HC Deb 02 July 1987 vol 118 cc613-4
4. Mr. Kirkwood

asked the Minister of Agriculture, Fisheries and Food what progress has been achieved in negotiating a substantial devaluation of the green pound.

Mr. MacGregor

The Agriculuture Council earlier this week agreed devaluations to reduce MCAs by 5.5 points generally and by 7 points for beef, with no change in the green rate for sheepmeat.

Mr. Kirkwood

Is the Minister aware that there is great disappointment at the continuing green pound gap? Is he aware that specialist beef producers in my constituency will be prejudiced to the tune of about 10 per cent. as opposed to their competitors in the EC? The Minister has said that United Kingdom producers should not bear a disproportionate and substantial competitive disadvantage compared to producers in the EC as a result of receiving lower prices. Why did he not hold out for a higher devaluation?

Mr. MacGregor

I should like to put three points to the hon. Gentleman. First, since February the beef MCAs have fallen by almost 16 points, and that makes a big difference. Of course, that also takes into account the strengthening of sterling, but it takes account, too, of what has been achieved in the negotiations. Secondly, I hope that the hon. Gentleman will acknowledge that in this price fixing we obtained a better green pound change by a long way than the average for the Community. We obtained a change of plus 2.4 percentage points, compared with plus 0.5 percentage points average for the Ten—better than the Irish and the French. Thirdly, he will be aware that green rate devaluations, while they help farmers and raise support prices, also have other impacts that we had to take into account. On balance, I think that we got it absolutely right.

Mr. Conway

Bearing in mind the importance of this devaluation of the green pound for farmers' incomes, will my right hon. Friend comment on the statement by the president of the National Farmers Union that, as a result of these negotiations and the statement yesterday, farm incomes will decrease by 15 per cent.? That is not the impression of many of us on this side of the House.

Mr. MacGregor

I am grateful to my hon. Friend for raising that point. Let me make it clear again that, although there are still some calculations to be done, because we have only just completed the negotiations, the more accurate picture is that the overall result of the price package is about neutral for British farmers. Of course, other things affect farm incomes, many of which we cannot be certain about this year — for instance, the harvest. No doubt the president of the National Farmers Union examined some of those matters, and his figure is therefore very uncertain.

Mr. Home Robertson

Does the Minister intend that trading in beef should take place on a fair basis between producers in the United Kingdom and Ireland and in other parts of the Community, and if so, when?

Mr. MacGregor

Obviously, MCAs fluctuate. It will depend on realignments and on the strength of sterling. Over the past few months, however, we have made considerable improvements in the trading position for beef farmers.