European Community (Agriculture Ministers' Meeting)

– in the House of Commons at 12:00 am on 27th April 1977.

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Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford 12:00 am, 27th April 1977

With permission, Mr. Speaker, I should like to report on the outcome of the meeting of the Council of Ministers (Agriculture) on 25th-26th April. My hon. Friend the Parliamentary Secretary represented the United Kingdom for the discussions on agriculture, and my right hon. Friend the Secretary of State for Scotland for the discussions on fisheries.

Agreement was reached on Community farm prices for 1977–78. The common support prices will rise by 3·5 per cent. for most commodities, the lowest figure since United Kingdom accession. There will be a butter subsidy for the United Kingdom, which was not included in the Commission's original proposals, at a rate of 8½p per lb., until 1st April 1978. This should lead to an immediate fall in shop prices of about 5p per lb., although I now learn that this may actually be an understatement. Prices thereafter will begin to rise again, but increases and decreases throughout the year are expected roughly to cancel out. The subsidy on Community butter will be financed by the farm fund. It will continue until 1st January 1979, though the rate after 1st April 1978 has yet to be decided.

For beef, our premium system, with intervention only as a fallback, will be continued not merely until July, as the Commission originally proposed, but for the whole of 1977–78. I am confident that agreement will be reached in the course of the year that the premium system be retained permanently. I shall announce this week the scale of United Kingdom target prices for 1977–78, but the average will be £30·28 per live cwt, and the level will rise to over £32 next March.

The levy on isoglucose will be fixed at, the maximum of half the level proposed by the Commission.

The action programme for milk has been improved. There will be no tax on vegetable oils and fats—that is, no margarine tax. There will be no regulation on the "exclusive use" of milk products or their labelling, although this will be further examined. There will be no ban on national aids for investment on farms. The action programme now comprises incentives to farmers, financed wholly by the Community, to cease to market milk or to convert to beef or sheep production; a "co-responsibility levy" of 1·5 per cent. from 16th September; Community aid for school milk programmes; and Community aid for accelerated programmes for eradicating brucellosis, tuberculosis and bovine leucosis.

I now think that it right to make a small move in the green pound. It will be devalued by 2·9 per cent. rather than the 6 per cent. proposed by the Commission, to take effect from the beginning of each marketing year, with two exceptions. It will apply to pigmeat from the beginning of May, thus reducing the monetary compensatory amount immediately by about 8½ per cent., and without at the same time reducing mcas on cereals. This will provide some relief to our pigmeat industry. We shall continue to press for a more fundamental change in the calculation of these amounts. The change will also be deferred for milk products, and will apply in two equal steps, one on 16th September 1977, and the other on 1st April 1978.

The change in the green pound will be reflected in higher common support prices for United Kingdom farmers in sterling terms. After allowing for the deferment of the change for milk products, however, the effect on retail prices will be very small. Its effect on all food prices between now and April 1978 will be more than offset by the butter subsidy which we have negotiated.

I consider that this package achieves a fair balance between producers and consumers. The effect on food prices in the shops has been cut to the minimum and the green pound devaluation more than offset by the butter subsidy. The effect on average food prices of this settlement during the period to next April is estimated at one-third of 1 per cent., so that with the transitional steps, the overall effect will be 1·25 per cent., When all the effects excluding the transitional steps are fully passed through, the increase in the RPI would be less than one-third of 1 per cent. Also agricultural support prices in the Community as a whole will fall in real terms, but United Kingdom farmers will get a big boost to their support prices from the combination of the transitional steps, the common price increases, and the small devaluation of the green pound.

I believe that the outcome of these negotiations represents a very good deal for both British housewives and farmers. The final package is a considerable improvement on what was originally proposed by the Commission. For us, the key objective was to keep consumer price increases to an absolute minimum while at the same time obtaining a fair deal for the farmer. I recommend the package to the House.

The Council also agreed to certain changes in the basic regulation on hops which will strengthen producer marketing. I believe that these will be welcomed by the Hops Marketing Board and the farmers' union.

The Council agreed on a mandate for the negotiations with the ACP countries on sugar prices for 1977–78. These will start on 28th April.

The Council decided to extend the present ban on fishing for herring in the North Sea for a further month and to consider the herring situation as a whole—including waters to the west of Britain as well as the North Sea—at the next Council.

I should take this opportunity to tell the House that Commissioner Gundelach has notified me that he is studying how the functions of the Milk Marketing Boards can be maintained, with particular regard to the means by which the Boards help to maintain the level of liquid milk consumption thereby reducing intervention on dairy products, with a view to making appropriate proposals.

Photo of Mr John Peyton Mr John Peyton , Yeovil

My first question to the Minister must be, why did he hold out in March? What does he think he has gained that was not available in March to justify the delay, all the bitterness and the loss of good will that has resulted? It would appear from what he has said that the subsidy on butter is something less than 1p per lb. Also, will the Minister clarify the anticipated total effect on food prices because that does not emerge all that clearly from the statement?

Does the Minister understand the consequences for the pig producers and processors? If so, why were these consequences not discussed in Brussels? Has he understood, in particular, the terrible effect on specialist producers who have very heavy investment and whose losses have been running for months at the intolerable level of £4 per pig after the subsidy? The breeding herd has gone down by 10 per cent. as a result of slaughtering caused by the destruction of confidence over the past six months. The producers feel that the Minister has given the Danes and others an easy ride in our market.

We all accept that farming costs went up by 20 per cent. last year. It would appear from what has been decided in Brussels that just over half of that will be recouped by producers. What does the Minister have to say about the future generally, and the future existence of the document "Food From Our Own Resources", which now begins to look shop-soiled and tarnished in the extreme? When can we expect a statement from the Minister on prices to farmers in this country for milk and potatoes—an announcement that has been very long delayed?

We understand that the way in which these negotiations were handled caused immense resentment in Europe, so much so that the Minister has lost a lot of good will, and this evidently made him unable even to raise the all-important question of structural surpluses, let alone make progress on it. Finally—[HON. MEMBERS: "Too long."] The Minister made a very long statement. Will the Minister take note of the fact that the Opposition will require a debate in Government time in order to give him an opportunity to make a speech explaining Government policy, if that is possible?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

Government policy has been made very clear. It is the Opposition's policy that worries me. Let me try to answer all those long questions. First of all, the right hon. Gentleman asked me why I held out in March. I held out for the simple reason that the difference between the two sides was too large to be bridged at that time. I said then that I was willing to sit day and night until we settled the matter. Most, though not all, of my colleagues in Europe thought it was better to come back after Easter on 25th and 26th April. But the actual difference in terms was significant. [HON. MEMBERS: "No"] That happens to be correct. Hon. Gentlemen were not there, and I was. The offer that lay between us was an offer tapering down to 6½p per lb. What we have got is one that is 8½ flat.

I remind the House that it is not stopping as a butter subsidy in April next year but will go on to the end of the year, at a rate to be decided. This was, therefore, a very considerable advance. I wish that the Opposition would get out of their historical liking for appeasement. If there are two conflicting sides, why do they always assume that this country is wrong?

The right hon. Gentleman's second point is covered in the statement. I thought I had made it clear, but let me make the point again. The effect on food prices until April next year—by then we shall have had, we hope, the price fixing of 1978—is one third of a penny in the £ if we exclude the transitional steps, for which I claim no responsibility. Opposition Members have a responsibility for that. It is 1·25p in the £ if we include the transitional steps.

I understand, of course, the crisis in pigmeat. That is why I introduced the subsidy and why I incurred the wrath That was where the wrath of my colleagues came, when I put in the pig subsidy. I find that complaints come from various sections of this House that I have not raised it, despite the fact that I have gone to court. Nevertheless, there is quite a substantial change going on. I believe that the effect of the changes I have announced will amount to about £22 a tonne. That is something on the way. That is taken together with the £23 a tonne that I got from the Commission last October. I intend to press the matter vigorously again at the next Council three weeks from now.

I understand the right hon. Gentleman's point that farmers are being recouped only half their costs, but this arises simply because we have not yet got the detailed prices out. We hope to get them out today or tomorrow, and I think they will command study. Then we can all have a good and, I hope, unequivocal look at them.

I shall endeavour to announce the milk and potato guarantees as speedily as possible.

The right hon. Gentleman's last question surprises me—perhaps it should not—when he asks whether I am going to deal with the structural surplus. That lies at the root of the CAP. That is what has got to be changed. I have said it all along. What on earth does he think was the point of dealing with butter specifically? It was, of course, to deal with the fact that butter was being sent outside the Community—to the Urals, as somebody said the other day—and being subsidised in being sent there when we believe it ought to be available to people inside the Community who are willing to take it. We know, of course, that the largest amount of butter is consumed by the poorer sections of the Community, the old-age pensioners and those earning under £30 a week. That was another reason for dealing with butter specifically.

The effect of dealing with this matter is to cut at the butter surplus and to see the beginnings of what I hope will be that major reform of the CAP which at any rate all my hon. Friends believe to be right.

Photo of Mr Donald Stewart Mr Donald Stewart , Na h-Eileanan an Iar

In the forthcoming talks at the next Council meeting on a possible ban on herring fishing on the West Coast of Scotland, will the Minister be prepared to make representations on small vessels, on which I have written to one of his hon. Friends at the Scottish Office? There are only two in the fleet in my constituency—there may be some elsewhere—which are engaged in herring fishing only by drift nets and which are too small and lack the equipment to go in for other kinds of fishing. I am informed that there would be no objection from the other fishermen concerned.

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

If the right hon. Gentleman has communicated with the Scottish Office I shall certainly take it up with my right hon. Friend the Secretary of State and look into the point as urgently as possible.

Photo of Mr Douglas Jay Mr Douglas Jay , Wandsworth Battersea North

Is my right hon. Friend aware that he might have got an even better deal if he had not been publicly attacked by Opposition spokesmen in Brussels during the negotiations?

Is he further aware that because—despite the most strenuous efforts that he made in these negotiations—we still face a further series of increases in the price of food, including the transitional steps, more and more people will conclude that it is time we withdrew from the common agricultural policy?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

My right hon. Friend has put a view that I know many people in this country share with him. My task was to deal as best I could with a particular prices package. To have brought back the lowest increase in prices since the United Kingdom joined the Common Market, and to have got a butter subsidy for the reasons I have given, was the best I could do at this stage.

Photo of Mr Geraint Howells Mr Geraint Howells , Cardigan

I am grateful to the Minister for finalising the price review negotiations this week. Will he not agree with me that this year's price review is a holding operation for farmers until we shall be able to persuade our counterparts in Europe to reform and change the common agricultural policy for the benefit of producers and consumers alike? The butter subsidy and devaluation of the green pound are a step in the right direction.

Will not the Minister further agree that the pig industry is in dire financial trouble? What further plans does he have to provide help for the industry?

Finally, is it not true that the biggest worry confronting the British farmer today is the precarious future of the marketing boards? Is the Minister in a position to comment on the future of these boards?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

With regard to the Milk Marketing Boards, I have referred to what I believe is a very significant shift on the part of Brussels. I was about to say Luxembourg but it is really Brussels. The Commissioner's notification to me represents, I think, a very hopeful change, and we shall build upon it.

I agree very much with the hon. Gentleman about the pigmeat situation. That is the reason, as I said a few moments ago, for my introducing national aid. I was grateful for the hon. Gentleman's support, although that support was not so widespread in other parts of the Opposition Benches.

Photo of Mr Bryan Gould Mr Bryan Gould , Southampton, Test

Will my right hon. Friend agree that his major achievement is not so much the temporary subsidy on butter, welcome though that is, as his staunch resistance to the very much higher price increases urged on him by his Common Market colleagues and by the Conservative Opposition?

Will he not also agree that if even he cannot protect us against unnecessary price increases, the time has come for us to say quite bluntly that the common agricultural policy is beyond reform and that we can no longer afford it?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

As to my hon. Friend's point about the common agricultural policy being beyond reform, it depends on what comes out at the end of it. But he is quite right. We were advised by right hon. and hon. Gentlemen on the Opposition Benches to accept the Commission's original proposals willy-nilly. We all remember that. We were told to do so. Had we done so, there would have been no butter subsidy. Had we done so, the variable beef premium would have ended in July. Had we done so, the isoglucose levy would have been at its full rate. Had we done so, there would have been a margarine tax of 2½ per cent., and the exclusive use proposals would still have been in force. Had we done so, there would have been a ban on investment in dairy farms. Had we done so, the devaluation of the green pound would not have been under 3 per cent. but would have been 6 per cent.

Photo of Mr John Peyton Mr John Peyton , Yeovil

The right hon. Gentleman's sublime disregard for the truth—[Interruption.]—is almost without parallel even on the Government Benches. But will he now answer the question which he dodged before? What will he do about structural surpluses? Is he saying that the butter subsidy is a way of dealing with that problem?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

Of course it is. Anyone who knows about them knows that structural surpluses are simply mountains of food or drink which have accumulated because people cannot afford to pay the prices.

Photo of Mr William Benyon Mr William Benyon , Buckingham

I should like to return to the question of pigmeat processors. Even after the adjustments made to the green pound, every pound of imported canned ham from Holland carries a subsidy of 27p per lb. vis-à-vis its English competitors. The 1,800 process workers in my constituency face a grave situation. Can the Minister give us any hope that in the discussions in the next three weeks something can be done about that?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

I certainly intend to see that the discussions are forcefully proceeded with. We have already made the difference one of £45 a tonne, and that should not be forgotten. I would remind the House that this is not a question of what the Commission can give but a question of unanimity in the Council. The plain, hard fact is that, important as it is economically to us, it is, if anything, even more important to the Danes, for example. When we talk about pig-meat we are talking about 30 per cent. of the Danes' export industry. It is tough going, but I shall endeavour to do it.

Photo of Mr Ronald Thomas Mr Ronald Thomas , Bristol North West

While I recognise my right hon. Friend's efforts, may I ask whether he is aware that the recent Cambridge Economic Policy Review made clear in a detailed analysis that the CAP was costing Britain at least £650 million a year, far from there being any kind of subsidy? Can my right hon. Friend tell us how much the additional cost will be? Does he not think that it is now time for the British Government to issue an ultimatum saying that unless this indefensible CAP is scrapped within 12 months we shall come out of it?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

I have read the report to which my hon. Friend refers. I think that after two very long nights now and five very long nights in March I have made my position clear to my partners in Europe.

Photo of Mr James Scott-Hopkins Mr James Scott-Hopkins , West Derbyshire

Does the Minister agree that by over-emphasising the butter situation he has thrown away an awful lot of things that should have been gained at this price review in Europe? He has lost them with the rise in the price of milk, which will start on 1st May and which was not proposed by the Commission. He has given way on milk and on isoglucose. He said that he would not give way on isoglucose when I said that he should not do so. The increase accepted by the Minister is 3·5 per cent., and that is 0·5 per cent. more than the original price rise proposed by the Commission. The emphasis has been entirely wrong. What the Minister has gained is far outweighed by what he has lost. Not only the consumer but also the farmer will regret the day that he was made Minister of Agriculture, Fisheries and Food.

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

I remind the hon. Gentleman that he suggested that we should take all the Commission's proposals as they stood, although he said that there were individual matters in them which he did not like. If he cares to examine the butter subsidy, which is designed only to start to get rid of structural surpluses and to help the consumer, he will find that it outweighs the green pound devolution.

Secondly, concerning isoglucose, which I think is important, I was willing to accept the rise because the final document says that it is a maximum of one half of the levy originally proposed by the Commission—as the hon. Gentleman will see if he studies the documents. It therefore gives us all the right in the world to continue and I think that this time we shall have certain allies to argue what the rate should be. I hope that it will be downwards.

Photo of Mr Norman Buchan Mr Norman Buchan , Renfrewshire West

Is it not rather pathetic that those who surrendered British interests in 1971 are now carping about my right hon. Friend's trying to protect British interests? The Tories are the guilty party. It is even more ironic that the main burden of their argument is that we have not so far dealt with surpluses, when this was precisely the position they chose to accept? Is it not a fact that the difference between us is that we recognise that the surpluses cannot and should not be dealt with through an end price policy but that we have to go back to the more traditional British form of farming sup- port to fulfil the aims of the White Paper "Food From Our Own Resources"? If the Common Market cannot achieve that, it is time we left the CAP.

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

I was interested to find, when reading the list of those items that we would have had to accept if we had followed the instructions—if that is the right word—of the Tory Front Bench, that no right hon. or hon. Member in the Opposition dared to mention the question of the variable beef premium. That is one of the most vital things in British industry, and yet we managed to keep it for the whole year, when it was proposed that it should end in July. The expectation is that it should now become permanent.

Photo of Sir Harwood Harrison Sir Harwood Harrison , Eye

Is the Minister aware of the great anger and frustration of all pig producers? Suffolk, which I have the honour to represent, is one of the biggest counties producing pigmeat. Some of the producers came here earlier this week to show their indignation and many hon. Members from both sides met them. The producers were worried—and it worries me, too—that if they continue to lose money, which they can do only to a certain extent, they will have to sell or kill off all their breeding sows and we shall be in a desperate state. This is illustrated by what I hope the Minister may have seen—[Interruption] Do you want to interrupt me?

Photo of Sir Harwood Harrison Sir Harwood Harrison , Eye

Well keep quiet then. I was saying to the Minister

Photo of Mr George Thomas Mr George Thomas , Cardiff West

Order. Everyone knows that remarks are to be addressed to me, in theory at any rate. I kept quiet for rather a long time, but I should now be grateful if the hon. and gallant Gentleman would put his question to the Minister.

Photo of Sir Harwood Harrison Sir Harwood Harrison , Eye

If we slaughter our breeding stock, we shall have a situation such as that described in the Press last Sunday, when imported cabbages were being sold for more than £1 each. We shall be held to ransom. This is what I am frightened about, and I want immediate action.

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

I am grateful to the hon. and gallant Gentleman for that point. It is exactly the point I was making and it is why I introduced national aid. I hope that the measures which I oined today in my statement will be of some assistance—although I admit only small assistance. I shall fight for a change in the calculation of the mcas. That, I hope, is where we all agree.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

Does my right hon. Friend not agree that the questions from the Opposition show that the Tory Party represents producers, whereas my right hon. Friend's efforts and the 1947 Agricultural Act show that this party represents both consumers and producers? Will my right hon. Friend comment on an apparent discrepancy in the price increase? The right hon. Member for Yeovil (Mr. Peyton) mentioned a price increase to farmers of 10 per cent. and my right hon. Friend mentioned a 1·25 per cent. increase.

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

I think that the right hon. Gentleman was talking about producers' prices. I was talking about food prices.

Photo of Mr Michael Hamilton Mr Michael Hamilton , Salisbury

Has the Minister had time to study the British Press this morning, and has he noticed the contrast between his own satisfaction with the settlement and what is in the Press?

Photo of Mr Michael Hamilton Mr Michael Hamilton , Salisbury

Secondly, the right hon. Gentleman is aware of my personal interest in the Hop Marketing Board—the first marketing board to be set up. Will he explain the significance of the latest development mentioned in his statement?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

The significance of the hon. Gentleman's second point is that the Hop Marketing Board will be recognised as a producer group for the purpose of aid until, I think, 31st December 1980. This is an important point and it gives us all the transition necessary. From time to time I read the British Press. I sometimes believe what it says and sometimes do not, and sometimes my beliefs are mixed.

Photo of Mr Ernest Fernyhough Mr Ernest Fernyhough , Jarrow

What is the difference between the original terms that the Common Market wanted to impose upon my right hon. Friend and those that he negotiated to finality yesterday? Can my right hon. Friend express it in pounds, shillings and pence?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

I reckon it to be, until early next year, about 1p in the £.

Photo of Mr Colin Shepherd Mr Colin Shepherd , Hereford

Does the right hon. Gentleman agree that the emphasis he placed on securing the extra ½p on the subsidy for butter seriously jeopardised his bargaining position for the pigmeat sector? If he waits a further three weeks before taking further steps in this direction, there may well be irreparable damage to the pig industry. In the meantime, will he go to the slaughter as a sheep rather than a lamb and take immediate steps by jacking up his own subsidy to, say, £1·50 or £2, just to sort the matter out?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

When Conservative Members, having said that I was wrong to defy what they believed—

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

I know that the hon. Gentleman himself did not, but others on the Conservative Benches did. Having said that I was wrong to defy what they thought was the Brussels rule—[HON. MEMBERS: "Who said that?"] I well recall that the right hon. Member for Yeovil (Mr. Peyton) told me that I was taking it lightly and frivolously, and that this was a very important matter. To ask me now to take it even more lightly and frivolously and to increase it is very difficult. If the hon. Gentleman reads in Hansard what I said, he will see that the difference between the last proposals in March and those finally accepted by all nine countries after some trial and tribulation at 2 o'clock in the morning represents a good deal more than just ½p in the lb. on butter.

Photo of Mr Max Madden Mr Max Madden , Sowerby

Does my right hon. Friend agree that so long as Britain remains subject to the common agricultural policy our people are trapped on an escalator taking them towards higher and higher food prices? Does he agree that the long-term interests of both British producers and consumers can be protected only by Britain's withdrawing from the CAP? Will the Government rescue the people by withdrawing Britain from the CAP?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

My hon. Friend speaks of high prices. I absolutely agree with my hon. Friend that we have been on an escalator going up. The one thing I can claim on this occasion is that the escalator has slowed down pretty considerably this year. This is the lowest increase since the United Kingdom joined the Common Market.

Photo of Mr Jasper More Mr Jasper More , Ludlow

Does the right hon. Gentleman recognise that whilst his principal interest seems to be in the RPI, the effect of his statement on imporant sections of the farming industry will be RIP? Why has he not made his long-promised statement on potatoes? Will he undertake that we shall have a debate on his statement and in Government time?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

The hon. Gentleman for a long and distinguished period once graced the same office as I held, as a Whip. He knows that the question of a debate is not in my hands.

Photo of Mr Neil Kinnock Mr Neil Kinnock , Bedwellty

Has my right hon. Friend noted the comments of the French Minister for farming to the effect that a reduction in prices is against the principles of the common agricultural policy? Does my right hon. Friend recognise, as I do, that structural surpluses are as fundamental and natural a part of the common agricultural policy as rigor mortis is of death? Does my right hon. Friend consider in those circumstances that the CAP is capable of reform, even under the persuasive influence of some one such as himself? Does he not recognise that, no matter how valiantly he or subsequent Labour Ministers attempt to extricate us from the worst effects of the CAP, and however dedicated their attempts, the British Press will always say that they were inadequate? Is it not time that we withdrew, on all those grounds?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

I had noticed that my French colleague, who was not alone in this, appeared to regard it as a principle that prices should not come down. I believe that he said so. I am afraid that nevertheless the price of butter will come down in this country. I make my apologies for it! But it will.

With regard to the general question that my hon. Friend raised, I think it important that there should be a sufficient change in the workings of the CAP to deal with the question of prices, because if it is not dealt with we shall always have structural surpluses. I believe the latter to be the absolutely wrong way of dealing with the food production and supply problems of Europe.

Several Hon. Members:

rose

Photo of Mr George Thomas Mr George Thomas , Cardiff West

Order. As hon. Members know, I have strong feelings about the House having the right to question what happens in Europe. In order to be fair, I shall call those hon. Members who have been standing.

Photo of Mrs Millie Miller Mrs Millie Miller , Ilford North

Does not my right hon. Friend agree that one of the most obnoxious aspects of the common agricultural policy has been the sale of cheap commodities to Eastern European countries? Would he care to comment on the suggestion that the ban on those sales is to be relaxed?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

I certainly think that the sales to which my hon. Friend refers are not only an obnoxious feature but a symptom of what happens when one accumulates a structural surplus and it apparently becomes more economic to sell it, highly subsidised, outside the Community than to those in the Community who really want it. I shall do my best now and in the future to see that this policy is changed.

Photo of Andrew Welsh Andrew Welsh , Angus South

How exactly will these small changes rescue the pig industry from its present crisis, especially as it needs a rapid infusion of cash? Will the right hon. Gentleman clarify exactly what he means by "fundamental changes to mcas"? Will he consider introducing an operating subsidy for pig meat processors, such as I believe has now been introduced into Ireland?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

I did not say "fundamental changes". I said "the recalculation of mcas". I have always believed—and I think that on the whole I take most hon. Members with me—that the best method is to relate the mca payment to the actual cereal content and not to the general basis. That is what I shall work for. But I accept what the hon. Gentleman says about the pig industry. We must do our best for it.

Photo of Mr Peter Mills Mr Peter Mills , Devon West

What is distressing is that the Minister seems to have been mesmerised by butter, important though that is. What is really important is the long-term changes that are needed. Will the right hon. Gentleman bear in mind that his attitude over that matter has done two things—first, it has put back the structural changes so desperately needed in the CAP, and, second, it has produced the confidence of the home producer. That is what the right hon. Gentleman must answer for.

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

I do not accept either the first or the second point. The interesting point is that the attack—for that is what it is—is on the high price which caused the accumulation of a structural surplus in a commodity in the dairy products sector. As the hon. Gentleman knows, butter is the worst culprit of the lot, and it had to be dealt with first. There was no doubt among my colleagues in the Council that that was what they felt, too, although their attitude to it was slightly different. The whole of the milk action programme, as now changed by us, goes exactly towards the same effect.

Photo of Mr Hector Monro Mr Hector Monro , Dumfries

Will the right hon. Gentleman understand that his astonishing complacency has done nothing for the confidence of the farming industry and nothing for the long-term interests of the housewife? Can the right hon. Gentleman say clearly how he equates the 50 per cent. under-recoupment of costs with his White Paper, and why he expects pig farmers to have to wait more than a month for action?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

The hon. Gentleman obviously did not listen to my reply to his right hon. Friend the Member for Yeovil. I said that we should wait until we had the detailed figures, because I think that there is a misapprehension. There is no complacency over the question of pig production. Anyone who has, as I have, introduced a national aid and has been subject to considerable pressure because of it knows exactly what I mean.

Photo of Mr Raymond Mawby Mr Raymond Mawby , Totnes

Will the right hon. Gentleman disregard most of what has been said by his hon. Friends and remember that the interests of the producer and the consumer are intermingled, and that any damage done to one will in the long term end in disaster for the other? Will he bear this in mind in any future negotiations, to try to make certain that the interests of the consumer are properly looked after by ensuring that the producer can continue to enjoy a reasonable standard of life?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

Yes, and that is the view of my hon. Friends and myself. It works another way. It means that all one has to do is look at the last quarter's food survey and see what has happened. When the price goes too high there is a drop in consumer consumption, and then the producer himself is worse off.

Photo of Mr Alick Buchanan-Smith Mr Alick Buchanan-Smith , Angus North and Mearns

Would it not be more realistic to acknowledge that, if progress has been made from the Commission's original proposals to the final settlement, any difference between March and now is very little indeed? Is there not some danger that, because of the acrimony generated as the result of the Minister's attitude, his own credibility and influence to change and reform the common agricultural policy—which is far more important in the longer term than any annual review—may have been for feited?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

I take it that the hon. Gentleman thinks that a change of 2p in the £ is insignificant. Many old-age pensioners and people on low wages would not agree. As for his second point, I would have thought that quiet firmness was better than appeasement any day of the week.

Photo of Mr Michael Shersby Mr Michael Shersby , Hillingdon Uxbridge

What will be the effect of the changes in isoglucose on its production in the United Kingdom, and how will it affect sugar production in the United Kingdom and the Community generally.

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

I believe that even half the rate that was originally proposed by the Commission would be far too high, but I am encouraged by the fact that that is the maximum amount. Other countries have begun to wake up to this point. We shall do as much as we can to see that this level is reduced.

Photo of Mr Robin Maxwell-Hyslop Mr Robin Maxwell-Hyslop , Tiverton

If it is not incompatible with Common Market policy to have a quota on Italian wine coming into France, why should it be incompatible with Common Market policy to put a quota on pigmeat from Denmark or elsewhere coming into Britain? Does not the Minister think that at the end of the day the only way in which we can achieve a common agricultural policy that will stand the test of time and give fair returns to the producer without getting over-production is by coming to a national quota system?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

The hon. Gentleman raises a very important and very difficult question, because I am being told about the amount of goodwill that I am sacrificing with our colleagues in Europe by not agreeing with what they say on every occasion, but now the hon. Member for Tiverton (Mr. Maxwell-Hyslop) is boldly advocating that I take additional national steps. I think that the truth of the matter is that provided that one can fully justify the steps that one takes—as I believe I could on the pig-meat subsidy—one should be allowed to take them.

Photo of Mr Michael Morris Mr Michael Morris , Northampton South

I declare an interest in the British biscuit industry, and in that context, and in relation to the Minister's statement, what decisions were made about the addition of mca's to British cake and biscuit exports? Is the Minister confident that he will be able to get rid of the nonsense of denying British industry the traditional labelling and naming of British biscuits?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

On labelling, the point we were making all the way along the line was that it was ridiculous to put this matter in the milk action programme. There is a point about labelling, but I think that the hon. Member for Northampton, South (Mr. Morris) and most hon. Members would agree that it has to be kept in proportion. There were some extraordinarily lunatic ideas about what was meant in the English language by "cream" or "custard", mainly by people who do not practise the English language. On the first point, I shall give the hon. Gentleman details, but I do not have them with me.

Photo of Mr Michael Brotherton Mr Michael Brotherton , Louth Borough

In the document "Food From Our Own Resources" the right hon. Gentleman's White Paper talked about doing good for the British agricultural industry, but devaluation of the green pound by 2·9 per cent. is a very small devaluation. Will the Minister explain to the people of this country that they have no God-given right to cheap food and that very soon we shall have to have a green pound which is on parity with the pound sterling, and therefore the price of food has to rise, otherwise the British agricultural industry will go broke?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

What I have always liked about the hon. Member for Louth (Mr Brotherton), ever since we had our first election fight in Deptford, is his invariable total honesty. I wish that he shared it sometimes with some of his hon. Friends, who try to do two things at the same time. They try to say that we should support the farmer, but that that means that food will be cheaper.

An Hon. Member:

That is what you said.

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

On the contrary, I say that I keep a balance, and that is very different. The hon. Gentleman has put his finger on the point. If one moves away from a price for food that the con summer—that is, the housewife—can afford, there is a drop in consumption, and that puts the producer out of business. The right way is to get the right balance between the right price for the producer and the right price for the consumer.

Photo of Sir Nicholas Fairbairn Sir Nicholas Fairbairn , Kinross and West Perthshire

The Minister's last reply reminds me of the accused man who was also accused of lying and replied that if he had wanted to lie he would have got a lawyer. We have a lawyer as Minister of Agriculture. What figure was taken into account in these negotiations for the increase in the price of diesel fuel, if any? Why does the Minister consider it satisfactory to have a de valuation of the green pound of only 3½ per cent., which means that farmers have to pay in a ridiculous currency? What will happen to the other marketing boards that the right hon. Gentleman has not mentioned, since they come to an end under the agreement at the end of this year? Will the Minister say whether he cannot immediately give a £2 subsidy on pigs and ask for other offences to be taken into account by the court if it finds against him?

Lastly, does the Minister not realise that his argument about butter is farcical because he is saying that one can remove a mountain—which amounts to only one small packet of butter per per- son in this country—by increasing production, but he will not save old-age pensioners money if he expects them to eat more? The Minister has sacrificed the interests of farmers for the temporary interests of consumers, and that will fall back on his head.

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

The hon. and learned Member put so many questions that I feel it would be more appropriate if I were to write to him. If his argument was as erroneous as his facts—he got the figure for the devaluation of the green pound wrong—it is not worth replying to.