HL Deb 25 April 1986 vol 473 cc1377-8
The Earl of Kinnoull

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

The Question was as follows:

To ask Her Majesty's Government how many months' supply of beef products are currently held in store by the EC Intervention Board, at what annual cost; and what supply would they consider it prudent to store in a properly managed policy, at what annual cost.

The Earl of Swinton

My Lords, at 31st March 1986 about 39 days', or one and a quarter months', supply of beef was stored in intervention stocks throughout the European Community. Of the total amount of 603,660 tonnes, just over 79,000 tonnes were stored in the United Kingdom. The cost of intervention storage varies depending on the amount in store at any particular time. In 1985, the cost to the Community budget of storing intervention beef amounted to 326.3 million European currency units or about £192 million. In the Government's view, a properly managed policy, with less reliance on intervention to support the beef market, should encourage consumption and discourage the accumulation of costly surpluses.

The Earl of Kinnoull

My Lords, I thank my noble friend for that very full reply which I shall examine with great care. Can he confirm that one of the factors contributing to this oversupply was the sudden policy of milk quotas last year which forced a lot of dairy cows on to the beef market? Can he also say how long good quality beef remains in good condition in cold storage before it starts to deteriorate?

The Earl of Swinton

Yes, my Lords, my noble friend is right that that is one reason for the current large surplus. There are others, such as over-production. Beef is bound to deteriorate. It depends on how long it is stored, but it certainly goes off in time.

Lord Sainsbury

My Lords, does not beef once frozen almost automatically lose a large proportion of its value compared with the fresh product?

The Earl of Swinton

Yes, my Lords, the noble Lord is entirely right, and he has more experience on that than most people in this House.

Lord Cledwyn of Penrhos

My Lords, the noble Earl the Minister has indicated what the policy ought to be. Can he confirm to the House that this precise problem is being discussed in the meeting of Community agriculture Ministers which is going on at the present time? Can he tell the House whether the meeting has come to an end and when we may expect a Statement?

The Earl of Swinton

My Lords, we consider that intervention is a wasteful and relative inefficient way of supporting the beef sector, and so in principle we support the Commission's basic approach of shifting the emphasis of producer support away from intervention more directly to the producer. We shall, however, need to look carefully at the Commission's alternative proposals, which would not as they stand provide adequate support for our beef producers. I am afraid that I do not know whether the meeting has finished or when we shall be reporting, but I shall let the Leader of the Opposition know that.

The Earl of Kinnoull

My Lords, will my noble friend reply to my first supplementary question about the length of time beef can remain in cold storage before deteriorating? Can he confirm the National Farmers' Union figure of about 18 months?

The Earl of Swinton

My Lords, I shall have to write to my noble friend with that answer.

Lord Bruce of Donington

My Lords, following the figures that the noble Earl was kind enough to give to the House, can he confirm that the burden borne by the British taxpayer in respect of this intervention stock is between £40 million and £42 million per annum?

The Earl of Swinton

My Lords, I do not know the exact cost but it is certainly high.

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