Milk Quotas

HC Deb 03 May 1984 vol 59 cc525-7

2. Mr. Penhaligon

asked the Minister of Agriculture, Fisheries and Food if he will allocate milk production quotas to the advantage of the small producer and milk producing areas.

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

I refer the hon. Gentleman to the reply that I gave to my hon. Friend the Member for Meriden (Mr. Mills) on 26 April. Initial provisional quotas have been allocated to producers related to their deliveries during the reference period, but a reserve amounting to about 2.5 per cent. of the quota has been set aside to deal with special cases, which will be carefully considered.

Mr. Penhaligon

On the whole, I interpret that answer as being no. Will the Minister partially mitigate the phenomenal social damage created by what he has so far done by quickly setting up the appeals procedure and announcing today that some financial compensation will be available to those who are most harshly affected, some of whom are in danger of going bankrupt?

Mr. Jopling

The detailed rules were finally debated in Brussels only yesterday and therefore we shall consider the details carefully. I assure the hon. Gentleman, however, that we shall move ahead with the special cases as fast as we can.

Mr. Maclean

Will my right hon. Friend take into account the special problems of small dairy producers who farm extremely wet land, such as is found in many parts of Cumbria, and therefore cannot switch into any other form of farming activity such as sheep or cereals?

Mr. Jopling

We shall examine all hard cases. I hope that we shall be able to consider the cases that my hon. Friend mentioned—he knows that I am well aware of them.

Mr. Torney

Is the Minister aware that, in addition to the hardship that will be suffered by all dairy farmers, considerable hardship will be experienced by the processing and distribution side of the milk industry? We already know that some creameries are likely to close and therefore considerable unemployment will be caused in that industry. Will the Minister assist in any way to alleviate that suffering?

Mr. Jopling

We are well aware of the problems that the imposition of the superlevy will cause in all sections of the dairy industry. I do not doubt that it will also cause problems in some processing plants, but that is an inevitable consequence of cutting production as we have. I remind the hon. Gentleman that, quite recently, the United Kingdom had about 140 tonnes of butter a day going into intervention.

Mr. Jim Spicer

I know that my right hon. Friend fully understands that the small dairy producer who has maintained his herd numbers at a constant level has not contributed to the expansion of milk production and is probably the hardest hit as a result of the base year. Will he assure us that when the appeals procedure comes into existence it will deal with those small producers first because, at the moment, many of their provisional figures are a cut not of 9 or 15 per cent., but of 20 per cent. and more?

Mr. Jopling

I assure my hon. Friend that I shall consider the possibility of helping the small producer. That is allowed for under the rules that the Commission has examined. I hate to argue in this way, but it is not strictly true that no small producers have expanded recently. On reflection, my hon. Friend will agree that some of them have.

Mr. Nicholson

Is the Minister aware that it is clear that there will be a much greater problem of hardship cases under the EEC milk quota arrangements in Northern Ireland? I fully support the view of the Ulster Farmers Union that it is essential that the Minister introduces measures to reduce the level of hardship for Northern Ireland dairy farmers, considering that we did not get the 65,000 tonnes which the Minister was supposed to negotiate for us in the EEC. Will the Government—

Mr. Speaker

Briefly.

Mr. Nicholson

—give an undertaking that measures will be introduced to relieve the special problems of Northern Ireland dairy producers?

Mr. Jopling

In allocating United Kingdom quotas between the regions account was taken of the trends of deliveries between 1981 and 1983. Northern Ireland was given the full benefit of the 63.1 million litres from the Community's reserves. In addition, a further allocation was made to Northern Ireland so that the reduction on 1983 deliveries would be no more than in other regions of the United Kingdom.

Rev. Ian Paisley

May I remind the right hon. Gentleman that when he finished his negotiation he went public on the fact that Northern Ireland dairy interests would have a good deal and that they would be advantaged by some 63 million litres? Why is the dairy industry in Northern Ireland not advantaged at the same level as that in the rest of the United Kingdom, but is getting less for its finished quantity?

Mr. Jopling

I can only repeat the answer that I gave to the hon. Member for Newry and Armagh (Mr. Nicholson), that Northern Ireland has been given the full benefit of the 63.1 million litres which I announced in terms of 65,000 tonnes, and that in addition it has had a further allocation so that the reduction on 1983 deliveries in Northern Ireland will be no more than in other regions of the United Kingdom.

Mr. Wigley

Has the Minister seen reports today of a dairy farmer with some 60 acres who increased his production from about 8,000 litres in April 1982 to 27,000 litres last month on the advice of the Ministry, and is now facing bankruptcy? Will the Minister assure us that people in this position will get an advantage under the 2.5 per cent. to which he referred earlier?

Mr. Jopling

The hon. Member will recall that the quotas are based on 1983 deliveries, which was the most up-to-date pattern of production. I should have thought that that arrangement would particularly help the farmers whom he has in mind. As to the Government's advice, the level of production is only one factor in determining profitability and the Government have consistently encouraged increased efficiency and better marketing. That can lead to increased profits even, in some cases, at reduced levels of production.

Mr. Colin Shepherd

Will my right hon. Friend confirm that in drawing up the present rules, arrangements, levels of quotas and so on, the Milk Marketing Board was closely consulted and involved and was highly regarded during the course of the discussions?

Mr. Jopling

The Milk Marketing Board was consulted all through this matter, right back to the point when the Commission first produced its proposals for a super-levy last July. A document which I believe the Milk Marketing Board has circulated to hon. Members says: The milk board will be responsible for paying the levy on any milk producer in excess of quota and then recovering the relevant part of the levy from those producers who had sold to the board milk in excess of their individual farm quota.

Mr. Robert Hughes

Is not the truth of the matter that the Minister, having failed in Brussels, has now bungled the applications, to the detriment of the small producers? Given that one third of the herds are of 60 cows or fewer, would it not have been better to exempt, and will the Minister not now consider doing so, small herds from the levy and having a progressive scheme for the bigger herds so that the levy is recovered from those best able to face the difficulty? What response does the Minister have to the Milk Marketing Board's reference to the £200 million made available in Germany and the 3 billion francs made available in France for compensation? What will he do about that?

Mr. Skinner

Come on. The right hon. Gentleman has a worse record than Bobby Robson.

Mr. Jopling

The hon. Gentleman made that carefully rehearsed joke a few moments ago. I am sorry that nobody heard it the first time.

The figures given by the hon. Member for Aberdeen, North (Mr. Hughes) are not entirely accurate. As I remember, 37 per cent. of herds have fewer than 40 cows.

One must bear in mind that in France and in Germany, where a £200 million scheme has been announced to create a reserve of quota for reallocation—I believe that it is hoping that it will be 4 per cent.—the structure of dairy farming is much inferior to ours. Britain has many more viable dairy farms than France or Germany.