HC Deb 16 November 2000 vol 356 cc1058-60
5. Ms Dari Taylor (Stockton, South)

What his priorities are for the next reform of the common agricultural policy dairy regime.[137136]

8. Mr. Andrew Robathan (Blaby)

If he will make a statement on his policy for the future of the dairy industry, with special reference to milk quotas.[137140]

The Minister of Agriculture, Fisheries and Food (Mr. Nick Brown)

May I tell my hon. Friend and the hon. Gentleman that I regard this as a matter of fundamental importance for the dairy industry and the future of the common agricultural policy? My priority is to bring about an orderly phasing out of the European Union milk quota system on the basis that I and other like-minded EU Agriculture Ministers advanced in the recent Agenda 2000 negotiations. My aim is to ensure that UK milk production should not be unreasonably constrained by quotas, and that through liberalisation UK producers should have the opportunity to participate in high-value export markets.

Ms Taylor

In thanking my right hon. Friend for his answer, may I urge the Government to keep pressing for the orderly and speedy end of milk quotas, as lowering prices will have the most effective benefit for efficient dairy farmers. Does my right hon. Friend believe that phasing out those quotas relies heavily on building alliances with European partners?

Mr. Brown

My hon. Friend is right, as we will not be able to phase out quotas in the European Union by quarrelling incessantly with the other 14 member states. I am enormously encouraged by the fact that Ministers from other countries who take an interest in the reform proposals advanced by the UK Government and I met recently as guests of the Italian Minister to discuss further reform of the CAP. I set great store by the review clause scheduled for 2003 and the discussions in the EU on whether or not it is possible to pull that clause forward to 2002.

Mr. Robathan

May I remind the Minister that last October he kindly agreed to come to my constituency to see dairy and beef farmers who are struggling? Those who have survived would still like to meet him and I very much hope that he will be able to visit them in the near future. While I agree with his policy, in the unlikely event that he is still Agriculture Minister at the time of the CAP reform—

Mr. Steve McCabe (Birmingham, Hall Green)

He will be there longer than you.

Mr. Robathan

The Minister may have moved up or down, or even—we hope—across to the Opposition Benches. What will happen if he is still Agriculture Minister at the time of the review in 2003 and is unable to persuade his European partners of the need for the quota system to be withdrawn?

Mr. Brown

I thank the hon. Gentleman for his kind wishes for my personal future in this post. I would point out that I have outlasted most of my predecessors. I think that I am also the fourth longest-lasting Minister in the Council of Ministers. There seems to be a rapid cull of Agriculture Ministers, as well as some of the animals for which we are responsible.

On the substance of the hon. Gentleman's question, the UK's views are clear and well known and, to be honest, they should not be a matter of party politics. We want to do the best thing for the dairy sector and for our own dairy farmers. The review proposals that we put forward in the Agenda 2000 round were right. I am convinced that the EU will have to return to our proposals or something similar in future. I argued the case vigorously with the other Ministers in the Council of Ministers and I am making progress.

Finally, I welcome opportunities to discuss these matters directly with those in the dairy industry and, although I have not been able to do it yet, I would like to visit the hon. Gentleman's constituency and meet the dairy farmers and, perhaps, those from neighbouring constituencies as well.

Mr. Huw Edwards (Monmouth)

Does my right hon. Friend agree that many dairy farmers have seen the price of raw milk fall considerably in recent years as the power of the supermarkets has increased? This matter was seriously looked at by the Competition Commission following the original recommendation of the Welsh Affairs Committee. Does he agree that, in order to re-establish their position in the market, dairy farmers should be encouraged to work in partnership with each other and form co-operatives?

Mr. Brown

As my hon. Friend knows, I agree with that proposition. I think that vertical integration in the industry is part of the way forward. It also means that there has to be much more co-operation between retailers, processors and producers. As people have heard me say time and again, I believe that each sector of the highly integrated supply chain has a vested interest in the well-being—which means the profitability—of other parts of the chain. My hon. Friend is on to a strong point. There is a pressing need for a good study of how the supply chain works, where the strengths and weaknesses are and how power is apportioned. I am reflecting on that and hope to have something further to say soon.

Miss Anne McIntosh (Vale of York)

Does the Minister think it fair that British milk quotas will not go up until 2005, whereas four other EU countries have had their milk quotas increased? Is it fair to our milk producers that we have to rely on French imports into Britain until that time?

Mr. Brown

I do not think that the quota system serves our country well, nor do I think it fair that during the Agenda 2000 negotiations I was saddled with commitments that had been entered into by the previous Government with regard to Ireland's quota dating right back to 1983–84. The solution is not to quarrel over the allocation of quota; it is to remove the instrument altogether. That should not come as a sudden shock to dairy farmers throughout the EU. There should be a progressive phasing out of the instrument. I still think that our proposals to depreciate it over six years are the right way forward.