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Commodity Prices

Volume 164: debated on Monday 8 January 1990

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To ask the Secretary of State for Foreign and Commonwealth Affairs what policy in respect of commodity prices is adopted by United Kingdom representatives to the Lomé convention.

The Lomé convention has no direct role in commodity pricing, but helps commodity dependent African Caribbean and Pacific (ACP) countries through aid for improved production and diversification. ACP states can also get help under the Stabex scheme, if they face shortfalls in export earnings from certain agricultural products, and under the Sysmin scheme if they face shortfalls in production or earnings from a list of minerals.

Does the Minister accept that the attitude of the EEC and of North American countries towards commodity prices has been a major contributory factor in the debt crisis in much of the world? Does she agree that the latest round of Lomé convention prices on exports from ACP countries has resulted in virtually the lowest real terms prices ever achieved by those countries? They are worried about the way in which they have been treated by the EEC. Is the right hon. Lady aware that exports from ACP countries to the European Community are at their lowest level for 25 years? Those countries and many of us are worried about the growing crisis faced by the poorer countries because the richer industrial countries are closing their markets to them and forcing them into debt and low commodity prices.

The answer to the hon. Gentlemen's first question is no. The answer to his second is that the Lomé convention contains no provision on commodity prices or participation in international commodity agreements. The three main areas of co-operation in commodities matters in the convention are the national indicative programmes, Stabex and Sysmin and the consultations. It is through the national indicative programmes that we seek to help countries that are heavily commodity dependent. Resources for diversification, including aid for processing, marketing, distribution and transport, are considered when individual country programmes are drawn up, and that will be happening this year.

The best way in which to help commodity-dependent countries is to enable markets to work efficiently and openly and to strengthen and restructure the countries' economies. That we are doing, not only through the EEC but directly.

How on earth can it help to have economies working more openly when the EEC is spending £220 million every week simply destroying food and dumping it at crazy low prices, with the sole consequence of spreading death, starvation and destruction throughout the Third world? Given her responsibilily for overseas development, will the Minister make it abundantly clear that she will do everything in her power to fight against this dreadful policy of dumping food on the Third world at crazy low prices and spending lots of our taxpayers' money on dumping high-tar tobacco in places such as Africa, which in my view, is an affront to the civilised world.

My hon. Friend knows that I have always been against subsidising the overproduction and dumping of food. I hope that he realises that Lome agreement EDF VII, which represents a 46 per cent. increase on EDF VI, gives the largest ever United Kingdom commitment to the Lomé countries. We are doing our best—through the EC programme and bilaterally, through the economic reform programmes—to help the countries, especially those that have been commodity dependent. Nevertheless, I agree with my hon. Friend that dumping excess provision created in Europe is no way to solve the problem.

But, specifically, does the Minister accept the importance of bananas to the economies of the West Indian islands, and the threat posed by the ending of the banana protocol in 1992? Does she recall the pledge of the Prime Minister in Jamaica in July 1987 to fight to protect their position? Will she say how far the Government have been able to fulfil that pledge?

That has nothing to do with commodity prices. The hon. Gentleman will know, however, that it was the British Government who fought hard for the banana producers during the recent negotiations on Lomé. The response that I have had from the banana producers has been one of gratitude for what Britain was able to achieve under the EDF discussions and the Lome convention.