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Dairy Products

Volume 928: debated on Thursday 17 March 1977

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10.

asked the Minister of Agriculture, Fisheries and Food whether he has any new proposals to ensure that EEC retail prices for dairy products are reduced to a level closer to prevailing world prices.

20.

asked the Minister of Agriculture, Fisheries and Food if he will make a statement on the policy adopted in the EEC for the future production of milk and dairy products.

32.

asked the Minister of Agriculture, Fisheries and Food what specific proposals he has to put to the Commission to prevent the continued building up of dairy produce surpluses in the EEC.

In discussions in the Council of Ministers on the Commission's price proposals and the proposed action programme for the dairy sector, the United Kingdom has consistently advocated the maximum possible restraint on common milk prices and indicated a willingness to consider other appropriate measures that could lead to a better balance in the dairy products market.

I welcome the tough line that the Minister has taken so far in reforming the common agricultural policy, but may I suggest that the Government consider pressing for an automatic relationship between target prices in the EEC and world prices? If there is to be such a big gap in the prices of commodities such as butter, the British consumer will suffer and there will be no incentive to efficient production.

The hon. Member has echoed what I said just now about the difference in prices inside and outside the Community, which makes the problem of surpluses much more acute. My right hon. Friend has taken this into account and we have put forward very strongly to the Community that those member States that have the most efficient producers should be given the greatest encouragement, and that others with less efficient producers should be discouraged. That would help to restrain prices.

Will the Minister confirm that the policy of the EEC on the dairy industry not only helps inefficient Continental producers but militates against the interests of the most efficient producers in this country and the consumers alike by keeping prices high? In this respect, will he agree that EEC policy is a major obstacle to our achieving the objectives for the dairy industry envisaged in "Food from Our own Resources"?

I accept the points made by my hon. Friend. If he looks at the White Paper he will see that the last page gives the relative position of efficiency and output figures for the dairy industry in the various Community member States. Britain has the largest herd size—higher than either Denmark or the Netherlands—but it is only third in output. Also, we are only 60 per cent. self-sufficient in milk products. This indicates the possibility and desirability of giving our own farmers more encouragment in dairy produce and discouraging the less efficient producers in other parts of the EEC.

In view of the scandalous rise in the price of butter, up to 72p a lb. by the end of the year, compared with 35p in New Zealand, does the Minister agree that this is due to the transitional steps that, unfortunately, must be taken? Is there any scope for renegotiating the two transitional steps? Otherwise the poorer sections of the community in this country will be in real trouble by the end of the year?

My hon. Friend made it clear that he had considered this aspect of the treaty to see whether the transitional steps were inevitable. He did not find any way of overcoming this difficulty. I emphasise the importance of taking steps to see that surpluses are prevented and that prices are kept to a minimum.