HC Deb 17 February 1977 vol 926 cc692-4
11. Mr. Newton

asked the Minister of Agriculture, Fisheries and Food what assessment he has made of the early results of the temporary subsidy for pigs.

Mr. John Silkin

Pig prices in the two weeks after the subsidy was introduced were on average much the same as they had been in the last two weeks of January. The addition of the subsidy means that producers' returns were substantially increased. This should encourage producers to keep up their pig numbers whilst discussions on the question of reducing the monetary compensatory amounts in this sector continue.

Mr. Newton

Will the right hon. Gentleman tell some of his hon. Friends that it cannot be in the interests of consumers, any more than of producers, to do the damage that was done to the pigmeat sector, or to leave it in the state of insecurity in which it lives by means of a temporary expedient? Will he accept that it is therefore in everybody's interests to have a partial revaluation of the green pound if that will help to achieve the recalculation of mcas and to restore confidence to British farming?

Mr. Silkin

The hon. Gentleman's question is undoubtedly meant to be helpful, but it is not as helpful as it might be in terms of the negotiations. On the general proposition he advances, it is right to say that our producers have faced a totally unfair and inequitable method of calculating mcas which has injured them. I take that to be common ground. The hon. Gentleman was right to say that the subsidy which came into effect a fortnight ago was a temporary expedient. The real question involves the recalculation of pigmeat mcas. The mere devaluation of the green pound within the limits envisaged by the hon. Gentleman would make no difference because it would put up the price of feeding stuffs by the same amount. I refuse to make that a bargaining counter in getting what I believe to be the fair and just basis on which pigmeat mca calculations should be made.

Mr. MacFarquhar

Will my right hon. Friend discuss this matter with the pig farmers, who largely assert that the effect of the temporary subsidy has already been wiped out by falling market prices? Will he also say when he hopes to move from this temporary policy, however welcome, to a more permanent régime?

Mr. Silken

I am ready and always have been—indeed, I put forward proposals as long ago as last September—to seek a fair and just method of calculating pigmeat mcas. That remains the case. The moment we can do that we can look at the need for temporary expedients of one kind or another.

My hon. Friend is wrong to believe that the subsidy does not go to the producers. The basis of the average price of pigs in the week before the subsidy was introduced was 68.09p per kilogram, and last week the figure was 68.05p per kilogram. This means that the average returns are up by virtually the full amount of the subsidy—that is, 5.5p per kilogram.

Mr. Peyton

Now that the effect of the short-term expedient has been totally exhausted, what does the right hon. Gentleman intend to do to give pig producers some confidence in the future of their industry?

Mr. Silkin

The right hon. Gentleman must have been so busy thinking up that supplementary question that he did not listen to my answer. I tried to point out that virtually the whole of that subsidy has gone to the pig producers. That is evident in the price, and the right hon. Gentleman cannot argue with that.

When the right hon. Gentleman says "This is only a temporary expedient, so let us get something going", I must remind him that the only movement in pigmeat mcas across the Channel took place as a result of my intervention and resulted in a change of 8 per cent. last November. I hope and believe that we shall get a more sensible and just method of calculating mcas, and I believe that the Commissioners and our partners in Europe are ready for it.