Food Surpluses (Hansard, 1 December 1988)

§ 1. Mr. Baldry
To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the progress that has been made in eliminating agricultural surpluses within the European Community.

§ The Minister of Agriculture, Fisheries and Food (Mr. John MacGregor)
European Community intervention stocks of most commodities have fallen significantly as a result of recent common agricultural policy reforms. For example, butter stocks have been reduced by 80 per cent. over the past year and stocks of skimmed milk powder are now almost negligible.

§ Mr. Baldry
Does my right hon. Friend agree that the fact that the United Kingdom butter mountain is melting and that skimmed milk powder surpluses have almost vanished proves that CAP reforms are beginning to work and that it is possible to reform the CAP in such a way as to provide a firm basis for the future prosperity of our farmers?

§ Mr. MacGregor
I agree with my hon. Friend. A main criticism of the CAP in recent years has been the amount of money that has gone into the storage and disposal of surplus stocks. The fact that those surplus stocks are decreasing substantially is a good sign for the future stability of our farmers. We must do other things to achieve complete CAP reform, but we should acknowledge how much has been done already.

§ Mr. Tony Banks
I understand that we have a large and growing cheese mountain as a result of EC surpluses. Of course, we expect to get nothing but hard cheese from the Government—[Interruption.] It will do for 2.36 pm. As I assume that some of that cheese will be in intervention 858 stores in my constituency—there is probably some good Greek feta cheese knocking about—is there any chance of the pensioners of Newham eating some of that feta cheese, with a pint or two of ouzo, at Christmas?

§ Mr. MacGregor
That was a rather belaboured remark. It is important to get the matter in context. The increase in cheese stocks is small, as is the total stock. The major expense lay in the butter mountain stocks, and they have been decreasing. As the hon. Gentleman probably knows, we took advantage of the EC free food scheme in relation to butter, but the decrease in butter stocks means that we shall have much less, or nothing, to do on that front in the future. That is not the best way to deal with the surplus. The best way is not to have a surplus in the first place.

§ Mr. Marland
As the agricultural surpluses are coming under control, will my right hon. Friend consider easing the co-responsibility levies on dairy products and cereals? They have always been iniquitous taxes and have had no effect on surpluses. Will he use his best offices to reduce that tax?

§ Mr. MacGregor
It is right to emphasise the fact that surpluses are decreasing and the mountains vanishing. The public at large and many pundits have not yet got hold of that fact. But we must still undertake further reforms, not least in the subsidised disposal of dairy products that are not in intervention stores. With other factors, that means that the dairy sector is still an expensive regime.
I agree with my hon. Friend that the co-responsibility levies on milk and cereals are the wrong way to tackle the problem, and I shall continue to battle to get rid of them. But the regimes are still expensive, and until we get them more under control I may be unable to persuade all my fellow Council Ministers to accept my view.

§ Dr. David Clark
Will the Minister confirm that it has cost the European taxpayer £4.5 billion to remove the post-1987 food mountain and thus reduce the amount in storage? Will he assure the House that, to stop those mountains being rebuilt, not even one quarter of that amount has been spent in 1988?

§ Mr. MacGregor
It is rather complicated to give exact figures on what it costs to get rid of surplus products, as costs are spread over several years. Perhaps I can write to the hon. Gentleman about that. He is right to say that the figure has been high for storage and disposal of stocks. Last year, the actual figure for the Community was £12.5 billion. It is important that we ensure that stocks do not increase again and that we do not face such costs. That is what the thrust of the policies is about.

§ Mr. Paice
Does my right hon. Friend agree that cereal farmers have taken an almighty beating in the cereal price that they received as part of the effort to reform the CAP and reduce surpluses? There has been a 42 per cent. reduction in their prices in the past 10 years. Would he say to cereal farmers in his and my constituencies that he understands their problems and that he will do everything that he can to ensure that they do not lead to widespread deprivation of vast areas of East Anglia?

§ Mr. MacGregor
I agree with my hon. Friend. I understand entirely the difficulties that many cereal farmers in this country are experiencing as a result of the 859 adjustment process that we have had to undertake, coupled also with two years of bad weather in East Anglia, which has certainly exacerbated our difficulties.
I do not wish to minimise the matter; I entirely understand the pressures. However, my hon. Friend will agree that there was no stable basis for our cereal farmers as worldwide and Community surpluses went on rising, at ever-increasing cost to the taxpayer. The best guarantee of a prosperous future is to tackle the problem of the surpluses, and taking marginal cereal land out of production helps with that, which is, of course, the purpose of the set-aside scheme.