European Community (Agriculture Proposals)

Part of the debate – in the House of Commons at 12:00 am on 16 March 1977.

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Photo of Mr Jerry Wiggin Mr Jerry Wiggin , Weston-Super-Mare 12:00, 16 March 1977

A feature of the debate has certainly been that some hon. Gentlemen who do not normally participate in farming debates have taken part in this one, perhaps through their own interests in food. I am sure that is a good thing and is to be welcomed.

The hon. Member for Birmingham, Handsworth (Mr. Lee) has not been a great debater on agricultural matters. When my great-grandfather represented the then Handsworth division of Staffordshire at least some part was agricultural and that would have been more appropriate.

I shall not follow the hon. Gentleman in most of what he said, because I do not agree with him. Moreover, his opening remarks about the previous Minister of Agriculture were both accurate and concisely put. I reserve my judgment about the present Minister of Agriculture a little longer, but I congratulate him on the clarity of his presentation to date which I am sure hon. Members on both sides of the House greatly appreciate. These matters are extremely complex, and winding them all up in a ball of cotton wool does not make it easier to understand the issues or to argue the case.

There has not been as much talk today as I should have liked about the obvious unfairness of failing to recoup the extra costs that the farming community has had to bear during the past 12 months. There is absolutely nothing new about not giving agriculture back its true costs. This was a constant and recurring feature of the old deficiency payment scheme, under which an arbitrary sum was deducted from the calculation on the ground that the industry had become more efficient. I hope the Parliamentary Secretary will tell me if there is any other industry which, even under the strict Price Commission rules, is not at least allowed to recover its costs. So far as I know there is no other. It is assumed that agriculture, because it is inherently very efficient, can carry the substantial burden, running into at least £100 million a year, on its back through its own efficiency.

It is said by some, I think by the Consumers Association, that at a time when we are fighting inflation the farmers have a social responsibility to make their contribution. Farmers have made their contribution, in terms of social responsibility and increased and efficient production, for many years. To use this particular argument at this time is like saying to any section of industry "You must not have all your costs back". So far as I know, that is not a feature of the present arrangements for the curtailment of inflation.

When the right hon. Gentleman was discussing the problems over the green pound during his opening remarks I had considerable sympathy with what he said, but he omitted to point out that the real difficulties with the green pound have resulted from the disastrous drop in the value of the £ sterling. That was due to the Government's mismanagement of our economic affairs. There can be no argument about that. The value of the pound is the value which the world puts upon the currency of this nation, and that is the responsibility of the Government. If the right hon. Gentleman would persuade his colleagues to do some of the things that are so necessary, to a substantial extent, our economic and green pound problems could be solved almost overnight.

A great deal is said about the difficulties of curtailing production. I heartily endorse the remarks of those hon. Members who have said that the natural reaction of the farmer whose prices are cut is to increase production, which immediately exacerbates the problem. It was exactly that problem which was the weakness of the old deficiency payments scheme. As over-production got worse, the Government said, "We shall cut prices" and immediately everyone reacted by increasing production yet further. There is nothing new about that. But it is absolutely true that it happened.

We must have a complete rethink about expansion in agriculture. We talk and think about expansion as expansion only in production. We have to start thinking about expansion in profit. Farmers have to be allowed to see at least as much profit, or perhaps more profit, from a controlled level of production, rather than seeking all the time to cover extra expenses by producing more unwanted goods. I believe this could be done through the strict discipline of marketing boards, which must be monopoly first-time buyers.

Our own Milk Marketing Board is a good example of how this can work to the positive advantage not only of the producer but also of the consumer and, as the Minister mentioned, the distribution system, the retailer, and so on. There seems to be great unanimity on both sides of the House with regard to retaining the Milk Marketing Board. I would suggest the system used by the British Sugar Corporation—another monopoly first-time buyer—in calculating, under Community rules, a quota system that allows a given quantity—an A quota—to be paid at a fairly high guaranteed price, which gives the farmer a knowledge and certainty of profitable production at a certain level. The grower can then grow more acreage at B quota prices, which may, in a year of shortage, exceed the A quota, but in a year of surplus may be totally unsaleable. That brings home to the individual producer the responsibility of adjusting his production to the market.

That is the problem the solution to which every country and every Government has been seeking for many years—to try to co-ordinate production with demand, given the immense variables of the weather and all the factors in agriculture of which we are so well aware.

I suggest that the representatives of the United Kingdom argue in Brussels that the marketing boards have much to offer. The marketing boards are not new to Common Market countries. France markets the vast majority of its grain through an organisation called ONIC. There are other co-operatives in Europe, which could be moulded into marketing boards given the necessary will. Today we have heard criticism after criticism. Let us try to be positive and make suggestions for putting the matter right.

I listened with interest to the critical remarks that were made on the subject of vegetable oil substitution for butter and margarine, on the proposed duty on isomerose production, and on the question of imposing conditions in relation to ice cream and certain other dairy products. Let us leave aside the jokes about cream sherry and the Milky Way and be serious.

If those products are sold on a subsidised basis, the market will be destroyed. There will not be the extra capacity. There may not be a demand for the product. The solution may be to take the argument to its logical conclusion and say: if ice cream, why not real cream instead of imported goods that cost us foreign currency? I do not know whether the consumer will like this proposal. I know that the manufacturer does not like it, because he does not like dealing with these raw materials.

I have some knowledge of the sugar industry. Until very recently I was closely connected with it. Isomerose production is expected to be 400,000 tons a year. If my calculations are correct, that will replace 200,000 acres of sugar beet production. If the Minister's solution to the problem is to tax isomerose so that its price is the same as that of sugar, he may well not achieve his objective. My instinct suggests that we should be moderate and have a system that is cheaper and more efficient, whether the item is food or anything else. We must take a step forward, and not be Luddites.

Isomerose is made from imported maize. Therefore, in the protective tariff wall put up around the Community for all imported foodstuffs there may be a case for saying that an extra duty should be imposed on maize so as to protect the domestic sugar beet producer. I mean any sugar beet producer within the Community. Maize is used to the greatest extent for cattle food. That is the biggest consumer of maize within the Community.

If it had been decided that taxing isomerose as an individual item would be advantageous to the beet producer, I would not have minded if the manufacturers had been told before they had started building their plants. But to decide it after they built their plants imports an element of unfairness.

We must be quite clear within the Community whether this form of protectionism is acceptable. If it is not, we must find a better solution. This is merely restricting the consumption of domestically produced products in favour of imported goods, and this applies in all three cases. I am sorry that it will affect some manufacturing industries. This is what we must weigh up.

I do not believe that the CAP is ideal, but I certainly do not believe that the old deficiency payment system was ideal. It is extremely unsatisfactory that we should be seen to be selling surpluses to Communist and other countries at ludicrous prices when our own consumers want the best deal possible. But I believe also that the criticisms voiced here today have been particularly destructive and not constructive.

The right hon. Member for Battersea, North (Mr. Jay) read out a list of items that could be produced more cheaply in other countries. That is nothing new. Wheat from Manitoba will always be cheaper than wheat from Hampshire, because Manitoba is a more economical place to grow wheat. Equally, Argentina is a better place for beef and New Zealand is a better place for dairy products. These are facts of life. If we do not protect our farmers as a matter of policy there are severe implications, not only for production, but for the capacity of farmers as employers, for the social structure of the countryside, for our strategic position, and for the substantial consuming power of the farmer in the industrial field.