HC Deb 08 June 1995 vol 261 cc307-9
5. Sir Thomas Arnold

To ask the Minister of Agriculture, Fisheries and Food when he next expects to meet his EU colleagues to discuss the further reform of the common agricultural policy. [25816]

9. Mrs. Gorman

To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the effects of recent attempts to reform the common agricultural policy. [25820]

Mr. Waldegrave

The next Agriculture Council is scheduled for 19 and 20 June. I will continue to press for further improvements to the common agricultural policy at this and every other suitable opportunity, in order to build on the achievements of the 1992 reforms.

Sir Thomas Arnold

Can my right hon. Friend spell out to the House his vision of a reformed CAP? What would it look like? Does he, for example, favour the progressive reduction of support prices to world levels?

Mr. Waldegrave

As my hon. Friend knows, I shall produce a report on that very matter, setting out my opinions in detail. However, in principle I do not think that anyone doubts that we need a policy that moves far closer to the market, and that deals with the real issues of environmental and social support, where they are rightly to be supported in the countryside, explicitly and not by agricultural policy. It is expensive and inefficient to use high food prices for those purposes.

Mrs. Gorman

I do not know whether my right hon. Friend goes grocery shopping, but is it not true that the British housewife pays twice as much for her groceries as she needs to? Is it not true that, if she went to the United States—which I admit is a long way to go for shopping—she would find groceries on sale for half the price, in a country where salaries are generally almost double ours? Is it not true that the common agricultural policy is nothing more than a rip-off of the British taxpayer? It cannot be reformed. Is it not true that we should repatriate those powers and return to a system of supporting our own farmers, as we used to do, with agricultural supports?

Mr. Waldegrave

My hon. Friend is right: if one goes shopping in America one finds that food prices are very much lower than they are in Europe. As a matter of fact, the common agricultural policy is not only expensive for the British consumer but is now proving expensive for consumers throughout Europe. I doubt whether a single country in Europe is deriving net economic benefit from the CAP. It must be radically reformed. However, I do not agree with my hon. Friend that repatriation is the best way forward. Repatriation is likely to mean the re-emergence of competitive protection and competitive state aids, supports and subsidies, which would damage British farming as well as the consumer.

Mr. Enright

Will the Minister spell out on each occasion that he proposes necessary reforms of the CAP exactly how much the salaries of British farmers will be reduced as a consequence?

Mr. Waldegrave

The calculations are interesting but difficult. If we stop the artificial dumping of subsidised foods on to world markets, world prices will rise. Farmers have less to fear from a world where there is freer competition because of that increase in world prices. The drastic experiment of New Zealand, which was forced to abolish all subsidies overnight—no one is proposing that here—shows that competitive farming can come through, even when farmers are competing with subsidised farming elsewhere.

Mr. Stevenson

When the Secretary of State has discussions with our European Union partners, will he raise the issue of the agrimonetary system? The Secretary of State will know that a significant proportion of the 6 per cent. increase in farm incomes is a result of the devaluation of sterling and the agrimonetary system. What specific proposals does the Secretary of State have in mind to reform that chaotic system, which costs the taxpayer a lot of money? How will he reconcile any reform with the need to ensure that there is no significant reduction in farm incomes as a result?

Mr. Waldegrave

We talked about long-term reform in answer to a question from my hon. Friend the Member for Hazel Grove (Sir T. Arnold). The hon. Gentleman is perfectly right, in that we face a real and imminent problem with regard to agrimoney. That issue will come up at the next Council meeting.

Britain's additional green pound devaluations are caused largely by the refusal of countries with stronger currencies, such as Germany, to allow revaluations. That makes the system break down completely and adds to net costs. We are strongly opposed to that and we are arguing, on the same side as the Commission, that revaluation should be allowed to take place within the agrimonetary system. If that does not happen, British food processors will be severely disadvantaged, as is beginning to occur already.

Sir Jerry Wiggin

Is it not a fact that the size and structure of farms in the United Kingdom is very different from that in all other countries in the European Union?

Will my right hon. Friend ensure that that fact is taken into account very firmly when considering reform of the common agricultural policy?

Mr. Waldegrave

I agree with my hon. Friend. What is considered to be a small farm in the United Kingdom is a large farm in virtually every other country in the European Community. That is why we are opposed to what is called, in Euro-jargon, modulation—that is, shifting all the support to aim at small farms. Small farms in Europe are minuscule farms here, and that kind of policy would seriously damage British farming.

Mr. Skinner

When will the Minister realise that all the talk about the long-term and a further review of the common agricultural policy is not in his best interests? If he wants to see anything done about the common agricultural policy and get his name in the history books, he had better do it sharpish, before he gets sacked.

Mr. Waldegrave

I am grateful for the all-party support that I am being offered. I will do my best to meet the hon. Gentleman's time scale.