HC Deb 10 July 1986 vol 101 cc433-5
3. Mr. Terry Lewis

asked the Minister of Agriculture, Fisheries and Food what is his latest estimate of the proportion of cereals grown in the United Kingdom which will be liable for the co-responsibility levy.

Mr. Jopling

I estimate that about three quarters of the United Kingdom's cereals production is likely to be subject to the levy.

Mr. Lewis

Is the Minister not aware that this is the first time that he has given any indication of the way in which the scheme will work? It should have been in operation at least 10 days ago. The whole industry has been thrown into confusion by this vacillation, and the Minister should be ashamed of himself.

Mr. Jopling

We have continually made the industry as a whole aware of how the arrangements will work. We have had a good deal of difficulty, because we did not have the final version of the Community's rules in English until recently. It is wrong to suggest that the industry has been kept in the dark.

Sir Peter Mills

I congratulate my right hon. Friend on the fact that the present proposals are a jolly sight better than the original ones. Having said that, many problems remain. Will my right hon. Friend bear in mind that, especially in the south-west of England, feeders must pay at least another £2 a tonne as a result of the burden? The burden of the co-responsibility levy should be shared all over British farming.

Mr. Jopling

I am grateful to my hon. Friend for his opening remarks. He is right in saying that we succeeded very well in the price fixing in reducing dramatically the discrimination that existed in the Commission's original proposals. I accept from my hon. Friend that many difficulties are inherent in the co-responsibility levy. That is why the House agreed that we should do everything we could to resist it. However, we found ourselves completely isolated and, at the end of the day, we had to accept it. I realise that it is likely that extra costs will fall upon the industry as a result of having to pay the levy.

Mr. J. Enoch Powell

What opportunity and what powers will the Minister have to resolve the problems that have arisen over the interpretation of first-stage processing in the Commission's regulations in this context?

Mr. Jopling

So far there is no Community or national definition to work on as regards what is a holding. I think that that is what the right hon. Gentleman is referring to. We are still considering the detailed criteria necessary in the light of comments made to us by the trade organisations concerned. We shall be issuing guidelines to the industry as soon as possible. Ultimately, the intervention board must decide in individual cases.

Mr. Heathcoat-Amory

Is my right hon. Friend aware that apparently the wretched tax is to be paid by compound feed mills but not by integrated units on farms, however large they may be? Does my right hon. Friend agree that that is highly discriminatory? Will he, at the very least, tighten up the rules to achieve a measure of equality and to exempte only those genuine individual farmers compounding their own feed and giving it to their own animals?

Mr. Jopling

Yes, but my hon.Friend should recall that, under the rules, a producer would be exempt from the levy if he processed grain on his own agricultural holding for use in animal feed on that holding. Exemption of an intensive unit would depend on whether an individual business met the criterion that compounding and livestock production were carried out on the same holding. We shall issue guidelines on that as soon as possible.

Mr. John

The right hon. Gentleman knows that this tax came into force and should have been levied 10 days ago. He said that the criteria are ultimately the responsibility of the intervention board. How much later is "ultimately"? I understand that at a meeting yesterday the trade was given no greater clarity about the criteria. Who is to blame for this mix up?

Mr. Jopling

The delay occurred because the Commission did not supply us with the detailed rules until a good deal of time had passed. I am sure that the hon. Gentleman is aware, because he has read the regulations which have come from Brussels, that the levy will be paid on the new crop. The new crop has not yet begun to come forward for processing, or for exporting or to go into intervention.