EC Food Surpluses (Hansard, 20 January 1987)

Lord Campbell of Croy
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 agreement reached at the December Agriculture Council demonstrated the Community's ability to take difficult decisions to curb common agriculture policy surpluses and their excessive budgetary cost. It is our aim that the forthcoming price fixing will take the process further.

Lord Campbell of Croy
My Lords, I thank my noble friend for his Answer. While applauding the initiatives taken by the Government during their recent presidency, I ask my noble friend how long it will be before action is taken on surpluses other than beef and milk? The longer these decisions are delayed the more painful it is likely to be for the farmers concerned.

§ Lord Belstead
My Lords, I am grateful to my noble friend for his first comment. We remain fully committed to reducing surpluses. We will continue to press in the forthcoming price fixing for realistic CAP prices as the central plank of our policy in this area. Those negotiations will begin next month. We strongly welcome the agreement in principle last December on a scheme for diversion of land out of sectors in surplus.

§ Lord Mellish
My Lords, is the noble Lord aware that it is very difficult for members of the British public even to try to understand what the common agricultural policy is all about? Is there any truth, for example, in the story that British farmers were paid over £1 million to destroy untold millions of cauliflowers? The average housewife would at present give almost anything to buy those cauliflowers. So what is going on? Someone is mad.

§ Lord Belstead
My Lords, over the past two years, taking all commodities, there has been a 9 per cent. reduction in prices for farmers in the Community. This shows that the agriculture Ministers—contrary to what has been said—are trying now, through the price mechanism, to see that surpluses are reduced.
However, the noble Lord, Lord Mellish, puts his finger on a very important point. It is that you need money when the going is tough. And, just at the moment, the going is tough because the weather is cold. I am absolutely delighted that the Agriculture Council has agreed that food should be made available from intervention stocks and other sources for charity organisations to distribute.

§ Lord Mellish
My Lords, that has not answered my question.

§ Lord Mackie of Benshie
My Lords, will the noble Lord confirm that at present the export of barley and/or wheat to third world countries is costing, with storage and the export subsidy, nearly, or about, the whole price paid for the grain which is stored? Should not the Government use this money to encourage alternatives such as forestry which are not in surplus? When do the Government intend to produce such plans considering the fact that taxpayers' money would be saved?

§ Lord Belstead
My Lords, it is for that reason that I said to my noble friend Lord Campbell that we very strongly welcome the agreement, taken in principle in the negotiations last December, for a scheme for the diversion of land out of sectors in surplus. The noble Lord, Lord Mackie of Benshie, asks when the Government are going to do something about that. Of course, the agreement in principle must be carried forward to agreement in fact, and I hope that we shall hear more about the matter from the Agriculture Council later next month. In the meantime, the Government are considering land use in the context of reform of the CAP, and we intend to keep your Lordships informed on that respect.

§ Lord John-Mackie
My Lords, I hope that the Minister is not in agreement with the point he made that price fixing is to be the sole way of dealing with these surpluses. It is generally agreed that that system would hurt British farmers very badly. At present we have quotas for various items, and I hope that the Minister will think about quotas along with some price fixing. Does the Minister consider that the EC plan announced this morning, with which the British Government agree, will have much effect on the total? I hear that it is being said in Brussels that it is only a small bite from a very large cherry.

§ Lord Belstead
My Lords, I am glad that the noble Lord, Lord John-Mackie, asked me the first question because it enables me to underline the fact that I entirely agree with him. There must be a two-pronged approach toward our problems. They cannot be solved by price alone. We shall be as tough as we possibly can be, and I hope that the Community will be tough too, so far as the price fixing is concerned. However, in the interests of both producers and consumers, there must be another plank to the platform of trying to reduce surpluses. That plank is involved in the answer that I gave to my noble friend's supplementary question when I said that we strongly welcomed the agreement on a diversion scheme for land where sectors are in surplus.
The noble Lord also asked me whether the sum announced from the Community would be only a fleabite. I am told that the scheme will cost around £38 million.

§ Lord Walston
My Lords, will the noble Lord quantify some of his remarks? As I understand it, he and his colleagues are relying on a reduction in price and a set-aside system either to do away with surpluses, although I am not quite sure if he meant that, or to enable the surpluses to increase at a rather slower rate than at present. It would be valuable to have his clarification on that point and particularly valuable to have some indication as to what sort of price diminution he thinks will be necessary to achieve the desired result. Under the set-aside scheme how much land does he think should or will go out of cultivation?

§ Lord Belstead
My Lords, the noble Lord asked me to quantify my reply. The size of the milk problem in the Community is over-production of around 20 million tonnes. The Government reckon that what 814 was agreed last December will take a sizeable cut out of that. We must remember that, in addition, the Commission will take action on the accelerated disposal of butter and the ending of intervention for skimmed milk powder during autumn and winter.
There are over half a million tonnes of beef in intervention stores in the Community. Once again the agreement will ensure that more is eaten and less put into store. As regards cereals, I do not think there is anything that I can add to what I have already said.

§ Lord Cledwyn of Penrhos
My Lords, obviously, there are powerful arguments in favour of making part of the surplus available to those who have suffered as a result of the appalling winter. Perhaps the Minister will answer two questions: first, whether his right honourable friend the Minister is in favour of this scheme; and secondly, whether his right honourable friend said, as reported in the press, that the scheme had not been properly thought through? What is the view of Her Majesty's Government? If the Government are in favour, is the Minister satisfied that people in this country who have suffered will receive a fair share of the surplus? What machinery has been set up to make sure that it reaches the right people?

§ Lord Belstead
My Lords, if I may say so, I think that my right honourable friend had many reasons for saying that further thought was needed. However, the Council of Agriculture Ministers finally came to the conclusion that this should be done. I can say to the noble Lord, Lord Cledwyn, that my right honourable friend the Minister of State, Mr. Gummer, will today be contacting charity organisations. Further details of how the scheme will operate in this country will be announced as soon as possible.

§ Lord Gladwyn
My Lords, can the Minister say what percentage of the vast total stocks, more particularly of butter, it is now contemplated will shortly be given away to the poor and needy? What is the physical percentage?

§ Lord Belstead
My Lords, I am sorry but I cannot state the physical percentage. I can say that the range of foods covered by the scheme will be very wide indeed. As I said earlier it is reckoned that, initially, the scheme will cost about £38 million.

§ Lord John-Mackie
My Lords, can the Minister confirm whether the sum of £38 million is for this country or for the whole of the EC?

§ Lord Belstead
My Lords, as I understand it, that is a Community figure.