Common Agricultural Policy

HC Deb 22 October 1987 vol 120 cc907-9

7. Mr. Grocott

asked the Minister of Agriculture, Fisheries and Food what steps he is taking to seek to reform the common agricultural policy.

Mr. MacGregor

The Council of Ministers is currently considering a wide range of Commission proposals for the further reform of the CAP.

Mr. Grocott

Will the Minister confirm that the figures that his Department has supplied show that the direct costs of the CAP to the taxpayer are about £2.5 billion this year, which is £44 for every man, woman and child in the country? Does he agree that it is just the tip of the iceberg? The figures do not include administrative costs or the hugely inflated food crop costs that result from intervention. When will the Minister stop mouthing about reforming the CAP and take the burden of costs off our backs?

Mr. MacGregor

The hon. Gentleman is quoting—the figure is not as high as he suggests—the figures in the public expenditure White Paper for the cost of the CAP. If one takes the matter more broadly, the costs across the Community and to the taxpayer are much higher than that. One of the problems that we face, and one of the matters that I constantly point out, is that we are spending £250 million a week across the Community as a whole simply for the storage and disposal of surpluses. I do not need any pressing from the hon. Gentleman to get on with reforms of the CAP. That is precisely what we have been doing. The United Kingdom Government have been much in the forefront.

I could list many of the changes that have already taken place over the past two or three years. The whole point of the current discussions in the Agriculture Council is to introduce stabilisers which will put further budgetary discipline into the CAP and bring us closer to the market place. Again, the United Kingdom, together with the Commission, is pressing for the changes which we see as essential for a successful outcome to the December summit.

Mr. Ralph Howell

Is my right hon. Friend aware that there is widespread concern at what is so far known of the stabiliser proposals being formulated in Brussels? Will he tell the House the position that he has adopted? Is he aware that many people think that the proposals will neither curb production nor cut expenditure on agriculture?

Mr. MacGregor

The proposals will help us to cut expenditure, particularly expenditure that is directed at the wrong areas. I have always taken the view that it is in farmers' own interests that spiralling costs are controlled. They may then have some stability for the future. It is as much in farmers' interests as in the interests of taxpayers and everyone else that we get on top of the matter.

As for our general approach, we support the introduction of stabilisers to produce better budgetary discipline. However, I am clear that they should not discriminate against British interests and that they should apply to all sectors. Some sectors are still excluded and although we do not normally produce in them—they include Mediterranean products — I am as keen to introduce stabilisers for such products as for any others.

Mr. Geraint Howells

Will the Minister inform the House of the latest developments on the EEC sheepmeat proposals?

Mr. MacGregor

Yes. We had a discussion on Tuesday about the stabiliser aspect of the sheepmeat proposals. I stated that I am critical of them as they stand at the moment because they discriminate against the United Kingdom. We have not yet discussed the wider proposals of the future of the sheepmeat regime, which I expect to discuss at the next Council meeting or shortly after.

Mr. John Greenway

Does my right hon. Friend recognise the widespread hostility towards milk quotas, and the fact that they have created a situation in which young dairy farmers find it impossible to get into dairy farming? As we address the question of the reform of the CAP, will my right hon. Friend confirm that no more quotas will be introduced?

Mr. MacGregor

On dairy quotas, if we could have tackled the problem of spiralling costs in another way I should have liked to do so. However, the plain fact was that we could not and the quotas have big disadvantages, one of which my hon. Friend has mentioned. The vast majority of British dairy farmers now believe that the quota system has given them a stability that they could not have achieved in any other way. We have made it clear that we believe that the quota system should be continued after 1989, and that has the support of the majority of British farmers.

Mr. Hume

Does the Minister agree that the proposals for the reform of the common agricultural policy, to which he has referred, will have a serious impact on regions that are heavily dependent on agriculture, and that those regions already have high unemployment, such as Northern Ireland and the highlands and islands? What has he brought forward to cushion the impact of those proposals?

Mr. MacGregor

I beg the hon. Gentleman to understand that if the costs of the CAP continue to rise as they are doing even more drastic measures will have to be taken, which will certainly not be in the interests of our farmers. Therefore, it is necessary to reform the CAP.

I should like to mention one point on which I am acutely conscious of the problems in the less-favoured areas. In the sheepmeat regime there is a proposal to place a ceiling on the limit for payment of ewe premium which would adversely affect sheep producers in, for example, the less-favoured areas. I have stated my strong opposition to that.

Mr. Maxwell-Hyslop

Has my right hon. Friend made any progress in persuading the other EEC Ministers that the only way to limit an otherwise open-ended budget and to ensure that the money goes to the producers rather than to the storers of the food is to have quotas across the entire spectrum of agricultural output? Otherwise, there will be a knock-on from one aspect of production to another when the squeeze comes on.

Mr. MacGregor

I know how much my hon. Friend studies these matters. However, there are grave difficulties in going down the quota route in other sectors, for example, cereals, in which they would be almost impossible to administer, quite apart from other difficulties.

My hon. Friend has made an interesting point about the dairy industry. One of the reasons for the further changes in quotas in December was to reduce the amount of stocks in intervention—the precise storage point that he makes. I am sure he will be glad to know that as a result of that change in December stocks in intervention are decreasing markedly.

Dr. David Clark

In the efforts to reform the CAP, which has the support of Labour Members, will the Minister assure the House that he will not bargain away the sheep variable premium and that he will not close his mind to the direct income support, which would be a great help to the smaller and poorer farmers in Britain?

Mr. MacGregor

If, by direct income support, the hon. Gentleman means the direct income aids which are currently being discussed in the Community — we discussed that on Tuesday—I must advise him that, for a variety of reasons, most member states were opposed to the present proposals, which, in their present shape, do not make sense, not least because there is nothing in them to prevent increased production arising as a result of the direct income support. That would run contrary to the major aims of reform. I do not think that the proposals in their present form are acceptable, or will be of much benefit, to the United Kingdom.

We have not yet embarked on detailed negotiations on the sheepmeat sector, but I can assure the hon. Gentleman that it would be absolutely my intention in our general approach to resist measures which would discriminate against United Kingdom interests and to favour those which would allow free but fair competition and enable us to capitalise on our natural production advantages in sheepmeat.