§ Q2. Mr. Douglasasked the Prime Minister if the public speech made by the Minister of Agriculture, Fisheries and Food on 31st October 1973 to the Country Landowners Association on feeding stuff prices represents the policy of Her Majesty's Government.
§ The Prime MinisterYes, Sir.
§ Mr. DouglasDoes the Prime Minister accept that the speech indicated a rather complacent attitude towards the plight of milk producers? Does he really believe that it is satisfactory to await the annual price review before doing something to halt the decline in the number of our milk producers and to lessen the effect of the reduction in milk producers on the processing industry?
§ The Prime MinisterWe have recognised right from the beginning that there is a very real problem here. At first it was thought that there was also a problem with pig producers over feedstuff prices, but in the last few weeks or so that has greatly eased. There is no complacency about this. I have seen Sir Henry Plumb on two occasions and the representatives of the National Farmers' Union to go over this matter with them. What we have said is that agriculture as a whole has had good returns, but the milk producers have also had reasonable returns. They have now been hit by this particular problem of feedstuff prices. But the answer is to await the price review. They know that in the longer term, following the coming price review, we shall be moving up to Community prices, from which the milk producers will benefit.
§ Mr. Cledwyn HughesIs the right hon. Gentleman aware that the cost of compound animal feedstuffs has nearly doubled in the last three years? What 662 effect will that have on meat and milk production and on the retail price of those commodities? Do the Government propose to allow increases in the price of milk, or are they simply banking on the hope that next year the cost of feedstuffs will fall?
§ The Prime MinisterIt is quite right for the right hon. Gentleman to ask that the Government should not be complacent. At the same time I can ask the right hon. Gentleman, with all his experience, not to exaggerate. I am informed that animal feed prices are 50 per cent. higher than they were at this time last year. What milk producers can look forward to is consideration of that fact in the price review.
§ Mr. FarrIn view of the difficult position in which some milk producers will find themselves, will my right hon. Friend say whether there is a probability that the price review negotiations this coming year will start earlier than usual?
§ The Prime MinisterThat is a possibility which is now being examined by my right hon. Friend. At one time, the proposition put to me in my meetings as well as to my right hon. Friend, was that there should be an additional price review of this particular commodity. Now, however, the proposal is—and, as I have said, it is being carefully examined—whether it would be possible to bring forward the date of the price review, but there are certain complications about it.
§ Mr. SillarsIs not the real reason why the Prime Minister refuses an interim price review that the Government no longer have the powers to institute such a review, having given away the powers in the European Communities Act?
§ The Prime MinisterNo, that is not the reason why we decided not to take special action at this time concerning milk producers. Right hon. and hon. Members of the Opposition have emphasised only too often in past weeks that the returns to agriculture as a whole have been extremely good.
§ Mr. Evelyn KingI understand the difficulties, but will my right hon. Friend bear in mind when he suggests that milk farmers ought to be patient—and indeed they ought—that milk farmers, unlike 663 many others, are in many instances, certainly in Dorset, very small farmers who have insufficient reserves with which it is possible to wait?
§ The Prime MinisterYes, Sir, we recognise that. But we also recognise that milk farmers have shared in the general increase in agricultural incomes over the last three years, up to this particular point of some six weeks or two months ago, when feed prices began to rise very rapidly.
§ Mr. CallaghanHave not we reached a very remarkable stage in the management of our economic affairs when the Prime Minister advances as a reason for not giving compensation to milk producers the fact that feedstuff prices have increased by only 50 per cent. in 12 months?
§ The Prime MinisterThis increase, as the right hon. Gentleman knows, is the result of world shortages of feedstuffs. [Interruption.] However much the right hon. Gentleman's friends may try to laugh it away, it is impossible for them to do so. What the Government are saying is that, as agricultural returns have been reasonable, the proper arrangement is to await the next price review. If the right hon. Gentleman wants to give his support to measures for dealing with inflation, as he should have done when he was Chancellor, he should support this attitude.