HC Deb 29 March 1984 vol 57 cc434-6
2. Mr. Haselhurst

asked the Minister of Agriculture, Fisheries and Food what effect the current year's price settlement in respect of pigmeat will have on home producers.

The Minister of Agriculture, Fisheries and Food (Mr. Michael Jopling)

It is proposed that the basic price will be cut by 1 per cent., but this price is a relatively theoretical concept in the pigmeat sector since it has no direct effect on market support arrangements. However, the cuts proposed in the institutional prices for cereals should produce concrete benefits in terms of lower pig production costs, while the proposed aid for encouraging the use of concentrated skimmed milk in pig feed should also be helpful. I expect the Commission to agree to continue to take account of regional difficulties in its management of the market. The impact of the proposed MCA changes will depend on future currency movements.

Mr. Haselhurst

If the final settlement does not appear to afford better prospects for the United Kingdom pig industry, are there any measures that my right hon. Friend can take independently to protect the survival, let alone the prosperity, of many United Kingdom pig farmers?

Mr. Jopling

I am conscious of the difficulties that the pig industry has been through, but I invite my hon. Friend to look at the current all pigs price index, which is currently at over 105p per kilo. That is the highest that it has been. There has been a considerable rise since mid-January, and the figure is now about 18 per cent. above what it was a year ago.

Mr. Budgen

What is the proposed percentage reduction in price for cereals, and what percentage decrease in the feed costs for the pig and livestock sectors does that amount to?

Mr. Jopling

A 1 per cent. cut is proposed in the institutional prices for cereals. If that is reflected in market prices, it should cut costs for pig producers by about 22p per fattening pig.

Mr. Geraint Howells

If the Minister cannot hold on to the variable premium for beef producers, why will he not try to persuade his counterparts in Europe to introduce a variable scheme for pig producers?

Mr. Jopling

I am determined to keep the variable premium for beef, but the hon. Gentleman should recall that the difference between a pig and a cow is that the pig breeds much faster and produces many more young. A modest subsidy of about lop per kilogram would cost the Community £1 billion.

Mr. Lord

I know that my right hon. Friend is aware of how closely the fate of pig farmers is linked to cereal prices. As even the most efficient pig producers are now in danger of going bankrupt, will he always look at all available means to lower the price of cereals to pig producers?

Mr. Jopling

My hon. Friend will know that I have consistently argued during the past nine months that the cereal livestock balance is wrong, and I have argued for a reduction in cereal prices. I shall be glad to look at whatever ways there are in which I can help the pig industry, although my hon. Friend will accept that the situation is now a good deal better than it was a year ago.

Mr. Robert Hughes

Does the Minister recollect that the National Pig Breeders Association has argued that the pig industry could prosper if there were a £20 per tonne reduction in the price of cereals? Is he aware that the association is worried that intervention is becoming the market of first resort, instead of last resort? Why does not the Minister do something about that, instead of worrying about the subsidy to pigs?

Mr. Jopling

I am glad the hon. Gentleman joins me in pleading for a reduction in cereal prices. As a signal to the hard-pressed livestock industry, in an effort to give it some confidence, I have said that it would be helpful if the Community were to agree to a price reduction over a number of years.