It is too early for the recent fall in cereal prices to have been reflected in the production levels of intensive livestock.
I agree that it will have a considerable beneficial effect. In the many discussions that I have with the industry, especially the pig industry, we are agreed that one of the main ways in which it can be benefited is through lower feeding stuff prices. That is one of the areas where the Government can help most while maintaining our efforts in the Community to get longer-term restraint on cereal prices. That helps both with margins for producers and in making sure that the products are competitive. But I agree with the Select Committee, which pointed out that the problem of cyclical instability will not be resolved by adjustments to prices of feeding stuffs alone and therefore that it is necessary to continue to have action within the industry on marketing, processing and matching output to demand.
In reviewing the prices and the production of these commodities, will the Minister assure the House that he will not favour the closure of uneconomic farms or the obliteration of agricultural communities? Will he also commend that enlightened policy so that it can be adopted by another member of the Administration in another strategic and vital primary industry?
It is essential to get the support pricing policy right in the Community, in order to avoid excessive costs to the taxpayer. Within that there are always structural adjustments in agriculture. That has been taking place over many years, and I believe that it will continue to do so.
With regard to the future course of cereal prices, it seems clear that the guarantee thresholds agreed this year will have been triggered by the output. The rumour is that it may require a reduction in target prices of about 5 per cent. at the next price fixing. Is it my hon. Friend's intention to insist that those guarantee thresholds are honoured in full?
We have not yet seen the new Commission's proposals, but I can assure my hon. Friend that it is the Government's view that cereals are best dealt with by a clear policy of long-term price restraint. Within that my hon. Friend is right to say that guarantee thresholds will bite next year, and we shall expect them to do so.
Is the Minister aware that grain prices continue to rise in that part of the United Kingdom that I represent? Does he also recognise that if it continues it will lead to a further decrease in the production of eggs and pig and poultrymeat and possibly to further job losses? Will the Minister consider again releasing some intervention grain to Northern Ireland?
We have to follow Community rules on the release of intervention grain, but I take note of what the hon. Gentleman said, and I shall consider it.