HC Deb 09 November 1977 vol 938 cc677-85
The Minister of Agriculture, Fisheries and Food (Mr. John Silkin)

With permission, Mr. Speaker, I should like to report on a recent meeting of the Council of Agriculture Ministers.

The Council met in Brussels on 7th and 8th November when I was assisted by my hon. Friends the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food and the Under-Secretary of State for Prices and Consumer Protection.

There was a first discussion of a Commission proposal to phase out monetary compensatory amounts over the next seven years and of the Commission's report on the possibility of replacing the present unit of account on which MCAs are based by a different basis, the European unit of account. The Commission's report concluded that in principle the EUA was the right unit to use but that there are a number of possible common price levels at which the present differing national prices could be realigned. I hold the view that a decision on the right price level must precede any decision on phasing out MCAs.

I reminded the Council of the problems which continue to face United Kingdom pig producers and processors because of the unfair calculation of MCAs in this sector. I obtained an assurance that the Commission would come forward as quickly as possible with the result of its study into trade distortions resulting from MCAs for which I pressed at earlier Councils.

The Council agreed that the special arrangements under which 27,532 tonnes of beef are imported without duty and with special reduced levies from the beef exporting countries which are signatories to the Lomé Convention should be continued for a further year. I welcome this. The Commission is still considering Botswana's request for an increase in her levy-reduced quota for this year which we continue to support.

The Commission reported on proposals for expenditure derived from the milk co-responsibility levy, including a contribution to an expanded school milk programme and greater emphasis on promotion and advertising. We emphasised the need to encourage the consumption of milk and milk products within the Community rather than relying on heavily subsidised sales to third countries.

The effects of the reduced apple crop in Europe this year were again examined by the Council and it was decided that the common customs tariff should be reduced by almost 60 per cent. until 31st January next. An equivalent reduction will be made in the tariff applied in the United Kingdom.

The Council considered a French request for a small derogation from the ban on the catching of North Sea herring, and agreed that coastal fishermen at certain ports between Etaples and the Seine should be permitted to catch 600 tonnes of herring, provided that their boats were of 30 tonnes or less and used drift nets only. The Council also agreed that a technical study should be carried out to see whether a more general derogation limited to small boats should be introduced.

Mr. Peyton

May I ask the right hon. Gentleman, first, whether he agrees that the present level of MCAs is enabling a flood of artificially cheapened imports of butter, pigmeat and beef to come into this country, thereby doing great damage to the livestock producer and undermining confidence? Does he agree that he has been talking about this matter for long enough, that the time has come for action, and that he should consider a measure of devaluation of the green pound? I suggest that 7½ per cent. is about the necessary level now.

Secondly, is the right hon. Gentleman aware that whilst I agree with him that the European unit of account is probably the more appropriate one, I do not agree that the issue of settling the MCAs must await the settlement of this other problem?

Can the right hon. Gentleman give the House an assurance that our producers here are receiving equal treatment with those elsewhere as regards the co-responsibility levy? In particular, can he say whether finance for promotion here will be available from this source in the New Year?

I am obliged also to ask the right hon. Gentleman why he could not make some more substantial reference to the problems of the fisheries industry? His reference today has been only on the very edge of this extremely serious problem. Perhaps he would like to take the opportunity today to confirm that he is still looking for a 50-mile management zone for this country.

Finally, will he, at some time, take an opportunity to fill in the large gaps left in his statement, which makes no reference to sheepmeat, potatoes or the price of milk, the last issue having been left unsettled for far too long?

Mr. Silkin

With regard to the fifth of those questions, I made no reference to sheepmeat, potatoes or the price of milk because it is my duty, and my pleasant duty, to inform the House of what took place at the Council of Ministers. As none of those three topics was discussed, it seemed a little superfluous even to mention them.

With regard to the fishing industry, what has happened— and I think that it is more sensible than what has taken place in the past—is that there is a separate fisheries council. There was a meeting about a fortnight ago and there will be another one in a month's time. In general, I do not think it a good thing that agriculture and fishery questions should come together because, on the whole, there is a roughly equal distribution of agriculture Ministers who are also fishery Ministers, but one has to bring in different fishery Ministers from the other countries, and it is very confusing.

The point about this particular Council was that we had to discuss the question of a French derogation on herrings because it was an urgent question. It was therefore put to the Agriculture Ministers when it might, for example, have been put to the Council of Foreign Ministers. I do not think, therefore, that it is apposite at this moment to go into what will in fact be the main discussion—the common fisheries policy on 5th and 6th December when we come to discuss the whole fisheries question and have two days on that.

I turn now to the other points made by the right hon. Gentleman. He wants me to devalue the green pound now because the present level of MCAs is too high and causes cheap food to come into this country. At least, as I understand it, that is what he says. It seems to depend a great deal on the audience to whom he is speaking. When he is speaking to the producers, he is all for much higher prices for them. When he is speaking to the consumers, he wants to keep prices down. Perhaps I can find a way round for him. If he cares to study it, he will see that the National Food Survey shows the interesting fact that when the price of commodities—I am thinking particularly of meat and butter—goes up, the consumption goes down. That is not good for the producer, and it is not good for the country.

The answer to the question of the devaluation of the green pound is that I have never made this a matter of theology. The green pound will be devalued or not as the national interest, and only the national interest, dictates.

With regard to the European unit of account, the EUA. I think that I have adopted the right basis on this. If the right hon. Gentleman cares to study the Commission's report—which has only just become available, as perhaps the right hon. Gentleman knows—he will find in, I think, paragraph 14, that the Commission says that the present unit of account—the present green currency —is unrepresentative because it affects the snake currencies—that is, it says, 37 per cent. of agricultural products and 35 per cent. of population. Why therefore, it should be so willing to have continue for another seven years a system which it regards as unrepresentative is beyond me.

The right hon. Gentleman asked about the co-responsibility levy. Belgium has said that it will sign, and that is all right. There arc certain areas in Italy representing a very small proportion where, for one reason or another, it appears to be extremely difficult to collect the co-responsibility levy—where one man is looking after a buffalo or a goat somewhere in Southern Italy, for example. The Council, having listened to the case, was fully persuaded of it.

With regard to promotion, I hope that that will start in the New Year.

Several Hon. Members


Mr. Speaker

Let me tell the House that I must be fair to those who arc anxious to speak in the major debate which will follow today. I hope that right hon. and hon. Members who are called will be as brief as they can, because we cannot allow the normal time for questioning today.

Mr. Grimond

Is the Minister aware that there is still anxiety in the North of Scotland over the price of store cattle? This is due, partly at any rate, to the valuation of the green pound. Can he hold out any hope of action in the near future?

Secondly, I am sure that he will not be surprised to know that I feel I must make some protest about the exception for herring fishing for the French. When I asked for an exception for Shetlanders, I was told that all exceptions were quite impossible. If exceptions are to be made, the Shetlanders have an extremely good case. When it comes to further exceptions, will he take into account not only small boats hut also those who want a small allocation for their processing industries?

Mr. Silkin

With regard to the first question, on cattle, I am persuaded that, at the moment, conditions are reasonably all right for beef, because we needed in any event to import a large quantity of beef as it was in short supply. I agree with the right hon. Gentleman that matters may look different in the New Year, and I shall watch the situation carefully.

The derogation in favour of the French is limited—this was the basis on which I agreed to it—to the very small French drifters out of the area between the Seine and Etaples. The Commission has promised to consider making the Seine derogation. I know that it affects, for example, a couple of boats in the Western Isles—and I had that as much in mind as anything else—and also the East Anglian fisheries. All those need to be considered. We are not talking about a large tonnage. In the Shetlands, alas, there are much bigger boats and much bigger tonnages.

But the conditions that I imposed for agreeing to the derogation are of some importance in the general fishing strategy. The first was the acceptance by the Council—and the Council did accept it—that only the coastal State was in a position to undertake the enforcement of conservation within its coastal waters. That was an important factor. I underlined it twice. I found, instead of the usual antagonism, smiles from the French and, indeed, from others of my Council colleagues. So we can take that as a reasonable principle.

The second basis was that if, by some chance, which I did not believe would happen and was assured would not happen, French or any other fishing boats came looking for herring within our waters, they would be treated with the utmost severity, as so many others have been during the past 10 months.

Mr. McNamara

The Minister will be aware that many of us are concerned about education and school milk. Can my right hon. Friend give the House more information? Can he say whether his colleagues in the Cabinet support the extension of the school milk principle to those children who were deprived of milk under successive Labour and Tory Governments?

Mr. Silkin

It is rather difficult at the moment to go into the details of this, because they are not altogether clear. However, what seems to be clear is that at least £15 million—translating the units of account into present currency—will be available for an expansion of the school milk programme throughout the Community. I say "at least "; it could be more. It is rather unclear at the moment. What the United Kingdom's share of that would be has not yet been stated. All these factors will have to be looked into, obviously, when we know what the exact facts are. But it may be a little while before we do.

Mr. David Price

What comfort can the Minister offer to British pig producers as a result of his statement, when he knows from the Meat Livestock Commission that the average losses of the most efficient farmer at the moment are more than £2 a pig?

Mr. Silkin

The only comfort that I can offer the pig producer at the moment is that, fortunately, feeding stuff prices have fallen quite considerably since last year, as the hon. Gentleman knows, and therefore he is benefiting from that. In addition, pig prices have risen, and he is benefiting from that.

As for the calculation, there is a slight degree of comfort. When I raised the matter—because I had been promised that it would be on the agenda in October —I had the full support of the French and Italian delegations and more than a hint from the Commission that it was looking very seriously into the calculation.

Several Hon. Members


Mr. Speaker

I propose to take two more questions from each side.

Mr. Jay

When will the Government bring forward the major proposals for reform of the common agricultural policy which were promised in the Prime Minister's interesting letter?

Mr. Silkin

I think that we have made a considerable start on this. The basic, immediate fault—no doubt there are others, and they will be dealt with in due course—is the very high common price level within the Community. We have been making a very strong effort on this, and it seems to us that we are getting some support not only from the Commission—which is now using very nearly the same language as us ; we should like it to go a little further, but it is coming closer—but also, rather surprisingly, in accents of a different character from inside the Council of Ministers itself.

Mr. Powell

Reverting to herring, will the right hon. Gentleman use the emergency derogation which has been accorded to French small boat fishermen in order to secure something this year, and not—as I know he already intends —next year, for the Mourne fishermen, who are, so far as one can tell, in exactly the same position?

Mr. Sikin

I am sorry that I omitted the Mourne fishermen in talking about the small boat fishermen in the United Kingdom. Frankly, we are not really talking about a large degree of tonnage. That is why I believe that it will be found possible to make some concession to the small boat fishermen. I should like to do that, but I must be bound—and that must be the view of the United Kingdom on this—by what the scientific evidence tells us. My own feeling is that the scientific evidence will probably tell us that there is not a great deal of harm in making this derogation.

Mr. Tomney

Has the Minister been able to make any progress with the EEC about our meat manufacturing and bacon curing industries which are in a very serious position at the moment and which will, if action is not taken, suffer considerable redundancy of workers?

Mr. Silkin

In many ways, the bacon processors, in particular, are now in a worse position than the pig producers. They are being squeezed by higher prices and their own difficulties in competition with imported products. I accept that fully. That was why I introduced the question of the calculation of pigmeat MCAs and why I intend to see that we move towards it again at the next Agriculture Council meeting.

Mr. Watt

I recognise that the Minister has fulfilled his role as Minister of Agriculture, Fisheries and Food to the full, but does he nevertheless acknowledge that he is doing permanent damage to the pig-breeding and the beef-breeding herds which are at this moment being sold off? Will he not, even at this late stage, adopt the suggestion that I put to him some time ago and devalue the green pound by 1 per cent. per month?

Mr. Silkin

In the first place, I must tell the hon. Gentleman that I do not accept what he said. It is a very difficult job being the Minister for agriculture, fisheries and food and keeping the balance between the lot. But I do not think that there is quite as much of a contradiction as the hon. Gentleman thinks between seeing that food is produced at a reasonable price and looking after the consumers' interests in that way, as well as looking after the producers' interests. As for his suggestion about a 1 per cent. devaluation of the green pound based on a unit that the Commission says is unrepresentative and applies to only 35 per cent. of the population of the Community, if we take the EUA we are only 12.1 per cent. away from the norm, whereas the Germans are 23 per cent., and that seems to me to be absolutely ridiculous.