Queen's Speech

Duke of Montrose Excerpts

Wednesday 2nd June 2010 Lords Chamber

[The Duke of Montrose]

My Lords, Parliament now has a coalition, which, with any luck, will guide the policies of the United Kingdom for the next five years. As noble Lords will be aware, one critical event in this period will be the next revision of the common agricultural policy.

I declare my interests as a farmer and a livestock rearer. I should like to say how encouraged I was to hear the right reverend Prelate the Bishop of Wakefield raising some of the issues that affect the industry. In fact, as one of the Government’s purposes is, I believe, to encourage business and manufacturing outside the south-east of the United Kingdom, they could bear in mind that agriculture has a part to play.

Strange as it may seem, the founding principles of the CAP are, in my opinion, still valid. These were: to increase agricultural productivity by promoting technological progress and efficiency; to ensure a fair standard of living for the agricultural community; to stabilise markets; and to ensure availability of supplies. The new factor that we have woken up to is that the CAP must also protect and enhance the environment. This is being achieved by the transfer of financial support within the budget from what is known as Pillar 1 to Pillar 2. Part of the Government’s task will be to see that this is carried out equitably across all our partners in Europe.

Another factor is that, as negotiations under the World Trade Organisation progress, farming will become more and more exposed to international competition. It is vital that every effort is made to maximise progress and efficiency in order to maintain competitiveness wherever possible. Here at home, as we are faced with our own financial crisis and the Government have already identified proposals to cut £162 million from the Defra budget, that will be an immense challenge. Can the Minister give any indication of the key areas in which this is likely to be achieved?

Something which the whole industry would like to see, and on which my noble friend Lady Byford made some of her points, is a reduction in the cost of administering the single farm payment. It seems quite extraordinary that, by adopting a more sophisticated structure, the average cost of administering every payment in England was, as she said, £1,743, whereas I have been told that in Scotland the figure was £240. However, the Scots are certainly now having to address the structural shortfalls in their scheme and they will have to move to an area-based system, but unfortunately they are unable to make the necessary alterations until the review takes place in 2013. Their advantage is that they now have certified maps for all the major holdings and the costs are not likely to approach those experienced in England. What cost target do the Government expect to meet when they carry out the single farm payment this year?

An area of additional expense for both the Administration and for farmers is the newly introduced sheep electronic identification scheme, under which all sheep and goats born after 1 January will have to have two ear tags, one of which is electronic. This shows every sign of being as much of an administrative nightmare as the single farm payment has proved to be.

Your Lordships’ House has already heard of many of the aspects which appear to be unrealistic. They are already posing problems in Scotland where the Administration are looking for a system that could be considered practical. There is the worry that individual farmers with their own reading machines, some of which might be less than top-of-the-range technology, will be liable to create errors. Under the system that they introduced, once all the sheep are tagged, almost all registration of movement will be carried out by drafting the sheep through what are designated “critical control points”. These will almost all be livestock markets and slaughterhouses.

The markets, in particular, can have throughputs of anything from 1,000 to 10,000 sheep a day. Various systems have been under trial and even last week at my local market, with 2,000 sheep present, the operators were proudly trying to maintain that they had only a 10 per cent error rate with the young lambs. However, this means that there could be 200 lambs with buyers which are not showing up correctly on the records.

I ask the Minister to note the proposal currently going through the European Parliament, which contends that the only practical way forward is a three-year introductory period in which the regime is allowed to operate without any question of penalty. This would allow a realistic assessment of what requirements are practical and of the processes and technology capable of delivering what is required. Can we have some assurance that the Government will be prepared to pursue this argument when it comes to the Council of Ministers?