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Dairy Farming

Volume 986: debated on Thursday 19 June 1980

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15.

asked the Minister of Agriculture, Fisheries and Food what is the effect on dairy farmers of the recent Brussels arrangements.

It is not possible to isolate the effects of this agreement from the many other factors which affect milk production. The actual price increase, combined with the co-responsibility levy, will not give any net benefit to our dairy producers.

Will my right hon. Friend accept that there is widespread resentment that we are contributing an increased proportion to the co-responsibility levy? The fact that our herds are, on the whole, larger than those in Europe means that they are all within the levy while many European herds are exempt. Will my right hon. Friend give attention to these aspects when this matter next comes up for discussion?

We rejected the exemptions, because they would have been unfair to the United Kingdom. The only exemptions that remain are minor exemptions in special areas. I remind my hon. Friend that other milk producers in Europe have not enjoyed the benefit of three green pound devaluations and a 22 per cent. increase in the liquid price of milk. Last year, those benefits helped our producers.

Will anything in the Brussels agreement prevent the implementation of the scheme proposed last September by the Milk Marketing Board? Does not the right hon. Gentleman realise that that scheme would be extremely helpful to producers and children? His response appears to have been apathetic.

I have spoken to the Milk Marketing Board and others about the scheme. They agree that in its present form, it would not qualify for the subsidies that are required. I am currently negotiating a new scheme in Brussels.

How can we reform the CAP—in which surplus dairy products are a significant factor—when the British Government agreed on 2 June to accept its principles? Does not my right hon. Friend realise that the second principle is to increase the earnings of individuals engaged in agriculture?

My hon. Friend should look at all the principles. One of those principles is to look after the consumer.

Does not the Minister agree that dairy farmers are more affected by high interest rates than by the Brussels agreement? What is he doing, on behalf of farmers, to get those interest rates down?

I realise that we inherited massive borrowing from the previous Labour Government and that that has had an adverse effect on interest rates.