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Common Agricultural Policy

Volume 958: debated on Thursday 16 November 1978

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asked the Minister of Agriculture, Fisheries and Food if he will make a statement about proposals to reform the common agricultural policy.

I refer the hon. Member to the reply I gave to him on 20th July 1978.

As reform of the CAP has now been sought for the past 11 years, and as there has been no radical reform at all, as merely an interim observation will the Minister say why it is that the Common Market, when considering the export of more than 14,000 tons of butter to Russia, has only reserved its position on this and not rejected it out of hand? Does not this illustrate the absurdity of the intervention system and also the fact that, if one is outside the Market, not only can one buy cheap food on the world market but there is also a plentiful supply of cheap food from inside the Common Market surpluses?

There could not have been a better or more timely underlining of what my right hon. Friend the Prime Minister said in his speech at the Lord Mayor's banquet, namely, that the crea tion of surpluses in the most costly way imaginable creates with it the problem of how to dispose of them. The obvious way to do it is, first, to see that there are no surpluses, which means hitting at the common support price; secondly, to increase consumption—and here I hope that perhaps the hon. Gentleman will tell some of his colleagues, say in Avon or North Yorkshire, to see that free school milk is available in the schools and, thirdly, to ensure that if we create a surplus we give it at the correct price to the consumers of Europe. There is an awful lot of fuss about a 6½p per lb. subsidy to the United Kingdom on butter but not much of a crisis about 47½ per lb. to the housewives of Russia.

Will my right hon. Friend bear in mind the fact that the capacity of Europe to produce food has by no means been fully tapped at present? Given that, does he think that modifications in the end pricing system will be sufficient? Will it not in fact be necessary for Europe to move towards some form of quotas?

The movement on prices is the first and most important issue. I view a movement on quotas with some degree of suspicion. It seems to me merely to fossilise the existing position. The United Kingdom—as the hon. Member for Macclesfield (Mr. Winterton) said a moment ago—can produce more food by itself. We ought to be encouraging that. To have a quota would merely mean our being kept at our present level of food production while the over-production went on in other countries.

May I thank the Minister for that answer and ask him to clarify the position a little more on milk. If we moved over to a quota system, as has been proposed in various quarters, does the Minister agree that that would penalise those traditional dairy areas in this country where milk should rightly and properly be produced, and that that would be extremely unfair?

One of the things that hon. Members, on whichever side of the House they sit, can be justly proud of is the increase in the productivity capacity of our own agriculture. The industry can produce milk—partly climatically, partly technologically—far better than the majority of the Community. The quota system would discourage any advances that could be made, while encouraging the three-cow or four-cow farm in, say, Bavaria or France—and I have seen them —to go on existing when clearly they should not.

Is my right hon. Friend aware that it is not only anti-Marketeers who are appalled by the wasteful absurdities of the CAP but that newspapers such as The Times and The Guardian, which strongly supported Britain's entry into the Common Market, are now demanding fundamental reforms in the common agricultural policy? Therefore, when the Minister goes to Europe will he make clear to his European colleagues that he is speaking for the British people as a whole.

I am grateful to my right hon. Friend for that. I am also grateful to those newspapers which, four or five years after the rest of us, have come to the correct conclusion.

Does the Minister agree that one way of reforming the common agricultural policy and saving millions of pounds of taxpayers' money would be to abolish the intervention system now operating in Europe? Have the Government put forward proposals that will bring stability to the industry and benefit to the consumers alike?

I have said already that the basic point remains the common price level. I do not mind what mechanism one gets. It is only fair to say that, for example, with potatoes we have for years had our own similar sort of intervention system. That does not worry me, although I agree with the hon. Member that the probability is that if one attacks it at the common price level, one will find what is wrong with the intervention system.