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Volume 79: debated on Thursday 16 May 1985

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asked the Minister of Agriculture, Fisheries and Food what is the total cost to public funds of supporting cereal prices in the current financial year.

The Minister of State, Ministry of Agriculture, Fisheries and Food
(Mr. John MacGregor)

It is estimated that support for the cereals market will cost the Community 2,325 mecu in 1985.

Is that not a scandalous waste of public resources? Does my hon. Friend agree that, besides encouraging price restraint, it is now imperative to reduce or transfer the cost of disposing and storing the lower quality grains?

My hon. Friend will know that at present we are debating the price review negotiations for this year, and a key part of the United Kingdom's approach has been to urge the maximum application of the guarantee threshold to cereals. The reason for that is to reduce the cost of support altogether.

Instead of wasting money on cereals in this way, will the Minister seriously consider sending cereals completely free of charge to the starving nations of Africa, such as Ethiopia, and to other parts of the world where people are starving? It may cost more money, but at least it would save starving people.

The Community is embarking on a major programme of food aid in relation to cereals this year, and the British Government have been taking a lead. There was a fairly large programme last year. However, to think that that is a way of disposing of surpluses and of dealing with that problem is the wrong approach. The real need is to get the cereal support price down. Simply to dispose of all surpluses free of charge would cost a great deal more than the figure that I gave.

My hon. Friend referred to the talks going on now in Brussels. Does he agree that today's news from Brussels is absolutely disastrous, that Britain's efforts to try to bring about price cuts in cereals have gone out of the window, and that we shall merely store up bigger trouble and surpluses if the rest of the Community has its way?

We cannot say that the news is disastrous, because we do not yet know what it is. The negotiations are continuing. It is true to say that the full application of the guarantee threshold will not be negotiable this year, but price restraint is the main item on the table for dealing with cereals this year, and we have allies in our approach to getting price reductions in cereals.

What is the likely carry-over of cereals in storage in the United Kingdom this year and next year if, as many forecast, there is another bumper cereal harvest this summer? Does the Minister think that taxpayers' patience can be stretched as much as storage facilities to harbour such unwanted grain?

It is difficult to say what the carry-over will be, but there will clearly be one. The hon. Gentleman will know that the United Kingdom has had considerable success in exporting grain this year — a total of about 4·6 million tonnes. However, I do not disguise the fact that the size of the cereal surpluses is a major problem. It is one of the main discussion points — indeed, one of the main stumbling blocks— in the present negotiations.