Agricultural Stabilisers (Hansard, 3 March 1988)

§ 5. Mr. Boswell
To ask the Minister of Agriculture, Fisheries and Food what is his latest estimate of the impact of the recent provisional agreement on agriculture stabilisers on the level of intervention stocks and the cost of the common agricultural policy.

§ The Minister of Agriculture, Fisheries and Food (Mr. John MacGregor)
The agreements on CAP reform reached at the recent European Council should restrain production, which should in turn reduce the pressure for sales to be made to intervention, and hence contribute to greater budgetary discipline in the CAP.

§ Mr. Boswell
I congratulate my right hon. Friend on that solid and remarkable achievement. Will he use the authority that that has given to press for a satisfactory realignment of green currencies and, on a wider compass, to press internationally for a measure of multilateral agricultural disarmament of subsidies through GATT?

§ Mr. MacGregor
Questions appear later on the Order Paper with regard to my hon. Friend's first point. As to his second point, I shall be going to the United States soon to discuss this matter with my opposite number there. I hope that as the European Community has taken some fairly tough decisions on agricultural spending and introduced substantial new restraints, that will help us in reaching agreement in the Uruguay round between now and 1990—which is the timetable set for the round—along the lines that my hon. Friend mentioned.

§ Mr. Geraint Howells
Will the Minister clarify whether the agreement on sheep stabilisers is provisional or is legally binding on sheep producers? If it is binding, will he give an assurance that the present sheepmeat regime will remain intact for years to come?

§ Mr. MacGregor
The Agriculture Council is meeting next week to discuss the detailed regulations that will follow the European Council agreement. After that, sheep stabilisers will be in place and will form a binding agreement. We shall turn our attention to the review of the sheepmeat regime shortly afterwards. I am not sure exactly when that will be, but it will certainly be later in the year. I imagine that that will be a protracted negotiation.

§ Mr. Paice
Will my hon. Friend, in pursuing reform of the CAP, which the agreement that has been referred to set in train, do everything that he can to ensure that British farmers are not at a disadvantage with regard to the implementation of the programme across the rest of the Community?

§ Mr. MacGregor
A number of measures in the original proposals discriminated much more against the British farmer than do those in the final outcome. That was a successful outcome to the negotiation for the United Kingdom. In particular, heavy emphasis was placed on the use of the co-responsibility levy as part of the cereal stabiliser mechanism. It remains in place because that is what the Commission and every other member state wanted, but it is very much reduced compared with other 1144 pressures we were under. I can assure my hon. Friend that, although one never wins 100 per cent. of the cases that one is aiming to win, most of the discrimination in the outcome of the summit was reduced for the United Kingdom, and many other member states had to accept decisions that were quite a long way away from their original starting positions.

§ Mr. Pike
Does the Minister recognise that many small hard-working farmers, who are working the most difficult land in the country, believe that, despite all the reforms, the common agricultural policy is putting them out of business? Will he accept that that policy is a financial disaster for Britain? Is it not about time that we saw an end to the common agricultural policy?

§ Mr. MacGregor
I am not sure that that is what farmers in the hon. Gentleman's constituency would want. It is worth mentioning that some of the policies that the Labour party would pursue would disadvantage farmers much more. I agree with the hon. Gentleman about the need for restraint on spending in the CAP, which is what we have been successfully achieving after working very hard to obtain.
As for farmers in the hills and uplands and less-favoured areas, the hon. Gentleman will know that there are substantial policies, such as hill livestock compensatory allowances, designed to cope with precisely the difficulties that they face.

§ Dr. David Clark
Will the Minister explain how the sheep stabiliser, coupled with the set-aside in agricultural arable land, will not result in sheep moving out of the upland areas to the lowlands, resulting in bankruptcy for many upland hill farmers?

§ Mr. MacGregor
I take it that the hon. Gentleman is not against sheepmeat stabilisers. [HON. MEMBERS: "Answer the question."] I will answer the question. If he is against the sheepmeat stabiliser, I hope he will take into account, bearing in mind what he has often said about expenditure on the CAP, that the costs of the sheepmeat regime were rising very fast, to well over 1 billion ecu this year.
I hope the hon. Gentleman will recognise that it was necessary to have a sheepmeat stabiliser. There is a small discriminatory element because we have a separate regime. As the hon. Gentleman knows, I fought very hard against that, but in the overall outcome we had to accept it. Nevertheless, there is a need for the sheepmeat stabiliser. I am fully conscious of the hon. Gentleman's point about the knock-on effects for sheep producers in the hills, as restraints must occur in local areas. As for the set-aside, we have to take a decision on grazed fallow, which is what the hon. Gentleman particularly had in mind. This week I have had discussions with the National Farmers Union on that subject, and specifically on the impact on hill sheep farmers.

§ Mr. John Greenway
Does my right hon. Friend accept that the imposition of a separate stabiliser for sheepmeat for United Kingdom farmers is deplorable? Is it not a fact that it is most important at the price fixing next week to negotiate the maintenance of the variable premium and to resist the imposition of headage limits on upland farms and lowland areas?

§ Mr. MacGregor
We do not know yet, because we have not seen the Commission's proposals, whether the future 1145 of the sheepmeat regime will feature in the price review proposals or later in the year. We have yet to see more details on sheepmeat; they are very scanty in many regards. When we see those details, we shall make up our mind. I am determined to avoid discriminatory action against the United Kingdom and to ensure that whatever is done enables the United Kingdom to use its natural advantage in sheep farming. The proposal on ceilings and headage payments for ewes to which my hon. Friend refers was one of the items that we negotiated out of the recent package. We shall be opposing that again if it arises.