HC Deb 05 December 1974 vol 882 cc1922-4
11. Mr. MacGregor

asked the Minister of Agriculture, Fisheries and Food if he will take immediate steps to ensure that United Kingdom sugar beet growers are given a firm indication now of the price per ton they can expect for next year's crop.

Mr. Strang

After next week's meeting of EEC Agriculture Ministers my right hon. Friend expects to be able to confirm that we shall be adopting the full EEC price for sugar beet with effect from 1st January. If this price is increased by 16 per cent. for the 1975 crop, as the EEC Commission has proposed, it will be equivalent to £12.28 per ton. On top of this, the growers will get the pulp and transport allowances.

Mr. MacGregor

Will the hon. Gentleman accept that there is great uncertainty among many beet growers in Norfolk— no doubt this is true of the rest of the country—about what commitment to make on their contracts next year? To say the least, many are unlikely to increase their acreage. Does the Minister realise that what is required in order to increase acreage for the United Kingdom on the A quota alone—let alone the B quota— which he successfully negotiated in Brussels, and which is so important to our balance of payments, is a clear statement to growers shortly after he returns from Brussels about the precise prices—not the percentage—that they will receive? Many believe that this, including the two other additions, should be at the level of £16 a ton, and many growers will not commit themselves unless there is a cost escalation clause.

Mr. Strang

I remind the hon. Gentleman that even under the old arrangements beet contracts were agreed before the price was announced in the following Annual Price Review. If the price proposed by the Commission is confirmed, it will represent an increase of 40 per cent. for 1975 crop prices and be 60 per cent. higher than the minimum price applicable for the 1973 crop. I am sure that that will be a great encouragement to producers to grow more beet.

Mr. Spearing

Does my hon. Friend agree that there would either be more money to pay farmers for sugar beet or less money to be charged to consumers if the facilities at port refineries for white end refining were not duplicated by the British Sugar Corporation? Will he consider this problem to ensure that we do not invest too much in refining capacity and have two sets of refineries that may be complementary?

Mr. Strang

My hon. Friend has raised an important point. The future structure of the refining industry is being considered by my right hon. Friend.

Sir David Renton

Is the hon. Gentleman aware that our sugar beet refining capacity this season—and quite often in recent years—has been under-employed? Will he bear that in mind and ensure that we have a realistic acreage that makes the fullest possible use of that refining capacity?

Mr. Strang

I am sure the right hon. and learned Gentleman appreciates that my right hon. Friend secured a substantial increase in the United Kingdom quota. The price to which I referred should provide a real encouragement to grow more beet.

Mr. Pym

Does the hon. Gentleman recall that in the summer we urged that we should go to full EEC prices on 1st January, and that we shall welcome it when the Minister takes that step? The result will be an increase in price as he said, but does he accept that, because of the uncertainty that exists, there is a real risk that the extra quota that he negotiated will not be taken up? What is the Minister's estimate of the take-up of the quota on the new basis? Is he aware that many fanners are not offering contracts, even though in previous years they have not known the price before making contracts, because of the uncertainties and poor crops this year, and because they do not feel that the incentive is big enough? When the Minister returns from Brussels, therefore, it is important that he should announce the price and do everything he can to fill the maximum possible quota acreage.

Mr. Strang

We accept that the greater the price the greater the incentive to beet growers. An increase of 40 per cent. is significant, and I put it to the right hon. Gentleman that it may be that some of those who have not signed contracts have been persuaded by publicity that has been given to the view that they should not sign but should hold back for a while.