Dairy Farming

It is a pleasure to see you preside over the debate today, Dr. McCrea. I begin by congratulating the hon. Member for Preseli Pembrokeshire (Mr. Crabb) on securing the debate and on his excellent opening speech. I agree, as clearly many colleagues do, with much of what he said, although not all of it. The only thing that spoilt his speech was his reference to Chelsea FC—I do not know why he wanted to go there, but it was entirely up to him, as it is his debate. It is clear from the three debates that I have attended in Parliament on the subject within the past week that the future of our dairy industry, and of our food industry more generally, is a prominent issue on the parliamentary agenda, and rightly so. I have listened carefully to the comments raised during the debate. Despite some of the concerns expressed, I believe that the sector can and does have a positive future and that it will play its part as an important and valuable element of the agricultural sector and the food chain, contributing to both the economy, rural areas and the wider environment. I think that the underlying tone of the majority of the contributions made today agrees with that optimism and positivism, despite the concerns that have been raised. I recognise that the medium-term challenges facing the UK and EU dairy industries are real. I meet with the NFU and other groups regularly to talk through concerns. Yesterday, I attended a meeting with the board of Dairy UK, at which we had a lengthy discussion and I responded to questions on a range of matters. As colleagues will know, I also chair the Dairy Supply Chain Forum, where all the stakeholders play a full part. We need to take a long, hard look at the dairy sector. It is clear that the substantial sums of money the EU has allocated to dairy farmers in the past year alone are unsustainable. The health check, the economic recovery plan, market management and the dairy fund have contributed billions of euros to dairy support, but those funds are not the answer to the sector's difficulties, as many colleagues have said. The EU dairy sector needs to be leaner and more competitive to benefit to the full from the opportunities of a globalised market and to withstand its shocks. We need to help the sector as prices rise to compete without support. With that in mind, we look forward to continued discussions in the high-level group, which was set up by the European Agriculture Council and the European Commission, and to further reform of the common agricultural policy subsequently. The high-level group process offers an opportunity to inform the direction of travel towards further reform, rather than away from it. I will try to respond to some of the points raised in the debate. The hon. Member for Preseli Pembrokeshire referred to the declining number of UK dairy farmers. It is clear that there is a natural consolidation in numbers. We are moving towards having fewer farmers, as has been clearly outlined, and larger dairy farms, but that is a move towards greater efficiency. The number of UK dairy farmers is falling more slowly than the number of our competitors in Europe, as has been outlined. The hon. Gentleman also raised the issue of TB, and the Government recognise the seriousness, the disaster and the tragedy that that represents for herds, farmers and farming. There is also an economic impact on the UK taxpayer because of compensation costs. The hon. Members for Shrewsbury and Atcham (Daniel Kawczynski) and for Newbury (Mr. Benyon) referred to the emotional aspect of that problem. I saw the piece on "Countryfile" about Adam's farm and recognise that it is a huge issue. I will come back to that in due course. The hon. Member for Preseli Pembrokeshire also raised the question of Dairy Farmers of Britain. Clearly, as my hon. Friend the Member for Stroud (Mr. Drew) mentioned, the Environment, Food and Rural Affairs Committee is looking at that and will come forward with its report. It is taking evidence from all those involved, including Ministers. The hon. Member for Upper Bann (David Simpson), in an intervention, expressed his view on subsidies. The UK strongly supports the end of quotas by 2015, and we lobby hard against market distortions. We lost the argument, and I know that there was some disagreement about the €300 million and whether that was a good or bad thing. We argued against the money being devoted to dairy farming because we thought it would further distort the market and not help the UK dairy industry, although obviously it was supported by the majority of member states at the Agriculture Council. As I said in my intervention, we are consulting on the share-outs of the €29 million allocated to the UK. With regard to the question that the hon. Member for Preseli Pembrokeshire asked on the burden of EU regulation, our aim is to keep the administrative burdens to a minimum. That is a key part of our negotiations at EU level and considerations during all of our policy development, as I am sure he knows. He mentioned unhealthy diets and remarked that there is a range of causes, from alcohol and a lack of exercise to poor food choices, and I do not disagree. I do disagree, however, with his accusation that the Government are not addressing those problems. We might have different conclusions on what the priorities should be and what emphasis should be given, but the Government are addressing all the issues he raised and will continue to press on that. I am more than happy to endorse the dairy industry and dairy products, and I said the same to Dairy UK yesterday. Indeed, my wife says that I have bread with my butter, rather than the other way round. The hon. Member for Preseli Pembrokeshire asked about the trends on dairy and milk imports. The UK imports high-value products and exports low-value commodities as a rule, which leads to the distortion, and no one would deny that the exchange rate is having an impact. With regard to the Food Standards Agency, it is clearly DEFRA's role to promote agriculture and dairy, but the FSA has a responsibility to promote a healthy diet and eating well. We do not see those two aims as incompatible. We see dairy as an important element in a balanced, healthy diet, and we make sure that we get that message across as strongly as we can and as frequently as we can. I will not return to the TB debate, if hon. Members will forgive me, because that matter has been aired well during the debate, and the same is true of Dairy Farmers of Britain. We covered the matter of the ombudsman in a debate last week. The vast majority welcome the advance of the ombudsman. The only Member I have heard speak against it is the hon. Member for Shipley (Philip Davies), who was alone in the Chamber last week on that. That demonstrates that, although there is not unanimity, there is overwhelming support for an ombudsman from all three Front Benches. The hon. Member for Shrewsbury and Atcham mentioned the size and power of Arla, but we covered that point to an extent in the European Committee, so he will forgive me for not referring to it again. I congratulate him on the establishment of the all-party group on dairy farmers—I hope that that advert increases attendance at the next meeting.