HC Deb 01 August 1946 vol 426 cc1228-30
The Minister of Food (Mr. Strachey)

An agreement has been reached with the Danish Government covering the supply by Denmark of butter, bacon and eggs to this country up to the end of September, 1949. The agreement provides that during this period we shall be offered a very high proportion of Denmark's exportable surplus of these three commodities. In return we have given Denmark an assured market up to the end of September, 1949, for substantial quantities of bacon and eggs. We are giving guaranteed minimum prices for these quantities, while the actual prices will be settled at specified dates nearer the time at which they will apply. On butter, the price has been fixed up to 30th September, 1947, and the Danes will consult us before they commit themselves to send more than certain specified quantities to other markets during 1948 and 1949. We have agreed with the Danish Government to publish the details of the agreement including prices and quantities early next week.

The prices which we shall pay the Danes for foodstuffs during the first year are higher than the prices which we are paying for similar products from other countries. This is because farm costs in Denmark are today extremely high in relation to costs elsewhere. These relatively high Danish costs are in turn due to the world shortage of animal feeding stuffs on which Danish agriculture is normally so largely dependent.

This situation will, we hope, prove shortlived, but while it lasts it makes the settlement of prices for our traditional imports from Denmark very difficult, and we have had to ask for tolerance and understanding from, for example, our Dominion suppliers. We have kept the Dominions concerned fully informed of our negotiations with Denmark, and I have good reason to believe that once again they are showing that they understand the position.

Moreover, if the prices we are paying appear high to our Dominions suppliers—and for that matter to ourselves—they appear low to the Danish suppliers. Indeed, the Danish Government informs us that it will be necessary for them to recommend to the Danish Parliament the payment of subsidies, to their farmers to supplement the prices we shall pay under this agreement, and I must pay a tribute to the spirit of goodwill and friendliness in which the Danish Government has carried on negotiations.

In summing up then, the prices we are paying appear high in relation to the prices which we pay for similar products from other sources and low in relation to Danish costs of production. It therefore seems probable that a reasonable compromise had been reached and I am very glad to be able to announce to the House this agreement which should re-establish our traditional trade with Denmark on a firm basis to the great mutual benefit of both countries.

Mr. Boothby

Can the Minister say whether any suggestions have been made to the Danish Government that they might accept payment for this produce in the form of British goods?

Mr. Strachey

No, Sir. Any direct barter agreements of that sort would be undesirable because the Danes will receive sterling, and, with the sterling proceeds of these sales, will be able to buy British goods, which I am glad to say they are buying.

Mr. Henry Usborne

Will the Minister now consider importing a little more cheese and manufactured milk products from Denmark, in order to allow more fresh milk to the chocolate makers in this country so that they can produce more full-cream chocolate?

Mr. Strachey

We intend to buy all the Danish cheese we can.

Mr. Quintin Hogg

While most people will be glad to learn that more food is coming, will the right hon. Gentleman explain how far this new agreement fits in with the terms of the commercial agreement, into which it is shortly proposed to enter; and, secondly, will he give us an undertaking that what is really happening is not that Danish farmers will import feeding stuffs which might have been imported by farmers in this country and that we shall buy the eggs and bacon which they produce at rather higher prices?

Mr. Strachey

As to the second part of the hon. Gentleman's question, the Danes, like everyone else, are at present getting practically no feeding stuffs, and those products are produced from their own fodder. In the future, we shall, naturally, put our own farmers in the highest priority as regards feeding stuffs which we are able to procure. As to the first part of the question, I am not clear what commercial agreement the hon. Gentleman has in mind. Is it the United States Agreement?

Mr. Hogg

indicated assent.

Mr. Strachey

There will be nothing whatever in this agreement contrary to the commercial agreement we shall be discussing in the autumn.

Mr. Walkden

Can the Minister tell us whether at any stage in the negotiations, any condition has been inserted in the contract which guarantees to the Danes coal and fertilisers which they badly need, or any forms of feeding stuff for cattle which, I believe, they also badly need, provided we can supply them?

Mr. Strachey

No, Sir. There is no condition of that sort in the agreement. Of course, the Danes need these things, but so do we.

Viscount Hinchingbrooke

Can the right hon. Gentleman say how it is that the Danish supplies of feeding stuffs are so liberal and the British so meagre?

Mr. Strachey

I do not know from where the hon. Member drew that assumption. It is certainly not the case; and the Danish dairy products are, of course, far below their prewar level for the same reason as ours are.

Mr. Orr-Ewing

Can the Minister say whether this will mean an addition to the expenditure of money in subsidising the consumer?

Mr. Strachey

I suppose the importation of all products in which there is any increase in price must have that implication as long as British consumer prices are kept stable.

Mr. Norman Bower

Does the statement mean that it will soon be possible to increase the ration of these food stuffs?

Mr. Strachey

No, Sir. I fear we can draw no such implication.