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Noble Lords: Hear, hear!

Earl Ferrers: Except myself! The Government were not advised to take this action. They were merely advised to make the facts public. They took this action without any consultation at all. People do not want to be nannied and bossed about like this. It is not surprising that before Christmas one butcher in Oxfordshire had a notice in his shop saying:

It is not very parliamentary language, but one gets the drift of what he was feeling.

We cannot live a risk-free life. The biggest risk in life is to be alive in the first place, because you know that you are bound to die. I sometimes think that the mental agitation of making a speech in your Lordships' House is more likely by a factor of 10 million to one to damage your health than eating a slice of beef on the bone.

Of course, these are not easy matters, and I sympathise with the right honourable gentleman the Minister of Agriculture and his predecessors in having to deal with them. The simple fact is that we have all--the Community as well as ourselves--got into an appalling mess over this, from which we must now try to extricate ourselves.

Every effort must be made to ensure that, even if Europe will not take our beef, we should be allowed to export it to third world countries. After all, it is perfectly good and wholesome beef, but the Community says that we cannot export it. It is that kind of infuriating and irritating behaviour by the European Community which gives the noble Lord, Lord Bruce of Donington, such ammunition in his invective against the Community.

Of course, the CAP has to be changed; everyone agrees on that. But it is not very easy to get 15 countries, all with different interests, to agree on how it should be changed. We must take care of our hill farmers. There is often no other form of employment for them. We must see that the efficient farms are not made to

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subsidise the smaller or inefficient ones. There are plenty of people in Europe who would like to see that happen.

With all these anxieties, it is not surprising that the farmers held a rally yesterday outside Parliament, cows and all, to complain. It was not farmers out on a jolly; it was a manifestation of an industry in despair. They want to feel that the Government understand their problems and that they care. I am bound to tell the Minister that at present the agricultural industry does not feel that the Government do care.

Perhaps I can conclude on a more encouraging note. Deloitte & Touche, a national firm of accountants, recently said that,

    "efficient farming is not about size, soil type or luck. What really counts is that the top 25 per cent. of farmers have developed their farming skills".

Its senior agricultural partner, Mr. Hedley Lewis, said:

    "Our best clients are already extremely competitive. No reform of the CAP would affect this natural instinct. They are also the ones who spend time and money enhancing the Environment by planting hedges, trees and wildlife habitats. All this brings big benefits to the whole country. But it is only made possible by a profitable agriculture which funds investment on and off the farm, into the Environment, into the Community, and back into the industry".

So said Mr. Hedley Lewis. I believe that he is right, and it is up to the Government to see that that happens. I beg to move for Papers.

3.28 p.m.

Lord Hooson: My Lords, I congratulate the noble Earl, Lord Ferrers, on robustly introducing this timely subject in his own inimitable style. As I listened to him, I thought that it was a great pity that the previous government did not listen to him when they were in power; had they done so, they would not have made such a mess of the BSE situation.

I have not the slightest doubt that the crisis in agriculture is a very real one. It is a national disaster. I have an interest to declare in that I am a hill farmer in mid-Wales. There 13.1 per cent. of the workforce in my county are employed directly in agriculture, the highest figure for any part of the United Kingdom. I shall be very surprised if 50 per cent. of the farmers in my area make any profit this year at all; I believe that they are all facing a loss. Your Lordships will have seen the table published in the Financial Times on 19th December last which showed that the average farm income in the United Kingdom had dropped by 23 per cent. last year--by far the highest drop in Europe--but this year will be even more devastating.

The effect of that is to threaten the whole rural community. Looking at the present state of agriculture and the reasons for it--I agree with many of the remarks made by the noble Earl on this subject--and the present attitude of this Government, I feel sure that we are facing the possibility of a rural depression with renewed rural depopulation which, if not arrested in time, will eventually cost this country far more in financial, economic, social and human terms than it will cost to take remedial measures now to prevent the crisis from deepening into a depression.

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The noble Earl referred to mistake after mistake being made by the previous government in the handling of the BSE crisis. Those mistakes have been continued by this Government in their knee-jerk reactions such as the banning of the sale of beef on the bone. Our approach to our fellow members of the European Union has been adversarial rather than seeking their understanding and support.

The whole of the approach does not appear to stem from any ill will, but is due to the fact that impractical people have been dealing with the matter. It is due to ignorance, a failure to understand and a failure to listen and consult. The result has been to place a huge overlay of bureaucracy on the farming industry, the abattoirs and so forth. For example, all inspection costs at a French abattoir in relation to lamb amount to 18.5p per lamb. At the present time in the United Kingdom it is 70p per lamb. After 1st April this year, due to the Government's policy, it is estimated to increase to £1.50 or £1.70 per lamb. Additionally, abattoir owners in this country have to pay £100 per tonne for the disposal of heads. In France they are saleable items. I did not know until recently that, up to around three weeks ago, the intestines of lambs were sold for 70p each. Their price dropped suddenly to 50p, and they will almost certainly be worth very little, if anything, soon because of a possible impending ban.

The actual all-in slaughter cost for a lamb in this country is now approximately £6 per head. The average slaughter cost in Spain, where all the costs of the inspections are not placed on the farmers or the abattoir owners but on the state--it is regarded as a public matter because it is to protect public health--is £2 per head. How can farmers in this country compete when such bureaucratic costs are being placed upon them?

Recently, I learnt of a British exporter of lamb who has his own abattoir in this country, but now still buys the lambs here, but takes them live to France and has them slaughtered there because it pays him to do that. The French abattoirs have to obey the same regulations under the European requirements as those in this country. British Ministers, officials and the Government do not seem to have any idea of what is happening and do not do anything about the parlous state of the lamb trade. They do not take any steps to improve and to acquire a more efficient system.

I was told recently by an abattoir owner, "We have all these inspectors, but look at their room. It is the untidiest room in the abattoir". Supermarket chain spot inspections, in his view, were much more effective, being carried out by those who were buying the lamb. They would descend suddenly on the abattoir and make sure that the conditions were right. Instead of that, we have an army of officials, many with no qualifications for the job, who have been placed in the industry over the past two or three years.

What should the Government do to alleviate the situation? First, to echo the words of the noble Earl, they should immediately apply to Europe for the funds that are available. I should correct the noble Earl on one matter. He mentioned £980 million, but that includes the contribution that will have to be made by our Treasury.

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Due to the Fontainebleau agreement it may be somewhat higher than the 50 per cent. that applies to other countries. On the other hand, the Fontainebleau agreement has enabled us to save £20 billion over the years so we can certainly afford to make a contribution now to agriculture.

It is interesting that, apparently, all the other European Union governments, made their contribution, but Ireland and Germany added to their contribution and enabled their farmers to survive unscathed what could have been a crisis in Europe as well. The question is whether this Government will give up their blind adherence to the Tory spending limits imposed by Mr. Kenneth Clarke, but about which he says he would take a pragmatic view and would change them if the situation required it. We want to know today from the Government whether they are prepared to seek aid from Europe on this matter.

Secondly, for heavens sake let us get the beef ban lifted or lifted to this extent. I have declared an interest before. I am a representative of beef rearers in this country. I have a suckling herd that was established over 30 years' ago and, like many other breeders, have never had a single case of BSE in that herd.

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