§ Lord CLIFFORD of CHUDLEIGHMy 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 whether they have any statement to make about the position of dairy produce factories in South-West England, some of which are closed, are about to close or are on part-time working.
§ Lord STRABOLGIMy Lords, the Milk Marketing Board for England and Wales have decided to stop supplying milk for butter production for the time being in order to maintain the supply of milk to the liquid market and to sustain production of other dairy products, particularly fresh cream and cheese.
§ Lord CLIFFORD of CHUDLEIGHMy Lords, is it not a scandal that the dairies of England have come to this sorry state of affairs? Is it not tantamount to criminal negligence that the advice given over the last 18 months by the NFU, the CLA, and the Milk Marketing Board about the dairying industry in the South-West has been ignored? To go from the general to the particular, why close down Hemyock, with a population of 2,000, putting 70 breadwinners out of work, and continue with building a new factory just over the hill at Wellington?
§ Lord STRABOLGIMy Lords, I of course do not accept what the noble Lord has said in the earlier part of his supplementary questions. This is a commercial decision taken by the Board in the light of the present supply situation, one in which the Government were not involved. 1008 The Government are anxious to see an increase in milk production which will make more supplies available for the greater manufacture of milk products, including butter.
Earl FERRERSMy Lords, can the noble Lord say what the Government are doing to bring this about? Is he aware that this year 60 million gallons of milk less are being produced than were produced last year? If the Government do not do something about the matter, not only will there be a shortage of butter and cheese, but also cream and liquid milk.
§ Lord STRABOLGIMy Lords, the increase in the guaranteed price announced last week should help to restore the confidence of the milk producers and reverse the recent decline in milk production. The Milk Marketing Boards will be guaranteed over 2p a gallon more—that is 6 per cent. more—from September, and the improvement from September will come I think at a crucial time and will help producers to meet the higher costs over the winter months.
§ Lord BALERNOMy Lords, are the Government aware that a 6 per cent. increase in the price of milk in no way covers the extra expenses which are involved in the production of milk, and that therefore there will be more factories closing and there will be still less milk in 1976 than in 1975?
§ Lord STRABOLGIMy Lords, the Government have underlined in very difficult circumstances the importance which they attach to the contribution which the dairy sector makes not only to the agricultural industry but to the national economy. The Government remain ready to consider further adjustments should these be necessary to assure our agricultural industry of a fair return.
§ Lord MACKIE of BENSHIEMy Lords, the Minister will have the figures. Can he give them for the rise in costs as against the rise in prices?
§ Lord STRABOLGIMy Lords, I can give the figures for total milk supplies. The latest estimate, for July, is that sales will be down by 4 per cent., which is 10 million gallons. This decline is partly due to unfavourable weather, and it is 1009 also a result of the continuing decline in the dairy herd.
§ Lord MACKIE of BENSHIEMy Lords, that was not the question. The Ministry of Agriculture have the figures, and the noble Lord must have them, of the rise in cost.
§ Lord STRABOLGIMy Lords, I am afraid that I have not got those figures. They do not arise from the Question on the Order Paper, but I shall of course go into the point and let the noble Lord know.
§ The Earl of KIMBERLEYMy Lords, what is the cost of keeping the factories of the West country going by finding an alternative source of milk, possibly from Ireland?
§ Lord STRABOLGIMy Lords, we will of course take note of what the noble Earl has said.
§ Lord PARGITERMy Lords, can the noble Lord say precisely to what extent production in the other EEC countries has affected our own production here, or our desire not to produce here?
§ Lord STRABOLGIMy Lords, we are of course mainly dependent on imported supplies of butter. The home production at the moment is about 7 per cent. of our consumption. It is, however, the Government's intention, as outlined in the White Paper, that by 1980 our own production should be considerably greater than that, and that we should probably not be dependent to more than about 50 per cent. on imported supplies.