Dairy Industry

Oral Answers to Questions — Agriculture, Fisheries and Food – in the House of Commons at 12:00 am on 6th December 1984.

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Photo of Mr Geraint Howells Mr Geraint Howells , Ceredigion and Pembroke North 12:00 am, 6th December 1984

asked the Minister of Agriculture, Fisheries and Food if he is satisfied with the present state of the dairy industry; and if he will make a statement.

Photo of Mr Michael Jopling Mr Michael Jopling , Westmorland and Lonsdale

The dairy industry is showing that it has the enterprise and will to cope with the quota system constructively. When we have achieved a better balance in the market, the industry will be on a more sound and stable basis for the future.

Photo of Mr Geraint Howells Mr Geraint Howells , Ceredigion and Pembroke North

Will the right hon. Gentleman assure British dairy farmers that he will abolish the basic co-responsibility levy in 1985. Can he give the House the latest information about which countries in the Community are collecting the super levy, and what is the position in Britain?

Photo of Mr Michael Jopling Mr Michael Jopling , Westmorland and Lonsdale

I answered the hon. Gentleman's first question earlier. I hope that in 1985 we can get a cut in the levy in the context of a tough price policy.

The hon. Gentleman also asked which countries were currently collecting the super levy. As far as I am aware, the only country which has collected it up to now—and no payments become due until 14 December—is West Germany. We shall be discussing these matters at the Agriculture Council in Brussels on Monday and Tuesday.

Photo of Mr Michael Shaw Mr Michael Shaw , Scarborough

Is my right hon. Friend aware of the great desire in the industry that the uncertainty over future quota levels should be resolved as soon as possible so that some stability can be returned to the industry?

Photo of Mr Michael Jopling Mr Michael Jopling , Westmorland and Lonsdale

I am aware that problems still exist because some producers do not know the final level of their quota. It is to quicken this process that we have agreed to treble the size of the tribunal from 30 to 90 members.

Photo of Charles Kennedy Charles Kennedy , Ross and Cromarty and Skye

Is the Secretary of State satisfied with the effect that the outgoers scheme is having on the price of stock within the industry? As the Treasury appears to be in a concessionary mood this week, will he take steps to try to persuade it to relieve dairy farmers in the scheme of the capital gains tax imposition, which falls so heavily on the first payment?

Photo of Mr Michael Jopling Mr Michael Jopling , Westmorland and Lonsdale

I invite the hon. Gentleman to compare the price of dairy cows for the current period with that of a year ago. He will find that, whereas a few months back prices were running somewhat below last year's, the gap has closed considerably and the difference in price is now very small.

Photo of Mr Colin Shepherd Mr Colin Shepherd , Hereford

Does my right hon. Friend agree that one of the unnecessary stresses within the industry is caused by the lack of flexibility between the wholesale quota and the direct sales quota? Can he sustain pressure on his colleagues within the Council of Ministers to achieve this very necessary flexibility?

Photo of Mr Michael Jopling Mr Michael Jopling , Westmorland and Lonsdale

My hon. Friend is right to highlight this lack of flexibility as perhaps the greatest single difficulty in implementing the scheme. I have been drawing the attention of the Council of Ministers to the problem of inflexibility between direct and wholesale quotas ever since the summer. I shall raise the issue again when I go to the Council next week.

Photo of Mr Brynmor John Mr Brynmor John , Pontypridd

Does the Minister accept that the fact that we are not likely to achieve the quota in the United Kingdom this year speaks volumes about the haste and the lack of forethought preceding the introduction of the milk quota scheme? Will he direct his mind to two further questions, one of which follows previous supplementary questions? When does he think that the uncertainties over quotas and appeals will be ended for the dairy industry? Secondly, as dairy workers are losing jobs because of their efficiency, and not inefficiency, should not the Government be turning their mind to proper redundancy terms so that these workers can be helped at a difficult time?

Photo of Mr Michael Jopling Mr Michael Jopling , Westmorland and Lonsdale

I begin by welcoming the hon. Gentleman to his new duties. I hope that he will enjoy his wide-ranging and highly complicated brief. I am sure that we shall have a good many tough debates between ourselves.

It is a fact that we have, so far, cut our milk production below the level of our quota for the period that we are discussing. I reject the suggestion that there was a lack of foresight. The answer lies in the considerable drought in the summer. Some of my colleagues in the Council of Ministers have approached me and expressed some envy in that they did not have the same drought, which reduced milk production.

When do I expect all farmers to have received the final levels of their quota? I am not able to answer that question. The tribunal—as I have said, it has been enlarged—has a great many appeals and exceptional hardship cases before it. However, it is too early to estimate when farmers will know their quotas. We are moving as quickly as we can.

The hon. Gentleman asked about compensation payments for dairy workers who are unfortunate enough to lose their jobs because of the reduced number of dairies. I draw his attention to answers that have been given on many occasions. These answers refer to the statutory scheme for redundancies and the special arrangements that are made by many of the dairies.