§ The Minister of Agriculture, Fisheries and Food (Mr. Michael Jopling)With permission, Mr. Speaker, I should like to make a statement about the meeting of the Council of Agriculture Ministers in Brussels on 10 and 11 December, where, with my hon. Friend the Minister of State, I represented the United Kingdom. Much of the meeting was taken up with further discussion of the new structures package. No agreement was possible on the basis of a compromise from the presidency. I emphasised the need for consistency between the costs of the structures measures and a decision, which has still to be taken, on the finance available for guidance expenditure over the next few years.
On the milk supplementary levy, the Commissioner said the that Commission was determined to ensure that the system was applied according to the rules in all member states, and that they would withhold funds for financing the dairy sector where the rules were not being observed. With most other Ministers, I emphasised the importance of proper and uniform application of the rules in all member states. Nine member states, with Denmark abstaining, adopted a statement noting that there are still technical and administrative difficulties concerning the application of the system in certain member states, and inviting the Commission to allow postponement of the first payment until the end of the marketing year. The Commission is expected to consider this matter at its meeting today.
During the discussion, I emphasised again the urgent need for the Commission to come forward with proposals to allow more flexibility between the dairy and direct sales quotas.
I raised again the issue of the price of natural gas for Dutch horticulturists, on which the Commission has instituted legal proceedings under the treaty. I urged the Commission, pending the outcome, to require suspension of the aid. The Commissioner said that the Dutch had already been asked to suspend the aid complained of. The question of recovery would be considered when the case was decided.
I also pressed the Commission on the French beef aid. The Commissioner confirmed that the French Government had notified this aid in accordance with the treaty, following the refusal of the Council at its last meeting to endorse the payments. The Commissioner confirmed that meanwhile no payments should be made.
In discussion on changes in detailed provisions on sparking wine, I refused to withdraw my opposition until I had received assurances that illegal procedures applied to United Kingdom whisky imports into Italy would be discontinued. I am happy to report that, after consulting Rome, the Italian Minister gave fully satisfactory assurances both that import procedures applied in future would allow imports at the lower rate of duty and that the excess duty charged would be refunded as quickly as possible.
In the veterinary sector, the Council reached agreement in principle on a proposal on charging for red meat and poultrymeat inspection. We have explained the need for the Community to reach early agreement on the harmonisation of inspection standards under the poultry meat hygiene directive. This made it possible to adopt the 1068 other outstanding issues in the veterinary package otherwise agreed at the June Council. These include satisifactory trading arrangements to protect the United Kingdom, including Northern Ireland, and the Republic of Ireland and Denmark against foot and mouth disease.
§ Mr. Brynmor John (Pontypridd)I thank the right hon. Gentleman for making that statement, but he will not be surprised to hear that it has raised more questions than it has answered. For example, concerning the last paragraph of his statement, will he confirm that the previous agreement makes it possible for an import charge to be made to cover the costs of inspection of New Zealand lamb? If so, what is likely to be the extent of that charge? The poultry industry in Britain will be fairly unhappy at a decision that again harmonises charges in advance of the harmonisation of standards, which means that our more rigorous standards will feed through into higher costs in the shops.
There are a few shorter points to be made. For example, France seems to be still adamant about beef aids. I hope that the Minister will be equally tough if any question is raised about continuing our variable beef premium.
The wine lake was discussed at the Council of Ministers. What does the agreement amount to? Does it mean a genuine agreement to effect a genuine cut in wine production or is it, as one fears, a potential cosmetic fiddle which will put money into the pockets of people who remain in the industry?
What will be the effect of the Finance Ministers' demand to be consulted before any structures agreement arrived at by the Agriculture Ministers is agreed? Will that happen and has it been agreed that it will happen? Will the Minister confirm that, as the structures agreement affects only 4 per cent. of the agricultural budget, it will be a minuscule control on the profligate agriculture budget of the EEC?
Did the Minister—I suppose from his statement that he did not—and his fellow Agriculture Ministers discuss the increasingly important question of mounting cereal surpluses, which will be greatly augmented by this year's monster harvest? Did they consider the likely effect of the United States 1985 Farm Bill, which is likely to add some £900 million to the cost of EEC cereal export subsidies? If Ministers have not yet discussed that, I recommend that they do so, so that they can avoid the sort of haste, panic and muddle that has characterised the dairy quotas scheme.
The main part of the statement relates to the decision to ask the Commission to postpone the super-levy until March. The Minister rightly said that the Commission is meeting today. Has he heard what results have been arrived at? Is it likely that the Commission will agree to a request for postponement, and if not, what will happen? What will happen to the Northern Ireland dairy industry as a result of the withholding of the first £60 million by the Commission, for example? The Minister will know that the dairy industry in the United Kingdom is in complete confusion. Does he accept that, at the very least, this further decision will prolong its anxiety?
This decision — coupled with the failure of two countries even to try to implement the scheme, and the fact that on the latest figures, five countries are over their quotas of production—will lead many people to doubt whether the milk quota scheme will ever be properly implemented. On top of that, there is a threat by the 1069 Commission that it will direct imports of fresh milk into this country. Is it any wonder that the dairy industry is confused and has lost faith in the Government, who launched into the scheme without anticipating any of the problems, however simple? Are we not in danger of being the only ones in the Common Market who are in step?
Can the Minister confirm that our inability even to fulfil our quota will not penalise us in the future, and will he use the present gap to try to obtain a more sensible scheme? The Select Committee has already criticised the over-hasty British scheme. Our dairy farmers, who have already made the sacrifice, will properly demand a fair deal and fair implementation throughout the Community. Will the right hon. Gentleman stake his reputation on getting that?
§ Mr. JoplingThe hon. Gentleman has asked a great many questions, which I shall try to answer. His first question was on the veterinary measures that I announced. The package provides for a charge on imports of meat from third countries to cover the costs of the limited inspection that is carried out. There has been provision for such a charge since 1972, although it has not been levied. The charge will not be implemented immediately. Charges have to be fixed by January 1986, so there will be further discussions on the implementing arrangements next year. New Zealand has known about this all along. It has not made representations to my Department. Domestic slaughterhouses are already subject to meat inspection charges.
The hon. Gentleman asked about beef, and in particular about the beef variable premium scheme. As he knows, this is something for which we fought, and, with great difficulty, we succeeded in keeping it within the package agreed at the last price review. There is no doubt that it will be one of the closely argued issues at the next price review. I see no reason to change the present arrangements, but the hon. Gentleman and the House will understand that the scheme has no friends in any other country in the Community. We did not enter into a detailed discussion of the wine situation following the agreements that were recently reached in Dublin.
The hon. Gentleman then asked me a question about the financial implications of the structures proposals. As I understand it, the arrangement is that the matter will be discussed at ECOFIN — the Council of Ministers (Economic and Finance)— when it meets to consider what the financial ceilings should be in relation to the structures directives.
The hon. Gentleman rightly said that the cereal surpluses are a crucial factor in the CAP. However, that subject was not on the agenda this time. Nevertheless, the cereal position was the subject of a good deal of discussion between Ministers in the margins of the Council. The hon. Gentleman also asked me about the United States Farm Bill, and I am hoping to meet Secretary Block within the hour to discuss that. He will also discuss that point with the Commission in Brussels before the end of the week.
The hon. Gentleman also asked me about the Commission's decisions on milk. It is considering the requests for a general delay at its meeting today. First reports are that it has decided to make no changes to the regulations, but there has not yet been any formal response 1070 to the Council's request. Thus, I cannot anticipate what the situation will be until we receive a formal response from the Commission to the request from the Council.
Mrs. Elaine Kellet-Bowman (Lancaster)My right hon. Friend said that he had drawn the Commission's attention to the need for flexibility as between direct sales and dairy sales quotas. Is he making any progress on that, and when are we likely to hear that such flexibility has been achieved?
§ Mr. JoplingMy hon. Friend will have heard me say before that this issue involves the clearest case of unsatisfactory rules within the present milk levy arrangements. I think that I have raised this matter at every meeting of the Agriculture Council since June, but regrettably so far to no effect. One difficulty in recent weeks is that we have had a lame duck Commission, as the Commissioner and many members will not continue in office after the end of the year. However, I assure my hon. Friend that I shall continue vigorously to press that important point.
§ Mr. David Penhaligon (Truro)Can the Minister confirm that there is only the remotest and faintest possibility this year of any levy being raised on the dairy farmers of England, Scotland and Wales? Can he also confirm that if it is to be raised, it will probably be raised by so little that there will be no logic in discouraging any dairy farmer in Britain from producing milk between now and next April? Were liquid milk imports discussed? If so, what is the present position?
§ Mr. JoplingThe hon. Gentleman will have seen the most recent figures, which show that when the period between April and October 1984 is compared with the same period for 1983, it is clear that the United Kingdom's milk production fell by 8.7 per cent. As he will know, that fall was largely assisted by the drought. I think that farmers have had sufficient information from various sources to show that it would be possible to produce more milk in the remainder of the year than in the first part of it and still not have a levy commitment at the end of it.
The hon. Gentleman asked me about imports of liquid milk, but that subject was not discussed in the Council of Ministers. However, he may have read in the press that our present arrangements have recently been questioned by the Commission. We are considering the situation and will decide, in due course, what response to make.
§ Sir Peter Mills (Torridge and Devon, West)Yes, but will the Minister put down a real marker next time he discusses milk imports in the Community? If they were imposed in addition to the problem of quotas, it would mean a very serious blow for British dairy farmers. Will he make it quite clear that we are not prepared to allow such milk to be imported until the health problem, including that of foot and mouth disease, has been cleared up, together with the whole problem of nationally subsidised production and the freedom of our producers to export their products to the Community? At present, that is not the case with sheep.
§ Mr. JoplingI endorse much of what my hon. Friend has said and am grateful to him for saying it. He is right to home in on the public health problems, which are central to milk importation.
§ Mr. Norman Buchan (Paisley, South)Is the Minister telling us that the central issue at present—the cereals 1071 surplus—was discussed only on the margins, when we are witnessing the biggest emergency and famine that the world has faced for many years? What is the present estimate of the cereal surplus and, how much will it cost? Will he repudiate the statement of the Tory chairman of the Tory group of Members of the European Parliament that they should sell that surplus, rather than giving it, in order to help solve the problems of Ethiopia?
§ Mr. JoplingI had better not get into the business of repudiating, or not, any Member of the European Parliament. I have enough on my plate dealing with the comments of hon. Members. Perhaps the hon. Gentleman is not aware of a question that I answered earlier about the last Council, where we discussed in depth the problems of world famine and the cereal situation. But on this occasion we had a particularly heavy agenda. Of course, the whole subject of cereals will come up in the course of the discussions on the price fixing for 1985, which we shall no doubt start early in the new year.
§ Mr. Eric Forth (Mid-Worcestershire)Has the Agriculture Council considered the likely effect of enlargement on the Community and on agricultural policies, in that the shift in balance and political influence in the Community will put much greater pressure on the northern countries and their products because it will put greater emphasis on Mediterranean so-called products and prices? Is my right hon. Friend concerned about that? Is the Council doing anything about it?
§ Mr. JoplingMy hon. Friend will remember that responsibility for dealing with the problems of enlargement lies mainly with the Foreign Office. But of course the Council of Agriculture Ministers has given a good deal of thought to the problems of Mediterranean products within the Community. As one who, like my hon. Friend, attends the Fisheries Council, I should add that fisheries represents another important area where Spanish fishing, in particular, could have great effects on existing members of the Community.
§ Mr. William Ross (Londonderry, East)Which states have difficulties in applying their rules over the milk supplementary levy? Is it true that some of those states now believe that the milk quota system is impractical, given the conditions that they face? Will the right hon. Gentleman confirm that a United Kingdom quota on milk is just a United Kingdom quota, and that no supplementary levy will be paid by the United Kingdom unless other states follow the rules and until the United Kingdom quota is exceeded?
§ Mr. JoplingNo doubt the hon. Gentleman will have seen statements that my right hon. Friend the Prime Minister and I have made in the past about the payment of levies. As a farmer, he will be aware that, because we have opted for formula B, these matters are based on the various milk marketing boards within the United Kingdom. Therefore, it is a fact that for the first six months of the milk year, a levy is due from Northern Ireland. However, the hon. Gentleman may like to know that milk production is down in most member states, including Denmark, France, Germany, the Netherlands, Belgium and the United Kingdom, and that from April to September milk deliveries in the Community were down on the same period last year by 1.7 million tonnes.
§ Mr. Andy Stewart (Sherwood)Does not my right hon. Friend agree that it would be misleading to talk about cereal surpluses if the cereal substitutes allowed into the Community were eliminated?
§ Mr. JoplingMy hon. Friend may recall that the matter of cereal substitutes — mainly maize gluten feed and citrus pellets—has caused a great deal of discussion in the Council of Ministers. The Council did not discuss it on this occasion, but we have always resisted limitations upon those importations. I have no doubt that when I meet Secretary Block within half an hour, that will form a major part of our discussions.
§ Mr. Tam Dalyell (Linlithgow)Just what are we going to do about the Dutch horticulturists with their subsidised Groningen gas? Does not the Minister understand that hon. Members from central Scotland who represent glasshouse owners know that they are becoming absolutely distraught because of the unfair competition? I understand from the Minister's statement that there are to be legal proceedings. Is it fair to say that the Dutch have cocked a snook at the Commission in the legal proceedings? Knowing the Amsterdam lawyers, may I ask the Minister whether there is any likelihood of their arriving at a conclusion before the mid-1990s, by which time many of the tomato growers we represent will be out of business and down the chute? What will the Minister do about it?
§ Mr. JoplingI am not going to enter into an argument with the hon. Gentleman about whether Amsterdam lawyers are any more pernicious than Scottish or any other lawyers. That would be inappropriate. It is a matter of the hon. Gentleman to judge.
I have made it quite clear that our view is that the Commission should have acted more quickly and that we expect the Commission to pursue the matter in the European Court if the Dutch do not comply. We extracted from the Commission yesterday a statement that it has already asked the Dutch Government to desist from that practice. I took particular trouble at a meeting with Mr. Braks, the Netherlands Minister, on Monday morning to express my serious displeasure at the way the issue has developed.
§ Mr. Nicholas Budgen (Wolverhampton, South-West):Is it true that five countries are now eligible to pay super-levy? Will my right hon. Friend explain why the payment was postponed if it is true that there is a general, serious and widespread political desire throughout the Community to restrain agricultural expenditure?
§ Mr. JoplingMy hon. Friend has not counted very well. As I understand the matter, the Commission's view is that seven countries are due to pay levy. Some have collected it, some have said they will pay and there are disputes with other countries. The crucial aspect of the operation is to ensure a uniform attitude towards the behaviour of member states as regards complying with the law and the regulations. That is much more important than any short-term arrangement. We must ensure that everyone complies with the law.
§ Mr. J. Enoch Powell (South Down)How can supplementary milk levy be due from the United Kingdom if its milk production is not exceeding its quota?
§ Mr. JoplingAs the right hon. Gentleman will see from the regulations, these matters are assessed under what we call formula B, on a dairy basis. For the purposes 1073 of the United Kingdom, especially for wholesale deliveries, we have treated the five milk marketing boards as the dairies. The levy and the quota are based on that. That is why there is levy due in Northern Ireland, but not in Great Britain.
§ Mr. Edward Leigh (Gainsborough and Horncastle)When my right hon. Friend spoke to his colleagues about cereal surpluses, did he impress upon them his view that they should be dealt with not at the last moment by a bureaucratic quota but by a price mechanism? Cereal farmers need an element of certainty. Above all, we need to take more grain out of intervention stores by relaxing controls on restitutions and export credit.
§ Mr. JoplingI am grateful to my hon. Friend because, for a long time, I have said that the way to deal with the cereal surplus is through the discipline of price and not through some bureaucratic horror such as quotas or co-responsibility levies.
§ Mr. Dafydd Wigley (Caernarfon)On milk, did the Minister make it clear, and will he now make it clear to the House, that, if any other state—Italy appears to be the culprit—does not comply with the requirements, we will reserve the right not to comply ourselves and to take whatever unilateral action is necessary to safeguard our dairy producers?
§ Mr. JoplingAs I said earlier, the hon. Gentleman will have seen what both I and the Prime Minister have said on this matter. We must be a little careful about Italy; a special derogation in the regulations agreed last March, because of the peculiar problems of Italy and Greece, provides that their assessment for levy is made on the basis of 12 months, whereas the other eight member states are treated on a shorter-term basis.
§ Mr. David Maclean (Penrith and The Border)I congratulate my right hon. Friend on his stance in the Agriculture Council in pressing for flexibility in milk quotas. What progress is he making towards a system of leasing of quotas?
§ Mr. JoplingI am grateful to my hon. Friend for those kind remarks. I have said many times that I am sympathetic to the prospect of leasing quotas. The present system of attaching the quota solely to the land is a great deal too rigid. In the end, we will have to make it more flexible, as well as dealing with the adjoining matter of direct and wholesale quotas.
I am afraid that it has proved impossible to get the outgoing Commission to change the rules. I shall give my hon. Friend the same assurance that I gave my other constituency neighbour, my right hon. Friend the Member for Lancaster (Mrs. Kellet-Bowman), that I shall press on as hard as possible with this matter when the new Commissioner is in office.
§ Dr. Roger Thomas (Carmarthen)My hon. Friend the Member for Pontypridd (Mr. John) mentioned the disarray in the dairy industry. Does not the Minister fear that that is due to the tardiness of the distribution of secondary quotas? Will he extend the outgoers scheme to all farmers, irrespective of farm size, on a partial surrender basis?
§ Mr. JoplingWith a great deal of difficulty, I managed to obtain £50 million for the outgoers scheme. It looks as though that will be spoken for—I hope so. I am afraid that there are no prospects at the moment for an extension of that.
I wholly reject the hon. Gentleman's suggestion about disarray.
§ Mr. Tony Marlow (Northampton, North)How did the Council of Ministers defend the cereal support system, under which, for example, if United Kingdom agriculture receives a bonus issue of 4 million tonnes of cereal from the Almighty over and above that which is required by farmers to satisfy their appetites and their bank managers, the taxpayer will have to put his hand in his pocket and find an additional £100 million at least, at a time when the Government are trying to cut back in other areas?
§ Mr. JoplingUnder the rules as they stand, there is an open-ended commitment to pay. My hon. Friend should recall that there has been a dramatic drop in cereal prices this year, which has been to the benefit of the livestock industry. He should also remember that this year, for the first time, the guarantee thresholds should bite very hard on cereal prices. Our estimate is that they should lead to a reduction of 5 per cent. in cereal prices at the next price fixing.
§ Mr. John Watson (Skipton and Ripon)How strong an assurance can my right hon. Friend give that production by British dairy farmers next year will not need to be reduced as a result of over-production by some continental dairy farmers this year?
§ Mr. JoplingI have every hope that that will not happen. In fact, that thought has never seriously crossed my mind. Certainly, we would strongly resist any such suggestion. As I said to the House the other day, people in the Community speak to me with a good deal of envy about the drought we had in the summer, which has greatly helped us to reduce our milk production level.
§ Mr. Mark Hughes (City of Durham)I am grateful to the Minister for making this statement on the Agriculture Council. I ask your advice, Mr. Speaker, about Questions Nos. 1 and 175 on today's Order Paper, which call for written answers. Both those questions were asked by the hon. Member for Banff and Buchan (Mr. McQuarrie) and both asked for a statement on the Fisheries Council meeting which was held on the same day as the Agriculture Council meeting. It is curious that we need to have two questions about the same Council.
§ Mr. JoplingI regret to say that I have not studied the Order Paper sufficiently to note that fact. With customary foresight, my hon. Friend the Member for Banff and Buchan (Mr. McQuarrie) has tabled questions on days when he thought it was likely that there would be a report on a meeting of the Council of Ministers.
§ Mr. JoplingIf my hon. Friend has tabled the question twice, that is a totally admirable belt and braces policy.