HC Deb 13 March 1980 vol 980 cc1535-7
5. Mr. Newens

asked the Minister of Agriculture, Fisheries and Food if he is yet satisfied that the competition faced by the British pig industry within the EEC is fair; and if he will make a statement.

Mr. Buchanan-Smith

By three devaluations of the green pound last year the Government have improved substantially the competitive position and prospects of the United Kingdom pig industry.

Mr. Newens

Does the Minister recognise that his policy has utterly failed to stop the sharp decline in the price of pigmeat since December? Will he further recognise that forecasts indicate that the price will continue to decline, together with the size of the pig breeding herd, unless some drastic action is taken immediately? Will he seek to introduce grants and to recalculate MCAs to provide the same basis for pigmeat as exists for cereals if he wants our efficient industry to survive against the totally unfair competition which it is forced to stand up to?

Mr. Buchanan-Smith

I ask the hon. Gentleman to recognise that the slight weakening of the market in recent months reflects a seasonal trend. Secondly, all those who have to forecast the state of the pig market forecast a stronger market for the end of the year. Thirdly, under the previous Labour Government MCAs were £231 a tonne 12 months ago compared with nil today.

Mr. Hill

Is my hon. Friend aware that it is not merely a matter of MCAs? Another factor is the lack of profitability for the pig farmer due to the cost of feedstuffs from the wholesale merchants. Is he convinced that the price of feed-stuffs to the pig farmer is controlled? Is he aware that there have been several price increases over the past few months?

Mr. Buchanan-Smith

I ask my hon. Friend to recognise that figures from the Meat and Livestock Commission, which carries out costings, indicate that the pig industry has returned into profit in recent months. Secondly, I ask my hon. Friend to recognise that when we obtained the latest devaluation of the green pound on pigmeat, the devaluation on cereals—which is the main input of pig producers—was delayed until the beginning of the cereal year, namely, at harvest time this year. To that extent pig producers have another advantage that was not available to them previously.

Mr. Needham

In the light of unfair competition facing pigmeat processors, do the Government have any plans to make finance available, either through the EEC or through other sources, to help the industry reinvest? Does my hon. Friend agree that the main cause of the unfair competition was the failure of the previous Labour Government sufficiently to devalue the green pound?

Mr. Buchanan-Smith

I am grateful to my hon. Friend. In some areas— not least in his constituency—there are problems for processing firms. There is, before the Council of Ministers, a structures package in which there is a sum of money available to help pig processors in the United Kingdom. As that package progresses, we shall bear in mind the point that my hon. Friend has made.

Mr. Colin Shepherd

Does my hon. Friend agree that the level of the pig breeding herd now shows signs of an increase? Does not that point to a return of confidence, which has been brought about by the removal of the green pound differential?

Mr. Buchanan-Smith

It seems that the pig herd is steadying. At this early stage it would not be right to read too much into that. The pig industry has been at a deep competitive disadvantage over recent years. It will take time for that to be put right.