To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on progress on the negotiations on the future of the sheepmeat regime.
Discussions on the Commission's proposals for changes to the sheepmeat regime have made little progress. I suspect that negotiations are likely to continue for some time.
I am sure that many of our sheep farmers would like to know whether the Minister is in favour of the present grading system, the deficiency payment and the headage payment, or is he in favour of further cuts in support systems.
I certainly think that we have to tackle the escalating cost of the sheepmeat regime because it has virtually doubled in three years and is now nearly 1.7 million ecus. In terms of the outcome of the regime, I am very much in favour of ensuring a system that will enable our industry to gain full benefits from its excellent structure, efficiency and expertise and from our natural advantages. I suspect that at some stage we will be looking at a different set of proposals, which is why I do not want to be too specific about how exactly we achieve our objectives. I am clear about our objectives and that we want to ensure that our sheepmeat industry has the maximum opportunities in the Community. I have made it clear from the outset that I am opposed to limits on headage payments.
My right hon. Friend will know that the farmers of south Dorset are particularly well set up and very efficient producers of mutton and lamb, and that they depend very much on the sheepmeat regime. Can my right hon. Friend reassure them that by a combination f the sheepmeat regime and green pound reform the Government will ensure that it is economic to produce mutton and lamb well into the next century?
I can assure my hon. Friend that that is very much my objective. Recent decisions that I have secured in the Community have proved that. My hon. Friend will know that the green pound devaluation which we secured in the recent price negotiations was more than double that of our nearest competitors in the Community. That greatly improves the competitive position of our producers and is another indication of how I fight for their interests.
What is the Minister's reaction to the fact that the European Commission wants to do away with variable premiums by 1992? The Commission specifically proposes to impose headage limits for hill livestock compensatory allowances. Is that not a serious threat of discrimination against British producers, especially those in the hills and uplands? Will he take this opportunity to give sheep farmers and their employees a clear statement of his and the Government's intentions for the future of the industry?
I have already made it clear that I am determined to fight for their interests in the way that I have always done. I have indicated the extra benefit that we secured in the price negotiations this year. I am as opposed as anyone to the imposition of limits on headage payments, because as well as running against the general objective of the CAP, which is to reward efficient producers and take advantage of natural advantages, it is clearly discriminatory. It also fails to take account of the importance to producers on quite modest incomes of the need to have substantial numbers of sheep in certain parts of the country, especially in Scotland where I have been for the last two days and where I thoroughly discussed these matters with Scottish sheep producers.