Agriculture

My Lords, I, too, thank my noble friend Lord Vinson for initiating the debate on the state of British agriculture. It is a timely opportunity to review the farming industry’s position. I very much welcome the noble Lord, Lord Rooker, to his place on the Front Bench representing agriculture. For both of us this is like recycling; we have been eyeball to eyeball in the past—I was wearing a different hat in those days—but I wish him well in his new responsibility. I join everyone in thanking the noble Lord, Lord Bach, for the work that he did in a very short time. He was certainly not responsible for some of the difficulties that we face at the moment, and he became a good friend to many of us. I declare my interest as one of those elderly farmers who my noble friend Lord Peel referred to earlier; I need my single payment. I also declare the various bodies involved in agriculture, politics and commerce that I have been and continue to be involved in. I am proud to be the patron of the Cotswolds Conservation Board, which is concerned with the preservation of the countryside. The noble Lord, Lord Rooker, spent some hours with me across some of that countryside not so very long ago looking at what was being done. Noble Lords are familiar with the sorry tale of the failure of the Government to pay the bulk of the single payment scheme by the end of March, as had been repeatedly promised by Ministers. I hardly need to reflect on the increased costs for many farm businesses—the stress that that caused them and many other businesses supplying the inputs. I hope that the Minister can deny the statement made in the European Parliament requesting an extension until 14 October before final settlement is made. If it is true that 85 per cent of farmers have received the single payment—I understand that £213 million is still to be paid, and that more than 5,000 farmers are waiting for the full payment and some are waiting for part payment—it is essential that those outstanding bills are settled and that payments are completed, and that it is ensured that the 2006 payment is not at risk and that all payments are made by 30 June. What would be the position in Brussels if that did not happen? As other noble Lords have rightly said, the farmers’ cash flow is probably at an historic low, for reasons outside their control. I hope that the Minister will accept that the estimated debt in farming is calculated to be £12 billion. If we take the low value of the euro against sterling for trade in Europe, the estimated loss is something like £3 billion—yet we talk about the freeing up of trade with other European countries. Many farmers might say that we should follow the lead of the Chancellor of the Exchequer and put surcharges and interest on late settlements of the single payment, as the Treasury does on late returns or late tax payments this year. However, farming is not just about the single payment. Planning for change is hardly an exact science, but it means that every opportunity has to be taken to look at the potential for new products for modern consumers, particularly in the energy market, and to learn to diversify, as farmers are doing. It is difficult to bracket farming into one operation when it has become so diverse and so specialised, and the market so globalised. If there is a food deficit in this country of £13 billion and we see self-sufficiency falling in the past 10 years from 74 per cent of our own market to 60 per cent, surely we must look at the market itself and do something about it. I accept that that is a responsibility that farmers must take for themselves. Food safety and security does not seem to register, as the noble Lord, Lord Christopher, said. There is always a risk of importing diseases such as avian flu, salmonella and foot and mouth, as we know to our cost. TB continues to spread like wildfire across the countryside, while the Government appear to wring their hands in despair. I know that scientific evidence comes from both sides, and that the position is extremely difficult. The cost of one pre-movement test for farming is of some help, but it is like shutting the stable door after the horse has bolted. It is a tragedy that could have been avoided if action had been taken 10 years ago. Farmers accept that they are in a risk business. Their products, either from the land or the animal, are subject to disease or the vagaries of the weather. In response to the demand for quality food produced from environmentally friendly farming, they welcome the announcement by the Office of Fair Trading to refer the grocery market to the Competition Commission. Does the Minister agree that analysis of the impact that food retailers have on producers might also be considered as part of that? The mind boggles when a producer is getting 18p a litre for his milk and it is sold in the supermarkets—at least, in the one that I use not far from my flat here in London—for 79p. The other day, I saw organic milk being sold at 99p a litre. While cash flow and market returns remain a major problem, agriculture continues to be the recipient of yet more regulations designed to bring farming into line with controls applied to other businesses and other industries. Plastic and card packaging, which the noble Duke, the Duke of Montrose, mentioned, is covered by the waste directive, and demolition and machinery waste is classified as controlled waste. These changes have implications for all farm businesses and add further cost to the present enforcement of regulations. We are well aware that there are tough times ahead and we have to accept that sleep-walking into the future, dictated only by today’s financial and trading giants, would be disastrous. Many areas of the country are successfully promoting sustainable food, and I am a great believer in localised food production and processing. I want to mention one thing outside this area. Farming land in the future will be about more than just producing food. Last weekend in Budapest I attended a conference which brought together people concerned with the World Trade Organisation and with where we are heading. The theme of the conference was producing products for biomass and biofuels for heat and so on. The whole emphasis worldwide, therefore, is on renewable energy from crops, and we are aware that various reviews are taking place. We are aware of the energy review taking place, and I was encouraged by the Prime Minister’s comments to the CBI. Industrialised crops can play a vital part in the step-change towards energy efficiency. We either keep up with the rest of the field or we give a lead in reducing CO2 emissions. I read in a recent report that, in an age of energy efficiency, we waste enough heat in power stations to heat the whole country for free; that we reuse only 1.4 of 5.6 million tonnes of reclaimed timber, with the balance going to landfill; that we have failed to recognise the energy resource in waste materials; that we have failed to recognise the need to consider the options for renewable heat; and that our forests could become more viable through the use of woodchips. It seems that the biggest barrier is ignorance. Finally, for the first time in my life, production is free from the shackles of commodity support. The cheap food policy that we have had in the past has gone and the Government’s ability to control production has therefore been reduced. We are on our own, and I believe that farmers will, and must, take responsibility for controlling their destiny in the future, particularly in marketing their goods.