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Dairy Industry

Volume 930: debated on Thursday 21 April 1977

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asked the Minister of Agriculture, Fisheries and Food if he is satisfied with the prospects for the United Kingdom dairy industry; and if he will make a staement.

The Government's policy towards the dairy industry continues to be set out in the White Paper, "Food from Our Own Resources", Cmnd. 6020. which envisages further expansion.

Is the Minister aware that the dairy industry is totally dissatisfied with the present type of price review and that his right hon. Friend referred to this when answering a recent Question? Is he aware that it does not allow the industry to invest and plan ahead as it is asked to do in accordance with the objectives and targets of "Food from Our Own Resources"? Bearing in mind the importance to the dairy industry of the Milk Marketing Board, will the Minister advise the House on the present position of the board and say whether we shall be able to retain it, since it is so important to the dairy industry?

The hon. Gentleman should realise that the level of the United Kingdom guaranteeed price will need to be considered in the light of the CAP settlement for this year. He talked about herd size. He should be aware that the herd size has been expanding since June 1976. The December 1976 sample census showed an increase of 2ยท4 per cent. in the number of dairy cows over the corresponding figure a year ago. In addition, milk production has increased.

As regards the Milk Marketing Board, we have made our position clear. We want to retain the essential functions of the board, and we believe that the board, in its organisation and work, is an example to the rest of the community.

Will my hon. Friend confirm that, although there are perhaps endemic milk surpluses in Europe at present, there is also evidence that there is likely to be a beef shortage in many areas within the Community, possibly even by the end of the year? If that is so, will it not strengthen my right hon. Friend's ability to make the necessary amendments to the CAP and to secure a shift in the structure of farming if we improve grassland production in Britain and Ireland?

My hon. Friend has made an important point. We have always said that the Community should encourage those areas where there is efficient production and discourage the others. That would, of course, help to deal with the problem of surpluses. My hon. Friend will be aware of the fight that we have had to maintain the beef premium scheme, at least for this year. We shall certainly bear in mind the need to discourage surpluses and to ensure production in the most efficient areas.