§ 3. Mr. Heathcoat-AmoryTo ask the Minister of Agriculture, Fisheries and Food what representations he has received about arrangements for the release of grain held in United Kingdom surplus stores.
§ The Minister of Agriculture, Fisheries and Food (Mr. John MacGregor)I continue to receive representations about the current arrangements for the release of grain held in intervention.
§ Mr. Heathcoat-AmoryDoes my right hon. Friend agree that storage is now one of the most profitable sectors of British agriculture? Does he think that the tendering procedures for taking grain out of store are adequate to overcome the natural reluctance of store owners to relinquish their source of income?
§ Mr. MacGregorWe are continually examining the storage arrangements to ensure that we get value for money. The real point is not about releasing grain from intervention stores, but that, under the Community rules adopted last year, Commission agreement is required for sales of grain from intervention on to the domestic market. We opposed those new rules when they were introduced, but we have them. There is no point in making intervention grain available, because, under Community rules, it cannot be sold at a price lower than the buying-in price and market prices are currently well below that level.
§ Mr. Ralph HowellWhat does my right hon. Friend consider to be the world market price for milling and other wheat?
§ Mr. MacGregorI do not have the precise figures, but I suspect that my hon. Friend is saying that the world market price can change. It depends on the surpluses that exist and the subsidy that is going in from not only the Community, but the United States and elsewhere, to reach a world market price. That is a difficult figure to estimate, but if we get the surpluses under control the world market price will not necessarily be where it is today.
§ Mr. Tony BanksIf the Minister cannot answer that question, perhaps he can answer this one. How much is it costing to keep the grain in intervention stores?
§ Mr. MacGregorhave made it plain many times that the costs are too high. The costs are about £12.5 billion a year for all intervention stores. That is not just the cost of storage, but the cost of disposing of the surpluses. That is why we took such a strong line in the negotiations for CAP reform that we have successfully carried through to deal with that problem. I have always made it clear that we must reduce those costs.