§ 10.0 p.m.
§ Mr. Michael Jopling (Westmorland)
I beg to move,That an humble Address be presented to Her Majesty, praying that the Eggs Authority (Rates of Levy) Order 1975 (S.I., 1975, No. 273), dated 27th February 1975, a copy of which was laid before this House on 11th March. be annulled.It is some time since we had the opportunity in the House to have a debate at length about the problems of the egg-producing industry. Having got this opportunity with the order presented to the House by the Government to increase the rate of levy to support the Eggs Authority, this gives us a very wide opportunity to discuss the problems of the whole egg-producing industry.
When one looks, as I am sure you have done, Mr. Deputy Speaker, at the provisions of the Agriculture Act 1970, the enabling Act which set up the Eggs Authority, one sees that the functions of the authority are very wide indeed, including support buying and all sorts of other activities, so that there is almost nothing that concerns hens and egg production which it would be out of order to discuss tonight.
§ Mr. Deputy Speaker (Mr. George Thomas)
Order. Perhaps I may help the hon. Gentleman. The desirability of having an Eggs Authority and of financing it by means of a levy on producers would be beyond the scope of our debate tonight.
§ Mr. Jopling
I think that there would probably be few of us in the House, Mr. Deputy Speaker, who would argue about the desirability of having such an authority. However, we are concerned mostly about the conditions that the authority finds in the industry for which it has responsibility. That will give most of us, together with the ingenuity to which you, Mr. Deputy Speaker, have referred on many occasions in the past, scope to discuss the problems of the industry.
This is a similar debate, although it is in many ways different, to a debate that we had in Committee this morning to discuss a similar levy to the Meat and Livestock Commission. However, when we consider the position of the Eggs 586 Authority, we find that the activities of the Government have caused even greater devastation and inroads into the egg-producing industry than they have into the livestock-producing industry, which we were debating this morning. Indeed, the action, or lack of action, by the Government in relation to the egg-producing industry has caused very great problems.
The egg-producing industry has been through a devastating time in the last few years. One only has to read the report of the Eggs Authority, which came before the House, I fear, only last December although it referred to the year ending 31st March 1973. For some extraordinary reason, it is the latest report that I have been able to get my hands on. One sees from this report that the authority begins its comments by saying:During 1971–72 returns to the producer had been constantly below the cost of production.When one moves on to read the report that has been sent to hon. Members by the National Farmers' Union, one sees that it says:However, in 1974/75 egg producers suffered a prolonged period in which prices were below the costs of production.One can see from that that for a variety of reasons egg producers have been going through great difficulties. Not for a long time have they experienced such a severe crisis as has occurred in the last six months. Earlier temporary periods of difficulty were as nothing compared to the recent problems.
The slump which has hit the industry in the past six months has seriously inhibited the work of the Eggs Authority. This is an inopportune time for the Government or the authority to impose a higher levy. Although the levy is applied to chick production, its impact falls on the purchasers of chicks and egg producers in general. The increase in the levy from £2.85 to £3.01 over the year is not a huge one, but many producers will not be able to pay the old, let alone the increased, levy.
I hope that the Minister will be able to give us a frank assessment of the devastation which has occurred in the industry during the past few months. How many producers have been forced out of business by the low prices? To what extent has the move to extra large units speeded 587 up? The Government must have figures on this. Will the Minister tell us what has happened and what will be the structure when the crisis is over?
We have to ask ourselves the reasons for this tragic decline in profitability. It has been caused largely by an over-supplied market. Thanks to the foresight of British egg producers, assisted by the Eggs Authority, producers have reduced the size of the laying flock to try to dissipate the over-production which has bedevilled profitability. According to the Minister's statistics, the egg-laying flock last year was reduced by 5 per cent. In normal circumstances that would have been a thoroughly praiseworthy move, but in the last few months there has been a surge of imported eggs, particularly from France. It is surely unfair that when producers have reduced production and cut the size of the laying flock by 5 per cent., the result should be to provide a market for French exports.
During this time all that the Government have done is talk. They tell us that they are having talks, further talks and more talks. I wonder that the Minister of State has not got lockjaw with all the talks he has had on egg production.
It is no surprise to me that all bodies that are concerned with egg production express anxiety about the unprofitable state of the industry. Whenever prices here rise significantly over French prices, a flood of imports comes into the country at a lower price. I refer to a number of statistics which have been produced by a variety of bodies concerned with the egg industry, including the Eggs Authority, which clearly show how the French egg producers seem ready to pounce on our markets as soon as they find an opportunity to undercut our producers.
If it is not true that we have been used as a dumping ground for the French, why is it that the French and I give the Minister credit for this—have agreed to reduce their flock during this month and the next few months? I hope that the Minister will not repeat the claptrap which we have heard before from the Department—namely, that we should not worry about French egg imports as they represent only 2 per cent. of our egg production. I have a letter that was 588 written by the Minister to my right hon. Friend the Member for Cambridgeshire (Mr. Pym). When talking about eggs he said:The total share of imports in our markets last year is now shown to have been only a fraction over 2 per cent.Will the Government never learn, and will Ministers never learn, that it is that 2 per cent. that can cause all the damage in the agricultural markets? I can remember over the years that with other products—for example, grain and meat—it can be the last 1 per cent. that wrecks the market, forces down prices and makes it impossible for the industry to continue on a profitable basis.
We are getting bored, and I am becoming increasingly frustrated to hear the Minister telling us "You need not worry about this, it is only 2 per cent. of the supply of the market". He must learn that that is enough totally to wreck the whole state of the market for months ahead.
French imports have been ruining a good deal of the work which the Eggs Authority has been trying to do. So often we have found in the past few months that French eggs have been sold as much as 3p per dozen less than eggs of comparable quality produced in this country.
Worse than that, French eggs are subsidised. The French authorities, backed by the Government, have been operating their equalisation fund on as much as 20 per cent. of total French egg production. That is a fund which collects money when prices are high and pays it out when prices are low. If it worked in that way it would not be too bad, but recently there has been evidence that the French Government have been making millions of pounds available as loans to finance the equalisation fund.
I would have thought that such action was in contravention of the articles of the Treaty of Rome. I would have thought that the way in which the equalisation fund works was designed to distort trade in utter flagrancy of the Treaty of Rome. We are told that it has operated in 10 of the last 12 months. When I was in Brussels a few weeks ago with my right hon. Friend the Member for Cambridgeshire and others of my hon. Friends we saw Mr. Lardinois and tackled him. There 589 seems to be some divergence of view as to whether the operations of the equalisation fund represent a practice which distorts trade. As I have said, I believe that it causes that distortion. Mr. Lardinois was inclined to take a different view. If it turns out that money made available by the French Government to the equalisation fund is not paid back and turns out to be not a loan but a gift, Mr. Lardinois certainly will take a different view. I hope that the Minister will give us the Government's view about the equalisation fund and these so-called loans. We must know what action the Government are taking. I hope that they are taking action in addition to merely talking about what is to happen.
I wish to refer the House to the assurance given by my right hon. Friend the Member for Lowestoft (Mr. Prior), as the then Minister of Agriculture, when moved over to the Community system and dropped the system of minimum import prices which we had been enjoying and which had given a good deal of stability to the egg industry. My right hon. Friend wrote a letter to the National Farmers' Union, a letter of which I am sure the Minister of State is aware. That letter gave the industry a categorical assurance that in the event of cheap imports coming in in the last few months action would be taken by the Government. But, unfortunately, since the Labour Government then arrived on the scene they did not honour that undertaking given by my right hon. Friend to the industry. Again, we must have an explanation on that matter.
I was glad to see in the Department's Press handout of 26th March that, following interminable talks, some sort of agreement has been reached with the French Government to institute an immediate cut in egg production by the culling of 2 million laying hens. Apparently the French Government have instructed banks not to advance new loans for the construction or extension of hatcheries and have insisted that the organisations concerned in the equalisation fund should prepare schemes to control production. On the face of it, that is all very well, but it is nothing like enough in the way of action. I understand that the French egg industry is over-produced by about 6 or 7 per cent. Therefore, I am not at 590 all sure that to cull 2 million laying hens will be adequate action.
I hope that we shall have an assurance that the Government will monitor the situation in response to undertakings which have been given. Will the right hon. Gentleman give an assurance that the Department will take a great deal of trouble to discover the extent to which the French are cutting back production and honouring their promises? We must know for sure that they are being honoured.
There is another step which the Eggs Authority could have taken, because under Section 3 of the Agriculture Act 1970 it has the right to pursue a support-buying operation. As I read the provisions of the present order, it appears that no mention is made of any support-buying operation. Indeed, it appears that the Government are deliberately preventing the authority from support-buying and from taking eggs off the market. The Conservative Government certainly allowed the authority to take such action. I hope that the Minister will be able to give us some information on that matter.
Although the French seem to be able to pour their eggs into our market, we do not seem to be getting anywhere quickly with regard to the French ban on exports of eggs to France. We all know that talks on these matters have, as I said earlier, been interminable. There is no reciprocal trade.
The Minister said that at last we had an understanding about the use of arsenicals in feeding stuffs. The Government have been talking about that for a long time. I have in mind a question asked by my hon. Friend the Member for Mid-Bedfordshire (Mr. Hastings) on 4th July 1974. in which he asked what was happening about arsenicals and why exports to France were not allowed. The predecessor of the Minister of State, the hon. Member for Renfrewshire, West (Mr. Buchan), said:We are discussing this kind of problem with the EEC, particularly as to whether we can secure amendments to EEC rules in relation to additives in feed, which would solve some of these problems."—[Official Report, 4th July 1974; Vol. 876, c. 588.]The matter has been discussed since July. We are not getting anywhere. We must have an explanation from the Minister 591 as to what the Government have done in these talks.
The British egg-producing industry accepts the spirit, the rules and the system of the EEC. I quote what Mr. Phillips, the Deputy Chairman of the Eggs Authority, said, according to a Press handout on 28th February. It reads:Mr. Phillips stated that the United Kingdom egg industry accepted the implications of free competition within the Community provided that the competition was fair.That is the crux of the point. The competition at the moment is manifestly unfair.The Government are not taking steps to ensure that British egg producers face fair competition.
§ Mr. Hamish Watt (Banff)
Does not the hon. Member for Westmorland (Mr. Jopling) agree that the Tory Party, when it took us into the EEC, did not go deeply enough in the negotiations to ensure that there would be fair play once Britain joined. Does not he agree that the egg producers are not the only agricultural producers suffering because of the neglect of the Tory Party?
§ Mr. Jopling
I am sorry that the hon. Gentleman should have said that. I dealt with that point a few moments ago. I do not know whether he was here. Perhaps he was not listening.
My right hon. Friend the Member for Lowestoft gave an undertaking to the industry that action would be taken if a flood of imports entered the United Kingdom in those circumstances. I said that I hoped that there would be in the winding-up speech an explanation why that undertaking was not honoured. The hon. Gentleman should put that question to the Government—not to me.
We cannot go on like this. There must be a better system in the Community. There must be a system of fair trade within the rules and spirit of the Community.
Work is going on within the European Parliament. Perhaps my hon. Friend the Member for Norfolk, North (Mr. Howell) will say something about that. On 2nd December 1974 a document was issued with regard to a common organisation for the market in eggs. We should like to know from the Minister what is happening in that regard, since the matter is urgent. Something must be done 592 quickly. It is no good the European countries scratching each other's eyes out over the egg market whilst trying to steal parts of the market from one another. I hope, therefore, that the Minister will tell us what progress is being made with the evolution of a common policy for eggs. The danger signals are already out. We know that the chick placings for laying birds were down by 22 per cent. in February. That is a dangerous figure. The National Farmers' Union has told us of its concern. I quote what Mr. Don Avery, the Chairman of the National Farmers' Union Poultry Committee, said on 7th April:There are none so deaf as those that will not hear, and right now we can only conclude that this applied to the departments of Ministers responsible for our industry, and here I refer particularly to eggs.Who in his right mind can deny that the further sharp cuts in chick placings in February are other than the direct result of the serious and persistent damage suffered by the industry?This is a warning that I give the House. Because of the Government's inactivity over the past few months, eggs may become very dear before the year is out. I hope very much that they do not become so expensive that the demand for them drops. But, if they do, it will be the Government's fault, and the Opposition will not hesitate to remind them that it was their inaction and their dithering which caused all these problems.
§ 10.25 p.m.
§ Mr. Geraint Howells (Cardigan)
During the past year, producers in nearly every sector of agriculture have lobbied hon. Members on both sides of the House. They are worried because of their financial plight, their troubles and their problems. A few weeks ago, the British egg producers were here in force, and I had the privilege of listening to hon. Members from both sides of the House addressing them. The producers were worried because we were importing too many French eggs and, as a consequence, our producers were having to sell their eggs for less than the cost of production.
As I have said in this Chamber many times before, British agriculture must have a long-term policy to safeguard its interests. A stop-go policy is of no use to the egg sector or to any other sector of agriculture. I hope that when the 593 White Paper on agricultural expansion is published the long-term interests of agriculture will be safeguarded. The agricultural crisis of last year must not be repeated. If it is, production will fall and our imported food bill will soar, to the detriment of our balance of payments.
I believe that the issue here is whether we should increase the levy on egg producers. The hon. Member for Westmorland (Mr. Jopling) spoke about imports of French eggs. I believe that we should debate an early day motion on the subject. However, tonight we are discussing an increase in the levy.
I believe in spending more money on promotional work. That is my belief, as a business man, though I am not a poultry man. If we want to sell our products we must spend more on promotional work, regardless of whether the time is opportune to increase the levy. It is much better to spend a penny wisely today and to hope for returns in the years to come. Being a Welshman yourself, Mr. Deputy Speaker, you will know that in Cardiganshire we throw our pennies into the waves as the tide comes in. I hope that this will be true of the egg producers.
I keep very few hens, but I keep a few sheep. In the past year or two, lamb consumption has dropped by nearly 20 per cent. Egg consumption will drop as well unless the producers themselves safeguard their sector of the industry. We in the sheep sector have realised that we must spend more on promotional work to ensure that consumers eat more lamb. I am sure that British egg producers will agree that it is better to spend a few additional pence this year to safeguard the consumption of eggs in the years to come.
I quote from the NFU circular:The money collected is used to finance market intelligence. research and development, advertising and sales promotion, providing a degree of market support, and advice on quality control.The circular continues:This function has been given support and encouragement by the National Farmers' Union since the Authority was established.Turning to paragraph 5, it states:In the meantime egg producers in Britain are going out of business and there is a marked lack of confidence among those who remain.594 I entirely agree with that statement.It is suggested therefore that the Government should ease the position of egg producers by increasing their contribution to the Eggs Authority's budget, thus reducing the producer contribution to a nominal level.The levy will come from the egg producers. As I said, I am not an egg producer, but I am a strong advocate for more money being spent on promotional work. That applies to all sectors of the industry—to big and to small business.
This is a trying time for egg producers in this country, but in the long term I believe that the extra levy imposed on them will help to consolidate the home market for eggs and increase consumption. I hope that British egg producers will be better treated when we are full members of the EEC, because under the Treaty of Rome, fair competition is essential.
§ Dr. Alan Glyn (Windsor and Maidenhead)
Does the hon. Gentleman agree that one of the problems, which has been set out by my hon. Friend the Member for Westmorland (Mr. Jopling), is not so much the levy as the 2 per cent. on the import of foreign eggs? That is the margin that has made all the difference between profitability and unprofitability. The hon. Gentleman and I know that many small egg producers have written saying that that problem has made the industry unprofitable. That small margin is the real factor about which we are talking.
§ Mr. Howells
I agree entirely with the hon. Gentleman. But we are discussing the extra levy, which, in my view, is very small. It is a matter of a few pence. I believe that long term it will do a tremendous power of good to the egg industry.
Fair competition is essential. Overproduction, as we witnessed in France lately, has led to unfair competition. Mr. Neville Wallace, the Director General of the British Poultry Federation, recently said that fair competition is not achieved where one country deliberately exploits the prudence and restraint of other countries within the EEC, and the Government must reassure the egg producers of this country that fair competition will and must prevail for the benefit of all concerned.
§ 10.34 p.m.
§ Mr. Peter Mills (Devon, West)
This is a useful debate, because it will enable us to highlight the disastrous time that egg producers are going through. I hope that perhaps tomorrow, after the Minister makes his statement on the future of British agriculture, confidence will be restored to the industry. All I ask is that the statement will not be by way of Written Answer. We need a full statement in the House so that we can probe these matters. That is just a shot across the Minister's bows. We shall take the matter very seriously if we cannot probe the White Paper which we hope will come tomorrow.
This is a disastrous time for egg producers. Many have gone out of business and others are in serious trouble. At home on Friday and Saturday nights, under both Governments, I have been rung up by various producers moaning about the state of British agriculture. But I have never had so many calls as I have had lately—some even on a Sunday There is no question of crying "wolf". The industry is in a bad state, and we should all be concerned. There used to be a slogan "Go to work on an egg If the loss of egg producers goes on, it will have to be more like" Treat yourself to the luxury of a British egg."
The levy is intended to finance market intelligence, research and development, sales promotion and the marketing of eggs, so this is not a narrow issue. I disagree with the hon. Member for Cardigan (Mr. Howells), who said that it is only the rate of the levy which is at issue. It is not: it is the activities for which the money is to be used. Improving the marketing of eggs is terribly important at the moment. One of the reasons that the French have been able to land their eggs over here is their good marketing system. They have co-operatives and can land eggs of a certain quality. We are not organised like them. We must get our marketing right. If we stay in the Common Market, we must be geared to marketing in the same way, and that means spending money on promotion and marketing. The French co-operatives do excellent work in this respect. The 596 marketing of eggs costs money, but it is essential to the industry.
I believe that Government support for the marketing of British agricultural products has slipped back. When British farmers tried to improve their marketing of pig meat by taking over the FMC, the Government referred the matter to the Monopolies Commission and so put a halt to the marketing of that product.
Are the Government doing enough to help with eggs? There should be no increase in the levy. The Government should contribute more to the fund. When one thinks of the nonsense of food subsidies like that for tea, one is sickened to think how wrong their priorities are. So the Government are not doing enough—but nor are the producers. They probably will not like my saying this, but producers have had their chance. They threw out the Egg Marketing Board. It had its faults and failures, but at least it was organised marketing and could give aids like promotion. I regret that the producers threw it out. We should simply have rectified the mistakes of the board.
I congratulate my hon. Friend the Member for Westmorland (Mr. Jopling) on his new appointment. He made a fair point, that it was fair trading that we required. Whether Tory or Socialist, the Government of the day must learn that if we are in the Common Market we must have fair trading. It is no good this country applying the rules correctly when the other Community members do not. I have made this point many times before in the House, and I shall go on doing so until I am carried out of this place. The Government must insist that everyone plays fair in this matter, and that must include the French. If the Minister says, as he probably will, that there is no evidence, he should ban the import of these eggs until the matter is finally sorted out one way or the other. If the situation had been reversed, the French would not have hesitated to stop English eggs going into their country until the issue had been resolved.
§ Mr. Jopling
I do not want to interrupt my hon. Friend in full flood, but, talking of floods, what he has suggested is precisely the situation with the French over the flood of wine. The French cannot tolerate it, and they put a stop to it in 597 exactly the way that my hon. Friend has described.
§ Mr. Mills
My hon. Friend is absolutely correct. He is improving as he goes along in his new position. We have seen this attitude from the French all along the line. We try to keep to the rules of the game, but the others do not.
I shall say "No" to this order tonight. I hope that the Whips realise that fact. This is no time for the industry to have to pay this extra levy. This is a disastrous time for producers, and the Government have not done all they should to help them. The Government could have paid more money into the kitty for the Eggs Authority to help with the costs of promotion and all its other activities. The Government could have helped by giving a little extra money and cutting out some of the nonsense of the subsidies paid on bread, butter, cheese, tea and the other items, the bill for which runs into hundreds of millions of pounds.
If only we concentrated on giving help where it is needed, to the producers, that would be of much greater benefit to the consumer in the long run. It would be money well spent. Whatever the Front Bench says, whatever the Whips on either side say, I intend to say "No" tonight.
§ 10.43 p.m.
§ Mr. Edward Gardner (South Fylde)
The part of the country that I represent is famous for its eggs industry and it is famous for the number and quality of the eggs that it produces. I can only hope that after the Minister has heard the admirable plea that has come from my hon. Friend the Member for Westmorland (Mr. Jopling) for some improvement in the situation, in future there will be the prospect once more of a prosperous eggs industry in South Fylde in particular, and in the country generally.
May I be allowed to join my hon. Friend the Member for Devon, West (Mr. Mills) in congratulating my hon. Friend the Member for Westmorland on his new appointment and wish him well?
We have all agreed that during the last 18 months the country's egg producers have suffered severely by the import of cheap eggs from the EEC countries at prices below the cost of production. The result is that French eggs have been 598 coming on to the market at 3p and even 4p below the prices of British eggs. There seems no doubt that the French are the worst offenders. The Germans and the Dutch are guilty, so it is supposed, of subsidising egg production. But the French subsidise their egg production by means of an equalisation fund, and it seems to many of us, prompted by those egg producers who are agitated by the results of the subsidies upon the future of the industry, that the subsidies are against the spirit and the letter of the Treaty of Rome.
It is well known that the nine members of the EEC have a production of about 65 million eggs a year from an international flock of hens of 309 million. I do not wish to appear in any way jingoistic or to start waving the Union Jack over the British flock of hens. But the flood of French eggs into this country has nothing to do with the efficiency of the French egg industry. The statistics seem to show that our egg producers are far more efficient than the French producers. In 1973—these are the latest figures that I was able to find—the French, who have 66,300 hens—[An hon. Member: "Million."]—were able to produce only 20,000 tonnes of eggs, while we. with only 47,000—[An hon. Member: "Million."]—hens, were able to produce 864,000 tonnes. With 19,300 fewer hens, we were able to produce 864,000 tonnes.
§ Mr. Gardner
However the statistics are viewed, whether in millions, thousands, multitudes or mean figures, we are far ahead of the French in the efficiency of our egg production.
§ Mr. Geraint Howells
The problem facing the egg producers of this country is not efficiency but unfair competition. The French producers can export into this country, while British producers cannot export eggs there.
§ Mr. Gardner
The figures that I gave came out last week in the European Parliament. They were reported in the way that I gave them to the House. I repeat them again, not to be tedious but in an attempt to achieve accuracy. In 1973, 66,300 French hens produced only 20,000 tonnes of eggs while 47,000 British hens produced 864,000 tonnes. Either that is 599 right or The Times report is wrong. On my feet, and without better guidance, I cannot say whether that is correct, but I can say without hesitation that we have nothing of which to be ashamed in the way in which we produce eggs.
The livelihood of hundreds of people in my area depends on the outcome of the issues we are debating. It seems to me that there is nothing to prevent the British Government now from stopping the trade in French eggs. They could make an anti-dumping application under Article 91 of the Treaty of Rome or Article 136 of the Treaty of Accession. There is nothing to prevent the Government from helping the industry in a practical way by imposing a levy or by providing subsidies for egg producers in this country to help them over the difficult period they are experiencing.
The French apparently say that the use of the equalisation fund is a legal way of subsidising egg producers in France. If they are right, why should not the British Government adopt their argument and apply a similar equalisation fund to subsidise our egg producers? If the Government believe that the French Government are acting illegally, why do they not take the matter up with the European Court of Justice? I am not suggesting that they should do, because we want to get something done immediately. These are actions which the Government could consider and take.
The egg producers, as we all know, are not fearful of fair competition. But they are under the threat of unfair competition. On 6th March many of my egg producers or their representatives came to this House to see me and other right hon. and hon. Members to tell us of their fears that for the first time in many years they would go bankrupt unless something was done to help them. My hon. Friend the Member for Devon, West reminded the House that there used to be a slogan—I sometimes see it still—"Go to work on an egg". The egg producers cannot go to work on the prices they are getting. If they have to put up with unfair competition from the French egg producers they will not be able to go to work at all. They will go bust!
§ 10. 53 p. m.
§ Mr. Ralph Howell (Norfolk, North)
I congratulate my hon. Friend the Member for Westmorland (Mr. Jopling) on his Front Bench appointment and on the vigorous case he has put up on behalf of the egg producers. We are discussing an increase in the levy of the Eggs Authority. I feel much the same as my hon. Friend the Member for Devon, West (Mr. Mills), that increasing the levy is not the answer. The Eggs Authority is not an adequate authority. The reason why the egg industry is in its present state is that the authority has not been doing its job nearly as well as it should have done.
At this point I have to disagree with my hon. Friend the Member for Westmorland. We have also been discussing the Meat and Livestock Commission, another inadequate body. These two organisations are equally ineffective since both sectors of the industry are in deep trouble. We must have something much more adequate and substantial.
We were wrong to abolish the Egg Marketing Board. The egg producers have themselves to blame for not seeing that this would be a retrograde step and for not improving that board. It was not perfect by any means but it could, and should, have been improved. It is impossible to get out of the predicament we are in unless we have some sort of planning in production.
We must think of the size of the laying flock, otherwise we shall for ever have these shortages and gluts which cause so much hardship, particularly to the small man. It is not the Eastwoods of this world who suffer, they can get by. It is the small men who suffer on every occasion, and until we can get some sort of sensible organisation to work out how many eggs we want to produce ideally and what the ideal size of the flock should be, and until we have an organisation which can help to bring about that ideal size of flock, we shall always be in this predicament.
I want to record my appreciation—and I am sure that many people agree with me on this—of the work of Commissioner Lardinois in exerting pressure on the French Government on this matter. Representation has been made through Members of the European Parliament, 601 and some effective action has been taken. I assure the House that M. Lardinois is doing all in his power to create fair trading between member States of the EEC.
Quite a lot of criticism has been made of the French. After listening to my hon. and learned Friend the Member for South Fylde (Mr. Gardner), I was not clear how many hens laid how many tonnes, but it sounded as though our hens did very well.
If only we had as good a Minister of Agriculture as the French have, a Minister who would look after our agricultural and our poultry producers' interests as effectively as the French Government and the French Minister of Agriculture do, we might get somewhere. I think that we should not criticise the French too much for their equalisation idea. This is a logical and sensible idea which we operate in the Milk Marketing Board, and have been doing for many years, with great success.
We must think seriously about production marketing boards in this sphere and in all others. But it is pointless for us to do it in isolation. We should be pressing for the EEC to be thinking of overall production marketing boards so that we do not get these pressures building up between one State and another. We shall always be out of phase if we go on as we are now.
I hope that my hon. Friend the Member for Westmorland will note these points and see the sense of them. It is no use addressing myself to the Government, so I shall address my remarks to my hon. Friend. I hope that when we are back in Government we shall take a more positive line in getting production planning not only here but in the rest of the EEC so that we can avoid these situations which do so much harm to our industry generally and to small producers in particular.
§ 10.59 p.m.
§ Mr. John Cope (Gloucestershire, South)
I shall not detain the House for more than a few moments. My hon. Friend the Member for Westmorland (Mr. Jopling), whom I congratulate on his new appointment, has made the case excellently and explained the position of egg producers, which is as acute in my part of the world as it is in the areas represented by some of my hon. Friends.
602 I have been having correspondence with the Minister on this matter. It has gone on for some time. We have exchanged several letters, and different letters from my constituents have been commented on by the Minister, but so far we seem to be getting nowhere. This has been going on since last summer, and all we have from the Minister is more and more waffle.
The Minister does not seem to realise that, as with everything else in agriculture, there is a time-lag from the time and placing of the chicks to when the eggs start coming on to the market. That is why, in the early stages of something like this happening, the effects are always disguised. This gives the Minister the ability, in a sense, to hide behind the current marketing position. But it is the future position with which we are concerned, and in this case it is the position in six months' or 12 months' time.
I do not see why we should support the order tonight. Producers are being asked by the order to pay more to increase the marketing, advertising and so on of eggs, but this will not increase sales of their own eggs. They will be paying to increase the market for French eggs. When British chick placings are falling, as we know, and when our producers' ability to produce is suffering as a result of the Government's inaction, I do not see why our producers should have to pay more to increase the market for the eggs of other producers.
§ 11.1 p.m.
§ Mr. Patrick Mayhew (Royal Tunbridge Wells)
I should like to follow up the point so eloquently made by my hon. Friend the Member for Gloucestershire, South (Mr. Cope). The greater part of the moneys which are supplied to the Eggs Authority by means of the levy is spent on advertising. But is is generic advertising—advertising the consumption of eggs, and not of British eggs or any particular type of egg. To the consumer an egg is an egg, whether it is an egg that is home-produced or an egg which comes from just across the Channel. Thus the home producer is primarily paying for the marketing of eggs which are produced in competition with himself.
603 Of course, it is not a case of merely the occasional consignment coming to this country. The Minister has said, seeking to minimise the problem, that it is only 850,000 per annum, and that that is only 2 per cent. of British home production. But the significant point about it is surely that the price elasticity of demand for eggs is very low indeed. It is approximately minus 0.1 per cent. That means that if one is going to try to clear a surplus of 2 per cent. of eggs, one has to reduce one's price by 20 per cent. That is the measure of the damage which the import of French eggs at low prices does to the home industry.
Yet it is not uncommon to find perfectly efficient egg producers here for whom a price reduction of even 1p a dozen produces a fall in profit margins of £1,000 a week. There are producers on that scale of business in my constituency. A drop of 1p a dozen in the retail price produces a drop in profit margins of about £1,000 a week—and this is one of the most competitive areas of the agriculture industry.
It is not possible for producers to adjust to these imports because they are as irregular in their timing as they are irregular in the context of Common Market law. From time to time there are no imports coming in at all, and then suddenly 25,000 cases are imported. Even a swing in supply of 5,000 cases can upset the United Kingdom market. It takes weeks and weeks to re-establish the structure of prices which existed before their importation.
I doubt whether the effect is anywhere more damaging in this country than it is in Kent, which is the prime target for these imports at prices which are below the price of production in France. "Dumping" is the right word. They are sometimes 9p per dozen below the cost of production, even in France.
Has the Minister read the recent article in L'Aviculteur which provides very clear evidence of subsidising on the part of the French Government? If he has, what is he proposing to do? What representations have been made by the Government, not through the EEC but directly by the Government themselves? Is it not clear to the Government that the French are using the arsenicals argument as a flimsy excuse to protect their 604 own over-producing industry? If so, what are the Government doing about it? Why do they not threaten the French with applying the criteria in the Swann Report, which ban the use of antibiotics in animal feeds in this country? Why do they not get off their chairs and do something in the interests of the home producer?
The measure of concern in the Labour Party for the problems of the agriculture industry is demonstrated by the fact that there are only two members of that party present in the Chamber. They are both on the Front Bench. I regard it as a disgrace.
I would have thought that this was the last time at which to increase the levy payable by our producers to the Eggs Authority. I am minded to vote against it to draw attention to the lamentable failure of the Government to do anything for their own industry.
§ 11.5 p.m.
§ Mr. Walter Clegg (North Fylde)
I should like to add my congratulations to my hon. Friend the Member for Westmorland (Mr. Jopling). For a Lancastrian to congratulate a Yorkshireman is something and it shows my affection for him. He replaces one of the men I most admire in the House of Commons and, coming from the same stable, I am sure he will be a welcome addition to our Front Bench.
This has been an interesting debate, but I should like to correct the impression which seems to have been abroad that somehow French hens are sexier than British hens. I cannot admit that the French, however sexy, can produce eggs more efficiently than English hens.
It may seem frivolous, but we are arguing tonight that the problem is not the way we produce eggs but the unfair competition we meet.
I should like to follow what was said from the Liberal bench: that we are constantly coming before the Minister with complaints from food producers. The last time I spoke in a debate on food production was about those who produce our fish and they were suffering from dumping, as are the egg producers. What is wrong is that we do not take action fast enough to protect our own industry. Other people do.
605 We heard from the Chancellor of the Exchequer that there would be a great White Paper on agriculture to encourage home production because it will save imports. He has gone a long way on the road to Damascus—I would ask the Minister to tear himself away from the Deputy Chief Whip and the other Whip —and we are told in the advance leak publicity about the White Paper that new incentives are to be given to grass-based products such as milk, beef, cattle and sheep, and that the other item to be singled out will be pork, but we are also told that for some reason eggs are not to be helped. I should like to hear from the Minister tonight in advance of the White Paper that, whatever the Government do, they will not sacrifice the egg industry.
My constituency was at one time the egg capital of the North of England. It is no longer. So many Members on the Labour benches appear to believe that businesses cannot collapse and that producers can go on producing when all the facts and costs are against them. They cannot.
If the Minister goes round my constituency he will see empty places where there used to be poultry. Firms have collapsed. I beg the Minister to take action speedily to prevent that happening over a wider area, because I assure him that it can happen.
§ 11.10 p.m.
§ Mr. Robin Maxwell-Hyslop (Tiverton)
The old Egg Marketing Board collapsed primarily because there were too many other outlets. It was a buyer of last resort on which the producer could rely, but at times of shortage of production many producers preferred to bypass the board and sell direct. In times of overproduction, however, they expected the Egg Marketing Board to be prepared to accept the whole of their output. That is what bust the Egg Marketing Board.
If we are to get back to organised marketing, our industry will have to discipline itself in two ways. First, it will have to place all outlets under the much more direct control of whatever form of egg marketing board there is. Secondly, we shall have to go to a quota system of production. That is what is meant by rationalising production. Unless that happens, the large producers will survive 606 by smashing the small ones. The large ones can command credit, which the small ones cannot, to carry them through when all egg production is loss-making, and they can buy their food on terms which cannot be matched by small producers. So we have to go to a system of quota production, bearing in mind that even without any imports the industry can easily ruin itself by over-production. It is demonstrable that the conditions of trade are not equitable.
I do not know what steps the Government have taken to persuade the Common Market countries to adopt the criteria of the Swann Report, but any veterinary surgeon in England knows—it must be true also on the Continent—that with every year that goes by a substantial number of antibiotics are lost from the veterinary therapeutic armoury through the use on animals, livestock and birds of antibiotics with special therapeutic basis for other purposes. That also has an effect on the doctor's armoury of antibiotics for use on human beings. He does not know what antibiotics have been absorbed by his patient.
Not only should we beware the importation of French eggs which are suspect by reason of antibiotic content. We have every reason, in the EEC's interest as well as our own, to persuade the EEC to abide by the regulations which followed the Swann Report which we in this country have disciplined ourselves to accept.
§ 11.13 p.m.
§ The Minister of State for Agriculture, Fisheries and Food (Mr. E. S. Bishop)
I am sure the House will agree that we have had a useful debate. It is proper for me on this occasion to welcome to the Opposition Front Bench the hon. Member for Westmorland (Mr. Jopling) and to say how much I regret that his predecessor, the right hon. Member for Cambridgeshire (Mr. Pym), is no longer able to fulfil that task. We wish him well in the future and a quick recovery from the illness which caused him to stand down.
The matter we are debating has given many of us in the Ministry as well as in the industry a great deal of concern. I appreciate the feelings which have been expressed on behalf of the industry. My right hon. Friend and I have spent a 607 considerable amount of time interviewing members of the Eggs Authority and the National Farmers' Union and many others connected with the problems which have arisen in the past few months.
I do not want to say a great deal about the contribution made by the hon. Member for Westmorland, except that I feel rather sad that many allegations have been made against the French, who are, after all, our partners in the EEC. Allegations have been made which, on reflection, the hon. Member for Westmorland and other hon. Members would find difficult to justify. It does not help for accusations to be made about unfair treatment by the French, dumping, discrimination, the equalisation fund and the steps which the French have taken.
Having heard the allegations of unfairness and of the procedure adopted by the French, the hon. Member for Devon, West (Mr. Mills) said that we might imitate some of those actions. I do not think that is the way we should talk about the EEC.
§ Mr. Peter Mills
I said clearly that if it had been the other way round the French would have stopped the imports until all the allegations had been cleared one way or the other, and that that is what we should have done.
§ Mr. Bishop
That is a new kind of law whereby we presume that someone is guilty until proved innocent. I do not know a great deal about the differences between French and English law, but I think that it is on us, as members of the Community, to give proof to the Commission, backed up by the evidence of the industry, that the other countries are breaking the law.
It would probably be a good thing for me to say at the start that the matters which have been discussed today have also been discussed by the Commission in Brussels. Mr. Commissioner Lardinois is not unfamiliar with the views that we have put even before the hon. Member for Westmorland, and his right hon. Friend the Member for Cambridgeshire went across to see what they could do about it.
I notice that the hon. Member for Westmorland did not tell us what Mr. Lardinois said about whether or not we 608 were justified in taking unilateral action. We have not had any indication tonight as to what the hon. Gentleman would do if he were in my position. He has not said whether he would have taken unilateral action and banned French eggs. He has not said whether he would have taken action against the French without any proof, although he has indicated that he might have done so.
§ Mr. Jopling
The Minister has asked about the talks that my right hon. Friend and I had with Mr. Lardinois. I should say for the record that at the beginning of the talks Mr. Lardinois asked that they should remain confidential. We issued a statement which no doubt the Minister has seen. As Mr. Landinois asked that the talks should be confidential, I did not think it right to give any details.
§ Mr. Bishop
I appreciate the hon. Gentleman's position and I shall not pursue that point. I do not think it is fair to give the impression that a case was made or pursued over there without telling us what really happened afterwards. I appreciate the hon. Gentleman's situation and his wish to honour the points which Mr. Lardinois may have made to him.
I now turn to the main points of the Prayer. The order specifies the rate of levy which is to be raised for 100 chicks by the Eggs Authority for the 1975–76 accounting period. This is determined in accordance with the Eggs Authority levy scheme of 1974.
§ Mr. Bishop
I appreciate the hon. Gentleman's point and I shall be dealing with it shortly. I ask for the indulgence of the House as I want to answer some of the points that have been raised. I am sure that hon. Members wish to have some replies.
The rate has been specified at E3.01p per hundred chicks, an increase of 17p on the previous accounting period. The point should be made that the cost of the 609 levy to the industry is of the order of only one-tenth of one penny per dozen eggs. At that level I cannot accept that a major burden is placed on producers having regard to the many functions carried out by the authority and the service which it gives to the industry. As I have said, the proposed increase in the levy this year is 17p per hundred chicks, or 6 per cent. It is true that any increase is unwelcome, and particularly, as hon. Members have said, in the situation now facing the industry, but if the authority is to carry out its work effectively it has to have the resources given the present economic climate. I would have thought that hon. Members, including the hon. Member for Devon, West, would have thought that the authority needed more money to carry out the vital role which it performs.
I now refer to some of the functions which the authority undertakes. They include generic advertising, publicity for eggs and market intelligence. The authority provides the egg industry with a market intelligence service through its weekly market report and through its quarterly review. The information includes the number of eggs passing through packing stations, prices in the various stages of distribution and so on. It also relates to research and development. The Eggs Authority sponsors research on working methods and the marketing of eggs. There is also the matter of quality control, and the authority is authorised to submit schemes in respect of quality testing and weight grading. There are also schemes aimed at the improvement of marketing. This is an important matter and has brought results. We must also bear in mind the matter of market support.
Those are only a few of the points undertaken by the Eggs Authority. I urge hon. Members not to divide the House on the order. The Eggs Authority has an enormous amount of work to do both now and in the future, and it needs all the help we can give it.
I wish to emphasise that the Government's contribution is being increased by 30 per cent. over last year's level. Therefore, the Government are undoubtedly making an increased contribution.
I should like now to deal with some other points raised by hon. Members in the debate. Clearly the debate takes place 610 against a background of pressure from the industry for the Government to take action against imports of eggs, particularly from France, which the industry alleges are responsible for the low prices on the United Kingdom market. Producers have undoubtedly had a difficult time in the last year or so.
The hon. Member for Westmorland referred to the report of the Eggs Authority for 1972–73, when, of course, the Labour Government were not in power. I do not make this as a party point, and I wish only to emphasise that the present position has not come about only in the last year. That report said:During 1971/72 returns to the producers had been constantly below the cost of production and this depressed market state continued unabated almost throughout the 1972–73 year. Even those periods such as the October/November quarter of 1972 when egg prices increased there was no real improvement in the earnings of producers due to the parallel steady increase in costs of production—caused mainly by escalating feed prices.Therefore, the picture has been very much the same over a long period of time.
Let me deal with some of the recent problems in the industry. Allegations have been made in this debate, and in the country as a whole, about the French. It is useful to put some facts on the record. I think it can be said that in the past few weeks the market has firmed up and prices have risen by 5p per dozen. The average producer should receive prices above his costs of production.
In view of the statements which have been made about imports and exports of eggs, we should try to get the facts straight. In February egg exports were higher than in the previous year, while imports were running at a much lower level—namely, at a figure of 42,000 boxes compared with 70,000 boxes. In that month total imports amounted to 42,000 boxes compared with exports of 46,000 boxes. It must be borne in mind that a unilateral ban on imports might well bring a similar ban in other EEC countries which would not be in the national interest. But I assure the House that the situation will be closely watched.
I appreciate the difficulties in a situation of over-production at home and in France. This has been the real cause of the trouble. We have taken steps with the Commission to see what can be done about the situation. In regard to 611 the current position, Ministers and officials have been in close touch with the industry and the situation in the egg market has been closely examined.
There has been pressure for a ban on imports. However, as I said earlier, the market is firming up at the moment. It is worth noting that exports in the last month have been greater than our imports.
I should like to refer to Article 135 of the Treaty of Accession which has been mentioned in the debate. That provision refers to action by member countries if there are features which may distort the pattern in the industry. This matter has been carefully considered and information has been submitted by the industry. I am not persuaded that we could put forward a case which would satisfy the provisions of that article, especially since the markets have been improving in recent weeks. Mr. Lardinois recently made it clear that he saw no evidence that French eggs were being dumped on our market. He sees no case for closing the market to imports from other countries. That was not a rejection of a request for action by the Government, because no such request was made. It is consistent with our judgment. There are at present no grounds on which seeking to ban imports would be justified.
I now refer to an article in the Financial Times of 11th April 1975, which states:A call for fresh Common Market action to safeguard the economic position of the egg producers in the UK and elsewhere was rejected by Mr. Pierre Lardinois.…Replying to a request from Mr. James Scott-Hopkins of the Conservative group, Mr. Lardinois reiterated his view that the controversial shipments of French eggs to Britain were no more than an adjustment of the EEC egg trade to Community enlargement.On the matter of the French action and subsidies, the French Government's recent measures to help the egg industry in France have been designed to relieve the pressure of supplies on their own and other Community markets, including the United Kingdom. The French hope that the culling of 2 million hens will cut production by about 5 per cent., and they have said that a further loan to the producers' price equalisation scheme carries the condition that producers should prepare schemes to control production. That 612 is another factor, because the French have been accused of subsidising their industry. If they are using some of the cash to cull 2 million hens, that will be helpful to us.
I assure the House that the Eggs Authority is holding discussions with representatives of the French and that the NFU has spoken to the French unions. Those exchanges seem to reveal agreement on the need for further discussion of measures required in the medium and long terms to assist and bring stabilisation into the Community.
The question of arsenicals has been raised by hon. Members. Agreement has been reached to ban the use of arsenical compounds in the feeding and rearing of poultry used for commercial egg production. The feeding stuffs trade has been consulted and accepts the ban. The licences issued by my Department have been altered so that this use is no longer lawful. I have informed the French Government so that, in accordance with the assurance already given they will allow United Kingdom eggs free access to their market. That is an important point, because I know that hon. Members have urged that we take action to allow the export of our eggs to France by complying with the requirements regarding additives.
As regards the Eggs Authority, the 1968 report led to the changes in the Egg Marketing Board. The hon. Member for Norfolk, North (Mr. Howell), among others, was concerned about the structure of the industry. By agreement in 1972 the Eggs Authority took over from the Egg Marketing Board. Therefore we now have a free market in eggs. That is a matter of concern to the board and to the industry, and it is important that the steps which we take should be as effective as possible.
Regarding the task of the Eggs Authority and attitudes to the authority, the Minister of Agriculture in the former Tory Government reviewed the Eggs Authority in the autumn of 1973 before deciding that it should continue in existence after March 1974. After consultations with interested organisations, it was announced that the authority should stay in being subject to satisfactory financing arrangements being worked out. The point which I have made is relevant to that situation.
613 I remind hon. Members of the comments made by my right hon. Friend the Chancellor of the Duchy of Lancaster when speaking on behalf of the United Kingdom in the declaration on the treaty, when, referring to eggs, he said:The enlarged Community will be self-sufficient in eggs so that prices are likely to be determined by internal market forces rather than by the operation of measures at the frontiers.It being half-past Eleven o'clock, Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 4 (Statutory instruments, &c. (procedure)),That an humble Address be presented to Her Majesty, praying that the Eggs Authority (Rates of Levy) Order 1975 (S.1., 1975, No. 273), dated 27th February 1975, a copy of which was laid before this House on 11th March, be annulled.The House proceeded to a Division; but no Member being willing to act as Teller for the Ayes, Mr. DEPUTY SPEAKER declared that the Noes had it.
§ Question accordingly negatived.