Tories and Labour betray the farmers - a European View (Islington Liberal Democrats)

Islington Liberal Democrats <Islington_ld@cix.co.uk>

Tories and Labour betray the farmers - a European View

April 5, 2001 12:00 AM

In the 4 years 1996-2000, prices for farm products have fallen by 31%, output has fallen by 20% and farm incomes by 61% in real terms. The main cause was the rise in value of sterling by 37% in that period. The pain for farming has been even more brutal than for manufacturing because support prices for all its output (not just the traded part) are fixed in Euros and compensatory arrangements for exchange rate fluctuations are being phased out. The milk support price fell from 26p per litre to 16p between 1995 and 2000 (of which 6p was a direct consequence of the rise in the ). Other support prices fell too. As a result, 42,000 jobs were lost in farming, many farms were pushed to the edge of bankruptcy and investment in agriculture fell by 40%. It was primarily the rise in sterling which caused these problems, exacerbated by the mishandling of the BSE crisis and now by the tragedy of foot and mouth disease. The recent modest recovery in the Euro exchange rate eased the pain and brought a little hope. But a secure future will only be possible if membership of the Euro at a reasonable exchange rate within the next few years provides stability. The reform of the CAP and the vital move towards a more sustainable organic future can then take place in a context in which rural life is not destroyed. William Hague's policy of excluding Euro membership in the next parliament is thus a blatant betrayal of farmers' economic interest - putting political demagogy first. The Brown policy of neglecting the exchange rate has created a two speed economy in which, as one farmer put it "Those who play with money prosper, and those who make or grow things take the pain". Both major parties have tried to dodge the central failure of their economic policy by scapegoating modest environmental changes (like the Government's retreat on taxing pesticides or the fuss about a 4p increase in the price of subsidised red diesel). A prosperous countryside can sustain and benefit from sound environmental practice.