HC Deb 23 March 1987 vol 113 cc10-1
11. Dr. Roger Thomas

asked the Secretary of State for Wales what has been the response within the Principality to the most recently announced outgoers scheme for the dairy farming industry; and if he will make a statement.

Mr. Nicholas Edwards

The first phase of the milk community outgoers scheme, which sought to buy up 2 per cent. of our national reference quantity to offset the 2 per cent. reduction in quotas, which is due to take effect on 1 April 1987, closed in 15 February 1987. Twenty-eight applications were received from producers in Wales, 12 of which were subsequently withdrawn, giving a total litreage offered under the scheme of 1.7 million litres.

Dr. Thomas

Does the Minister agree that, with an outgoers scheme, which is really a redundancy payment scheme, it would be much better to pay three or four years' payments immediately an outgoer leaves dairy farming? He would then have much more cash to develop some alternative diversification.

Mr. Edwards

The hon. Gentleman will be aware that we shall now have to introduce across-the-board compulsory reductions in quotas to producers in England and Wales under the scheme that has been agreed by the European Community. He will also be aware that compensation from EC funds has been increased from 18.3 to 27.5 per litre for seven years under the outgoers scheme, which is designed to effect permanent cuts. We must now wait to see how such new arrangements, which have been agreed by the Commission, operate.

Mr. Best

Is my right hon. Friend aware that many dairy producers in my constituency are trying to eke out a living on a net income of £3,000 or less? Does he not consider that there needs to be positive discrimination in favour of the smaller farmer to ensure that the rural life of Wales and Cefn Gwlad is not inhibited? Does he accept that the £90 dairy inspection charge was just about the last straw that broke the dairy cow's back for many of my constituents?

Mr. Edwards

I happen to believe that the campaign against the charge has been rather exaggerated. I do not believe that the impact of about 50p a cow will break any backs. I agree that the smaller producer is important. That is one of the reasons why we made special arrangements, when we introduced the quota scheme, to bring smaller producers up to a minimum level. I am sure that the increased compensation arrangements under the outgoers scheme will also be welcomed by such producers.

Mr. Geraint Howells

Will the Secretary of State inform the House why the many dairy farmers who have left the industry have turned their backs on the outgoers scheme during the past two years?

Mr. Edwards

Clearly, those who did not take up the outgoers schemes did not believe that it would be good value for money and made a judgment on the available alternatives. Of course, sale and leasing arrangements have also been taken into account. We are now moving into a new situation with a compulsory reduction in quotas, and the compensation arrangements will therefore be quite different in the period ahead.