HC Deb 19 January 1978 vol 942 cc652-4
10. Mr. John Ellis

asked the Minister of Agriculture, Fisheries and Food if he will make a statement on the present situation on monetary compensatory amounts, particularly with reference to the pigmeat situation.

12. Mr. Molloy

asked the Minister of Agriculture, Fisheries and Food if he will make a statement on the latest situation in the pig and pigmeat product industry.

Mr. Bishop

Pig producers' returns have improved in recent months. Pig prices have risen and feed costs have fallen. Higher pig prices have, however, brought difficulties for the curing industry, which has to compete with imports benefiting from unfairly high monetary compensatory amounts. The European Commission's report on the distorting effects of MCAs should be submitted to the Council of Ministers later this month. Naturally, I hope that this report will support the belief held by my right hon. Friend and me that the way pigmeat MCAs are calculated must be changed.

Mr. Ellis

Does my right hon. Friend accept that, short of giving his right hon. Friend the almost impossible task of making sense out of the common agricultural policy, it should be made clear to the Opposition that it does not help the pigmeat industry in particular or our national aspirations overall to revalue the green pound? We know that he has to do a deal, but his negotiating posture should be to give as little as possible on the green pound and to maximise the amount that he can get on renegotiating the MCAs.

Mr. Bishop

I think my hon. Friend is correct. He will recall that over a year ago my right hon. Friend secured an 8 per cent. change in the MCAs, and he has used the green kroner devaluation to get assurances from the Commission. We are hopeful that in the near future we can press successfully for a recalculation.

Mr. Molloy

Is my right hon. Friend aware that this issue affects not only the farmers but the pigmeat industry as well? Many of us recognise his dilemma, that if he wants to help the farmers he has to hurt the housewives—which did not apply under our guarantee system—but this is only another vicious by-product of our being a member of the EEC. Nevertheless, could my right hon. Friend outline in some detail what is being done to help the farmers and what progress, if any, he has achieved in trying to obtain changes in the MCA system?

Mr. Bishop

I appreciate my hon. Friend's interest in this subject, and it is true that my right hon. Friend has considered the interests not only of the pig producers and the industry but of consumers as well. In reply to his question about how we have used the Community system to help farmers, I can tell my hon. Friend that, in addition to the 8 per cent. change, there was the 3 per cent. change last year in the green pound devaluation, there was the assurance on the green kroner devaluation, and, of course, the subsidy of £17 million helped the industry, which would have been very much worse off had we not got that. These factors should be borne in mind.

Mr. Torney

On a point of order, Mr. Speaker. Has the Minister noticed that, if he had looked a little further down the Order Paper—

Mr. Speaker

Order. That is a wicked waste of time.

Mr. Watt

When the Minister makes his statement, will he preface it with his belief that no amount of tinkering with MCAs or green currencies will ever really work and that the only answer is to scrap the common agricultural policy and return, as the hon. Member for Cardigan (Mr. Howells) said, to a system of deficiency payments?

Mr. Bishop

My right hon. Friend is facing reality in this situation, and he has pressed quite firmly over a period of time for a review of the MCAs. I believe that the country should keep this issue in perspective, because, as our annual review says, apart from the modest improvement as a result of better prices and lower feed costs, there are encouraging signs of a modest expansion of the breeding herd in the coming year.

Mr. Body

Is the Minister aware that what has plunged pig producers into their present state of gloom is the appalling increase in the price of feeding stuffs—from about £25 a ton to £110 a ton in the space of four years? The main reason why this has come about—he realises that feeding stuffs—

Mr. Speaker

Order. Will the hon. Gentleman ask a question rather than give information?

Mr. Body

The main reason, is it not, is that import levies are now having the effect of taxing them by 58 per cent.?

Mr. Bishop

I accept some of the hon. Gentleman's submissions in this respect. It is quite true that the unfair payments which are being made to Holland and Denmark, in particular, on the export of their products are causing severe competition to our own industry. But we agree that the best way to tackle this is by selective action in relation to MCA devaluation.