Chamber
Plenary, 06 Apr 2000
06 Apr 2000 · S1 · Plenary
Item of business
Dairy Industry
I welcome the opportunity to contribute to the debate. Since I became Minister for Rural Affairs, I have been aware of the problems in the dairy sector. One of my first public engagements was a visit to a dairy farm in Ayrshire. I was told that one or two colleagues and friends of the farmer would be there—250 turned up. He is a man who has many friends.
I have been impressed by the efforts and the commitment of those who are involved in the industry, but no one should doubt that I am also well aware of the deep-rooted problems that Adam Ingram has brought before us this morning. Acknowledging the difficulties is one thing, but finding ways and means of giving the support for which Adam Ingram calls is another. The EU dairy regime is not constructed in a way that makes direct assistance an option.
As Adam Ingram pointed out, the deregulation of the milk industry and the abolition of the milk marketing boards some years ago resulted in a structure that does not appear to permit vertical integration. It is a great pity that some of the statements that were made at the time represented the wrong interpretation of the changes.
However, faced with that situation, I have adopted a twin-pronged approach. First, I will try to find a way to provide cash assistance. I am grateful to Adam Ingram for acknowledging that I have stuck to my guns in insisting that agrimonetary aid that ought to have been paid has been paid to the dairy sector. Although we are paying that money in full, it is not a huge injection of funds. I hope, however, that it will help. It is the first time that agrimoney has been paid to the dairy sector. The last time that such help was available was in 1997 under the Conservative Government, but the money was not paid.
Agrimoney is not enough—which is why I supported the removal of the over-30-months scheme weight limit. I hope that that will provide extra support for the dairy sector. I trust that the EU—which we have approached—will be sympathetic to that.
Many farmers in the dairy sector also keep sheep and beef cattle. Most of those animals are in less-favoured areas and will, therefore, be eligible for support from the package that I announced the other day.
Secondly, we must recognise that short-term assistance—helpful as it might be—does not address the industry's wider needs. As part of that process, I will call today for a serious debate about the future path of the agriculture industry. I will say more about that later, but I should advise members that copies of a discussion document to accompany that debate are available in the Scottish Parliament information centre. This morning's debate is, however, on the dairy industry and I want to concentrate on that.
Several developments might help to stimulate the market. The industry voted 2:1 to extend the remit of the Milk Development Council to the sponsoring of generic advertising. I welcome that development and I assure members that I will continue to oppose any proposal by the EU to stop the school milk scheme. That scheme is crucial in embedding in people at an early age the value of milk and milk products.
We want to examine the industry's long-term strategy—something that my department and I have been considering for some months. I am pleased to announce to the chamber that the Executive will fund a £50,000 industry-led study that will examine the difficulties and the opportunities faced by the dairy sector. The study will analyse the sector's problems, examine the market's requirements and draw up proposals for the future.
That is an example of good collaboration between the Scottish farming industry and the Executive. The proposal came from the food chain working group that we set up and which is chaired by the National Farmers Union of Scotland. The group comprises representatives of the Executive, major retailers, processors and primary producers. The group is tasked to examine all sectors of the industry as part of its work; it has identified the dairy sector as a priority.
The dairy study will be led by a group made up of representatives from all sectors, including the SAOS. Its role will be to examine co-operatives, as the SAOS already does. I have to say to Adam Ingram that it has made a valuable contribution, both within the Co-operative movement and in its linkages with other bodies. I hope that the study will produce useful information and additional help, in a vexed situation.
The Executive has been taking steps to assist our farmers, but we must work within the restrictions of the common agricultural policy.
I have been impressed by the efforts and the commitment of those who are involved in the industry, but no one should doubt that I am also well aware of the deep-rooted problems that Adam Ingram has brought before us this morning. Acknowledging the difficulties is one thing, but finding ways and means of giving the support for which Adam Ingram calls is another. The EU dairy regime is not constructed in a way that makes direct assistance an option.
As Adam Ingram pointed out, the deregulation of the milk industry and the abolition of the milk marketing boards some years ago resulted in a structure that does not appear to permit vertical integration. It is a great pity that some of the statements that were made at the time represented the wrong interpretation of the changes.
However, faced with that situation, I have adopted a twin-pronged approach. First, I will try to find a way to provide cash assistance. I am grateful to Adam Ingram for acknowledging that I have stuck to my guns in insisting that agrimonetary aid that ought to have been paid has been paid to the dairy sector. Although we are paying that money in full, it is not a huge injection of funds. I hope, however, that it will help. It is the first time that agrimoney has been paid to the dairy sector. The last time that such help was available was in 1997 under the Conservative Government, but the money was not paid.
Agrimoney is not enough—which is why I supported the removal of the over-30-months scheme weight limit. I hope that that will provide extra support for the dairy sector. I trust that the EU—which we have approached—will be sympathetic to that.
Many farmers in the dairy sector also keep sheep and beef cattle. Most of those animals are in less-favoured areas and will, therefore, be eligible for support from the package that I announced the other day.
Secondly, we must recognise that short-term assistance—helpful as it might be—does not address the industry's wider needs. As part of that process, I will call today for a serious debate about the future path of the agriculture industry. I will say more about that later, but I should advise members that copies of a discussion document to accompany that debate are available in the Scottish Parliament information centre. This morning's debate is, however, on the dairy industry and I want to concentrate on that.
Several developments might help to stimulate the market. The industry voted 2:1 to extend the remit of the Milk Development Council to the sponsoring of generic advertising. I welcome that development and I assure members that I will continue to oppose any proposal by the EU to stop the school milk scheme. That scheme is crucial in embedding in people at an early age the value of milk and milk products.
We want to examine the industry's long-term strategy—something that my department and I have been considering for some months. I am pleased to announce to the chamber that the Executive will fund a £50,000 industry-led study that will examine the difficulties and the opportunities faced by the dairy sector. The study will analyse the sector's problems, examine the market's requirements and draw up proposals for the future.
That is an example of good collaboration between the Scottish farming industry and the Executive. The proposal came from the food chain working group that we set up and which is chaired by the National Farmers Union of Scotland. The group comprises representatives of the Executive, major retailers, processors and primary producers. The group is tasked to examine all sectors of the industry as part of its work; it has identified the dairy sector as a priority.
The dairy study will be led by a group made up of representatives from all sectors, including the SAOS. Its role will be to examine co-operatives, as the SAOS already does. I have to say to Adam Ingram that it has made a valuable contribution, both within the Co-operative movement and in its linkages with other bodies. I hope that the study will produce useful information and additional help, in a vexed situation.
The Executive has been taking steps to assist our farmers, but we must work within the restrictions of the common agricultural policy.
In the same item of business
Mr Adam Ingram (South of Scotland) (SNP):
SNP
Scotland is a nation of 5 million people, and covers nearly half the UK landmass. It has some of the best agricultural land in Europe and, without doubt, som...
George Lyon (Argyll and Bute) (LD):
LD
Is Adam Ingram saying that the Scottish Agricultural Organisation Society, which was set up by the Scottish Executive to encourage co-ops to be set up in Sco...
Mr Ingram:
SNP
No. I am saying that there ought to be a drive to support co-operatives, and to link that to the creation of joint ventures between co-operatives and dairy c...
George Lyon:
LD
Is the member arguing that the SAOS's powers should be handed over?
Mr Ingram:
SNP
We will talk about that later.
The Presiding Officer (Sir David Steel):
NPA
You are on your last minute.
Mr Ingram:
SNP
Wherever possible, we should be encouraging new product development and innovative marketing, which has seen considerable growth in some segments of the dair...
The Minister for Rural Affairs (Ross Finnie):
LD
I welcome the opportunity to contribute to the debate. Since I became Minister for Rural Affairs, I have been aware of the problems in the dairy sector. One ...
John Scott (Ayr) (Con):
Con
Does Mr Finnie accept that the £50,000 survey that he has announced is too little, too late? The dairy industry has been in terminal decline for two years. H...
Ross Finnie:
LD
I can say only that Mr Scott is disagreeing with the food chain working group that we set up, which includes representatives of the industry and of the Natio...
Alex Johnstone (North-East Scotland) (Con):
Con
I begin by drawing members' attention to my entry in the "Register of Interests of Members of the Scottish Parliament". They will find that I am a farmer. I ...
George Lyon:
LD
If the European price is now below the world price, why do we need export restitutions to allow us to export products from the EU into world markets?
Alex Johnstone:
Con
I am just reading a new section, which I will continue to read. It is suggested that the US five-year average projection for prices will be up to a penny abo...
George Lyon:
LD
Will the member give way? He cannot be allowed to get away with it. He is arguing that co-operation is the way ahead for the dairy industry. It was his party...
Alex Johnstone:
Con
The dissolution of the milk marketing boards in 1994 need not have been the end of co-operation. The circumstances allowed the creation of a number of active...
The Presiding Officer:
NPA
Conclude now, please.
Alex Johnstone:
Con
We must encourage co-operatives. They are an essential element—
Cathy Jamieson (Carrick, Cumnock and Doon Valley) (Lab):
Lab
Will the member give way?
The Presiding Officer:
NPA
No, he is over time.
Alex Johnstone:
Con
I have to wind up. As a member of a co-operative in the past, I believe that we must ensure that we strengthen them against the processor but not against the...
The Presiding Officer:
NPA
That is enough—you are three minutes over time.
Alex Johnstone:
Con
I welcome the fact that the SNP raised this subject; I support the motion.
The Presiding Officer:
NPA
I am afraid I will have to take time off that allowed for the closing Conservative speaker, because this is a very short debate.
Dr Elaine Murray (Dumfries) (Lab):
Lab
Members will have to forgive me, as one who was raised in this city, for not knowing about the intricacies of farming. However, nobody can deny—certainly nob...
Fergus Ewing (Inverness East, Nairn and Lochaber) (SNP):
SNP
If the price that farmers are paid for milk has fallen, why has the retail price not fallen? Is it not the case that there may be profiteering by the superma...
Dr Murray:
Lab
I find that a curious intervention. Of course I would be concerned if the supermarkets were profiteering and I believe that the issue has been referred to th...
Mr Jamie Stone (Caithness, Sutherland and Easter Ross) (LD):
LD
Given what the member has said about the strength of sterling, does she agree that the farming industry needs a European currency sooner rather than later, w...
Dr Murray:
Lab
That is something that we must take on board when we consider whether it is in Britain's interest to join the European single currency.
John Scott rose—
Con
Dr Murray:
Lab
I must press on, or I will run out of time. I will take an intervention from Mr Scott later, as I have something to say in which I am sure he will be interes...