Dairy Surpluses (Hansard, 6 May 1982)

§ 16. Mr. Dykes
asked the Minister of Agriculture, Fisheries and Food if he is still concerned about the size of dairy surpluses within the European Economic Community common agricultural policy storage system.

§ Mr. Peter Walker
Yes, Sir. I am accordingly arguing in the Council of Ministers for more effective measures to tackle the surplus.

§ Mr. Dykes
As these surpluses must be tackled, would my right hon. Friend be surprised to learn that on a recent visit to Moscow I noticed that in food shops the bulk of butter was not of EEC origin—nor, indeed, sold as butter—but was from New Zealand? Does my right hon. Friend agree that this reality should be borne in mind when our anti-Marketeers go on about surplus EEC butter being sold to the Soviet Union?

§ Mr. Walker
Yes, Sir. But, as my hon. Friend knows, the United Kingdom is opposed to the sale of cheap and subsidised butter to the Soviet Union, and will continue to be so. I am glad to say that in the market arrangements for the past year there has been a substantial reduction in the problem of surplus butter. Nevertheless, the Commission must remain vigilant in tackling the problem.

§ Mr. Spearing
Does the Minister agree that the reason why his hon. Friend found New Zealand butter in Moscow is that New Zealand has no other markets in which its butter can be sold? Does the Minister further agree that, despite his remarks, there is approximately a 20 per cent. surplus of milk production in the EEC, which is costing taxpayers between £2 billion and £3 billion a year in export subsidies?

§ Mr. Walker
Yes, and that is why the Government have supported measures to try to curtail the surplus without damaging Britain's efficient and important position. I am sure that the Opposition will rejoice in the retention by the British Government of a butter subsidy that is double the size achieved by the Labour Government and a school milk subsidy that has been improved by 25 per cent. following the negotiations.

§ Mr. Marlow
Is my right hon. Friend aware of the fact that there are not only surpluses of butter within the Community, but also of cereals, wine and sugar? In line with the Government's commitment, will he pursue a vigorous policy to ensure that there are no price increases, even above the rate of inflation within the United Kingdom, allowed for these products now in surplus?

§ Mr. Walker
My hon. Friend has mentioned a diversity of products. As I have said, my right hon. Friend the Minister of State was successful in improving the wine regime to make it more cost-effective. Price-fixing for a number of cereal commodities is below the inflation rate for Europe, and perhaps that satisfies my hon. Friend. When considering the spectacle of Poland and other countries, it seems that the only thing that is worse than a cereal surplus is a shortage.