European Community (Agriculture and Fisheries)

Part of the debate – in the House of Commons at 12:00 am on 17 October 1975.

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Photo of Mr John Davies Mr John Davies , Knutsford 12:00, 17 October 1975

I am sure the Minister will recognise that this matter lies largely in his own hands. The ball is at his feet. I am sure that there would be very little reluctance in the Community if he wished to go in for something more positive. Our farmers generally and our milk producers particularly have other problems of such a considerable kind that this is a problem of which they should be relieved as far as possible. When we think of the great difficulties they face in trying to deal with the problems which they sec coming in the matter of capital transfer tax, the uncertainties about tied cottage issues, and the gloom of the wealth tax looming on the horizon, one must recognise that our farmers have many problems which are of a degree and nature which their continental equivalents do not face. To add to these problems is, to my mind, the straw which breaks the camel's back.

I fully agree with what my hon. Friend the Member for Westmorland said. I believe we all recognise the difficulties of the Minister and of the Cabinet in trying to close this gap in a short period of time. I understand that from the consumers' point of view, and I am sure my hon. Friends do, too. But what would be possible would be to give a clear indication first of a settled programme in order to close that gap, and a formula which would not allow it to re-open. I strongly urge the Minister to give attention to that proposition.

I promised to be quick, and I will be. There are, however, some issues which none the less I feel I should mention from the point of view of Community interest, not as contrasted with the national interest but combined with the national interest. One factor which seems to me to be wholly unacceptable in the present Community situation is the dislocation of timing between the budgeting activity of the Community and the farm pricing system.

We have been through a budgetary exercise on which the German Chancellor had a great deal to say, but anybody who is concerned with these matters knows that the 66⅔ per cent.—two-thirds of that budget, comprising the agricultural aspect of the budget—is at the moment totally uncertain. We are basing ourselves on last year's price assessments, transported into this year and calculated on the likely decrease of production and consumption. But we all know that there has got to be another review of pricing. We see a budget two-thirds of which is represented by these figures and which can be changed, and changed in a massive way, one way or the other, with a subsequent and formidable supplementary budget presumably coming along.

I plead with the Minister to use his influence with his colleagues and in Brussels to try to get the budgetary system organised in a way to enable us to take a real look at the Community budget. At the moment we are not able to do that. We are looking at something which we know to be a travesty. It is important that we should button up these two very unsatisfactory aims of Community activity.

Secondly, what worries me about the co-responsibility activity which is referred to in the stocktaking document and the Scrutiny Committee's report is this. Surely what should not happen in the Community is that the pricing and intervention system, which I have always supported, and will continue to support, basically, should be so devised as to make marginal production a matter worth while considering solely for interventionary purposes. This is what I believe substantially happens in continental farms. Many continental farms, in France particularly but also in Germany and Italy, and perhaps in Belgium and Holland, too, actually do calculations which are related to the marginal cost of production, notably of dairy products, with a view to seeing whether the intervention system pays them to enable them to go into intervention.

In this area of co-responsibility, I believe, a much better system could be worked out so that there was some penalty on the purely marginal approach to the cost of products related directly to intervention purposes. I commend action on that matter to the Minister.

Next, in the same context—I am sure that the Minister is entirely with me here—it should prove practicable to find a method of pricing arrangements within the Community which allowed for obvious differences in the nature of the agricultural industries of the individual countries. Ours, of course, is the most significant, and it is ridiculous for the Commission, in my view, to put before the Community as a proposition a two-tier milk régime or a two-tier grain régime which it must recognise as entirely unacceptable to such an important member as ourselves. There should be flexibility within the Community system to allow for, so to speak, the majority who may be so affected to take account of a Commission proposal but for a country such as ourselves—I instance both those products, but I am thinking particularly of milk—to be allowed special consideration and be provided for as such. I see no difficulty there.

Finally, I put a strong recommendation to the Minister that the guidance section of the fund should be deployed more strongly in favour of the more efficient marketing of Community products. To date, the guidance section has been directed purely towards the structural aspects of farms and like matters. I am sure that money would be far better spent and rewards more readily obtained if we had a deliberate effort to try to secure both better marketing and better distributive procedures, with, I believe, an increase of the market itself.

It is my firm view that the tendency to reinforce structural change through the guidance fund is a dead loss, and I should like to see—I hope that the right hon. Gentleman will agree—the Minister using his influence to secure a shift in the use of that part of the fund for the purposes I suggest.

I am grateful for the opportunity to speak at this point in the debate, and I hope that what I have said will be regarded as constructive and not merely critical.