asked the Minister of Agriculture, Fisheries and Food what representations he has received about the effect on competition in the grain trade of the grants made to farmers' co-operatives for the construction of grain stores and silos; and if he will make a statement.
Representatives of private merchanting interests have from time to time expressed the view that grants to cereal co-operatives cause unfair competition and are unnecessary because they are able to provide all the facilities that are required at no public cost.I believe that grant-aid to cereal co-operatives has encouraged farmers to replace outdated on-farm storage with modern facilities and given them access to more sophisticated drying methods. Nevertheless, I am very aware of the strong views held by private merchants and understand them. Grants to cereal co-operatives have been reduced by two thirds in the last two years and 90 per cent. of the cost of facilities now has to be found by a co-operative's members. Where merchanting groups successfully apply for grant under the EC marketing and processing regulation, 355/77, the percentage of both United Kingdom and EC grant will now be similar to that awarded to co-operatives. Furthermore, a number of co-operatives have employed merchants as marketing agents and the costs incurred by the co-operatives can be grant-aided in certain circumstances. I hope that merchants will recognise that the position is now more balanced than before.