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Price Increases

Volume 19: debated on Sunday 4 April 1982

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asked the Minister of Agriculture, Fisheries and Food whether he is satisfied with progress in the discussions with his European Economic Community colleagues about the next round of agricultural price increases.

I refer my hon. Friend to the statement I made to the House on 18 February 1982.

Does my right hon. Friend agree that the whole issue of agricultural prices is a ratchet with which to obtain concessions on other fundamental issues in the Community? Does he envisage, in the end, accepting a price increase of below 9 per cent. in order to obtain concessions on Britain's long-term budgetary contributions?

No, Sir. I have made it clear that the proposals in their present form, which would include a green pound revaluation of 4 per cent. and would mean that British farmers would obtain price increases way below the 9 per cent. proposed by the Commission, are completely unacceptable to the British Government.

When will the Minister announce the conclusions of this year's price review?

I am not in a position to do that, because it depends on the actions and views of nine other Member countries and the Commission. I am not sure when all these views will coincide, but I hope that it will be as soon as possible.

Why has the Minister so enthusiastically welcomed the Commission's action in taking the French to court? Should we not follow something of the French lead in adopting national aids which would, at least, give aid where it is needed in the industry as well as helping the consumer? Should the right hon. Gentleman not now be pressing the Chancellor to reduce interest rates, the cost of which to the farmer has trebled over the past four years?

I am relieved to hear the hon. Member proposing more public expenditure on agriculture, which is in sharp contrast to other Labour proposals, such as agricultural re-rating. In the Community market in which we operate it is completely unfair for a Government to subsidise its farmers and create unfair competition with other farmers.

Is my right hon. Friend aware that his remarks concerning the unacceptability of the green pound revaluation will be well received by agriculture? Does he agree that the massive green pound differential engendered by the Labour Government, resulting in enormous negative MCA's, did massive damage to United Kingdom agriculture? Is he aware that the industry needs this respite to make up the difference?

Yes, Sir. There is no doubt that a long period of negative MCA's was very damaging to British agriculture's prospects both in the home and overseas markets. I am glad to say that since we reversed that policy we have improved our self-sufficiency to the extent of an improvement in our balance of payments of £1,000 million a year.