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Common Agricultural Policy

Volume 87: debated on Thursday 21 November 1985

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7.

asked the Minister of Agriculture, Fisheries and Food what progress has been made in discussions with his European colleagues on the Commission's Green Paper, "Perspectives for the Common Agricultural Policy".

The Council had an initial debate on the Green Paper when it met informally in September. At its meeting this week there was discussion based on a Commission memorandum on specific ideas for the cereals sector. The Commission has given notice of its intention to issue a memorandum next month covering its wider conclusions from the "Perspectives" exercise. We shall continue to press for a realistic price policy to be adopted as a central element in tackling the problems of costly surpluses in the CAP.

Does my right hon. Friend agree that the Commission's proposals for cereals are likely to bear more heavily on the United Kingdom than on other parts of the Community? What steps does he propose to take to ensure that that does not happen?

Co-responsibility levies would pose real difficulties of administration and equity, as my hon. Friend said. They would distort the proper working of the market. We should remember that the levy is a revenue-raising device to provide temporary relief for the budget. Rigorous long-term action on the price level remains indispensable to bring the cereals sector into better balance. Those were all points that I raised at the Council meeting this week.

Will the Minister acknowledge that the food mountains in this country are now at record levels and that the millions of tonnes of grain that are dumped in secret stores represent a scandalous misuse of resources? Do his earlier answers mean that he recognises that the proposed co-responsibility levy on cereals will make things worse, because the farmers will see it as a forerunner for quotas and expect him to insist on cereal price cuts?

I am glad that the hon. Gentleman shares my view about the importance of price cuts and the relative ineffectiveness of co-responsibility levies. He also referred to the large quantities of grain stored in this country. We have those tremendous surpluses throughout the Community basically because during the past seven or eight years the Council of Ministers has ignored the advice given to it by the hon. Gentleman's colleagues while his party was in power, and by my colleagues while this Government have been in power. If the Community had taken the British advice from both parties, the surpluses would be less today.

In view of that answer, will my right hon. Friend explain why there is no surplus and no wheat going into intervention in France, while we have a surplus of 6 million tonnes, which is likely to rise to 7 million tonnes? This morning the Agriculture Select Committee was told that that vast quantity of wheat was now valueless and that nobody wanted to buy it. This year we shall import 3 million tonnes of wheat from France and elsewhere for milling purposes because our wheat is, unfortunately, valueless and not wanted by our trade.

I do not accept that the wheat that we produce is valueless. That is not true. One of the matters about which we have recently been pressing the Commission is that it should have schemes to export grain of feed quality because there are markets in the world where that type of grain is needed. I hope that before long we can persuade the Commission to introduce a scheme that will in particular reduce the stocks of feed quality wheat that we have in store.

Has the Minister, in his discussions with his colleagues in the Community, considered the social and regional policy implications of a substantial shift from price support to direct income aids, which is proposed in the Green Paper?

Yes, I have considered that. I am worried about the possibility of income aids. The Commission has not yet made any proposals, and there would be difficult problems to overcome regarding income aids. They are difficult to administer, there would be problems of conflicts with existing social security schemes, and expense is a major factor. It is an area where national policies could well be far more appropriate. We could find that assistance from income aids would go disproportionately to other countries, and not to the United Kingdom.

Will my right hon. Friend reconsider his stand on trying to reduce cereal surpluses? Does he recognise that there is no difference between co-responsibility levies, price restraints and price cuts? In the first instance they will encourage higher production, which is the road we followed on milk, when we refused to consider milk quotas until the last moment. Will my right hon. Friend urgently change his mind and take steps to impose some form of cereal quota throughout the EC?

It is not true that there is no difference between price cuts and co-responsibility levies, because the advantage of a price cut over a levy is that it reduces the price to the livestock producer and makes the product more competitive in the export markets. I am surprised to hear my hon. Friend express support for quotas. If, for example, he wants to put our cereals industry into a straightjacket, so that we who are so efficient would not have the opportunity of increasing our share of European production, that will do a great disservice to the interests of our country, quite apart from the fact that in some parts of the Community it is almost impossible to administer cereal quotas.

In view of the importance of the document to the agriculture industries of both parts of the island of Ireland, and bearing in mind that some people in the EC will attempt to promote a common agricultural policy for the whole of that island, can the Minister tell us whether he intends to seek the advice of the Anglo-Irish ministerial council on that and other matters, where some people will advocate such a CAP?