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Dairy Quotas And Beef Subsidies

Volume 114: debated on Thursday 23 April 1987

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asked the Minister of Agriculture, Fisheries and Food what further representations he has received concerning the current changes to dairy quotas and beef subsidies; and if he will make a statement.

I frequently receive representations on these matters from farmers and industry representatives.

If more dairy cows are to be culled as a result of quota restrictions, can the Minister tell us what the effect will be on the price of beef in the short-term and the longer term?

I think the hon. Lady would probably agree that in the longer term — 18 months or so — the likelihood is that the beef market will firm up considerably because of the smaller dairy herd and the need to bring more forward from specialist beef producers. In the meantime, there is a wide range of views, some of them from independent sources, suggesting that it will not have a major effect. We are certainly going to spend a good deal of money trying to take beef off the market into third markets to try to help. If the hon. Lady will cast her mind back to the original imposition of quotas, the truth was that the effect upon the beef market was very much less than had been feared. The hon. Lady must watch carefully, but my own view is that things will not be as bad as some fear and that in the medium term there is a good future for the beef industry.

Will my right hon. Friend ensure the continuation of the milk quota leasing system, which worked well last year and brought a welcome degree of flexibility to the system? Can he explain why it has been stopped, and say whether he will reinstitute it as a matter of urgency.

We are doing everything possible to defend the flexibility in the system which the milk quota leasing opportunities give. We are the country most concerned with that flexibility. We are opposed by other countries in the Community and I am afraid that the Commission has not always found it possible to support us, although it does look as if it is being a little more supportive now. I hope very much that we will be able to continue that for as long as we have quotas, because flexibility is the name of the game if we are to ensure that the milk industry is open to others and is not just closed on those who are in it at the moment.

May I revert to the figure of 435 million ecus mentioned by the Minister as being the effect of cow culls on the beef industry? Will he now confirm that that is nowhere in the EEC budgets for the coming year, despite the Commission's obvious sympathy, which was mentioned by the Minister?

I have to say that exactly what my right hon. Friend the Minister and I have said in the House has been confirmed by the Commission. There is no doubt about it. The money is there for that purpose. It is there clearly in the budgets and was taken into account when the budgets were drawn up. It is there in the additions. If the hon. Gentleman would like to do the addition he will find that there is an extra sum for that purpose.

Will the Minister tell the House why he supports the Irish beef producers so that they can make a profit while beef producers in the United Kingdom make a loss?

I hope that the hon. Gentleman will bruit abroad that I was attacked violently in the Irish Dail for my opposition to the Irish subsidy—[Interruption.] My current state is not entirely the result of that. I do not think that anybody could accuse me of being other than extremely strongly opposed to any special treatment for the Irish. The Irish have been treated in a way that is not acceptable, particularly in the original allocation of dairy quotas. I am pleased to say that my right hon. Friend the Minister had a major success in ensuring that on this occasion the Irish got the same treatment as everyone else.