Agriculture (Agenda 2000)
We now move to the debate on motion S1M-185, in the name of Ross Finnie, on Agenda 2000 and the development of agriculture in Scotland, and amendments to that motion.
I am pleased to have the opportunity today to address the chamber. In the time available, I will outline the steps that the Executive has taken and is proposing to take to create a more secure future for Scottish agriculture.
There is no doubt that Scottish agriculture is in a serious situation. The difficulties encountered over the past two years are almost unprecedented. However, the Executive is working hard not only to alleviate the symptoms of the malaise, but to tackle the underlying causes.
Some of the problems affecting our farmers cannot be resolved by any single Government. Economic problems in Russia and the far east, over-production of certain commodities in much of Europe and the weakness of the euro all add to the problems. Their resolution, however, is not entirely in the hands of this Parliament.
Nevertheless, there are many things that can be done and that we have already begun to do. Turning first to the most immediate problems, I recently announced, in conjunction with other UK agriculture ministers, an assistance package worth £40 million for Scottish farmers. The package comprised £20 million for hard-pressed hill farmers and a further £20 million to offset some of the costs that the industry is facing as a result of the legacy of BSE, such as the costs of cattle passports and of controls on specified risk material, which have now been deferred until 2002.
I also indicated that I was seeking the agreement of the European Commission to the introduction of a cull ewe scheme to help with the disposal of unwanted sheep. My officials had a final meeting with the Commission on Tuesday. I regret to say that it is now clear that there is no chance of the European Commission approving such a scheme. I am very disappointed. We have tried for several weeks to persuade the commissioners of our argument.
I feel that it is important for me to convey the bad news to our sheep farmers now, so that they do not hold back ewes from the market in the hope of a scheme being introduced. I hope that sheep farmers will recognise that the £20 million increase in hill livestock compensatory allowances that we have been able to secure comprises a sizable contribution towards relieving the difficulties that they face.
Next week, when I meet the European Union commissioner, Franz Fischler, I intend to draw his attention not only to the genuine problem of cast ewe disposal, but to the wider issue of what to do with unwanted and dead animals. I intend also to express my grave disappointment at the narrow way in which the regulations have been interpreted, which has prevented Scotland from benefiting from a cull ewe scheme.
Turning to the medium term, I will deal first with the implementation of Agenda 2000. As members will know, the common agricultural policy has a powerful influence on the performance of Europe's farmers. In simple terms, it delivers almost £500 million of direct subsidy payments to Scottish farmers each year, which works out at around £23,500 for each average-sized farm. Clearly, therefore, any changes to the common agricultural policy must be handled carefully.
The Executive has inherited a package of CAP reform measures that was agreed in March this year. The package consists largely of compulsory measures with a few optional items. The result is far from perfect—on occasion it drives farmers to operate in ways which are contrary to the needs of the market—but, overall, it provides a financial safety net for the next few years.
There will be winners and losers, but our best forecast is that the compulsory elements of the reform package will, when fully implemented, provide a net additional £50 million across Scottish agriculture. The package has been particularly welcomed by our specialist beef producers, as it delivers extra support for suckler cows. In the beef sector, we forecast an increase in direct beef subsidies of £75 million, which may be offset partially by a fall in market price support. The overall result, however, will be more direct support for Scottish beef farmers.
The picture for arable farmers is more mixed. There will be a 22 per cent increase in payment rates for cereals, offset by a reduction in rates for oilseeds. For dairy farmers, changes in the milk regime have been deferred until 2005-06.
In regard to the optional measures, which have been widely consulted on, the key element has been the introduction of a new scheme for the less favoured areas, to replace the hill livestock compensatory allowance mechanism. I believe that I have proposed a groundbreaking mechanism—an approach to help hill and upland farmers. My objective is clear: to support and maintain sustainable farming in the Scottish countryside in a way that provides economic, social and environmental benefits, particularly
where farming conditions are most severe. The scheme that I envisage will not only provide essential support for the most disadvantaged, but act as a useful model on which to develop longer- term support arrangements to underpin those who earn their living on our hills and uplands.
Consideration is also being given to other measures to be operated under the new rural development regulation, which will be the successor to the various objective 1 and objective 5b structural fund schemes and on which wide- ranging discussions have already taken place.
A sustainable future for Scottish agriculture ought also to include increasing focus on organic farming. I am keen to encourage farmers to convert to organic methods, which benefit the environment and the consumer. I am, therefore, delighted to announce that I have today signed a new regulation to increase organic aid scheme payments from this autumn. The regulation increases payment rates and maximum areas eligible from 300 to 1,000 hectares. These proposed increases would further encourage farmers to switch to organic methods and give a boost to the amount of organic produce on the shelves for consumers. While the money available is somewhat limited, I am satisfied that such marketing and processing can be contained within our financial arrangements.
Is it possible for the minister to give clear figures, as that would be helpful?
Is Mrs Ewing seeking a clear figure in terms of the amounts?
Yes.
I am sorry, but there are a number of details that are being announced in relation to the regulation. The actual amounts will bring us to a level almost the same as the level currently operated under the English scheme. The increase in area was, as I indicated, from 300 to 1,000 hectares, which is a substantial increase.
I will move on to the longer term. The theme of longer-term sustainability is, perhaps, the more important part of what I have been trying to do in the agri-food business, that is, food companies that use Scottish agricultural produce.
Earlier this year, I launched the Scottish Enterprise food strategy, an ambitious project to develop the Scottish food industry into a major asset for the Scottish economy. I am keen to support the project and I am determined that it should also be used to help the farming industry to become an integral part of the food industry. To put it quite simply, the Scottish industry must capture more of the added value in the food chain in Scotland if it is to prosper and it must move away from the commodity markets wherever possible. That will not be an easy task, but I hope that the enterprise strategy will provide an opportunity to move down that route.
Central to that strategy is our determination to get Scottish beef back on the table abroad as well as at home. We all know about the high quality of beef, and I pay warm tribute to the efforts of our producers, processors and exporters in developing and sustaining that reputation. Next week, I will be strongly supporting our drive when I attend Anuga, the food fair in Cologne, and when I subsequently go to Brussels as part—
I share with the minister his disappointment at failing to get the EU to move on a cull ewe scheme. However, what progress is he making on decisions taken by the EU? How many meetings has he had with the French Government to persuade it to take Scottish beef, to end the ban on its imports and to press the Scottish case?
Personally, I have had no such meetings. However, I have added the Scottish Executive's needs to the memos that are currently being circulated through our UK representative and through our ambassadorial team, all of whom are pressing the commission to take serious action, particularly against the French Government. As I understand the position, the French Government is now threatened with infraction proceedings. The European Commission must make it quite clear to the French that they are in gross breach of their obligations. That point is being made strenuously by the UK Government, and I have added my name to the contribution that has been made on this issue.
I must move on, as time is precious. I have made it clear that I consider it to be as important to look forward and to try to take the whole question of our agriculture into a slightly different frame. On Monday, the First Minister and I met leaders of the National Farmers Union of Scotland to progress the longer-term agenda. All present acknowledged the problems that face farming and accepted that there could be no quick and easy solutions. We agreed that it was important to develop medium and longer-term strategies and to take a fresh look at the situation.
The approach that I am adopting is similar to the one that I would have taken had I still been in the business sector; that is, I will look at the problems and constraints and develop strategies to make use of the opportunities. That will not be quick or easy, and is not necessarily likely to overcome all the problems, but I believe that it is the way in which we must go forward. For too long, perhaps, we have hidden from some of the real issues and been fearful of the answers. It may be that we, both Government and industry, have lacked the
confidence to look for new opportunities. Whatever the reasons, the time is right to move on.
In the first instance, the Executive proposes to take a look at two sectors that are experiencing particular difficulties: the sheep sector and the dairy sector. They are not the only ones. I am only too well aware of the appalling problems that face the pig sector. I continue to have discussions with my officials to look at whether there are any ways in which we can help, but I do not want to raise hopes because they are also in a position where any form of assistance would break the hurdle of state aid.
I intend to invite an experienced and respected businessman, with a track record in international markets, to carry out a wide-ranging review of the sheep industry from the farm to the consumer. The aim is to identify opportunities available to the sector, then pass them on to the industry to work up a renewed strategy.
For the milk sector, I have agreed to provide financial support to the Scottish Agricultural Organisation Society Ltd to enable it to work with Scottish Milk and experienced consultants to prepare a strategic plan for the sector, reflecting the ideas that industry managers have been trying to work up in recent months.
In case there is any doubt, it is not a question of doubting the ability of those in the industry; indeed, the initiatives will need to draw on their experience and skills. It is a question of supplementing and complementing those in the industry and bringing some fresh thinking to those two beleaguered sectors. In addition to those market-oriented initiatives, the Executive has proposed other steps. These include reviewing red tape, proposing an increasing dialogue on the growing links between farming and environmental pressures and exploring ways of ensuring incomes for those who live in more fragile areas.
Of course, these are but a few stepping-stones in what will be a long crossing. I do not want to pretend that there are any easy or quick solutions to the problems that face our agricultural industry. There are not. What I am saying today is what I said to the NFUS, and what has been my consistent theme since I took office: I am prepared to look at the medium and longer-term issues to try to find a solution to the problems that have bedevilled the sector for so long.
I move,
That the Parliament welcomes the Scottish Executive's support for Scottish farmers and approves the steps it is taking to assist in creating a more sustainable future for Scottish agriculture.
I am very glad to speak in the Parliament's first debate on the agricultural industry. It is a shame that so little time has been allocated to this. [MEMBERS: "Hear, hear."] The time certainly does not reflect the economic importance of the agricultural industry for Scotland.
Although agriculture, in many ways, is out on its own—sui generis—in other ways it is very similar to, and suffers the same sort of pressures as, other industries in this country, particularly the manufacturing industry. In particular, I refer to the high, and rising, rates of fuel duty, particularly on diesel. That affects the cost of every agricultural input and output, often to a significant extent in rural Scotland.
In addition, the high rate of sterling makes our agricultural exports—when we are allowed to make them—increasingly uncompetitive. On the other hand, by making food imports more attractive, it reduces the market for home sales even in the areas where we are trying to break into niche markets.
The other side of the coin is relatively high interest rates, which have their own particular knife to twist in this industry. The industry is forced into increasing borrowing to make up for incomes that have often fallen to zero and below. In his summing-up, will the minister say whether he has had any discussions with the major banks about their policy towards agricultural borrowers, who face many difficulties?
Many of the pressures that I have mentioned, such as taxation and currency levels, do not fall within the minister's direct remit as they are— currently, at any rate—reserved for Westminster. Whether it can influence its comrades south of the border on those issues will be a crucial test of the Executive's clout with them.
All things being equal, some of those factors taken on their own might have been bearable for a while, but as the minister has acknowledged, all things have not been equal for some time. The UK Government might decide that its macro-economic strategy requires that it makes some hard choices—that is their favourite phrase—but let us be clear; even in the case of fuel duty, the decision is economic and is one that has precious little to do with environmental concerns in rural Scotland.
We cannot escape the realisation that the Government's strategy will come at the expense of the health of certain areas of the economy and that Scottish agriculture will be one of those areas. It is essential that the Executive uses whatever muscle it has to influence the Chancellor of the Exchequer in his future decisions.
I welcome at least one of the measures that were announced earlier this week. Ignoring the fact that consultancy is the fastest-growing industry in Scotland, we do need a regulatory review of the hugely complex array of regulations and the associated costs that accompany almost every agricultural activity. Those might individually have been justified at some time, but collectively they have become a bureaucratic nightmare.
Farmers often joke that two vehicles are required when they sell a lorry-load of beasts: one for the beasts and one for the documentation. That is an exaggeration that is born of bitter experience. While I am sure the Government's intention in reviewing the situation is sound, we must wait to see what is delivered.
On other issues, successive Governments have promised to reduce the burden of regulation but have been singularly unsuccessful in doing so. As recently as the last Westminster election Labour was promising a bonfire of the quangos. Postelection, we have seen little in the way of results. On the matter in hand, the time for discussion is very limited—it is now the time for action.
I would like to turn briefly to the common agricultural policy, which is central to the future of Scottish agriculture. That is why it is mentioned specifically in our amendment. I am sorry that we do not have time to debate that in more detail.
The CAP dwarfs the sums that are paid out in structural funds. In Dumfries and Galloway three times more per person is paid out through the CAP than is paid through structural funds. We spend lots of time talking about the structural funds but debates on the CAP tend to be the preserve of very few people, as is demonstrated in the chamber. The man or woman in the street is much more likely to know about Jubilee 2000 than they are to know about Agenda 2000.
Nick Brown, the UK agriculture minister, gave some indication of the unsatisfactory and probably transitory nature of the new CAP. Ross Finnie alluded to that in May when he said that
"many of the commodity regimes may come under such pressure that they must be readdressed in this period".
The period to which he referred is that of the new CAP. In other words, because of pressures from the World Trade Organisation and from enlargement of the European Union, we will need to renegotiate the CAP before renegotiation is due.
If that happens before the Scottish parliamentary elections, it will be a litmus test of the Executive's ability, or otherwise, to influence the course of EU deliberations. The Executive will be watched very closely by the Parliament in that. The minister should not underestimate his own powers or the powers of Scottish people negotiating in Europe. He should go to France and he should seek out meetings with his European and French colleagues to try to get the French to change their position.
I am running out of time, so I will say in conclusion that if there is one thing this new Parliament can do, it can give long overdue attention to Scotland's agriculture and rural areas. They are important economically, socially and environmentally. Agriculture is too important to be discussed only by a minority of politicians, or only when things go wrong, and it is too important to be left to the farmers. It deserves the attention of us all.
I move, as an amendment to motion S1M-185, in the name of Ross Finnie, to leave out from "welcomes" to end and insert:
"notes the vital role of agriculture for Scotland's rural communities; recognises that many of the factors causing the serious crisis in Scottish agriculture are outwith the control of the Scottish Executive, and calls upon the Executive to make representations to Her Majesty's Government on such matters as interest rates and the level of road fuel duty and to implement the Common Agricultural Policy (CAP) reforms in a way which best sustains rural communities."
I begin by declaring an interest in this issue. As many members know, I am a farmer. Farming is an activity that, for varying reasons in recent years, I have conducted largely in a charitable capacity. That is why we find ourselves here today.
The motion that has been proposed by Ross Finnie begins by asking the Parliament to welcome the Scottish Executive's support for Scottish farmers. I am not prepared to withdraw that part of the motion, which is why I deliberately kept it in. There is a great deal to be said for the way in which the Executive has supported Scottish farming in the short time during which it has been responsible for that.
I must also say—and I have made no secret of this in the past—that I have tremendous respect for Ross Finnie and for the ability that he has brought to the role of Minister for Rural Affairs in this Parliament. Part of the reason for that is that, as members may remember, Ross Finnie's Welsh counterpart, when she was appointed, was the source of several jokes, largely because she was a vegetarian. There was an attempt by certain elements in Scotland to suggest disappointment that Ross Finnie—a man whose experience lay entirely outside the rural sphere—had been appointed to that important role. However, I would be the first to say that Ross Finnie has brought to
that role an extraordinary ability to learn about the problems that the farming industry faces and to address himself to those problems.
However, we cannot have too much praise. On the second half of the motion that Ross Finnie has proposed, which expects this Parliament to approve of the steps that have been taken to assist in creating a more sustainable future for Scottish agriculture, the jury is still very much out. The Conservatives have been laid open to quite a bit of criticism. The accusation—normally by my friend George Lyon—that the problems of the Scottish farming industry are entirely the fault of the previous Conservative Government is one that we have tried to deny, and I cannot allow it to pass at this point. There are few farmers in Scotland who would not happily swap their economic position today for their economic position in May 1997. The fact is that our industry has gone downhill quite convincingly since that year.
Grain prices are down by 40 per cent; cattle and sheep prices are down by 20 per cent; milk prices are down by 30 per cent; and I was told yesterday that pigs have been losing money for 22 consecutive months. That is a record for which the Government that we had for the two years preceding the establishment of this Parliament was largely responsible, but for which the current Executive must be accountable to some extent.
We must consider why that has happened, and I am not prepared to accept that it was all the fault of the previous Government.
You would say that.
In determining the causes of the problem, the best source is the National Farmers Union of Scotland, which has produced a list of the issues that it believes have done the most damage to Scottish farming. Right at the top of that list is the strength of sterling, which has already been mentioned by Alasdair Morgan. The problems that are associated with the strength of sterling are so severe that virtually nothing that we can choose to do, or that the Executive can do on behalf of Scottish farming, will overcome those problems. For that reason, I must join Alasdair Morgan in calling for the situation to be considered as a problem that goes beyond agriculture.
Alex Johnstone said that he was concerned about the strength of sterling, and he has quoted extensively from Jim Walker's document. Is he telling us that he shares Jim Walker's view that the United Kingdom should join the euro, or is he not endorsing Mr Walker as fully as he is trying to claim?
Oh, mischievous.
But true.
I have to say that I am not endorsing the call, heard occasionally from certain parties in Scotland, to join the single currency. The problems associated with the high value of sterling and high interest rates have been created to a significant extent by policies driven by the current Chancellor of the Exchequer in his desperate attempt to get our economy into line with that of Europe, so that ultimately he can join that single currency. If he took a broader view, considered the economic situation in this country and acted in such a way as to follow the needs of the farming industry rather than the needs of his own long- term economic aim, we would not be in the position in which we find ourselves today.
I endorse the view, expressed earlier by Alasdair Morgan, that transport costs are a major part of the problem faced by the industry. A farmer in the north or north-east of Scotland is almost 600 miles from the main market of Europe. Raw materials have to be hauled in over that distance and products have to be hauled out. The effect on the overall value of produce from the north and north-east of Scotland, as well as the rest of Scotland, is quite excessive, running into enormous amounts of money that we have simply not been able to find. That is why our industry no longer makes a profit.
I want to address one or two of the issues that Ross Finnie raised. I join him in saying that the disaster of the cull ewe scheme will be felt throughout the Highlands and Islands as well as in the lowland areas where sheep are produced. Hopes have been dashed as a result of that scheme failing to come to fruition. We must remember that the scheme was important for more than simply economic reasons. There were sound welfare and environmental reasons why the scheme should have been approved. The failure of the European Union to give permission for the scheme to go ahead is a disaster that will be felt in every corner of rural Scotland.
Perhaps that is a lesson to us in how we should deal with Agenda 2000 and the reforms that it will bring to Scottish farming. We must look carefully at how we implement European regulation. Too often in the past we have accused our own Government of gold-plating European regulation. We now have an ideal opportunity to consider a more constructive and positive way of interpreting European regulation in future, so that we can at last have the level playing field that we have been promised.
However, there is something that we can do and it is something that we need to do fairly quickly: we must pursue the opportunity to give fair competition to our producers. Representatives of the pig industry, for example, have been asking for a considerable period for the opportunity to have all meat products produced in the United Kingdom,
and particularly in Scotland, labelled with their country of origin. I have already submitted a written question on that subject, but it may not yet have come to the attention of the relevant ministers, so I shall raise it again today.
I suggest that not only may it be within the powers of this Parliament to demand that such labelling be introduced, but it may be within existing powers to demand the introduction of such labelling. It has been suggested to me that the powers of the Food Safety Act 1990 may allow ministers to ask for such labelling to be introduced. If that is the case, I ask that action be taken urgently to ensure that our pig producers have the opportunity to have their product out there in the market, identified as home-produced, so that they can reap the benefits of the investment that they have made. If the ministerial interpretation of that regulation is not as it has been described to me, it is important that action be taken as early as possible so that that opportunity can be taken and our pig farmers can be protected from unfair foreign competition.
I move, as an amendment to motion S1M-185, in the name of Ross Finnie, to leave out from "and" to end and insert:
"but, recognising the unprecedented crisis facing our Scottish farmers, calls for additional steps to be taken to reverse the continuing decline in the economic fortunes of Scottish agriculture."
As members have said, only a short time is available for the debate. It would be helpful if speeches by those participating lasted no longer than four minutes.
The farming industry is in dire straits. Never before have there been so many difficulties across the entire sector at the same time.
When Jim Walker, president of the NFUS, came to the Rural Affairs Committee last month to give evidence to us about the crisis in the sheep industry, he rightly included the wider crises in the farming industry and in rural areas. I said to him then that I had first-hand experience of visiting dairy, beef, pig and sheep farmers in my constituency and that they are all in crisis. I asked him which sector he thought had the highest priority. His answer was:
"Rather than prioritising the sectors, we should prioritise the solutions so that we can make the best and the biggest difference in the shortest time."
Mr Walker went on to confirm what many farmers in West Aberdeenshire and Kincardine have said to me:
"The farming industry is desperate for the chance to compete fairly and it has simply not been getting the chance."—[Official Report, Rural Affairs Committee, 7 September 1999; c 53-54.]
One example of the costs is the £7-per-head cattle passport scheme that was about to be introduced as a result of strict public health measures designed to ensure consumer confidence in the industry—rightly so. However, many of our competitor countries pay for such public health costs from Government sources and do not lay them on the industry. It is clear that the Executive recognises that as a major cause of concern; it has ably argued for the postponement of the £7-per-head scheme to 2002. I welcome that, and I hope that it will never see the light of day.
The partnership Government has identified the problems of Scottish agriculture and has taken direct steps, as the motion recognises, to assist in creating a more sustainable future for it. Ross Finnie, our Liberal Democrat Minister for Rural Affairs, who has had fulsome praise heaped upon him, lost no time in acting in support of our farming communities. A few weeks ago, he announced a £40 million assistance package to ease the burdens on farming. We have helped to secure the lifting of the beef export ban. There is a lot more to do, but we have achieved that. The compulsory elements of the common agricultural policy reform measures to which Ross referred will, when implemented, provide an additional £50 million in direct subsidies to Scottish farmers.
Yesterday I was particularly pleased to hear Jack McConnell confirm, in answer to my intervention, that money would be allocated to introduce an independent appeals mechanism for farmers suffering penalties in relation to their EU subsidy claims. That measure is a direct result of the Liberal Democrat influence in the partnership agreement and will be welcomed by farmers.
The SNP's amendment seeks to remove the focus from the good work that the Executive and Ross Finnie have been doing and to place it on matters for which Westminster MPs must argue. That is not exactly a productive or helpful approach for farmers.
Will the member give way?
No, I get only half the time that Alasdair had. If I have time, I will give way.
I am aghast at the cheek of the Tories in lodging their amendment, which
"calls for additional steps to be taken to reverse the continuing decline in . . . Scottish agriculture."
The decline started in 1997, did it? It is a decline for which the Tories were hugely responsible in the first place. The BSE crisis caused devastation
in rural communities. I would have thought that the Tories would keep a very low profile in the debate. It is clear that the Executive takes the problems that face our farmers seriously and is acting to address them.
The two amendments are not worthy of our support. As a Liberal Democrat, I whole-heartedly welcome the Executive's support for Scottish farmers, and urge members to support the motion.
As the representative for the Stirling constituency—an area that one might not imagine is classified as 93 per cent rural—I understand fully the difficulties facing Scottish farmers. Like Mike Rumbles, I have been to my local mart and have paid several visits to local farmers.
I welcome Ross Finnie's motion and the Executive's efforts to ensure a sustainable future for farming in Scotland. The BSE crisis has damaged the beef industry, and caused a knock- on effect on our agricultural industries. We have suffered not only the loss of direct agricultural jobs, but a serious threat to dependent jobs. The industry has been damaged by a fall in exports and we must examine ways in which to increase Scottish exports to Europe—an export market that was worth almost £700 million a year in the years up to 1996. Even the welcome lifting of the ban on British beef has not been without its problems in regaining markets, particularly in France. The Westminster Government is addressing those complex issues, and we should support its efforts. We should also support the efforts of Ross Finnie, who spoke on that matter earlier.
In this country we can applaud the animal welfare standards that our farmers maintain, but those standards do not come without costs. There must be a level playing field within the European market. We must also address the contentious issue of labelling. Import labelling is often unclear, and even misleading. We must present to the European Union the case for the compulsory declaration of country of origin, to inform consumers and promote the buying of Scottish meat.
It is essential that, as the Scottish Parliament, we work with Westminster to strengthen our case for Scottish farmers before the European Commission, and search for solutions that are specifically Scottish. Many of those solutions have been alluded to.
Agenda 2000 reforms provide opportunities for farmers to further restructure their businesses towards a more market-oriented future, but we all recognise that agriculture still needs substantial support. We welcome the £40 million aid package that was implemented in September and which was referred to earlier, particularly the aid to the hill sheep farmers in my area. However, as was clearly stated by Ross Finnie, a long-term strategy for Scottish agriculture is needed. The Scottish Executive is to provide Scottish Milk, the country's largest milk co-operative, with assistance in putting together a strategic plan. We need to examine more options for creating partnerships with local enterprise companies and councils. While those measures go some way towards supporting our traditional farming, it is essential that we recognise the need for diversification, which allows farming to develop in a modern market.
In looking for the way forward, we must support innovative measures. Mention has been made of organic schemes. I know that Robin Harper is a great supporter of them, and Ross Finnie has also mentioned them. The success of the farmers' market in Perth is another excellent example of innovative thinking.
Many farmers are open to change and diversity, and we must support their efforts in those areas. Agenda 2000 shows the need for rural development plans that address diversification and recognise the increasing scope for farming, forestry and the natural environment to be developed for each other's benefit, to which Ross Finnie alluded.
We can also develop further the Scottish brand with new labelling for home-grown products, such as labels identifying specially selected Scotch lamb. I am sure that pig farmers will have similar ideas. We are not short of ideas.
Sustainability is at the heart of Agenda 2000 and this Government's programme. I commend the motion.
I will talk about aspects of the issue that do not always have sufficient prominence in discussions on agriculture in Scotland: the environmental protection requirements and agri-environment measures. Today in Scotland we must manage the environment in a way which, crucially, will provide a living for food producers and will otherwise be of benefit to people and wildlife. In effect, support is needed for environmental projects on farms.
For example, diffuse source pollution from agriculture is likely to be the primary source of river pollution by 2010 and is currently the biggest cause of water pollution outside urban areas. The Scottish Environment Protection Agency has regulatory powers to deal with point source agricultural pollution caused by slurry, silage and
agricultural fuel oil. The ability of farmers to pay for the collection and storage facilities required by those regulations often limits the rate at which improvements can be achieved. Grants for that important aspect of pollution control could provide measurable benefits in environmental improvement.
That brings us to cross-compliance. It is no secret that farmer and landowner representatives are not in favour of further cross-compliance. Cross-compliance offers environmental benefits, which should in any case underpin good farming practice. As implementation of that element of Agenda 2000 is a decision made by the individual member state, I urge the minister to ensure that initiatives that are implemented are relevant to Scotland and the situation that prevails here. He should take note of the farming industry and environmental interests. Scotland currently has about £15 million-worth of agri-environment spending. It should be noted that Ireland has about £100 million.
Of the three schemes funded in Scotland, probably the most contentious has been the countryside premium scheme, which has been heavily oversubscribed, and by implication underfunded, since its implementation in 1996. It is intended that that scheme and the environmentally sensitive areas scheme will be merged. All farmers in Scotland will be able to apply to the rural stewardship scheme, but will have to compete for the limited resources available. The Executive plans no further consultation on that. Could that be because farmers, growers and crofters are keen to participate in larger-scale, better-funded programmes? I am pleased to hear of the minister's commitment to the third scheme, the organic aid scheme. It would have been difficult for him to ignore the fact that organic farming is the most buoyant sector in the agricultural industry, both in the UK and in Europe. In Europe, the momentum is generated not only by market demand, but by agri-environmental policy there; organic funding is a key element. If the growth rate continues, 30 per cent of agricultural land in Europe will be farmed organically by 2010.
In Wales, there is a plan for converting to 10 per cent organic by 2005, which has gained widespread support from the Welsh Assembly and the farming community. Farmers in Wales receive one and a half days of conversion advice, while in Scotland there is access only to telephone advice services. The organic aid scheme in Scotland is badly organised. For example, when farmers apply, there is only a small window of opportunity for conversion start-up, between August and October. What justifiable agricultural reason is there for that?
There is concern that the organic aid scheme will continue to be underfunded. Until we know the figures from the minister, set against the interest in conversion, that will remain unresolved. A fear is that it might be designated as a discretionary scheme. Scotland is ideally placed to promote a huge expansion in organic farming. Among its many positive attributes, organic farming assists moves towards economically sustainable agriculture.
We must have a much stronger line from the Government on genetically modified organisms. Farms that have spent time and energy securing their organic certification could have it revoked immediately should there be any contamination from nearby GM crop trials. The possible gene contamination of organic crops, the effects on plant life and the problems for consumer choice are a matter for another debate. More research is needed to examine the potential impact of GMOs on organic farming. It would be good to have a commitment from the Executive that that matter will be sympathetically addressed.
I, too, represent a largely rural constituency, and have been made well aware of the problems faced by local farmers. The public's perception is that farmers tend to exaggerate their woes. I have received a couple of letters complaining that I was supporting the farmers. There can be little doubt that farmers in the beef, dairy, sheep and pig sectors have experienced real and continuing problems this year.
I was one of several MSPs who contacted the minister to request that the Executive should take action when it could to relieve the immediate problem. Before Mr Finnie's meeting with Nick Brown and the Welsh Agriculture and Rural Development Secretary, I lodged a member's motion to draw attention to farmers' difficulties. I was, therefore, pleased to hear Mr Finnie's announcement of 20 September, which set out a number of measures to support the farming industry. In addition, I congratulate the minister on applying to Brussels for a Scottish cull ewe scheme, although I am disappointed that the strict rules that the EU applies on state aid for agriculture have created significant difficulties in that area.
Both Messrs Morgan and Johnstone made some interesting and valid points, but the amendments in their names seem to have been lodged principally for the sake of disagreement. They do not offer anything particularly different in terms of wording, apart from raking over the usual old coals
of fuel taxes and the strength of sterling—neither of which is within the remit of the Minister for Rural Affairs or, indeed, of the Scottish Executive.
Will the member give way?
No, I must press on as I do not have much time.
I was encouraged by the statement that the chief medical officer made this week to the Rural Affairs Committee. The development of new tests for the infective agent in BSE will allow us to determine cow-to-cow transmission of the disease more accurately. The tests will also enable speedier detection of the presence of the agent in animal tissue and improve the confidence that we can have in future that the disease has been eliminated from our cattle herds. They should also indicate whether BSE is present in the sheep population. A clean bill of health for both species must improve our export prospects.
Confidence will need to be accompanied by an aggressive marketing strategy, both overseas and in this country. The Executive has recognised that by appointing a sheep study group and by supporting the Scottish Enterprise food strategy. The minister mentioned the general consensus about the need for medium and longer-term strategies, but—as he says—those will not be quickly or easily implemented.
Scottish farmers often articulate the complaint that the restrictions are much more strictly enforced here than in other European Union countries and that their European competitors have an advantage over them as a result. Where that is the case—and many of us believe it to be so—the aim must be to level up the standards in the rest of Europe to those in the UK. In the meantime, our higher standards should be used as a marketing tool, particularly at home in Scotland.
We in Britain like to think of ourselves as a nation that places a lot of emphasis on animal welfare. A number of bills on animal welfare issues are currently being considered. Despite being a carnivore—I apologise to any vegetarian colleagues who happen to be present—I, too, regard animal welfare as important. I was, therefore, shocked to learn that many other European countries still use stall and tether methods. I have a photograph from the pig industry around somewhere; other members may also have received information. I found it shocking that pigs were being farmed in such atrocious conditions and being placed in small stalls for about three and a half months during pregnancy. I do not think that most Scottish consumers of pork have any idea that pork is being produced under such conditions in parts of Europe. We should make that point strongly—I see that Mr Johnstone has the picture of the pigs.
That is why initiatives such as the Scottish pig industry initiative quality mark for Scottish pork are important. Higher standards in production and animal welfare equate to higher-quality products. We must get that message over to our home markets. On the odd occasions that I do the shopping—and they are very odd occasions—I check that I am buying Scottish meat. We should encourage other people in Scotland, when they go to the supermarket and the butcher, to do what the NFUS has suggested and ask whether the meat is Scottish. If we believe in our products at home, we will have a better chance of selling them abroad.
I call Mr McGrigor.
Thank you, Presiding Officer. In deference to you and to Mr Ross Finnie—and before I am accused of ignoring protocol in this Parliament—I must explain that it is critical to my contribution to use the word ewe.
I have recently been to markets in the Highlands and Islands for the Autumn store lamb and cast ewe sales. I have watched with horror the expressions of men and women as their livelihoods go down the drain. The price of lamb might have hardened slightly, but it is still half what it was three years ago.
The price of cast correct ewes, which would previously have been upwards of £30, has fallen to less than a fiver. The feeding ewes, which one would expect to trade at between £10 and £20, are worthless. I saw one lot of 40 good feeding sheep go for £2. That is 5p per head—a drop of
99.66 per cent. That is just one example of the crisis in Scottish agriculture, which is in a worse state than it has been at any time in living memory. In Scotland, the agriculture sector employs 69,000 people directly and 200,000 indirectly. Most of those jobs are in rural communities and sustain rural populations.
The Scottish tourism industry is worth about £2.7 billion a year and there is no doubt that farming shapes and manages much of the world- famous culture and environment that attracts people to spend that money here.
The crisis in Scotland is three times as bad as it is in Europe. One of the main reasons for that is the ridiculously high price of fuel. Admittedly, red diesel can be used in tractors, but the reality of transporting animals and people in remote areas is that any so-called new money in support of Highland agriculture is absorbed by continual hikes in the cost of fuel. Since Labour came to
power, farm incomes have fallen by three quarters. Within the UK, more than 2,000 dairy farmers have gone bust, the pig herd has fallen by more than 1 million and numerous slaughterhouses have been forced to close.
The Scottish beef industry, which used to be famous for having the finest product in the world, is being held back by the ludicrous ban on beef on the bone, even though the Donaldson report recommended lifting it and the Spongiform Encephalopathy Advisory Committee said that the chances of being struck down with Creutzfeldt- Jakob disease owing to consumption of beef on the bone was less than the chances of being struck by lightning or hit by a meteorite.
I do not now whether Mr McGrigor knows this, but this week Sir David Carter came to address the Rural Affairs Committee. Mr McGrigor could have attended that meeting, asked Sir David questions and heard what he had to say. If he feels so strongly about the issue, he might at least have done that.
Unfortunately, I was in the Highlands and Islands, dealing with people who were complaining about sheep prices.
As a farmer in George Lyon's constituency, I ask him—I see that he is not here—why he cannot persuade the Executive to take the lead for once, especially as Scottish beef is one of our best exports and he promised before the election to support the lifting of the ban. I suppose that he will say that he is waiting for medical evidence, but what about the scandal whereby pig bones— which cannot be fed to pigs in Scotland—are exported, ground up and fed to pigs whose meat is sold in Scotland?
So far, the Parliament has failed to protect the Highland hill farmers, who expected an improvement on Westminster. Although there are some factors over which we have little control, we should be able to produce a level playing field for Scottish agriculture.
In last week's The Scottish Farmer magazine, a qualified vet called for an end to the ridiculous situation where inspectors turned up at his farm to inspect the inspectors who were inspecting him dipping his sheep. The new rules for slaughterhouses are cryptic. Why should we need qualified vets for hygiene inspections in abattoirs? The rest of Europe does not need them, so why do we? The Executive should push for a reduction in interest rates, which would reduce the value of sterling. It should cut the Meat Hygiene Service inspection charges and try to reduce the enormous veterinary costs to Scottish farmers and crofters.
In the Highlands and Islands, farming and crofting still provide the basis of the social network of many communities. All that those communities ask is that the Parliament gives them a chance to continue to farm.
Jamie McGrigor has given some graphic illustrations of an industry in trouble and the effect that that is having on individuals and families; it is a message that we should all heed.
The agriculture industry remains the backbone of Scotland's rural economy. Its importance and ability to generate wealth—and, in its ancillary industries, employment—cannot be overemphasised. The industry is under siege from falling incomes and increasing regulation; almost every sector is under threat. The devastation inflicted on Scotland's fishing industry should be a warning signal of the fate that awaits Scotland's agriculture sector unless action is taken to restore the health and competitiveness of one of the country's greatest assets.
I could choose almost any sector of the industry to highlight the plight of agriculture, its work force and ancillary industries. However, I will concentrate on the beef sector, which is the most important component of Scottish agriculture, contributing about 25 per cent of Scotland's gross agricultural output. That top-quality sector is still reeling under the effects of the BSE crisis. It must now be given every possible assistance to regain its lost markets quickly.
The lifting of the export ban on 1 August was a step forward, but the strictness of the EU's date- based export scheme constitutes a major and costly hurdle for Scots producers to overcome. The problems of French resistance and the lack of abattoir facilities must be tackled with urgency. The recovery in Scotland's market share has to take place against an EU beef surplus; we have the quality products and the expertise to regain, with the correct Government policies, those multimillion- pound markets.
The Scottish Executive must be more proactive and positive in fighting in Europe for Scotland's interests. Scottish Executive representatives should have constantly put pressure on French Government ministers over their decision to ban Scottish beef imports. In the past, Scotland has suffered from the UK's refusal to recognise an obvious Scottish solution to the problem. Even now, in post-devolution circumstances, that symptom seems to persist. I believe that any Scottish minister of agriculture should be pressing the Scottish case directly and urgently to the French. I am disappointed that there has been no direct contact with any French ministers, never mind the French consul. There is every
opportunity, and Scotland's case must be pressed.
I welcome the National Farmers Union and Scottish Executive initiatives on issues such as the over-30-months slaughter scheme, specified risk material controls, the loss of value of by-products and the much-needed integrated administration and control system bureaucracy review. The proof of the pudding will be whether or not there is an improvement in the industry's competitiveness. Scottish farmers need practical help from the Government, not more rhetoric and regulation. The industry has a right to expect action; the Executive will be judged by the success or failure of its efforts to deliver that action for Scotland.
I begin with a declaration of interest. I am the third practising farmer to speak on behalf of the Conservatives today. As I have interests in beef, I was encouraged to hear comments about the quality of the beef that we produce in Scotland.
The motion asks that we congratulate the Executive, as though the job was done and dusted and Scottish agriculture and our rural economy were back on their feet. I am sure that that is not what Mr Finnie intended when the motion was lodged. As we heard this afternoon, the job is merely beginning. I am sure that he, above all others, realises that there are problems—we have heard graphic descriptions of them—in every sector of Scottish agriculture.
When I started my notes, I wrote down the words cast ewes. I was pleased to hear that Mr Finnie was going to take on Mr Fischler. Like Mr Finnie, I was disappointed that there is no scheme—I raised that with the minister some weeks ago.
To allow Mr Finnie better to illustrate the problem when he next meets Mr Fischler, I will happily lend him my Land Rover and a trailer full of cull ewes so that he can ask Mr Fischler what he should do with them. It is a huge problem— environmental as well as financial. Because of the impact on the environment and the water supply and so on, we cannot just kill animals and bury them anywhere. I desperately feel that, if nothing else can be done, a scheme to uplift animals from farms and dispose of them free of charge is probably the best way forward.
Mr Finnie suggested that people should get their cast ewes into the marketplace, but there is no point in doing that as there is no market to take them to. Last week, we sent animals to market— we managed to get a slot. The traders very kindly sent me a note to say that the selling fees were more than the moneys that I had been offered, but that they would waive the fees on this occasion on the understanding that I would not send them any more ewes. That is happening all around Scotland.
Other members have mentioned problems. Sylvia Jackson—she is my local MSP but she has not visited my farm—talked about the farmers' market in Perth. That market exists because primary producers in Scotland do not get a fair price for their produce compared to the price that the housewife pays in the high-street shop. I do not say that shops are profiting over the top, but the difference between what the primary producer pays and what the consumer pays are scandalously high and it is always the primary producer who gets caught.
Will the member give way?
I would rather not. Fergus was probably going to agree with me—bless him for that.
Various comments have been made on commodity prices. I was surprised that nothing was said about the enormous threat hanging over Scottish farming from the fertiliser tax—the minister has influence on that with the Cabinet down south, through his Executive colleagues. I found it amazing that the fertiliser tax was not discussed today, as it is probably as crippling as, if not more crippling than, fuel costs, about which we have talked.
I congratulate those members—particularly Dr Jackson—who have suggested that we should get a handle on the labelling of product. If European Union rules tell us that the only way in which we can discriminate is through the housewife's choice, we have to make it crystal clear to the housewife—
Will the member give way?
I am sorry; yesterday, I gave way to Mrs Ewing, as she is a lady, but today I no longer wish to be a gentleman. Time is against us.
It is important that the housewife knows what is on offer. In the old Conservative days, when even Raffan was a Conservative, we had the buy British campaign. There is nothing wrong with a buy Scottish, or a buy local—Welsh or whatever else— campaign. We produce a quality product, which will not be available unless the farming community is given a clear steer to keep going.
Ross Finnie came out with a classic line about £40 million of new money. Some £20 million of that is an overrun from a previous scheme. It is not new money, although I am grateful for the passport relief.
There are several issues that cannot be discussed today—I am bitterly disappointed that
this debate has not had the time that it deserves. [MEMBERS: "Hear, hear."] Mike Rumbles should pipe down about the past. I am fed up with the Liberal Democrats' needle sticking. The trouble with them is that they are playing 78s while we have moved on to CDs.
Please wind up.
I will use the few seconds that I have left to say that red tape is smothering Scottish agriculture, horticulture and even business—I do not doubt that Fergus would agree with me on that. It is important that we use what means we can to simplify the implementation of any common agricultural policy reform. We must ensure that, if there is modulation—in which there will be winners and losers—the small to medium- sized family farm, which is the basis of Scottish agriculture, does not come out as a loser.
My colleague Mr Johnstone has lodged a positive amendment. The Conservatives will happily work with anyone to benefit Scottish agriculture. We think that the motion is meaningless. The SNP amendment has merit, but it does little more than suggest "possibly, perhaps". We are asking for positive action.
I call Richard Lochhead to wind up on behalf of the Scottish National party.
Thank you, Presiding Officer. I will try to be quick.
I, too, welcome the debate on Scottish agriculture, given its importance to the economy and to Scotland as a whole. The word crisis is often so over-used that it loses its meaning, but in the current context of farming, crisis is the only word that we can use. The crisis affects every farmer in every sector, the length and breadth of Scotland.
Yesterday, pig farmers visited the Parliament to make a presentation to MSPs—they are in the middle of a huge crisis. Many pig farmers have to sell the family silver, even their families' insurance policies, to survive the next few months.
Anyone who read last week's Sunday Post will have seen an absolutely shocking picture relating to the crisis facing sheep farmers. The words underneath the picture say that it is
"a picture which should shock anyone who sees it."
The picture is of a farmer shooting his own lambs, because that is the cheapest option open to him. That must be incredibly demoralising. It is an appalling state of affairs.
The difficulties facing beef farmers have been outlined by many members. We all know that beef farmers are having to jump through hoops to get their beef back into the markets. A couple of weeks ago, a farmer sold his cattle at the auction mart for £5. After commission was deducted, he received a cheque for 1p; he is framing that cheque to remind him, in future years, of the current crisis.
Livestock farmers face many common challenges. We want the Scottish Executive to tackle those challenges head on. The Scottish Executive can take vital measures, which depend on no more than assertiveness, determination and political will. The farmers are not looking for handouts; they are looking for a level playing field so that they can compete in international markets. They want less red tape and costly bureaucracy, which is an enormous burden on all sectors of industry. They want our loyalty—the loyalty of consumers to put Scottish produce in their shopping baskets.
We want Ross Finnie to make representations on behalf of the industry with that determination and political will. We want him to bang on Gordon Brown's door, to speak to him about the fuel duty, to demand actions and to demand answers.
The increase in the price of fuel hit six times over the cost of the journey that takes cattle from field to plate. It increases the costs of taking the cattle from the hill farmer to the mart, from the finisher to the farm, from the farm to the abattoir, from the abattoir to the central distribution point and from there to the supermarket, from where the consumer takes the meat home. Because of the fuel duty, the cost increases six times over—and the cost always lands with the primary producer. That must change.
I must also mention interest rates, which have led to cheap imports and increasingly difficult export conditions for the industry. One farmer from Gordon told me that the most recent 0.25 per cent increase in interest rates cost him £5,000—with a stroke of a pen, Government policy cost that farmer £5,000. We want Ross Finnie to knock on the doors of all the banks to get their co-operation, too. As many speakers have said, we also want him to fly to France to speak to the French Government and to put the case for the Scottish farmers in person. We want the minister to get the supermarkets on board as well.
Let us not forget the young farmers. For agriculture to survive in Scotland, we need young men and women to take over the farms. The young farmers are being put off farming. The farmer who lost £5,000 told me that his son had decided not to go into farming. That trend will be repeated across the country unless we address the challenges that face the industry.
The Scottish National party demands that the minister do all that he can to face the challenges and to help the industry, so that Scottish agriculture can continue to make a vital contribution to the Scottish economy, to Scottish culture and to Scotland as a whole.
I share with many members the wish that we could discuss agriculture for longer. I am now such a convert to the industry that I would have liked to have a whole day to discuss what are serious issues. In no way do I diminish the seriousness of the situation.
However, we have to be a little careful not to talk the industry down. Some remarks were made during the debate about the beef sector. I am not suggesting for a minute that the beef sector has recovered, but of all the sectors, the beef sector has done a remarkable job, both in its pricing and in penetrating the English markets in the past nine months. I hope that that will be fully supported by the SNP. The sector has done that job at a premium, and there are very few people who gain shares in a market at a premium.
Alasdair Morgan asked questions on matters that are, by and large, out of the hands of the Scottish Executive—fuel costs, sterling interest rates and banking. Those points were also raised by several other contributors.
The Scottish Executive is cognisant of the problem concerning the absolute cost of fuel. All Scottish Executive ministers are involved in discussions as to how we should present our case to the Chancellor of the Exchequer at Westminster. We have yet to come to a conclusion, but it would be wrong to suggest that we are not cognisant of the problem.
I can assure Andrew Welsh and others that I intend to continue the dialogue that I have already opened with the banks, because I am concerned that they might take a wrong turn.
In response to the point made about the common agricultural policy dwarfing structural funds, I say to Alasdair Morgan that my position is clear: we have an opportunity to accept the existing settlement as a given, and I intend to engage with the industry to ensure that we formulate a strategy that will put us where we want to be in 2005-06. That strategy should be developed in Scotland, and we should be taking our case to Europe on behalf of Scottish farmers.
Does the minister accept that the current settlement may not be internationally tenable up to its expiry date and that, as Nick Brown said, we may have to renegotiate in Europe within the next few years?
Even if that is the case, we in Scotland should be looking at the longer term. If that involves our having to renegotiate, that should take place here in Scotland. I do not agree that we should put reforms to the CAP solely in the hands of the Westminster Government. We in Scotland should be making our distinctive contribution to the way in which that matter is resolved. We should be preparing now for 2005-06.
I am enormously grateful for Alex Johnstone's warm endorsement, although I realised that there had to be a sting in the tail. Nevertheless, I thank him for his contribution to the Rural Affairs Committee. No doubt we will clash at some future date. He went through a litany of things that were not done, but he did not question the methodology of what the Executive is now seeking to do, namely, to take a far longer-term view of what is required for Scottish agriculture.
It would be stupid and foolish of me to look for congratulations on things that we have not done, but I am looking for support for our new way of tackling the problems of the industry. That is why I picked up on the sheep sector in particular. It is nonsense to blame the farmers for the guddle, but what is absolutely true is that there is no mechanism at present that allows us to consider the chain from the sheep farmer out to the ultimate consumer and to produce a strategy that is relevant to their needs.
I welcome Irene McGugan's comments about organic aid, although I have managed to drop them on the floor. [Interruption.]
There are your papers, minister.
Thank you very much indeed.
I welcome Irene McGugan's comments about such issues as costs to the environment and cross-compliance. In finalising arrangements, I intend to invoke cross-compliance to achieve the correct balance between the agri-environment and the interests of farmers.
As for the rural stewardship fund, one of my biggest disappointments is that the rural agenda has been so grotesquely underfunded. On the subject of GM organisms, Ms McGugan will welcome the fact that the Executive has adopted the same precautionary approach that underpins the way in which the European Union has applied its regulation on this matter.
I am disappointed that the cull ewe scheme has not been implemented. However, we have to move forward. The help package will mean real money in the hands of hill farmers. I do not want to minimise the difficulties of Scottish farmers and I am greatly encouraged by the comments that I have heard today.
Farming is crucial to the health of rural areas and I assure members that the Scottish Executive will continue to do what it can to secure the agriculture industry's healthy, profitable future. I hope that members will support the motion and reject both amendments.