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Food Prices

Volume 79: debated on Thursday 16 May 1985

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asked the Minister of Agriculture. Fisheries and Food what proportion of food price increases since 1975 have been the result of higher real prices paid to farmers; and what proportion can be attributed to higher food processing and retailing costs.

Apportioning increases in food prices between prices paid to farmers and the costs of retailing and distribution can be done only in broad terms. In the decade since 1975, agricultural product prices have risen by 122 per cent., while retail food prices have risen by 166 per cent. Associated with this slower growth of agricultural prices, the cost of basic food raw materials now accounts for 44 per cent. of consumer spending on food compared with 50 per cent. 10 years ago.

My hon. Friend may be aware that in real terms the cost of food, taking the farmgate price received by farmers, has fallen substantially in real terms. What expectation has she that the current common agricultural policy proposed price cuts will result in substantially reduced production, for which she no doubt hopes?

I am not hoping for substantially reduced production, but clearly realism in the common agricultural programme means that we need to consider surplus production.

Does my hon. Friend agree that the moderate rise in food prices compared with the retail prices index is helped greatly by the variable beef premium? Will she encourage my right hon. Friend in no way to barter that valuable instrument in exchange for anything else?

I can only reiterate to my hon. Friend that my right hon. Friend and hon. Friends need no encouragement to defend British interests in this matter.