Dairy Industry

Oral Answers to Questions — Agriculture, Fisheries and Food – in the House of Commons at 12:00 am on 20th June 1985.

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Photo of Mr David Penhaligon Mr David Penhaligon , Truro 12:00 am, 20th June 1985

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

In spite of the effective implementation of quotas, there is still a substantial surplus of milk production, and significant shifts in consumer demand are taking place. I am confident that there is the enterprise and flexibility for this efficient and successful industry to adapt to changing circumstances.

Photo of Mr David Penhaligon Mr David Penhaligon , Truro

Does the Minister recall the correspondence that we have had about leucomycin? It was the result of infected food being supplied by Dalgetys to more than 150 dairy farmers in Devon and Cornwall, which seriously affected their milk production. The company has honourably faced its responsibility to make compensation. The panels recognise that the production loss is genuine, yet the rules do not allow any extra quota to be given. Will the Minister tell the House precisely what he has done so far to correct that obvious injustice?

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

I am aware that several cases fell outside the rules—they were cases of hardship—and that they could not be dealt with by the tribunal and the panels. I am aware of those difficult cases, and I shall be meeting Lord Grantchester later this afternoon to discuss them.

Photo of Mr Michael McNair-Wilson Mr Michael McNair-Wilson , Newbury

Despite the many vicissitudes through which the dairy industry has passed in recent months, does my right hon. Friend believe that doorstep deliveries are safe for the time being?

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

How nice it is to see my hon. Friend in the Chamber. I hope that the doorstep delivery is safe for the time being, but the continuance of that excellent service depends upon the support of housewives. If housewives buy their milk in other places, the doorstep delivery system will be in jeopardy.

Photo of John Home Robertson John Home Robertson , East Lothian

Is the Minister aware that last year milk production in England and Wales was 215 million litres below quota? Is he further aware that there is still a colossal surplus of milk production in the EC? Does he accept that last year he caused the maximum disruption of the industry in Britain, for the minimum benefit in Europe? May we now have a proper, long-term review of the dairy industry? That might be a useful chapter in a possible White Paper on agriculture.

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

The hon. Gentleman has bowled me a full toss here. I refer him to a recent press release from the Milk Marketing Board on the "Milkminder" dairy costing service, which demonstrated that, for the 1,931 herds surveyed in 1983–84 and 1984–85, margins over purchased feed increased by £53 a cow in the first year of quotas, from £511 to £564.

Photo of Mr James Spicer Mr James Spicer , West Dorset

Will my right hon. Friend comment on the effect of the payment of levy on an annual basis? Has he received representations from the farmers' unions of England or Wales on the result of the recent price fixing in Brussels?

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

I was able to get agreement that the payment of levies which might become due will be made on an annual basis. That has been welcomed by the NFUs, and it will be helpful to farmers who are changing the seasonal pattern of their production. I was especially pleased that a Welsh farming organisation warmly welcomed the livestock part of the price fixing settlement.

Photo of Mr David Harris Mr David Harris , St Ives

Without minimising the real hardship caused to some dairy farmers, does my right hon. Friend agree that the figures from the Milk Marketing Board survey show that there has been a real overall increase in profits for the dairy industry during the first year of quotas? Will he reject completely the hypocrisy of the junior Opposition spokesman on agriculture, the hon. Member for East Lothian (Mr. Home Robertson)?

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

I am grateful for my hon. Friend's comments. The Milk Marketing Board's survey referred to margins over purchased feed, not to profits. Of course, the two are related.

Photo of David Maclean David Maclean , Penrith and The Border

Is my right hon. Friend aware of the consternation in the dairy industry about the Government's attitude towards delays in payment for butter taken into intervention? Although EC countries have reduced the minimum delay from 120 days to 90 days, Britain is sticking to 120 days. Does he accept that not only will that cost the Dairy Crest £1·25 million in extra interest payments, but, more damagingly, it implies to British farmers that the Government will not treat them on equal terms with other EC farmers?

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

Member states can use their discretion on those matters. I do not have the information on what other countries are doing. It is doubtful whether we should make intervention more attractive and increase the already heavy burden that it imposes on public funds or reduce the incentive for production to find the real market outlets.