HC Deb 18 January 1978 vol 942 cc439-41
12. Mr. Monro

asked the Secretary of State for Scotland if he is satisfied that hill and upland farmers have received a fair financial return during 1977; and if he will make a statement.

Mr. Harry Ewing

As indicated in the annual review White Paper, published last week, average net incomes on hill sheep and upland rearing farms in Scotland are estimated to have gone up by 43 per cent. and 16 per cent. respectively in 1976–77. Further increases are forecast for 1977–78.

Mr. Monro

Is the Under-Secretary of State aware that the staggering increase in the costs of production of beef on hill and upland farms far outweighs any profit on sheep? Is he further aware of the grave damage done to farming generally in Scotland and throughout the United Kingdom by the Government's failure to devalue the green pound?

Mr. Ewing

Many interests have to be balanced before a decision can be taken on the devaluation of the green pound. It is worthy of note that the Government have devalued the green pound on numerous occasions, and will no doubt do so again, but only in the interests of the nation as a whole.

Mr. Canavan

Does my hon. Friend agree that many of the difficulties faced by farmers stem directly from our membership of the Common Market? Instead of listening to the Tories and the SNP, who are calling for a huge devaluation of the green pound, which would have a massive inflationary effect on food prices, would it not be better to scrap completely the common agricultural policy and revert to a system of deficiency payments which would ensure a fair price for both the farmer and the housewife?

Mr. Ewing

In my usual fair and generous manner, the best that I can say to the farmers is that they seem to have some slight misunderstanding of the effect of the common agricultural policy.

Mr. Grimond

I should like to associate the Liberal Party with the tributes that have been paid to our colleague who died so tragically this morning.

In addition to the need to devalue the green pound, have the Government any plans to increase the bill livestock compensatory allowances? This has been a poor year for cattle sales in Orkney, and this seems to be the only way in which farmers might get a fair price.

Mr. Ewing

The whole economic position of the hill and upland sector is being examined in the annual review of one agriculture industry. The results of that review should not be anticipated. The point made by the right hon. Gentleman will be taken into consideration.

Mr. Welsh

Does the Minister agree about the importance of sheep farming in maintaining hill and upland farm viability? What estimates have been made of the effect on agriculture in Scotland of the French and Irish sheepmeat deal? What steps will be taken to expand Scottish sheepmeat trade with EEC countries?

Mr. Ewing

I accept the importance of sheep farming in maintaining the viability of these mixed units.

I will consider the other specific matter that the hon. Gentleman raised, and write to him about it.

Mr. Buchan

Further to the point raised in the first supplementary question, may I ask whether it is not the case that there is a general problem facing hill and upland areas, much of it derived from high feedstuff prices, which in turn arise directly from our unprincipled entry into the Common Market undertaken by the Tories? Does my hon. Friend not agree that, rather than going for mass pressure and mass capitulation to this unprincipled demand for the complete devaluation of the green pound, it would be much more sensible to give a direct injection of capital and increase the hill calf subsidy? Will my hon. Friend give urgent attention to another point that has been raised in this exchange, namely, the French-Irish deal on sheepmeat, which is coming close to breaking the spirit if not the leter of the Rome Declaration?

Mr. Ewing

I have given a specific undertaking to the hon. Member for South Angus (Mr. Welsh) that I will look in detail at the points he has made. I recognise the economic difficulties being suffered by hill and upland farmers. Their position is being considered in the review of the agriculture industry, but I must ask for the indulgence of the House when I say that I cannot anticipate the outcome of that review.

Mr. Younger

Is the Minister aware that, due to soaring costs of all kinds, there are many Scottish farmers who will be expecting a net reduction in their income in the coming year? Will he bear in mind that while the rest of the population is busy squabbling about whether they will get a 10 per cent. increase this is not the case for the farmers? Should not the farmers at least be dealt with on the same basis?

Mr. Ewing

That supplementary question does not lead me to the view that many farmers will suffer a net reduction in their income in the coming year. The forecast that I gave to the House was that farmers will have an increase in income this year, although some farmers in various sectors might have some difficulties. It is this aspect which is being examined.