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Volume 170: debated on Thursday 19 April 1990

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To ask the Minister of Agriculture, Fisheries and Food if he has received any representations about the competitive position of bakers using north American grain in preference to European grain; and if he will make a statement.

I have received no representations, but I am arguing for a reduction of the high levy imposed on north American wheat in the current price negotiations. The bread-making quality of home-produced wheat has improved to such an extent that we now use less than a tenth of the amount of imported grain that we were using 10 years ago.

Will my hon. Friend do his utmost to achieve a reduction in agriculture tariffs at the forthcoming GATT talks so that quality bakers, such as Warburtons in my constituency, no longer have to pay a levy of £100 a tonne on imported north American high protein grains?

We shall press to get levies down and the GATT talks will almost certainly result in a phased programme of cuts sustained over a number of years. Without that, I do not think that the GATT talks would succeed at all. I remind my hon. Friend that the stabiliser has produced three years of cuts in grain prices and that farmers are feeling the pinch. It is only fair to say that if we obtain the green pound devaluation for which we are aiming—in the United Kingdom, at least—grain prices will rise, which will put farmers on more equal terms with their competitors overseas.

Does the Minister accept that the major problem affecting competition with European grain producers is the enormous burden and disadvantage imposed on the home industry as a consequence of the gap between the green pound and sterling? Does he accept that the original proposal to cut the gap by one third is inadequate in relation to those commodities for which the difference is well over 10 per cent.?

The hon. Gentleman will see from the arrangements that were on the table when the price-fixing negotiations broke up a few weeks ago that the devaluation of one third had rather passed into history. We very much hope that when the negotiations resume, it will stay part of history.

As British millers and bakers are buying wheat at 30 per cent. less in real terms than they were five years ago, does my hon. Friend agree that it is about time they passed on some of their good fortune to their customers?

It is certainly true that the price of grain as a raw material for the bread maker has not increased recently. It is also true that we must strike a balance—that is what most politics is about—between the interests of the producer and the interests of the consumer. At the moment, it is the producers who believe that they face an injustice, and we are trying to correct that.