Egg Marketing Board

HC Deb 22 January 1969 vol 776 cc453-6

2. Sir G. Nabarro

asked the Minister of Agriculture, Fisheries and Food whether he will now make a statement on the future of the Egg Marketing Board.

22. Mr. Scott-Hopkins

asked the Minister of Agriculture, Fisheries and Food what plans he has for reorganising the Egg Marketing Board; and if he will make a statement.

24. Mr. Eadie

asked the Minister of Agriculture, Fisheries and Food what proposals he has for changes in the organisation of egg marketing.

49. Mr. Pardoe

asked the Minister of Agriculture, Fisheries and Food if he will now make a further statement following his consideration of the Report of the Reorganisation Commission for Eggs.

Mr. Cledwyn Hughes

Yes, Sir. As the statement is rather long, I am making copies available in the Library now and I will, with permission, circulate it in the OFFICIAL REPORT.

Broadly, however, the Government accept that in the changing circumstances of the industry it would now be right to move to a free marketing system. We intend to phase out the egg subsidy over the next five years and propose to remove eggs from the guarantee under the Agriculture Acts from 1st April, 1974. We have asked the Marketing Board to continue with its present functions for the next two years, but we intend to establish a new central authority for eggs whose functions would include support buying and to move to a basically free marketing system from 1st April, 1971.

The Government intend to introduce the necessary legislation as soon as possible. In view of the phasing out of the subsidy and the transition to a free market, we shall also be embarking on discussions with overseas suppliers with a view to introducing minimum import prices for shell eggs and egg products.

Mr. Speaker

Order. Answers should be reasonably brief.

Sir G. Nabarro

I will read with avidity the statement when it appears. Is it the right hon. Gentleman's intention to abolish in forthcoming legislation the requirement to stamp shell eggs with a lion? Is the new authority to comprise the interests, as forecast in the Daily Express, of producers, distributors and consumers, all in one board?

Mr. Speaker

Order. Supplementary questions should be reasonably brief, too.

Mr. Hughes

The answer to the second part of the hon. Gentleman's supplementary is, "Yes, Sir." The answer to the first part was given by me just before Christmas.

Mr. Pardoe

Is the right hon. Gentleman aware that many hon. Members wholeheartedly welcome the fact that we are to go over to a free market in eggs? Will he consider what part was played in this by the Western Egg Pasteurising Company, of Camelford, and will he use his powers to ensure that it gets some recompense from the public purse for its efforts?

Mr. Hughes

That is an individual case about which there has been a great deal of correspondence. I do not think that it would be proper for me to comment on it when replying to a general statement.

Mr. Maclennan

What thought has been given to the special problems of egg producers in remoter parts of the country and particularly to the problems of the Orkneys?

Mr. Hughes

I am obliged to my hon. Friend for raising that point, which I have taken into account. Perhaps he will read my statement in the Library.

Mr. Godber

Hon. Members will read the full statement with great interest. It is an important statement and I reserve my position on it. Meanwhile, on the question of the import of both shell eggs and egg products, will the right hon. Gentleman ensure that minimum prices are adequate to give a fair return to home producers?

Mr. Hughes

I appreciate that point. These will, of course, be matters for negotiation.

Mr. Boston

What plans does my right hon. Friend have to ensure quality control at the retail level in the absence of packing station marks, since it will no longer be possible, as it has been up to now, to trace causes of complaints back to the source?

Mr. Hughes

I appreciate that as well, but this is a matter for the consumer, the housewife, who has a great deal of discrimination in this matter.

Miss Quennell

What will be the position of those egg producers who have been brought before the Board's courts and who may now find themselves in a strange position in view of the announcement which he has just made?

Mr. Hughes

That raises a different matter. I should be grateful if the hon. Lady would place a Question down about it.

Following is the statement: 1. The Government have now reached conclusions on the Report of the Reorganisation Commission on Eggs, in the light of the views expressed by the interested organisations. I would like to take this opportunity of thanking Mr. Rowland Wright and his colleagues publicly for their valuable work. 2. The Government agree that in the changing circumstances of the industry, it would now be right to move to a free market, and to phase out the subsidy. We also accept that in the new situation the industry will need a more broadly based central body than the Egg Marketing Board with the kind of functions recommended by the Commission but with specific provision for representation of producer and trade interests. We believe however that the industry will need a reasonable transitional period to make an orderly adjustment to the new conditions and our aim is to complete the whole operation within the next five years, that is by 31st March, 1974. 3. The first step towards these objectives has already been taken with the removal of the "Lion" stamp. We propose to start phasing out the subsidy immediately with the objective of completing the operation by 31st March, 1974. During this period eggs will remain within the guarantee arrangements and progress towards our objective will be reviewed with the farming industry at each Annual Review. The subsidy will be phased out by reduction of the guaranteed price, and it will be put into a flat rate basis by abolishing the feed price formula, and accelerating the phasing out of the present profit and loss sharing arrangement. Moreover, to enable the phasing out to be completed within the transitional period, the limitation of 9 per cent. imposed by the Agriculture Act, 1957 on the maximum aggregate reduction in the guaranteed price permitted over any three year period, will be removed from eggs after 31st March, 1971. When the subsidy ceases after 31st March, 1974, eggs will no longer be covered by the guarantee arrangements 4. We think that the market should be allowed adequate time to adjust itself to the removal of the stamp. We have therefore asked the Egg Marketing Board to continue with the present arrangements for fixing centrally basic producers and wholesale selling prices until 31st March, 1971. During this period the egg subsidy will continue to be paid to the Board. After that date the new body will come into operation and egg prices will be determined by the conditions of the commercial market instead of being centrally fixed. I am sure that we can count on the Board's co-operation in achieving this orderly transition. 5. After 31st March, 1971, the subsidy will be paid to the new central body whose trading functions will be confined to a limited amount of support buying to be determined each year in consultation with the Government. Until 31st March, 1974, the funds for this will be earmarked from the payment made to the authority under the guarantee, the balance being disbursed as a flat rate subsidy to producers in respect of first-quality eggs sold to packing stations. Thereafter, support buying will be the responsibility of the new authority and will be financed by a levy on the industry. 6. In view of the longer transitional period we are proposing, we do not consider that there is a case for any compensation to producers going out of egg production as was proposed by the Commission. We will, however, discuss with the Northern Ireland authorities the provision of special assistance towards sea transport costs for producers in Northern Ireland and similar provision will be made on this account for producers in the Orkneys. 7. The Commission emphasised in their report the need to safeguard United Kingdom producers from the risk of market disruption by excessively low priced imports. The Government accept this and intend to open discussions with overseas suppliers with a view to introducing minimum import prices both for shell eggs and for egg products. In the meantime the situation on imports will be kept under close review. 8. Many details of these proposals remain to be worked out and this will be done in consultation with the organisations concerned. The proposals will also entail legislation which the Government intend to introduce as soon as possible.