Examination of witnesses (Questions 300
WEDNESDAY 1 NOVEMBER 2000
MR D HANLEY,
MR P ASHLEY
300. From the Baltic?
(Mr Ashley) No not from the Baltic. A lot of the timber
which comes in to us comes from Poland.
301. Are you saying that is coming wholly by
(Mr Ashley) All the way by road. Those trucks are
unloading and working within the UK for one or two movements before
they go back.
302. They come from Poland to Rotterdam or wherever,
load up with petrol there, hop over to Hull, M62, then into Manchester.
(Mr Ashley) Yes.
(Mr Hanley) It is not just forestry. We certainly
noticed in the last 12 months a lot of the movements of product
which are coming onto my farm are being done by European hauliers.
When you ask them where they have come from, they say Manchester
or Bristol. We buy a lot of vegetable waste from the South East
and quite frequently now the lorries which roll up with that product
are actually continental haulage firms. Whereas two years ago
it would be guaranteed to be people who normally haul sugar beet
or something, British hauliers, it is now being done, the latest
one only a week ago, by a Polish driver who could not even communicate
303. May I come back to the issue of red diesel?
You only pay the lowest rate of tax on red agricultural diesel,
three pence. For sure it has gone up but that has been nothing
to do with the Government, that is to do with the world oil prices.
Is it perhaps more that the impact is a drop in income for the
farming community as opposed to perhaps the increase in red diesel
which is essentially the problem when you get down to it?
(Mr Hanley) Although red diesel affects us, everybody
needs to be aware that it is not only British agriculture that
uses red diesel. I was with a fisherman yesterday who also uses
it. I understand some of the train companies use it. The situation
with our business is that we are a small intensive dairy unit
which relies on contractors. I can tell you that not six weeks
ago the biggest contractor in Monmouthshire employing some 26
people virtually overnight ceased his business because, number
one, he was unable to get paid and, number two, his major one
and he made this statement on a television programme, he could
not recoup his increased charges for red diesel. That is the dramatic
effect it is having and that is a major employer.
304. I am just making the point that that is
not because of any increase in taxation it is the actual physical
cost of the diesel itself in terms of increase in world oil prices.
(Mr Hanley) I would totally agree with that.
(Mr Pratt) My position is quite clear. I am a beef
and sheep producer and everything that goes off my farm goes off
on a lorry. Everything that comes into my farm is also coming
in on a lorry. I farm in a very rural area between the Brecon
Beacons and the Black Mountains. You cannot get much more rural
than that. My nearest shop is 10 miles away. My nearest filling
station is 15 miles away. These are serious problems for me. What
I am finding as a beef producer is that my stock is having, through
no fault of mine, to travel much further to the point of slaughter.
The reason for this is that the slaughter industry is being decimated
and especially in my part of the world. I have animals which have
to travel 200 miles now to be killed. I am concerned about welfare
with this. We have an extra cost because the haulage contractor,
due to his extra costs, has to pass his costs to me. It is quite
well known, and these are Ministry figures, that farm incomes
have dropped 90 per cent in the last five years. I may add that
I am a qualified agriculturalist with a degree in agriculture
and have been farming on my own for 44 years. I have operated
an efficient business all my life and I am finding it increasingly
difficult to stay in business with the present state of affairs.
Whatever increase is placed on my business at the present moment,
and I do not mind telling you that my net profit last year was
£1,600. I find that deplorable for a business which has a
tremendous amount of capital employed in there. I have operated
this efficient business for 44 years and never had this problem
until the last three. It has gradually escalated and it has now
put my business in jeopardy. You have the figures in front of
you for my additional haulage costs and they are making my business
look as though it will go into a deficit for this coming year.
I find that disturbing. I used to employ two men; I now employ
no-one. I am a working farmer and believe me, I am 67 years of
age and finding it increasingly difficult to cope with the work.
However, I have no options but to carry on. I have a part-timer
who comes in, but obviously part-timers need extra money because
they are a convenience labour force. As far as I can see all my
hay and straw is brought in on lorries, my feed is brought in
on lorries and all my stock is transported on lorries. Irrespective
of the red diesel question, we do harvest a fair amount of silage
but my contractor's charges, and I have given you my figures,
have escalated quite considerably. Part of silage making involves
plastics. Plastics involve fuel. This automatically increases
the cost of this particular enterprise. So I am extremely concerned
at what this fuel tax increase is doing to my business. I find
it deplorable that the Government has now put me in the position
that I cannot see a profit for the future when I have an efficient
business, I am on a decent scale of business, run efficiently,
I tightened the belt wherever possible.
305. On the question of red diesel, do you think
that perhaps the red diesel tax regime should be extended to all
transportation related to farming so that one way of assisting
the price structure of your contractors, who obviously work probably
exclusively with the agricultural sector, and your costs would
be to have red diesel provisions extended to areas relating to
farming but not in the way that they are presently done.
(Mr Pratt) No, I do not think so. What we ideally
want is a cut in taxation. The tax on diesel is already high enough.
I do not think the red diesel needs to be extended any further
than where it is now. Quite frankly what I want is a better return
for my product at the end of the day and to be in a position to
306. Put it the other way. I take it that you
also want continuing support from the Government for your agricultural
activities in the way of subsidy or whatever assistance you get
under EU rules.
(Mr Hanley) I would totally disagree with that comment.
Comments about subsidies keep coming up. If you talk to most British
farmers, they do not want subsidy payments, they do not want support
payments. What they want is a level playing field. One thing which
has not been mentioned here today is competitiveness. We are not
being allowed to be competitive. In our industry we produce probably
up to the highest welfare standard, to the highest hygiene standard
in the whole of Europe yet we are the lowest paid. If you talk
to any single farmer, and I know there are farmers who have made
a lot of money from subsidy payments, they would far rather be
allowed to farm to feed our country without the necessity of subsidy.
However, we pay into Europe and therefore we are entitled, as
I understand it, to some recourse for that uncompetitiveness.
The subsidy thing is something which is used against us when in
fact if you talk to most British farmers they would far rather
be able to be competitive.
(Mr Pratt) I would wholeheartedly support that remark.
I find it abominable that I am a quality assured farmer, my goods
are to absolute maximum standard, I cannot go any higher, yet
much has been said today about transport coming in from over the
Channel. I find it absurd that a quality product which I am producing
in this country, is being undermined on price and everything else
by cheap commodities of a similar nature but certainly not up
to the standard coming in from anywhere in Eastern Europe or the
continent. I find that deplorable.
(Mr Hanley) On the Eastern European thing, talking
as someone who used to import cattle into the UK from areas like
Denmark, it is now actually being made very, very easy, and one
of the haulage gentlemen brought it up earlier on, by drivers
who come from the Eastern bloc countries. They are working for
next to nothing and they are driving hours which our drivers would
never ever be allowed to compete with. Anybody who infringes tachographs
in this country is virtually locked away for ever more and yet
these people are coming over here. I gave you the instance about
the vegetables which were delivered to my farm last week. When
I asked that driver when he left Poland he told me three days
before. I asked how much rest he had had and in broken English
he said, what he needed and then go back. Why are we not looking
after Britain. Why are we so concerned about looking after anyone
307. Did you contact the traffic commissioners
and report this gentleman?
(Mr Hanley) No, I did not.
308. Why not?
(Mr Hanley) Because I did not.
309. Silent pain evokes no response.
(Mr Hanley) I can assure you that I have had meetings
with the Minister of Agriculture, I have brought this point up
and so have colleagues of mine. During the fuel dispute we were
talking to the police forces around the country and we did bring
up various points about continental drivers. I understand from
one of our haulage colleagues down in West Wales, I think last
month, that a tanker came into Fishguard and that tanker driver
was questioned about his load. He said it was orange juice. When
they tested that lorry, it was actually carrying fuel. The driver
said he had made a mistake, he had picked up the wrong trailer.
What happened? He was turned around and put on the ferry. If that
had been one of our people, he would have had the keys thrown
(Mr Ashley) In our particular business we have a vast
quantity of these foreign lorries come into us. I have discussed
this with the Ministry of Transport people. I have never actually
discussed tachographs with an individual driver but I have discussed
what jurisdiction they seem to have on them. There does not really
seem to be a lot of jurisdiction. They seem to come in, they have
very broken English and the lorries do seem to be of a much lower
standard in maintenance than we see in British lorries.
310. Could you indicate to us in terms of your
gross income what percentage you would reckon currently comes
from the various types of support payments which are available
(Mr Hanley) Certain my industry, which is the dairy
industry, sees very little subsidised input. All I have claimed
recently is agri-monetary compensation for the strength of the
pound. I run a farm of 88 acres, I milk 140 cows and it equated
to £1 per day for the year: £365 is what I got. If I
grow arable crops on any of my arable aided land I am entitled
to claim a subsidy. On maize, which I grow, we are probably down
now to about £80 an acre.
(Mr Pratt) Let me explode the myth about these subsidies.
Subsidies are based purely on the area of your farm. They are
headage payments with a maximum stocking rate. Once you reach
that stocking rate it does not matter how much stock you have
over that limit, you will receive no financial benefits. I think
that needs to be made clear. This is not an open book to claim
and I feel the general public are underinformed on this particular
311. Does that mean if you choose to carry a
bigger stock than the Ministry would regard as appropriate for
the purposes of subsidy, then you are on your own?
(Mr Pratt) Yes, you are on your own.
(Mr Hanley) That is correct.
312. You make a choice to do that or not as
the case may be.
(Mr Pratt) On the hill farm which I run I do not have
a choice. I farm at 1,100 feet above sea level, the winters are
hard and therefore they are longer. I have to carry only the stock
that that farm will comfortably carry during the worst parts of
the year but I am restricted on the area of boundary of the farm
I farm. I have no hill runs, no mountain runs, I am paid purely
on the ground I occupy.
313. You have not actually answered my question.
You said you would prefer to do without support payments, that
would be your ideal situation. I was trying to get some picture
as to what percentage of your current gross income is actually
made up of those support payments which you would rather do without.
(Mr Pratt) My support payments are £8,000 per
year because that is on suckler cows and sheep, maximum. I cannot
have any more for the acreage I farm.
(Mr Hanley) Last year it would have been £1,800
on an 88-acre dairy farm.
(Mr Pratt) I am currently marketing beef at 68p per
kilo and I can tell you pre-BSE I was marketing quality beef at
£1.36 to £1.40 per kilo. On those sort of figures I
do not need subsidies but on the present figures I am operating
on now I cannot live without them. It is a very sad fact that
we are being undermined by cheap imports.
314. You say you are marketing beef for 68p
per kilo. What is the cost per kilo of taking it to the abattoir?
Do you bear that cost yourself?
(Mr Pratt) I bear that cost myself. In my figures
for haulage costs are 200 miles to the abattoirs for killing.
(Mr Hanley) You are operating between £1 and
£1.20 a loaded mile.
(Mr Pratt) Yes.
315. You have given us figures which show that
the costs increase just as a result of the increased transport
costs amounts to some £2,654 in one year.
(Mr Hanley) Yes, that is right.
(Mr Pratt) Yes and I can assure you I have erred on
the side of caution on those figures. I dread to see the figures
which will come out.
316. What do the operations which require you
to use fully taxed diesel consist of?
(Mr Hanley) In my own business it is if I move stock
or any of my product from A to B where it is not available to
me to use an agricultural machine. For instance, if I take stock
to my nearest market I have to travel about 34 miles, a round
trip of 68 miles and it would not be advantageous to use an agricultural
tractor. What you have to realise is that they are not very quick
on the road, they do cause a lot of gridlock on the road, as some
of you are probably fully aware. The wear and tear on those in
terms of tyres etcetera would just not make it cost effective.
317. Would it be allowable anyway to use red
(Mr Hanley) Within a radius of the farm it is allowed
but we are not allowed on any motorway network and if we drive
on any dual carriageway those vehicles have to be fully roadworthy
to carry out that operation.
318. You have your haulage contractors who are
(Mr Hanley) Yes.
319. Am I right in thinking that they are bringing
in feed and taking out milk?
(Mr Hanley) That is correct.