HC Deb 02 July 1987 vol 118 cc619-20
10. Mr. Bruce

asked the Minister of Agriculture, Fisheries and Food if he will make it his policy to press for a substantial devaluation of the green pound; and if he will make a statement.

12. Mr. Speller

asked the Minister of Agriculture, Fisheries and Food if he will make a statement on progress on the European Community negotiations on the proposed devaluations of the green pound.

Mr. MacGregor

I refer the hon. Member and my hon. Friend to the reply I gave earlier.

Mr. Bruce

I acknowledge that the Minister secured a 7 per cent. devaluation for beef as against a 5.5 per cent. general devaluation, but does he not acknowledge that the Irish secured a 2.8 per cent. devaluation? Given that they are the major competitors in the beef regime, does that not mean that the gap is still too disadvantageous? The hon. Member for Macclesfield (Mr. Winterton) has already said how important dairying is to underpin the rural economy in his area. Will the Minister acknowledge that that is also true of the beef industry in my constituency and many others, and what will he do to bring that industry into profit?

Mr. MacGregor

Not only is our beef sector affected by the green rate devaluation that was secured—although it was well above that of the Irish—but, MCAs for beef will fall because the Commission will be reducing the percentage of the intervention price used to calculate MCAs from 85 to 80 per cent. —a significant move in the direction that we were seeking. We pressed for that, and it was another of the changes that we obtained in the price package, which was advantageous to Britain. That means that the net MCA payment on Irish sides will go down from about £27.80 to £22.60, which is almost a cut of 19 per cent. That is a considerable improvement on December 1986, when the equivalent figure was £63.

Mr. Speller

I take the point that my right hon. Friend has made, but will he accept that the British farmer, who is as patriotic as the next man, entirely accepts the need for reform and devaluations, but does not understand why it always seems that the minimum amount that he receives is not sufficient to restore him to a reasonable livelihood? He is looking to the Government for rather more help than he has received.

Mr. MacGregor

Within the Community we have fought hard for legitimate British interests and we have been very successful. I entirely understand what my hon. Friend has said and I should like to see a satisfactory solution for farmers. We must face the fact that we have substantial surpluses. In some senses we are facing the penalties of the success that farmers have had in hugely increasing production. Therefore, that means that we shall have to reduce the costs of surpluses and face up to some agricultural land coming out of production, hence the importance of the other initiatives that we are now taking.

Mr. Maclennan

What are the prospects of the Minister supporting the entry into the exchange rate mechanism of the European monetary system within the next financial year? It will give farmers some relief from the constant fluctuations, which are hitting our farmers harder than others.

Mr. MacGregor

I think that the hon. Gentleman is well aware of our position on the EMS. Membership of the EMS has no automatic effect on green rates. It is the panacea that some people seem to be chasing all the time, but it does not exist. Green rates will still be reviewed on each price level, and exceptionally at other times, whether we are in or out of that system.