HC Deb 02 February 1984 vol 53 cc394-5
10. Mr. Phillip Oppenheim

asked the Minister of Agriculture, Fisheries and Food if he will make a statement on the plans to take intervention grain out of store and make it available to pig and beef producers.

Mr. MacGregor

A Community scheme to sell breadmaking wheat from intervention stocks for animal feed at a special price was introduced on 4 December 1983. Barley from intervention is also available at the lowest price consistent with Community rules. But these offers are not being taken up in the United Kingdom because ample supplies of feed grain are available on the open market at lower prices.

Mr. Oppenheim

Is my hon. Friend aware that under the present scheme 90 per cent. of the grain released from intervention will go to French and Dutch farmers? Is he aware also that such schemes have great potential benefit for the livestock sector, especially the pigmeat sector, at the same time as they benefit the consumers of the EEC, at no cost to the EEC? Does my hon. Friend know that further schemes would be greatly welcomed, especially if they equally benefit the British livestock sector?

Mr. MacGregor

Unfortunately, that scheme is not helpful to us, because our prices on the open market are lower. A large part of the grain goes to Italian farmers, not to French and Dutch farmers. The problem with such schemes is that if they operate on a substantial scale well below the open market level supplies coming on to the open market are simply replaced, thus creating the vicious circle of open market supplies going back into intervention stocks. Great problems would occur if one did as the hon. Gentleman suggested. I assure him that we are pressing the Commission for some relaxation of the present rules in a number of areas where we believe future schemes would be more advantageous to the United Kingdom.

Mr. Geraint Howells

Does the Minister agree that the deficiency payment for pigs which operated in the 1960s and 1970s worked well? In view of the serious problems facing the pig industry, does the hon. Gentleman agree that the payment should be reintroduced in the near future?

Mr. MacGregor

The difficulty is that a deficiency payment scheme of the type suggested by the hon. Gentleman—I have seen his early-day motion—would be illegal under Community rules.

Mr. Lord

I trust that my hon. Friend has seen the report that the French Government plan to help the French pig producers to the tune of £8.3 million. If that report is true, will he take steps to see whether that action is allowed under EEC regulations? If it is not, will my hon. Friend stop the French Government from taking that action? If it is allowed, will he ensure that the same type of aid rapidly comes to our own hard-pressed pig producers?

Mr. MacGregor

The Commission is responsible for ensuring that no illegal aid is given. When we saw the report that the French authorities might have in mind arrangements for providing loans to pig producers in financial difficulty, we immediately got in touch with the Commission. We understand that already it has approached the French authorities on this matter. I shall certainly pursue this issue, if necessary, with the Commission as soon as we have the details.

Mr. Harris

Does my hon. Friend agree that we should tackle the root cause of the problem by examining corn intervention itself? Is he aware that my right hon. Friend the Minister's earlier reply on grain prices will have the wholehearted backing of the House?

Mr. MacGregor

My hon. Friend is absolutely right. That is how it must be tackled in the medium to longer term and that is why we have supported firm measures on cereal prices to improve the balance. Nevertheless, there are other legitimate ways in which we can help the pig industry, and these we have been pursuing. The reintroduction of private storage aids, for example, has led to a big take-up in this country in its first week.

Mr. Mark Hughes

Does the Minister accept that no one in the House believes that it is right for Spanish pig producers to obtain grain from Europe which is subsidised by British taxpayers when our own pig producers have no effective incorporation scheme to use that grain at a reasonable price? Will he look much harder at this?

Mr. MacGregor

I have been looking at it very hard. I have explained the basic difficulty of trying to offload surplus grain on to internal Community markets in the way that the hon. Gentleman suggests. Sometimes it is necessary to dispose of such surpluses in export markets. I assure him, however, that we are pressing for a relaxation to the rules to make it possible for the cereal incorporation scheme to be taken up in the United Kingdom.