HC Deb 17 July 1980 vol 988 cc1740-3
9. Mr. Dormand

asked the Minister of Agriculture, Fisheries and Food if he is satisfied with progress which has been made towards reform of the common agricultural policy.

Mr. Peter Walker

In both price fixings since we took office agricultural support has been reduced in real terms, and this represents progress towards reform. Added to that, the new sheepmeat regime is the first occasion on which the Community has decided to go in for a deficiency payments system. I believe that, too, is a welcome reform.

Mr. Dormand

Is the right hon. Gentleman aware of the increasing anger in Australia and New Zealand about the effect of the EEC's farm policy on the economies of those countries from which we have had great support in the past? Is he further aware of the threats of retaliation from those two countries, not least on the export of uranium? Is not this yet another example of this crazy system? If he cannot change it fundamentally, is it not time that we withdrew from it completely?

Mr. Walker

The New Zealand and Australian positions are rather different. Australia has always negotiated toughly on all trade bases. It is not unknown for Australia to have protectionist policies for its own benefit. Therefore, it is understandable that it should have spoken out as it has in this sphere.

It is important that Western Europe should not take actions which destroy the economy of New Zealand. That is why we agreed only to a sheepmeat regime which was subject to New Zealand having a satisfactory agreement. I hope and believe that there is every possibility of New Zealand obtaining a satisfactory agreement.

Mr. Dykes

As there is a coefficient of 50:1 between retail prices in this country and their rate of rise and intervention price fixing in the CAP, is it not unfair to blame all our troubles on CAP price increases?

Mr. Walker

Over the past year inflation on non-food items has been 24 per cent., but on food items as a whole it has been only 14 per cent. and a minor part of that is the increase in CAP prices. Over the past two years CAP prices have been a stabilising influence.

Mr. Spearing

Did the Minister note the remarks of his right hon Friend the Lord Privy Seal yesterday to the effect that the Government would be putting forward their own proposals for the financial restructuring of the Common Market's funds? What contributions will the Ministry of Agriculture make, what proposals will be made and will the right hon. Gentleman publish them?

Mr. Walker

They will be the usual lively, progressive sensible proposals that we make on all such occasions, and we shall be only too proud to publish them.

Mrs. Kellett-Bowman

Does my right hon. Friend agree that, now that Germany is the largest paymaster in Europe, it will be his strongest ally in seeking further reform of the common argicultural policy?

Mr. Walker

Yes. The reform of the budget means that we do not have eight beneficiaries and one paymaster, and that brings about a considerable change in attitudes.

Mr. Heffer

Is it not time that the right hon. Gentleman and his right hon. and hon. Friends told the people the truth about the financing of the Common Market—that 1981 is bound to be a crunch year, that the Common Market will be in a great financial crisis, and that, unless something is done about the CAP and the whole question of financing the Common Market, we shall be in trouble, and so will the Market?

Mr. Walker

I believe that the success that we have had in price restraint in the last two price fixings, coupled with going over to deficiency payment schemes, is a considerable contribution. Most important, as my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) has just mentioned, now that the cost of the CAP is more equally borne by other countries that will enable us to make more rapid progress.

Mr. Budgen

Will my right hon. Friend explain how it will be possible to reform the CAP in such a way as to reduce the Community budget, except by allowing farm prices to fall in real terms?

Mr. Walker

One of the important factors is the degree to which, for example, the problem of financing the Community's surpluses is borne, not on the CAP but by the national Governments responsible for producing those surpluses. A move towards that principle would be very helpful.

Mr. Mason

Is not the right hon. Gentleman aware that the sheepmeat regime is creating uproar in the Commonwealth? He has already been made aware during Question Time that Australia is angered and talking of trade war, and that New Zealand is in the throes of concern, fearing a cutback in not only its lamb exports but butter exports. What exactly is the proposal that Gundelach has taken to New Zealand, with the right hon. Gentleman's agreement, that is causing so much anger in Australia and New Zealand?

Mr. Walker

The telegrams from New Zealand that I have seen, and the reports this morning, in no way vindicate what the right hon. Gentleman has just said. In fact, the Prime Minister of New Zealand welcomed Mr. Gundelach's visit and suggested that he had come with constructive proposals. The right hon. Gentleman is surely reporting only the remarks made by one Australian Minister, and not the New Zealand position. I hope that out of the negotiations a satisfactory arrangement for New Zealand will be made. If it is not, there is no sheep-meat regime. That is the strength of our position.

Mr. Mason

Does the right hon. Gentleman think, because of his alleged telegrams saying that the Prime Minister of New Zealand welcomed Mr. Gundelach, that next Tuesday at the Agriculture Council meeting he will secure agreement on a sheepmeat regime?

Mr. Walker

I do not know in detail what talks are going on today. I would very much hope so, because I believe that what is on offer to New Zealand safeguards its exports of lamb to Europe and gives it a dairy products quota which, as a result of the previous Government's renegotiation, it would not otherwise have had.