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Milk Quotas

Volume 124: debated on Thursday 17 December 1987

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To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on Her Majesty's Government's response to the European Commission's report on the operation of milk quotas.

The Commission's report on the operation of milk quotas is still under discussion. In the present circumstances, however, it is realistic to continue with the quota system.

When the Minister is trying to reduce the surpluses, will he remember that in the less-favoured areas of Scotland, such as Argyll and Bute, milk producers are not contributing to the surpluses or butter mountains, because all milk is used for liquid consumption and making cheese? Does he agree that the loss of creameries that produce Scottish Cheddar would cause a great deal of unemployment?

I would welcome any creameries producing cheese, but I would not welcome creameries producing butter which then went into intervention to add to the mountains. It is with some disappointment that we notice that butter production has increased this year in Scotland. The creameries are an important part of the countryside, and I am sure that both the Scottish and the English Milk Marketing Boards have them in mind.

Will my hon. Friend include in his response about the operation of milk quotas the fact that milk quotas have made a considerable difference to the dairy industry, in providing security, and have done much to help to establish a secure market for the small dairy farms, which are so vital to the British countryside?

I entirely agree with my hon. Friend. Milk quotas have given to that section of the industry the security for which most other sectors of the industry are looking. The number of people leaving the milk industry has fallen from 2,500 a year before 1983 to 1,300 a year now.

To judge from the Minister's stately girth, he has obviously been doing his best to reduce butter mountains on his own. Would he like a bit of assistance? Would he welcome help from some of the pensioners of Newham, for example, if they were allowed to get at the butter mountains that exist in my contituency in Stratford? Does he accept that because of the price of butter, beef and other foods in intervention stores, there is no question of the people who get that food for free going out to buy more? Therefore, it is no argument for the Government to say that giving food away will only cause more food to go into intervention.

It was shown last year when we distributed £60 million worth of free food that it did make a difference in retail outlets. However, I know that the hon. Gentleman's constituents in Newham appreciate the fact that food price inflation is less than inflation generally and has continued to be so. The range of food available to people makes it possible for them to enjoy a balanced diet at a very reasonable price.

Does my hon. Friend agree that the three diversification grant schemes to be introduced next year will do a great deal to reduce surpluses in this country? Will he consider issuing a statement on the ability of farmers to apply for more than one diversification scheme or to switch between them?

I am sure that farmers and farmers' organisations will be adroit and acute enough to consider all the schemes that they may apply for.