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Lord Mackie of Benshie: My Lords, as I understand it, the Minister has sympathy for the point of view that we expressed--namely, that the herd number should be on the traditional basis--but he does not intend to do anything about it.

The Earl of Lindsay: My Lords, I do have sympathy. Let me explain the logic and rationale. Perhaps I may cite the example of why, for top-up purposes, in-calf heifers should not be excluded from the definition of a herd. Let us take two farms, Farm A and Farm B, with similar-sized herds, both of which are due to lose a similar number of animals through the selective cull. The herd at Farm A has just calved and has 20 newly calved heifers when officials visit. Farm B has heifers which are due to calve in a couple of weeks. In those two cases, where all the circumstances are identical save for calving dates, which are about two weeks apart, different treatment in relation to top-ups is arbitrary and illogical. That is what would happen if one excluded in-calf heifers. We have therefore included a logic and an equity through incorporating in-calf heifers. Noble Lords may wish to consider this point when reading Hansard before approaching either myself or MAFF to seek further details.

I stress that the compensation package overall is more generous than for other diseases. The top-up is not intended to cover consequential losses entirely: compensation is designed to cover the value of the animal based on the formulae that we have agreed. The top-up is simply a contribution to dislocation.

I shall deal quickly with the point about tax. A booklet on taxation matters will be sent to all beef and dairy farmers who are affected. It will therefore be possible for each and every farmer to take up issues with the Inland Revenue such as how in-calf heifers are dealt with on the basis of the information provided by the booklet.

I hope that I have explained some of the principal points raised by noble Lords. I hope that the House will feel able to agree the selective cull. This has been a useful opportunity both to remind the House of the

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essential reason for the selective cull and to answer some of the practical points raised by the noble Lord, Lord Carter, and others.

4.37 p.m.

Lord Carter: My Lords, I am extremely grateful to all noble Lords who took part in the debate. I shall be extremely brief in replying. I must apologise for forgetting to declare an interest at the outset. I am a director of a farming company with dairy cows. We have had BSE in the herd, but fortunately it looks as though we shall not be affected by the selective slaughter scheme.

The Minister is absolutely right: we shall have to read Hansard to determine the exact meaning of his remarks in relation to top-up compensation and the reason for including in-calf heifers. As I listened to him, I had the feeling that the explanation would have been easier to understand in the original Sanskrit.

To return to the point about recovery of the market, we should not become over-excited. It is perfectly true that sales of cuts, roasts and prime beef are back to 90 per cent. or more. There is still a reduction in the consumption of processed products; and exports are non-existent. Overall, the total for the beef market is still down, as compared to the total before BSE, by some 30 to 35 per cent. I received those figures from the MLC only last week. The overall market, which is the one that concerns us, is still considerably down.

One matter that did not emerge from the discussion may be of interest to your Lordships--indeed I was surprised when I discovered it. Of the 1 million animals that have already been slaughtered under the over-30-months rule, it seems, if I am correct, that fewer than 4 per cent. have been incinerated. So somewhere there are 960,000 carcases in cold storage. Let me pick up the point made by the Minister about remarks made about the ban at the beginning of the crisis. If the German Minister of Health had gone on German television and said that he was prepared to consider the slaughter of the whole of the German beef or dairy herd, I wonder whether the British consumer would have been queuing up at the supermarket to buy German beef.

The Minister kept referring to new scientific evidence. Let us be clear that no scientist has yet required the slaughter of a single animal for scientific reasons. From the beginning scientists made clear that they understood why the Government wished to introduce a slaughter scheme to restore consumer confidence. But no scientist has asked for the slaughter of a single animal. The new scientific evidence, of which the Minister made so much, was a new statistical forecast of the likely effect of different rates of slaughter. As we know, that will only reduce the headline rate of BSE over the next few years. It does not do anything towards helping the eradication of the disease.

I must take up a final point with the Minister. I understand entirely the backlog of slaughtering with the over-30-months scheme. It would not have been possible to slaughter the animals, if the Government had introduced the selective slaughter scheme last autumn,

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or indeed last summer as they said they would. But the suggestions that I made were not an irrelevance. The animals would have been on the farm. There would have been restrictions, but the farmer would still have been able to milk them. He would still have had the income from the milk. He would also have been able to plan and would have known how many heifers he needed and how many he was going to lose. He would have received the compensation either when the animal left the farm on the over-30-months scheme or indeed when the selective slaughter scheme was eventually introduced. I do not feel that the Minister answered that point.

As I said at the beginning, this has been a sad day. We hope that it is the end of the beginning of this awful crisis. I beg leave to withdraw the Motion, and I shall not move the second Motion standing in my name.

Motion, by leave, withdrawn.

Potato Industry Development Council Order 1997

4.42 p.m.

Lord Lucas rose to move, That the draft order laid before the House on 13th January be approved [9th Report from the Joint Committee].

The noble Lord said: My Lords, I beg to move that this draft order be agreed to.

This order provides for the establishment of a potato industry development council to take forward some of the work of the Potato Marketing Board. A year ago, we debated the order which led to 30th June 1997 becoming the date when the potato marketing scheme would be revoked.

As required under Section 27(1) of the 1993 Agriculture Act, the Potato Marketing Board has applied to the agriculture Ministers for approval of a scheme to transfer its property, rights and liabilities to a successor body: a development council. This followed a growers' poll and our own consultations, which both showed overwhelming support for such a body.

The proposed functions for the council are listed in Schedule 1 to the order and can be summarised as commissioning or assisting research and development; the collection and dissemination of statistical information; generic promotion and the development of exports; and setting basic quality standards for raw potatoes.

The council will comprise 16 members including the chairman and one other who must be independent of the potato industry. Nine members will represent the interest of growers, including at least one seed potato specialist; one will represent employees in the industry and the remaining four will represent the industry beyond the farm gate, including at least one with knowledge of the marketing or distribution of potatoes.

The council will be required to keep a public register, in two parts, of producers who grow one hectare or more of potatoes and first purchasers of 100 tonnes or more of potatoes. The dual register reflects the dual funding

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system that has been agreed upon by the joint committee of the Potato Marketing Board, whose members represent all sectors of the industry and consumers.

While a single levy might seem to be more efficient, there was significant opposition to it from growers and from processors. Growers in particular argued that a single levy point would undermine the concept of a body able to act for the industry as a whole. And the dual system does have the advantage of giving the council access to much better information on the industry. We feel that Article 9 of the order deals as effectively as possible with the practical difficulties that the dual system might have presented.

The order provides for a ceiling of £40 per hectare for the growers' levy and 25 pence per tonne at the first point of sale. We have set the ceilings higher than the anticipated actual charges to save the need for early amending legislation.

With this order we draw to an end the cycle that started with the passing of the Agriculture Act 1993. I have pleasure in commending it to the House.

Moved, That the draft order laid before the House on 13th January be approved [9th Report from the Joint Committee].--(Lord Lucas.)

4.47 p.m.

Baroness Nicol: My Lords, my interest in this order arises from the fact that I am a vice-chairman of the all-party Retail Group. In that capacity, I have become aware of some of the concerns within the retail industry. There are in fact two main areas of concern. The first is the levy to which the Minister referred. As he said, the Potato Marketing Board worked with a single levy on growers based on the acreage of potatoes grown. That levy was passed up the chain as part of the cost. It was a system that worked very well, I am told.

The proposed introduction of a levy at the first point of sale as well as a levy on acreage, in the opinion of the British Retail Consortium, will inevitably introduce loopholes and opportunities for avoidance, due to the large number of merchants, merchant growers, agents and other operatives selling potatoes within the industry. They believe that the new system also will be expensive to enforce and very difficult to operate.

Therefore, I must ask the Minister whether it would not be better to fund the new council through the tried and tested method of the single levy on acreage, as we did before. I do not feel that he gave a very convincing explanation of why the second charge has been introduced and I should like to hear more about it. Will not the double charge have the effect of inflating the cost, at the end of the day, to the consumer or indeed the processor?

The second area of concern is the membership of the proposed industry development council itself, a body set up to:

    "increase efficiency and productivity and improve and develop the service that the industry renders the community".

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No one could argue with those aims. But the composition of the council is taken directly from the Industrial Organisation and Development Act 1947-50 years ago--and does not reflect the needs of the present-day industry.

Retailers understand what consumers want and aim to fulfil that demand by close co-operation with growers. The partnership approach which has developed over recent years works well for the farmers, who grow to the specifications of the retailers in relation to varieties as well as to other specifications. Surely the structure of the new development council should reflect that partnership. Does the Minister appreciate that there is a new relationship which should be recognised in the council, or has the formula for the new one just been taken off the shelf as part of the old 1947 model? That is not appropriate for 1997.

I do not know what consultations the Minister had with the retailing industry, but will he undertake to look again at this matter before the draft order is approved?

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