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Common Agricultural Policy

Volume 932: debated on Wednesday 25 May 1977

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asked the Secretary of State for Scotland what estimates of the fall in production in agriculture have been made owing to the CAP prices recently announced.

The decisions on farm support prices and related arrangements assure our farmers of a fair return for their labours and should encourage them to produce more food at prices the consumer can afford.

Is the Minister aware that that is not my experience from talking to at least my local farmers? They are now much concerned about the future, because costs in farming are rapidly overhauling whatever increase there is in prices. There is grave concern about the future, which will undoubtedly end in a fall in production. Will the Minister continue the efforts in Brussels to get some amendments to the CAP, so that these factors are taken into account?

I do not think that the future of agriculture depends entirely on what happens in Brussels, although obviously that plays a large part in influencing the future of the industry. I have confidence in the industry. It is too important an industry for any Government to disregard its contribution. However, what I have noticed is that sometimes farmers tell one things that are slightly different from the accounts that they show at the end of the year.

Given the state of consumers and given the state of farmers—and they are both in a bad state—is it not the situation that neither can afford a continuation of the CAP?

The farmers are not in a bad state. By exaggeration the hon. Gentleman does no credit to the genuine problems that face farmers. It is equally untrue to suggest that the rise in prices over the past six months has been entirely due to the CAP. In fact, the products covered by the CAP represent a very small proportion of the retail price index for food.

If the Minister is so happy with Scottish agriculture at present, will he say which sectors of Scottish agriculture are up to the target set in the White Paper "Food from Our Own Resources" and which are not? Is he aware of the growing financial discrepancy between returns for crops and returns for livestock? Is he satisfied with these trends?

No. I am certainly concerned about the fall in production. Given reasonable circumstances this year, I think that we should see improvements. Obviously, when there is a fall in production we must make every effort in the sectors where that is evident—though it is not as significant or as widespread in all sections of the industry. However, certainly I am disappointed. I hope that we shall get back on target this year and in succeeding years.

Is my hon. Friend aware that among farmers in the Kilmarnock area there is much more concern about the savage increases in rents by the local landowner, Kilmarnock Estates, owned by Lord Howard de Walden, than there is about the CAP prices? There is a limit to what we can do about the CAP, but surely we can do something about these rent increases at home.

I quite agree. My right hon. Friend highlights one of the indicators that suggest that there is still a large degree of confidence in agriculture, such as the applications for capital grants for replacement stock, and there is no shortage of applicants when any farm becomes vacant.

Did the hon. Gentleman say that he thought that prices reflected a fair return to producers? If so, will he enlarge upon that statement and relate that to the prices being paid to pig producers?

I do not remember what I said about that. I do not think that what I said was said in the way in which the hon. Gentleman put it.

I recognise, frankly, that pig production is the one section of the industry that is going through an extremely difficult situation at present. As the hon. Gentleman knows—because he was present here yesterday—a statement will be made this week, or the House will be informed by my right hon. Friend, of what action is being taken through the efforts of my right hon. Friend and Commissioner Gundelach.