asked the Minister of Agriculture, Fisheries and Food if he is satisfied with the prospects for the dairy sector of the United Kingdom agricultural industry.
Yes. I believe that the structure and efficiency of our dairy industry provide a sound basis for its future.
Is my right hon. Friend aware that dairy farmers in my constituency are facing rapidly increasing costs and that they feel strongly that prices should increase by the same percentage as increased costs?
Yes, I well understand that view. I recognise that costs are increasing. However, it is fair to say that the benefits to the industry of the green pound devaluations that took place last year will come through in terms of income over the current year. In February we announced an increase in the price of liquid milk. The producers will obtain a share of that increase. That will serve to increase their incomes over the coming period. I am glad to say that the climatic conditions of the winter have been of considerable assistance to dairy producers.
Will the Minister give the House his comments on the case advanced by the Dairy Trade Federation for new administrative arrangements for school milk, whereby it would be possible for the Government to get £60 million from the European Economic Community to provide school milk to councils for less than 7p a pint? Is it not about time that the Government came forward with such an initiative, which would be to the benefit of our farmers, our schools, our local authorities and our whole budget?
I recognise fully the argument that the hon. Gentleman has advanced and the attractiveness of obtaining from the Community substantial grants in this sector that would help liquid milk production. We have had considerable talks with the NFU, with the Dairy Trade Federation and with other authorities. We have endeavoured to persuade them to re-examine the scheme so that we may take proposals to Brussels that may be of assistance without having an adverse effect on the Government's objective of reducing public expenditure.