§ 4. Mr. Deakinsasked the Minister of Agriculture, Fisheries and Food what was the final decision on cereal prices taken by the European Economic Community Council for 1985–86; and if the EEC Commission's proposal on prices for 1986–87 is based on the previous year's figure as adopted by the Council, or as operated by the Commission.
§ Mr. JoplingThe Council of Ministers took no decisions on cereals support prices for 1985–86. Price levels for 1986–87 were set by the Council at its meeting of 21 to 25 April and did not depend on those which the Commission applied in 1985–86.
§ Mr. DeakinsI am grateful to the Minister for the latter information. Does he accept that what happened in the 241 price negotiations last year, when the Commission overruled a West German veto on cereal price reductions, shows the fragility of the Luxembourg compromise and contradicts the assurances given to the House by the Foreign Secretary that the Single European Act posed no threat to the Luxembourg compromise?
§ Mr. JoplingThe hon. Gentleman should recall that last year the Commission was obliged to take measures to maintain the smooth running of the cereals market. It is not helpful to quibble about this pragmatic approach in the circumstances of last year's deadlock. This year's decisions have been taken clearly by the Council without any threats of the Luxembourg compromise.
§ Mr. Kenneth CarlisleDoes my right hon. Friend agree that the recent discussions in Europe on agricultural prices have been disappointing? We shall not solve the basic problem of surplus production in Europe by tinkering with prices. We must get our European partners to consider a far more fundamental reform of the CAP.
§ Mr. JoplingMy hon. Friend is not as optimistic as he might be about the effects of the recent price-fixing. It constitutes a considerable reduction in prices in the cereals sector. I shall be surprised if it does not have some effect at the margins. I agree with my hon. Friend that one is unlikely to deal with the cereals problem by price policy alone. That is why, as he knows, I have lately been discussing—I have also mentioned it to the House—the prospects of a policy of set-aside, which could help us to deal with the growing surpluses.
§ Mr. JohnWhy, then, did the Ministry give evidence to the Select Committee, whose report was issued this week, that it was depending on prices alone to counter and control the cereals surplus? If the Minister is so confident that it will work at the margins, why will he not give us an estimate of the amount by which cereal production will be cut as a result of the price agreement?
§ Mr. JoplingIt is impossible to predict the effect on production, because the weather plays such an important part. I guess that the hon. Gentleman has read carefully what I have said during the past few months and that he knows that I have said that I believe we shall solve the problem of cereal surpluses only with a package of measures, of which price restraint should be a front-running member.
§ Mr. Ralph HowellIs my right hon. Friend aware that that argument is convincing nobody? Indeed, I doubt whether he is convincing himself. What possible sense can there be in reducing prices, which will encourage every farmer in Europe to produce more cereals, while talking about a package of set-aside? Could he concentrate his mind on this subject and realise that only a mandatory set-aside throughout the Community and other surplus producing areas of the world will solve the problem?
§ Mr. JoplingMy hon. Friend has advanced arguments that are familiar to the House. He will know that a mandatory set-aside is not very far removed from quotas and the House has largely agreed, although I know that my hon. Friend does not wholly agree, that it would be bad for Britain if we had quotas to deal with the cereals problem. I believe that a policy of a voluntary set-aside could sit very well with a policy of price discipline on the lines that we have succeeded in negotiating at the most recent price fixing.