Common Agricultural Policy (Hansard, 2 July 1987)

§ 3. Mr. Strang
asked the Minister of Agriculture, Fisheries and Food what was the total cost in sterling of the common agricultural policy throughout the European Community in 1986.

§ The Minister of Agriculture, Fisheries and Food (Mr. John MacGregor)
Expenditure on the common agricultural policy in 1986 was £13,800 million.

§ Mr. Strang
Is the Minister aware that he was right to acknowledge yesterday that this year's prices package represents a failure by the Council of Agriculture Ministers to tackle the problem of the costly food mountains in Europe? Will he assure the House that when he seeks to resolve that problem it will not be at the sacrifice of British livelihoods and jobs, and that there must be greater national responsibility within the Community for agricultural production?

§ Mr. MacGregor
I certainly acknowledge that there is a long way to go, but I would not say that yesterday's agreement was a failure. It marked some significant improvements in dealing with CAP reforms, particularly in two areas where the costs have been rising substantially, namely, cereals and oilseeds. That followed from a more significant reform in dairy and beef in the December package and showed a change in direction. It was not a failure, but I acknowledge that there is a long way to go. I can assure the hon. Gentleman that, while obviously everyone in agriculture will have to bear some part of the containment of the surpluses, it will be my determination to ensure that there is no undue sacrifice in any sense for British farmers and that they get a fair deal.

§ Sir Richard Body
Does my right hon. Friend agree that there is also a human cost attaching to the CAP and that, despite the vast sums being spent, the number of farmers in the original Six has fallen from 21 million to 7 million? In this country their number is still declining at the rate of 3,000 or 4,000 a year. Is it not time that we asked ourselves whether price support, in accordance with the CAP, has the effect of supporting farmers?

§ Mr. MacGregor
I know of my hon. Friend's great interest in these matters. He has written interestingly about them. The decline in numbers is not just associated with the structure of the CAP. I am sure that he will acknowledge the substantial improvements in efficiency that have taken place within farming, which obviously have had an impact on the numbers involved.

§ Mr. Livsey
Does the Minister recognise that sheep production is the ninth highest cost under the CAP? Will 612 he ensure that the future of the sheep industry in Britian, particularly in the less-favoured areas, is protected in the coming negotiations?

§ Mr. MacGregor
Naturally, I am well aware of the importance of sheep production in the less-favoured areas. We have yet to see what the Commission's review of the sheepmeat regime will produce. I have already made it clear that I am not prepared to accept anything that involves unfair discrimination against the United Kingdom. That is why we managed successfully to get the proposal for a headage ceiling on the payments for ewe premium dropped from the discussions in the recently completed package.

§ Mr. Colin Shepherd
Is my right hon. Friend aware that no less than 20 per cent. of the FEOGA costs are related to the storage of surpluses? If he is successful in bringing production more into balance with needs, will he make strenuous efforts to make it clear to the Treasury that the United Kingdom farming industry could benefit by the use of such funds released, in part at least, for restructuring itself for the future?

§ Mr. MacGregor
I understand exactly what my hon. Friend says. I have made it clear that we hope that some part of those funds could be used for alternative land use, diversification and so on, to enable structural adjustments in the countryside to take place. That would also provide alternative income for farmers and others in the rural economy. The cost of storage, let alone disposal, is so high at the present time that it is unrealistic to think that anything like that total proportion could be devoted to alternative schemes.

§ Mr. Beggs
Will the Minister tell the House whether the Anglo-Irish Agreement has in any way reduced the extent of smuggling of livestock from Northern Ireland into the Irish Republic? Does he agree that the smuggling of livestock into the Republic from Northern Ireland threatens the viability of meat plants in Northern Ireland and also results in fraudulent claims for payments from EC funds and therefore abuses the common agricultural policy?

§ Mr. MacGregor
The question of the Anglo-Irish Agreement and what is discussed under it is a matter for my right hon. Friend the Secretary of State for Northern Ireland. In terms of exports of beef from Ireland to Northern Ireland or elsewhere, the hon. Gentleman will have noted that in the current price fixing that has just been completed we obtained a higher devaluation of the green pound than of the Irish punt, and this has had a favourable impact on the trading position of the United Kingdom.

§ Mrs. Kellett-Bowman
As any sales of a surplus product reduce the cost of the common agricultural policy, can my right hon. Friend tell me why Live Aid's request to buy surplus butter to turn into, I understand, buttermilk—which sounds a bit unlikely—to send to Africa has been turned down?

§ Mr. MacGregor
To some extent, any sales of the surpluses in intervention provide some reduction in the overall cost. However, as my hon. Friend knows, the costs of disposal out of intervention are still a very significant part of the CAP. I shall have to look into the other point that she has raised and I shall write to her.

§ Mr. John
The Minister has been quoting 1986 figures. Will he admit to the House that since then the situation has deteriorated in that the CAP budget is now £16 billion, which is more than a £3.5 billion over-run? Therefore, we are talking about a cost to the Community of about £20 billion.

§ Mr. MacGregor
I acknowledge that the cost of the CAP has risen. That is why the Government are devoting such strenuous efforts to trying to get further reforms in the CAP and to get the costs down.