EEC: Payment of Superlevy (Hansard, 17 January 1985)

§ Lord Wynford
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead)
My Lords, the Commission collected from member states the amounts of supplementary levy which it estimated to be due in December by deducting them from the advances intended to cover expenditure in that month. As it became clear at the Agriculture Council in December that there were differences in the interpretation of the rules and uncertainty about the amount of levy, we and six other member states suspended collection of the levy. In the event only Germany has collected levy from producers. Greece and Italy do not have to collect levy until the end of the milk year.
In addition, the Commission has instituted legal procedures against the seven member states and has reduced the advances for their January expenditure on milk by 12½ per cent.

§ Lord Wynford
My Lords, I thank my noble friend the Minister for that reply because it clarifies a position which is very often obscure and also fluid. Can my noble friend confirm that if the Italian Government or any other government disregard the EEC rule, payments for over production of milk and its products must be made by individual producers and not by the governments themselves out of their own funds? Then the whole scheme would become unacceptable to us because there would not be parity on equal terms throughout the Community.

§ Lord Belstead
My Lords, my noble friend is almost right. There are two forms of quota: one is the form for which we opted, which is payments through dairies; and the other is payments by individual producers. Where my noble friend is absolutely right is that the payments must not be made by the national governments.

§ Lord John-Mackie
My Lords, may I ask the Minister a few questions on this point? Do farmers know their liabilities for this levy, and has any of it been collected? If it has been collected, what is happening to it? Is it being retained by the board, or being invested? What would happen if everybody took the attitude, "We are not going to pay unless you pay"? There would then be a bit of a deadlock, would there not?

§ Lord Belstead
My Lords, there has been no collection of levy in the United Kingdom because we were not prepared to see our producers disadvantaged compared with others. It is true that we now face a dilemma. It is possible that we can get out of it through further discussion within the Agriculture Council. What is absolutely certain is that, unless other member states change their attitude to the proper collection of the levy, the British Government's attitude will remain the same.

§ Viscount Hood
My Lords, is the Minister aware that the rigidity between the wholesale and direct sales quota is harmful to British producers—notably, cheese makers?

§ Lord Belstead
My Lords, I entirely agree with my noble friend. I am glad to say that the Commission 1077 have put forward a proposal which would have some beneficial effect at the Agriculture Council this week. I hope this is something that can be carried forward in a fruitful way.

§ Lord John-Mackie
My Lords, can the Minister answer my first question? Do farmers really know what their liability is, if the levy is collected?

§ Lord Belstead
My Lords, it is quite fair of the noble Lord to ask me that question, because it is the first question in all farmers' minds. The primary levy was notified to producers a long time ago but we are still in the final stages of appeals being examined by the tribunal, which now numbers 90 members who are trying to finish their work as swiftly as possible. What all farmers in Great Britain know is that there is a considerable undershoot for the present marketing year of some 2 per cent. and therefore there should be a good deal of flexibility for production for the rest of the marketing year up to April.

§ Lord Monk Bretton
My Lords, is my noble friend aware of press reports that the Commission is now offering concessions to member states to get levy paid? I gather that one of these concessions may well amount to absolving France from levy altogether in the first year. I wonder whether these concessions will, overall, be fair to United Kingdom producers who have met their target under the quota system at great cost to themselves.

§ Lord Belstead
My Lords, I am aware of those reports but the fact is that the Commission have put forward two proposals: one to prevent movement between direct sale and wholesale quotas, which was an aspect raised by my noble friend in a previous question, and the other to provide for re-allocation of unused quota between producers or between regions within countries—which would benefit producers who are above quota. Both those proposals, if they were to be agreed, would be of very great assistance to the United Kingdom.

§ Lord Wynford
My Lords, my noble friend Lord Hood has put his finger on a most iniquitous and desperately unfair situation as regards the direct sale and wholesale position. Does my noble friend the Minister not agree that in these circumstances, where a producer has both wholesale and direct sale quotas (and there are many of these—I believe 3,000 of them), the damaging inflexibility which exists will not be fairly and fully remedied unless there is backdating to 2nd April 1984? I ask what the Government are proposing to do to right this very grave wrong from its first inception.

§ Lord Belstead
My Lords, my noble friend is absolutely right about the difficulty that exists here. My right honourable friend the Minister has been pressing for more flexibility again and again at Agriculture Councils. I will certainly draw the attention of my right honourable friend to my noble friend's remarks, and I give my noble friend an assurance that we will continue to press this important matter.