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 Edward Bishop Mr Edward Bishop , Newark 12:00, 17 October 1975

No, I must get on because there are many points to cover.

I was saying that the reduction in the value of the green pound last July, together with the increase in guaranteed milk prices, was estimated to mean an increased return for United Kingdom producers of £100 million in a full year. The further change my right hon. Friend announced this week has been estimated to have a similar effect. These large improvements are in addition to the substantial increase in guaranteed prices which my right hon. Friend made in this year's annual review. They come on top of the improvement in the 1975–76 CAP support prices and the new EEC beef régime which were negotiated at the beginning of this year.

The reductions in the green pound have enabled us to increase the guaranteed price for milky over 2p as from the beginning of September and by a further 2·3p from 1st November. The effective guaranteed winter price is now over 40p a gallon. The average guaranteed price for milk this whole year is 40 per cent. higher than the price set by the previous administration in the 1974 price review, This point should be emphasised on far more occasions when we are accused of not doing enough for the industry.

In the face of that record I find it very difficult to accept some of the criticisms of hon. Members opposite. At the same time, we have sought to minimise the effect on consumers. This is most important at a time when we want all the co-operation we can get in dealing with our anti-inflation policies. We have arranged for the latest green pound change to apply to beef from only 5th January and to wheat from 1st July next year. When fully effective, the increase in food prices as a result of the latest change should be less than 1 per cent. Moreover, in the long run it must be in the consumers' interests to maintain our farmers' returns at reasonable levels.

The hon. Members for Westmorland (Mr. Jopling) and the right hon. Member for Knutsford spoke of the need for considering automatic arrangements for reducing MCAs. Any change in the national representative rates involves difficult and very sensitive issues. Automatic rules could not take these properly into account. The Government, however, keep the green pound under regular review, and we have changed the rate four times already in just over 18 months.

I turn to the major document before us today, the Commission's stocktaking report. It was produced at the request of the EEC Council of Ministers following the Council's discussions last autumn, and today's debate is particularly timely because at the end of the month the Council will have its first substantive discussion of the Commission's report.

The stocktaking exercise is a valuable opportunity to review the operation of the CAP and to assist its development in the future. Clearly, this must be part of a continuing process. That is my reply to several hon. Members, including my right hon. Friend the Member for Battersea, North (Mr. Jay), my hon. Friend the Member for Farnworth (Mr. Roper) and the hon. Member for Westmorland. Major improvements can, and must, be made. I have particularly in mind the new beef régime which my right hon. Friend negotiated earlier this year. The Community recognises, I think, that further improvements still have to be made.

The Commission's stocktaking report contains much which accords with the United Kingdom's view of the CAP. That this should be so is a tribute to my right hon. Friend's efforts in the last 18 months, during which time he has had responsibility for agriculture and food. In particular, the Commission's report reiterates the importance of fixing support prices in relation to the needs of modern farms and the market situation for each commodity. This point was made by the hon. Member for Bodmin (Mr. Hicks) and others.

The report emphasises the need to avoid accumulating surpluses, and I think reference was made to the budget by the right hon. Member for Knutsford. The importance of containing the costs of agricultural support is recognised by all hon. Members, I believe. The Commission accepts that when surpluses do arise and have to be disposed of, Community consumers should be given maximum priority. There is recognition also of the need to take account of the countries outside the Community, including the developing world, though there are problems here in distribution.

As my right hon. Friend made clear, we intend to build on those points in the Commission's report. We want a flexible and efficient common agricultural policy which provides a sensible and reliable framework in which efficient producers in the Community can maintain and, where appropriate, expand their production. This is most important in framing our future policy considerations. This point has been emphasised this afternoon by various speakers.

The interests of consumers must be brought fully into the discussion of agricultural issues. I am afraid that those who say that we are not doing enough here often refuse to recognise that the whole purpose of agriculture and of food production is to provide for the needs of the consumer. Agriculture is not an end in itself, although, of course, it is a very important link in achieving that objective.

The philosophy which seems to underlie the Commission's document, therefore, is fully in line with the approach outlined in our White Paper published earlier this year. I emphasise that the basic principle underlying the stocktaking is that agricultural production should be located within the community where it may be most efficiently carried on. This is something which we must, and will, bear in mind. While our milk industry has certain climatic and structural advantages, it would be entirely in accord with the Commission's approach that our producers' share of Community production should increase to reflect their relative efficiency.

I must say a word or two more now about milk and surpluses. My right hon. Friend has made clear that he understands the industry's concern. His announcement a few days ago shows that that is so. We recognise that the Commission's proposal in its present form could cause difficulties for our pattern of winter and summer production, but here again the House may be assured that we shall have very much in mind in any discussions in Brussels the need to avoid unfair discrimination against our producers.

There have been references to the build-up of stocks of skimmed milk powder within the Community since the Commission's stocktaking document was prepared. This build-up indicates the need for short-term measures to reduce these stocks, and we shall certainly keep in mind the points made in the debate about that.

The hon. Member for Westmorland spoke of accelerating the transition. I remind him that this was a part of the Act of Accession and is controlled there. Moreover, apart from the legal consideration, there are the other aspects, to which I referred earlier, in reference to the cost of living.

Comments have been made about the glasshouse industry. In this connection, I draw attention to the policy which we adopted to give aid to the industry early last year before it was ended in December. In fact, we were pioneers in this in Europe. I am pleased to note now that the better prices of produce have helped the industry through the difficulties which it experienced earlier this year.

There has been reference also to the storage of beef in the United Kingdom. Contracts for assisted private storage of beef have been placed since July for about 11,000 tons. I say that in reply to my right hon. Friend the Member for Battersea, North. The beef has not been out of the hands of traders or the trade. This is merely a matter of private storage arrangements.

We shall continue our policy of not agreeing to undue intervention for beef, and we hope that the present arrangements, which my right hon. Friend negotiated earlier this year, will enable us to ensure that, whatever changes are made in the beef regime, we are not at a disadvantage in relation to the present situation.

Now, a few words about the fishing industry. I noted the comments of my hon. Friend the Member for Kingston upon Hull, West (Mr. Johnson), who reminded us that we have the biggest fishing industry in the Community. My right hon. Friend has said that we want to renegotiate the common fisheries policy as soon as possible and not wait until 1982, as the Act of Accession dictates. We have this matter very much in mind at present, and on my visits to many fishing ports throughout the country I have emphasised our interest and concern. We shall certainly bear those matters in mind in the near future.

I have not been able to answer all the points raised, but I assure the House that we shall keep in mind all that hon. Members have said. I end with a tribute to my right hon. Friend and his influence and interest from the days of Tom Williams and the 1947 Act, which was the basis of agricultural prosperity in this country. My right hon. Friend never forgets to remind us that he was PPS to Tom Williams. We shall keep in mind the policies of the Labour Government in 1947 for the security and stability of the industry in the development of the CAP, just as we did in what we said in the White Paper.