Does my right hon. Friend agree that sheepmeat production is of particular importance to the west of the country, with only uplands to work, and where little else can be done with the ground? Does he agree also that the stabiliser package, as it is currently running, not only ignores imports from eastern Europe and New Zealand, but penalises United Kingdom and European production? Is there not, therefore, a case for seeking a marked reduction in imports from New Zealand under the voluntary restraints agreement below the level of 205,000, which is currently on the table, bearing in mind that at present New Zealand is putting in only about 200,000, yet this works against the interests of United Kingdom producers?
I agree with my hon. Friend about the importance of the sheep sector, not only in the west country uplands, but in uplands throughout the United Kingdom. I am aware of that in the negotiations on which we are embarking. The stabiliser was introduced because of the escalating cost of the sheepmeat regime, now estimated to be more than I billion ecu, from a much lower base only a short while ago. The stabiliser was introduced to control that and it relates entirely to increases in flocks in the European Community.
My hon. Friend will know that imports from New Zealand and elsewhere are a major aspect of the review of the regime that we are undertaking. There is a draft agreement with New Zealand. The arrangements with New Zealand are GATT-bound, but we shall have to see how the negotiations go as we proceed with the review. I expect that that will take a long time.
Is it right that under the stabiliser proposal upland sheep farmers in less-favoured areas may face cuts in premiums because of increases in production on lower ground, particularly as a result of farmers who grow grain moving to sheep production? Can the Minister guarantee that that will not happen? If he cannot, will he look at the case for increasing the hill livestock allowances to compensate?
I cannot give a guarantee that that will not happen because, clearly, stabilisers are introduced in this sector, as in any other where there is a high cost in the regime, in order to control the costs of the regime. It is not possible to distinguish across the Community where the sheep receiving the benefits come from. I am aware of the importance of the sheep sector to the uplands, which is why I excluded grazed fallow from the set-aside scheme. I wanted to ensure that upland farmers were protected from what I would otherwise have seen as unfair competition. I did that because I was strongly aware of the sector's importance to the uplands.
Is my right hon. Friend aware that food prices and agricultural support are at their lowest level for 20 years? Does he realise that depressing agriculture prices is doing vast harm to the industry and to the British economy in general?
I do not think that that question is entirely related to the review of the sheepmeat regime, but I should like to say that it is important to ensure long-term stability for our farmers. That is what I have been keen to secure. While we have surpluses and the heavy cost of disposing of them, long-term security is on a fragile basis. I acknowledge the splendid contribution that farmers have made to food production and to keeping food prices down. I agree with my hon. Friend about that. I hope he agrees, however, that we must ensure security for the long term. Getting rid of surpluses and their cost must be part of that.