomes, I listened to what has been said. I recognise the problems but, to be totally fair, we should talk not only about farm incomes; we should also note that the Farm Business Survey showed that 46 per cent of full-time farms in England in 2004-05 had diversified business arrangements, and that the average output of the diversified activity was some £18,500—very often a sum larger than that which the farmers were earning from agriculture. In parenthesis, I wonder why it is that, with the crisis often referred to in farm incomes, agricultural land prices are rising dramatically. Finally, I pay a personal tribute to my noble friend Lord Bach. He served this House well and the Government loyally, a service that was not entirely reciprocated in the recent reshuffle. I shall refer briefly to two particular aspects of his work. With the single farm payments, he was working with a system and implementation programme not of his making—and if we look at the situation today, we find that 85 per cent of payments have been made. Although he was subject to political criticism, that criticism was not offered by any of the farming unions; neither the NFU, nor the CLA, nor the TFA criticised him. I also pay tribute to the work that he did in the lifting of the beef export ban after 10 years. There was a great success and a great fillip for the beef sector of British agriculture, and I pay tribute to my noble friend for his role in it.