HL Deb 31 July 1968 vol 296 cc303-6

2.50 p.m.


My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government what steps they are taking to stabilise the price of milk to producers and of milk products to manufacturers.]


My Lords, the level of return to milk producers is a matter for the Farm Price Review. The guaranteed price fixed at the Review is, of course, for the standard quantity. The standard quantity includes a substantial proportion of milk which goes to the manufacture of milk products. The price at which milk is sold to manufacturers of milk products is settled by negotiation between them and the Milk Marketing Board.


My Lords, may I ask the noble Lord not to pass too lightly over the first part of my Question, because the hopeful words in this year's Price Review, indicating that producers were to receive 1.2d., on average, more per gallon, for their milk, have not been borne out. In fact, in June, which was last month, the rate per gallon was actually less than it was in the previous year.


My Lords, the noble Lord is quite right in his figures. Of course, the reduction to which he refers arises from the fact that the amount of milk being offered is far greater than the standard quantity. But there is a problem here and, of course, the question of price dilution is taken into account when the Review takes place each year.


My Lords, following the noble Lord's reply, the question of dilution is to some extent inevitable, bearing in mind the Government's expansion programme for the dairy industry in the interests of the beef industry. As a supplementary on the second part of my original Question, does the noble Lord appreciate that the market in this country both for dried milk and for cheese is in danger of collapse, owing to the quantities of both of those commodities being offered from abroad at very low prices? I use the term "dump" prices without any fear of correction.


Yes, my Lords. Again the noble Lord is on to a very serious problem, and it is one of which the Government are aware. My right honourable friend said in another place that he was giving this matter—I think he used the old words— "close and careful attention". I hope myself that another statement can be made on this in the very near future, in a matter of days.


My Lords, would my noble friend agree that it is rather strange that those people who support the competition of capitalism are also demanding stabilisation?


My Lords, is the noble Lord aware that on this matter the Government's good faith is at stake? They made an award of an extra 1.2d. per gallon for producers at the last Price Review on the basis of the higher cost of producing milk. Therefore, the Government have an overriding obligation to see that something like that price is achieved.


My Lords, on the other hand, I am sure the noble Lord, Lord Nugent of Guildford, will agree that the Government are honouring their obligation in this matter. They agreed to pay a certain price, a stabilised price, a guaranteed price—and in this matter a guaranteed price is very necessary—but it was for a standard quantity. Over and above that standard quantity, there is, of course, this dilution of price. But the amount of the dilution will be taken into account each year when the Review is discussed.


My Lords, May I ask the noble Lord whether he is aware that the farmers have had a much more rigid and severe incomes policy imposed on them for a very much longer time, than any other industry in the country?


My Lords, could the noble Lord give me some information as to whether, in view of this serious situation, the Government are considering the possibility of putting import levies on to the manufactured milk products that are now being dumped in this country?


My Lords, if the Ministry of Agriculture were the only Department in Whitehall it would be a comparatively simple matter. If Britain were the only country in the world concerned with these difficulties, then again it would be simple. But we have to take into account international obligations. This we are doing, and I hope that before very long a statement can be made.


My Lords, may I ask one last supplementary question? If the statement which the noble Lord hopes will be made in a few days follows the example of many other agricultural statements—that is, that some form of voluntary agreement between suppliers is to be entered into—may I ask him to pay particular attention to price as well as to quantity? I ask that because dried milk is being offered from Belgium to this country at the present time at 50s. to 60s. a cwt. when what is called the "threshold price" in the E.E.C. is 227s.


My Lords, I note what the noble Lord said, without adding to what I said.


My Lords, is the noble Lord aware that when milk was put into cartons we were told that it was because bottles were too expensive? Is he further aware that this does not alter the price?


My Lords, I am not sure that this makes any difference to the price which the farmer receives.


My Lords, could my noble friend say why it is that, while the opposite Benches argue that free competition is the greatest thing in the economic life of this country, they then argue that protection is important?