Pig Industry (Hansard, 17 March 1983)

§ 1. Mr. Geraint Howells
asked the Minister of Agriculture, Fisheries and Food if he is satisfied with the present state of the pig industry; and if he will make a statement.

§ 15. Mr. Myles
asked the Minister of Agriculture, Fisheries and Food what is the current profitability in pig production.

§ The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Alick Buchanan-Smith)
Pig prices are lower than they were a year ago, but there are indications that they have now steadied. The longer-term prospects will depend on the industry achieving a better balance between supply and demand and on expanding its share of the United Kingdom bacon market and developing pigmeat exports.

§ Mr. Howells
Has the Minister any immediate plans to save many pig producers from going bankrupt? Will he consider introducing a deficiency payments scheme for pig producers similar to the scheme that has served the beef and lamb sectors well over the past five years?

§ Mr. Buchanan-Smith
A deficiency payments scheme would not be appropriate, because the circumstances of pig and beef production, as the hon. Gentleman knows, are different. Help is already available in a number of ways—for example, in the private storage scheme and in the increase of restitutions. Such assistance has been given to the industry at the instigation of the Government.

§ Mr. Myles
Will my right hon. Friend consider ways to improve the efficiency of pig processing plants, because that is where the weakness in the chain of pig production and processing occurs?

§ Mr. Buchanan-Smith
One signficant point over this period of difficulty in the pig industry is that prices held up more strongly for quality products than for other products. Schemes, such as the bacon charter scheme are well worth supporting. I hope that in that and other ways we shall see an improvement in quality, to which I am sure the housewife will respond.

§ Mr. Home Robertson
The Minister referred to supply and demand. Is he aware that the supply and demand for feeding grain for pig producers is severely distorted at the moment? Is he further aware that there are vast quantities of feeding grain that could be made available to pig producers at reasonable prices? In view of the severe crisis in the industry, is it not about time that he did something about the matter?

§ Mr. Buchanan-Smith
The hon. Gentleman will realise, because this point was raised at the last Agriculture Question Time, that it is a question whether such a cost-effective scheme can be worked out.
As to supply and demand in the pig industry, there was an expansion in the pig herd at the end of last year of over 4 per cent. when compared with the year before. In recent months there has been a 17 per cent. reduction in the amount of pigmeat coming from Denmark. Of these two factors, the industry has control over one. The other will, I hope, help in the longer term.

§ Sir Peter Emery
Has my right hon. Friend had discussions about the size of the pig herd, because this is one of the major factors? What advice will my right hon. Friend give the smallholder, who is often caught between the problems of supply and demand and is more seriously affected than the big producer?

§ Mr. Buchanan-Smith
As my hon. Friend knows, the pig industry can react quickly to changes in economic circumstances. The increase in the herd in the early part of the year was well beyond what was warranted. That is one of the major reasons for the present position. Equally, there is a wide variation in profitability between different herds, as the Cambridge survey shows. Efficient producers—and some of the small producers are efficient and good—can weather these problems.

§ Mr. Beith
Will the storage scheme be continued for as long as it is needed? Will the Minister look at other ways in which the industry can be helped, such as assistance with veterinary examination costs?

§ Mr. Buchanan-Smith
I am delighted to say that the storage scheme has been used by the industry to a greater degree than ever before. During the six weeks that the scheme has been operating we have taken up twice as much pigmeat as we did during the three and three quarter months that it operated a year ago. I am glad that the industry is using the scheme. If it needs to be extended, we shall consider how best to do so.
I understand the problems about exports. There could be veterinary and other problems. Officials of my Department and representatives of the trade have been meeting to try to identify where improvements might be made. I have asked for a report from them by early next week.

§ Mr. Buchan
Does the Minister accept that many pig producers are at present incurring losses? We find his answers terrifyingly complacent. Is he aware that we are subsidising intervention grain being sold to Spain to the extent of £69 per tonne, while our pig producers are paying £120 per tonne? Why cannot we release this grain in the normal way to this country's pig producers?

§ Mr. Buchanan-Smith
The hon. Gentleman is complacent, because he always talks about trying to keep down the cost of the common agricultural policy. If the subsidy were at the same level as that for exports it would almost double the present cost of the Community's cereal regime. If that is what the hon. Gentleman wants, it is time that he said so. He says different things to different audiences. The hon. Gentleman should also remember that, while there are subsidies for the export of cereals, equal credit should be given to the subsidies available on the export of pigmeat to third countries. That balances the position.

§ Mr. Buchan
The Minister is prepared to pay vast sums of money to subsidise wheat going elsewhere. Why cannot he use the same amount of money to subsidise grain and barley sold to British pig producers? He is willing to spend on foreign producers but not on our producers. He is adopting an extraordinary position.

§ Mr. Buchanan-Smith
I have the United Kingdom's interest at heart. Unlike the hon. Gentleman, I am not prepared to see the cost of the cereal regime jump from £1,300 million a year to as much as £3,000 million a year. If that is what the hon. Gentleman wants, he should say so. I believe that the pig industry is on an even footing with the cereal industry, because the pig industry benefits from export restitutions in the same way as the cereal industry.