HC Deb 29 March 1984 vol 57 cc438-40
5. Mr. Geraint Howells

asked the Minister of Agriculture, Fisheries and Food if he is satisfied with the present state of the dairy industry; and if he will make a statement.

Mr. Jopling

As the annual review of agriculture for 1984 makes clear, dairy farm incomes are forecast to be significantly lower in 1983–84 than 1982–83, partly as a result of bad weather last spring and summer. This was one reason why I decided to increase the maximum wholesale price of liquid milk from 1 March to the benefit of producers, although the associated rise in the maximum retail price will not take place until 3 June.

Mr. Geraint Howells

Does the Minister not agree that he should now accede to the request of the dairy producers and of members of the National Farmers Union that they should be given three years to adjust their farming methods? Does he not agree that unless he accedes to that request many small dairy farmers in the south west of England, in Wales and in many other parts of Britain will be made bankrupt?

Mr. Joplin

I think that it would not have been realistic to achieve a three-year transitional period. The NFU came to us and asked for a transitional period, and we negotiated one year. I think that it is necessary for the dairy industry to grapple with the difficulties of over-supply and the massive over-production and surpluses in the community. I hope that the one-year transitional period will help in easing the difficult decisions that have to be taken straight away.

Mr. Marlow

Can my right hon. Friend explain to the House why we, who are not self-sufficient in milk products, are taking two and a half times the cut in dairy produce as the French, who produce bigger surpluses in Europe? Could not my right hon. Friend fight a little harder on behalf of British interests?

Mr. Jopling

Before saying that Britain is not self-sufficient in dairy produce, my hon. Friend should recall that if we take into account our political decision, which I believe he supports, to allow New Zealand butter to come to Britain—I am glad to see him nod—in 1982, since when things have moved on considerably, we have reached 131 per cent. self-sufficiency in solids not fats, and 100 per cent. self-sufficiency in butter fat, taking New Zealand imports into account.

Mr. Ron Lewis

The right hon. Gentleman appears to be satisfied with his achievements to date. Is he aware that the dairy farmers in his county of Cumbria — and especially in his constituency—are far from satisfied with the state of the dairy industry? I understand that even the chairman of the Cumbria NFU has a little disagreement with the Minister. What will he do about it?

Mr. Jopling

I hope that our disagreements will remain little ones. I do not think that anyone could be happy about the prospects facing the dairy industry. Difficult decisions must be taken. We cannot continue to produce milk in over-supply. We are currently producing about 17 million or 18 million tonnes of milk more than the Community consumes.

Mr. Charles Morrison

In formulating his decisions about the application of quotas on individual farms, will my right hon. Friend take account, first, of the need to ensure that quotas are saleable and, secondly, of the position facing farmers in the middle of an expansion plan who may already have invested money in new building and who now find themselves in considerable difficulty?

Mr. Jopling

Saleable quotas give rise to considerable difficulties. For that reason, the Commission has suggested that the quota should go with the land. While there is room for flexibility, that is probably a rather good principle.

With regard to the milk producers in the middle of expansion programmes — whether half funded by the Community or by their own money—we shall keep a national reserve to deal with hard cases.

Mr. Penhaligon

Can the Minister confirm that in the final analysis his Department will be responsible for the allocation of quotas to farmers? Would it be possible for the right hon. Gentleman to skew those quotas in favour of the smaller producers and those areas that feed cows on grass?

Mr. Jopling

We are currently holding discussions with the farmers unions and the milk boards about who allocates the quotas and administers the scheme. I am not yet in a position to make a statement about that.