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Agricultural Policy

It is a pleasure to follow the hon. Member for Ogmore. I remember the by-election in Ogmore where it rained incessantly for three or four weeks. I ruined three suits, and I was soundly defeated, but I can attest to the fact that the post offices in Ogmore are indeed extremely rural. On one godforsaken day, I found myself in a village at the top of the Ogmore valley and walked into a post office, whereupon the postmaster looked at me in an astounded fashion and said, ““Good God. I have been here for 25 years and never once have I seen a politician, and when one finally turns up, he’s a Tory.”” My experiences in Ogmore were pleasurable, but my suits did not enjoy it in the same way. It has been a good sitting this afternoon. There has been much cross-party agreement on many issues, especially the CAP negotiations. We should welcome the fact that the UK Government, unlike many others in Europe, not only acknowledge the existence of the devolved nations, but also encourage the involvement of Ministers from the devolved nations in the CAP negotiations. The hon. Member for Ogmore mentioned the work being done by our Members of the European Parliament. One key thing that struck me on my recent visit to Brussels was the farming unions telling me that the four Members from four different parties that we currently have in Europe work together extremely well, ensuring that the case is made—[ Interruption. ] Four parties. Unfortunately, there is no Liberal. They feel that they have a ““Team Wales”” operating in Brussels, and the MEPs play a full part in that. When it comes to ensuring that the CAP changes actually work for the benefit of Welsh farming, having a strong, unified voice in Brussels is extremely important. Many hon. Members have already touched upon people’s concerns about the CAP. There is a real problem with the payment entitlement scheme. The potential effects of land banking should concern us, and many hon. Members have discussed it already. Land banking could increase the value of land to the extent that the common agricultural policy’s aim of making it easier for young farmers to get into the industry will actually be mitigated by the unintended consequence of the proposals for the payment entitlement scheme. The UK Government, supported by the Welsh Government, should work extremely hard to ensure that we do not, by mistake, end up making it more difficult for young people to enter the industry. In the same way, there is concern out there that for many of its 50 years, the common agricultural policy has been responsible for over-production across most of Europe. We all remember the 1980s, when Europe had butter mountains, milk lakes, and wine lakes while people were starving in other parts of the world, which was completely unacceptable. Although many go in the right direction, there is concern—six months prior to any agreement—that the CAP change proposals may have unintended consequences and move us back to a situation where production is discouraged rather than encouraged, at a time when one could argue that food security is more important. I am not saying that that will be the final consequence of CAP reform, but we must keep it in mind. While I suspect that no one in this room will oppose the greening measures in the CAP, there is real concern about the Commission’s intention to include greening as part of the 70% of pillar one, not just as part of pillar two. I would be reluctant to see Welsh farmers, who in many ways have been at the forefront of the greening agenda, penalised under the CAP proposals—if, for example, elements of their work within pillar one were not deemed to be green enough. There may be a problem about the potential penalties that have been talked about in relation to the greening measures. I hope that the UK and Welsh Governments are actively considering how to ensure that greening occurs in the context of a suitable settlement, which not only allows Welsh farmers to farm and produce food but takes into account environmental issues. Finally on the CAP, the hon. Member for Ogmore made the point about the definition of an active farmer extremely well. If that definition is based on the turnover of anyone involved with land, we will have a problem, so we should try to rectify that. The whole point of the common agricultural policy is to support the farming industry and if, again as an unintended consequence, that is not the case, I would be greatly worried. However, the CAP negotiations are certainly moving ahead, and the partnership that we can see between the Ministers from the UK and Welsh Governments should be applauded. We should take into account how this Government are trying to make things easier for our rural communities. When we talk about agriculture, it is impossible not to refer to rural communities’ economic needs. This morning, the shadow Secretary of State commented on the effect of the VAT increase on fuel prices for hard-pressed motorists and farmers in rural areas, but I thought his comment about the effect on farmers was bizarre. I suspect that he is not very up to speed on VAT law, because I do not know of a single farmer who is not VAT registered. If any element of our rural communities is not complaining too much about the increase in VAT, it is farmers, because they benefit extremely well from how the VAT system treats their industry. The shadow Secretary of State certainly made a very odd point. There has been an increase in VAT, but on numerous occasions now, not only have this Government, despite inheriting such huge financial problems, reduced the duty on petrol and fuel, but they have not implemented changes proposed by the previous Government. By August, that will make a total difference of 10p a litre in fuel duty—10p less than would have been the case—and if VAT is taken into account, it is 12p less per litre. That is a significant contribution, which should have cross-party support. On transport, I am extremely concerned about the real threat to rural bus services that will result from a very odd and last-minute decision by the Government in Cardiff. This debate is about the policy towards Welsh agriculture of the Government in Westminster, but it is important to point out that the changes that the UK Government have implemented on the fuel duty rebates for bus operators have been done with 18 months’ notice and mean a cut of about 20%. I am sure that bus operators in England find it extremely difficult to service rural areas and communities, and the changes will undoubtedly have an effect, but in Wales, we have had an announcement giving eight weeks’ notice of implementation for a cut of about 27%.