§ 4.13 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers)
My Lords, with your Lordships' permission I should like to repeat a Statement which has been made by my right honourable friend the Minister of Agriculture in another place. The Statement is as follows:
"With permission, Mr. Speaker, I should like to make a statement on the Council of Agriculture Ministers' meeting in Brussels on 15th and 16th February.
"The Council began its consideration of the Commission's price proposals for 1982. Reactions varied widely. The United Kingdom urged the need for prudent price increases on products in surplus, and Germany adopted a similar approach. Other countries called for much higher increases than the Commission's 9 per cent. average.
"I expressed our rejection of the Commission's present proposal for a revaluation of the green pound that would, taken together with their other proposals, result in British farmers obtaining price increases of less than 4 per cent. on average, with severe consequences for their income levels.
"The United Kingdom made it clear that the price settlement would have to keep the growth of guarantee spending below that of the increase in the income of the Community under present arrangements. 665 "The Commission recognised the importance of taking early action to deal with the preferential gas tariff available to Dutch glasshouse growers. On United Kingdom insistence, supported by Denmark and Germany, the Commissioner undertook that he would take proposals to the Commission next week.
"The Dutch Minister implied that prior to this he would endeavour to put proposals to the Commission which could result in an agreement without resort to the European court.
"In accordance with his promise made to the United Kingdom at the last Council meeting, the Commissioner reported on the question of recent French national aids. He stated that France had not supplied the information required and that he would have to take legal action if this was not forthcoming.
"The French Minister promised that the information would be forthcoming and I obtained a declaration from the Commissioner that if any of the cash announced in this aid was paid prior to being cleared by the Commission, such payments would be illegal and the Commissioner stated that he would be recommending to his colleagues next week action under Articles 92 and 93 of the treaty for those elements of aids that were not legal.
"In a discussion on Mediterranean products, we urged the need for effective measures to deal with a surplus of table wine in a way which would not add to the Community budget or harm the existing alcohol producers.
"On olive oil, we, together with Germany, the Netherlands and Denmark, made it clear that we were opposed to any tax on competing oils and fats in order to make the market easier for olive oil.
"The Council will resume its consideration of the price proposals at its meeting in March".
My Lords, that concludes the Statement.
§ Lord Peart
My Lords, we are grateful to the noble Earl, Lord Ferrers, for informing the House of this latest farm price review. As one who over a long period of time studied many of these price review proposals from different angles, I congratulate the noble Earl. He made a clear statement. His Minister had no alternative but to press for refusal to have further price increases. In the circumstances, this would have been bad, so I think that the British policy is right and proper.
I should like to ask the noble Earl how the farmer has been affected by the price review—and how he will be affected. For example, farmers have had a very difficult period over the last month. All of us could say that we have had a difficult period, but the farmers in particular have suffered. May I ask whether there will be any special help for the farmers from Brussels? Will they be able to borrow at cheaper rates? Is it possible for there to be a system which will help them to survive? I do not want to make too much of this point, but farming is important to us. Our farm Minister in Europe must protect the interests of our farmers, both small and large. Therefore, I should like to know what is being done to help the farmers.
§ Lord Banks
My Lords, may I join in thanking the noble Earl for repeating the Statement which has been made in another place. We on these Benches agree with the Government on the need for prudent increases in prices where agriculture products are in surplus. We think that the Government were right to resist the higher demands. First may I ask the Government whether they accept the Commission's 9 per cent. proposal. Secondly, may I ask the Government whether we are likely to get an agreement on farm prices without agreement on the British share of the budget and on the wider question of reform of the common agricultural policy. Arising out of that, may I further ask whether or not such a comprehensive settlement will require some increase in the total resources available to the Community.
My Lords, I am very grateful to both noble Lords for what they have said and for the support which they both generously gave to my right honourable friend in the stance which he took over what is the preliminary start of the price fixing arrangements.
The noble Lord, Lord Peart, referred, quite understandably, to the increased borrowings by farmers and asked whether there would be anything in the price fixing to alleviate that problem. I know that the noble Lord will not imagine that I am skirting around the answer when I say that this is only the beginning of the price proposals and that I cannot tell him what will have been decided at the end. One must wait until the arrangements have been made before seeing whether they meet with the noble Lord's approval in this regard. On the generality of the matter, whether one has subsidised interest rates or capital grants is a matter for each individual country. We have looked into this and have found that the circumstances in our country require capital grants rather than subsidised interest rates. That is why, traditionally and historically, we have gone for capital grants, and that has remained our position.
The noble Lord, Lord Banks, asked whether we accept the Commission's 9 per cent. proposals. The original reaction to this was on the total package of the proposals. We do not approve where there are increases in relation to some products which have a structural surplus, and in some of these cases we consider that the Commission may have been too generous. The noble Lord, Lord Banks, asked me also whether the budget arrangements and CAP price fixing were aligned together. I will just tell him that at the beginning of the mandate exercise all 10 member states agreed that the three chapters of the Commission's mandate report dealing respectively with regional and other policies, agricultural policy and the budget were linked, and that all three should proceed in parallel. As my noble friend the Secretary of State for Foreign and Commonwealth Affairs said on 27th January, we do not believe that the agricultural chapter on which the price fixing depends can proceed independently.
§ 4.33 p.m.
§ Lord Davies of Leek
My Lords, while thanking the noble Earl for the Statement, and as one who has been dragged, kicking and screaming into the Market (and I am quite sure that the noble Earl the Minister 667 and his colleagues have been trying their best to get what would he considered in the EEC a fair deal for British farming) may I ask how far the terrific winter that we have had to suffer, particularly in the constituency that I had the privilege to represent, which has some 3,000 farms in it, has been considered? In that North Eastern part of Staffordshire, around the Peak district and Leek, there are some 1,400 farms of 30 acres or less, and I know how a man and a woman have to work for a living on those little farms, together with those in my homeland of Wales. They had a terrific winter in Wales. It was fortunate that television showed the people of Britain what these people who earn a living from their farms, had to do during the winter period. Was there not some exceptional approach this year, for those farmers in particular? The noble Earl used an expression about some form of capital grant. What did he mean by that? Will the people of whom I am speaking receive some benefit thereby?
My Lords, the noble Lord, Lord Davies of Leek, referred to the winter which has recently hit farmers very hard, and he was quite right to do so. Many farmers suffered very considerably. Clearly, where this happens it is a matter of great concern. One is always in the position of trying to see whether it is possible to help them or not, and it is possible that there may be some help. This will be pursued from the European point of view, because it is not something that Governments help out with always. We have taken the view that a Government can help out where there is a national disaster, but this was not a national disaster. It certainly hurt some farmers more than others. But that is the nature of farming, where one is involved in the weather, and if Governments were to take on the responsibility of helping farmers when they met a patch of bad weather, ipso facto they might require some form of redress when the farmers hit a spell of good weather and got extra beneficial results. But I take the noble Lord's point.