§ 6. Mr. LathamTo ask the Minister of Agriculture, Fisheries and Food what response he has received on the outcome of the recent price-fixing negotiations in Brussels.
§ Mr. MacGregorThe price settlement was very satisfactory for the United Kingdom. The green pound devaluations and reductions in the milk co-responsibility levy which I secured have been particularly welcomed in the House and elsewhere.
§ Mr. LathamIs my right hon. Friend aware that he is entitled to gentle if not ecstatic congratulations on that generally satisfactory outcome? Is it not particularly good that there has been a step towards reducing the milk co-responsibility levy and will he press for further progress in that regard?
§ Mr. MacGregorYes, I agree with my hon. Friend. One of the major breakthroughs in this year's price negotiations was that we achieved a reduction in the milk co-responsibility levy across the board, and elimination of it in less-favoured areas. We also secured a commitment that that would be the first stage in further developments towards phasing it out. It is particularly satisfactory that many other Ministers now recognise that the milk co-responsibility levy does not necessarily have a part to play in the CAP reforms. I hope to extend that to cereals. I assure my hon. Friend that I will be pressing for further progress in future price negotiations.
§ Mr. KirkwoodWill the Minister give us an assurance that the recent changes in interest rates will be taken into acount in future price-fixing negotiations, as they are creating adverse financial conditions for farmers in my constituency? Returning to headage payments, is the 1108 Minister aware that 884 farms in my constituency and in Tweeddale, Ettrick and Lauderdale are in receipt of hill livestock compensatory allowances, and the headage payments restrictions would adverseley affect them? We welcome the Minister's support, and hope that he will strengthen his resolve to ensure that those arrangements are not interfered with.
§ Mr. MacGregorThe next price negotiations—I am almost tempted to say thank goodness because they take so much time—will not begin for another nine months or so. It would not be right for me to comment on what general aspects of agriculture we shall be considering then. The draft proposals for the hill livestock compensatory allowances are only at an early stage of consideration and I am sure that there will be long negotiations on them. I have made clear my position on headage payments limits, but I must point out that one of the difficulties facing us is that a number of other member states are trying to skew the many elements of the common agricultural policy far more towards very small farmers. That is not in the interests of agriculture in the Community as a whole. However, it is one of the factors that they will be taking into account in looking at the limitations, so I shall have quite a battle. I am clear that it would be a mistake to extend the system any further. I voted against the beef regime recently because I disliked the limitation on headage payments there.
§ Mr. KnapmanWill my right hon. Friend inform the House what effect the devaluation of the green pound will have on farmers' incomes?
§ Mr. MacGregorI am glad to say that the changes in the green pound this year will, of themselves, add about £155 million to farmers' incomes, but will have a negligible effect on the retail prices index.
§ Mr. Ron DaviesThat, of course, will not do anything to offset the 20 per cent. loss in farm incomes from 'which farmers have suffered since 1983. Can the Minister tell us whether, when he was in Brussels, he discussed the pricing of organic produce? Can he tell us especially whether he tried to convert his colleagues in Brussels to the view advanced in Britain by his right hon. Friend the Secretary of State for the Environment, who said a couple of weeks ago that he regarded the production of organic food as another means by which farmers rip off consumers?
§ Mr. MacGregorThat is not what my right hon. Friend said.
§ Mr. Ron DaviesYes, it is.
§ Mr. MacGregorIn answer to the hon. Gentleman's question, we did not discuss the pricing of organic produce in Brussels and we have not done so before. The increase in organic production has a part to play—although in my own view, it is not a major part—in the development of agriculture and it is important to allow it to develop because I know that some consumers especially want organic food. It is important that organic produce should be defined correctly and I am sure that the hon. Gentleman will welcome our recent announcement about an agreement on standards for organic produce, which is an essential first step in the development of organic produce.
§ Mr. Charles WardleMy right hon. Friend won many advantages for British farmers in the Brussels negotiations. Did he have an opportunity to discuss the fruit and vegetable regime, which still suffers from many inefficiencies, costs about £1 billion ecu a year and has been sharply criticised by the Court of Auditors?
§ Mr. MacGregorI have noticed that the Court of Auditors has just criticised the operation of the regime and I am trying to get hold of a copy of its report myself because I want to study it urgently. I am grateful for what my hon. Friend said about the price negotiations. We managed to extend the stabilisers to certain further vegetables and there have been, therefore, reductions in price there, which will be helpful in dealing with some of the critical aspects of the regime that my hon. Friend has in mind.