Agriculture: Regulation

Viscount Brookeborough Excerpts

Tuesday 29th March 2011 Lords Chamber

[Viscount Brookeborough]

My Lords, first I declare an interest in that I farm in a small way and have about 120 acres of trees. To add to the basic agriculture, I wish to refer to the regulatory burden on private commercial forestry, which is an important part of many farming enterprises.

The state, through the Forestry Commission, produces nearly 70 per cent of UK timber production, which is almost a monopoly, but it is also the regulator, which is an unhealthy situation for us all. For example, as a landowner you currently need to apply for permission to put new land into forestry and also to take land out of forestry, as that is a change of use. However, the Forestry Commission presumably does not have to ask itself this and it can do what it wishes. A landowner, having gained permission to plant and probably doing so with a grant of public funds, produces a crop ready for harvesting after at least 40 years. This time, he now has to apply to the state for a felling licence to harvest a crop that the state grant-aided specifically for that purpose when it was planted. This appears to be madness and jobs for the boys.

This brings in another issue—the distortion of the timber market—as the time taken in obtaining felling licences restricts the ability of producers to react to the changing demand and prices of timber in the short term. This does not apply to a grain producer who can sell where he likes. However, the private timber producer has to gain permission from a monopoly state producer and is therefore likely to miss the boat. In addition, the state producer is hide-bound by five-year plans. For example, during last year timber prices rose by more than 50 per cent for some packages. The sawmills that we use were screaming for more timber. A few weeks ago I was talking to a state forest harvesting manager and I asked him why they did not fell some very suitable timber that I knew of at this high price. His answer was that he could not do it as it was not programmed within that year of his five-year plan.

There are two points. First, it is no wonder that our state forests are so uneconomic if they cannot be more flexible. Secondly, the price logically became as high as it did as a result of demand and inflexible supply. Therefore in a period of low prices and oversupply the opposite might occur. State forests will continue felling and oversupplying and the price will go even lower. The forestry section of agriculture in the UK is not being allowed to operate in a free market. The burden of state regulation, control and interference in this sector is far too great, and I ask the Minister what the Government are going to do about it. Privatisation of some state forests at the right price might well be a good option, but the whole business operation needs looking at.