Select Committee on Trade and Industry Minutes of Evidence

Examination of witnesses (Questions 300 - 319)



  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 road?
  (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 with me.

Mr Laxton

  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 carry on.

  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 else?

  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 away.
  (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.

Mr Morgan

  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 under CAP?
  (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 matter.


  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.

Mr Morgan

  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.

Mr Chope

  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.

Helen Southworth

  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.

Mr Morgan

  317. Would it be allowable anyway to use red diesel?
  (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.

Helen Southworth

  318. You have your haulage contractors who are separate.
  (Mr Hanley) Yes.

  319. Am I right in thinking that they are bringing in feed and taking out milk?
  (Mr Hanley) That is correct.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2001
Prepared 15 March 2001