Nitrate Vulnerable Zones

I congratulate my neighbour my hon. Friend the Member for Ludlow (Mr. Dunne) on securing the debate. I will significantly curtail my speech because I want to ensure that other hon. Members are called. By way of introduction, I would like to point out that there is a terrible crisis in the dairy industry, as hon. Members are already aware. The price paid for milk to farmers by the supermarkets has until recently been absolutely disgraceful. On top of that, there is a terrible crisis of bovine TB throughout the country. In 1998 in Shropshire, 45 animals were slaughtered under bovine TB control measures, and in 2006, the figure was 915. There has been a massive increase in the number of animals slaughtered as a result of bovine TB. The recent foot and mouth outbreak also cost farmers throughout the country more than £100 million. So far the Government have offered only £10 million in compensation, which is wholly inadequate, and there is not much hope that the NFU will pursue the Government through the courts to give appropriate compensation to our farmers. Nevertheless, we are making progress. We now have an all-party group on dairy farmers. I am chairman of the group and 189 Members of Parliament are members of it, many of whom are from the Labour party. I pay tribute to you, Sir Nicholas, as you are one of the most active members of the group and thank you for all that you contribute. I will, of course, send a copy of what the Minister says in this debate to all 189 members because I am sure that they will all be interested to hear the comments made today. One of the most encouraging things that has happened is that the Office of Fair Trading has finally decided to fine the supermarkets for the way in which they have behaved. The all-party group met the OFT on many occasions and repeatedly pressed it on this issue. I am pleased that it will be fining supermarkets, but the group now wants to convince the OFT that fines should go not directly to Government coffers, but to farmers. The nitrates directive will be hugely damaging to the dairy industry. It will result in a substantial increase in costs for dairy farmers. From the various studies that I have read, I calculate that it will add an extra £15,806 a year to the costs of the average dairy farm in Shropshire. That equates to a cost of compliance to the farmer of 1.34p a litre. Many dairy farmers will simply not have the capital available to cope with the NVZ proposals, if they are implemented. The 2008 forward planning booklet of the Hong Kong and Shanghai Banking Corporation estimates the average cost of production at more than 25p per litre, and that is before family labour is taken into account. Even with the improved prices, many farmers will not receive a milk price in excess of that amount. The Environment Agency has shown that there have been falling trends in nitrates in 75 per cent. of rivers in the past 15 years due to decreased fertiliser applications. Why must we add additional measures when we are already achieving the objective? In existing NVZs, when a long-term nitrate decline is evident, new action programme proposals should be waived. That point was made by other hon. Members, and I hope that the Minister takes it on board. I shall put three points to the Minister in my remaining few minutes—[Hon. Members: ““Seconds.””] In that case, as I am generous to my hon. Friends, I shall conclude with one point. My hon. Friend the Member for Ludlow mentioned anaerobic digestion, which is one of the most important points. I hope that the Minister will tell us that he has been to Germany or Sweden to see it in action because the Germans and the Swedes are advancing tremendously with anaerobic digestion. They are using farm waste to ensure that energy is produced, and ultimately the result is that far more animal waste is spread on farm land. I look forward to the Minister telling us what plans the Government have to support our farmers in order to ensure that they can enter the field of energy production, which ultimately will help everybody.