Dunkel Proposals: Impact (Hansard, 6 February 1992)

§ The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington)
My Lords, the Commission of the European Communities negotiates on behalf of the 12 member states in the GATT. We have made clear to the Commission and 339 other member states that our main anxiety with the Dunkel proposals is very much the point which I believe my noble friend Lord Mottistone has in mind; that is, the inconsistency of the proposed reductions in internal support, border protection and export competition with one another.

§ Lord Mottistone
My Lords, are the Government taking steps to try to have the position of the Dunkel proposals clarified? I understand that no figures have been produced and therefore there is no balance sheet, as it were, to cover the pros and cons of the proposals. Is she aware of any other countries where processed foods of one sort or another may be as at risk as, we fear, are some of the processed foods in this country? Can we get some allies to try to dig something out of Dunkel?

§ Baroness Trumpington
My Lords, to answer the first part of my noble friend's question, the Commission has not produced such an analysis. Mr. Dunkel's proposals remain subject to negotiation. The council noted that a final assessment of the Dunkel paper would only be possible after and would be influenced by the outcome of further negotiations.
With regard to his second point, widespread anxiety was expressed at the last Agriculture Council. For example, both Denmark and the Netherlands pointed to the possible impact of the proposals on pigmeat and dairy products. The combined effect of Dunkel's proposals on imports and exports would also be significant in a number of Mediterranean sectors, such as wine, I believe.

§ Lord Cockfield
My Lords, arising out of the Question, can the Minister say who gets the benefit from the enormous sums of money disbursed under the CAP? It most certainly is not the farmers. Some of us would like to know who it is.

§ Baroness Trumpington
My Lords, all farmers get benefits from the CAP. Only some get direct aid.

§ Lord Gallacher
My Lords, does the Minister agree that the issues raised by this Question emphasise the importance of obtaining a settlement of agricultural matters in GATT negotiations before concluding present discussions about the restructuring of the CAP? Can she say whether the Commission accepts that proposition? Also, do Her Majesty's Government agree that growers of food and processors are mostly unaware of the Community's response to the GATT proposals, which leaves both those categories dangerously in the dark?

§ Baroness Trumpington
My Lords, it is difficult for me to get that information over except by the kind of question asked by the noble Lord today. We hope that it will be taken up by various trade journals and read, and the information thus disseminated. Indeed, I believe that the Commission is aware of its importance. However, it is Mr. MacSharry who negotiates with regard to the Dunkel proposals.

Lord Bruce of Donington
My Lords, instead of trying to elicit information on the negotiations by 340 question and answer, as the noble Baroness stated, would the House not be better informed if the Government themselves set out a detailed memorandum explaining their attitude, the points at issue and their views on what the progress ought to be?

§ Baroness Trumpington
My Lords, the noble Lord has said it—"what the progress ought to be". We are one of 12 negotiating countries. The best we can do is to influence our colleagues from the other member states.

§ Lord Campbell of Alloway
My Lords, would it be wise for the United Kingdom to lay all its cards face up on the negotiating table in circumstances such as these when the future course of the negotiations cannot be known?

§ Baroness Trumpington
My Lords, we have made our views very clearly known. I understand that the Commission is well aware of our views and is taking them into account in the discussions on the Dunkel proposals. I cannot remember what the noble Lord asked after that.

§ Lord Stoddart of Swindon
My Lords, will the noble Baroness accept that some of us—I include myself—are puzzled about the answer that she gave to the reasonable question asked by her noble friend Lord Cockfield? Is she aware that farmers in this country and in many other parts of the EC—including France, where they riot—are not satisfied that they are doing well out of the common agricultural policy? Is she further aware that our net contribution to the Community's budget is £2,440 million, whereas Spain receives £1,750 million? Those matters need to be explained to ordinary people. If the noble Lord, Lord Cockfield, with his experience does not understand it, exactly who does? We need an explanation.

§ Baroness Trumpington
My Lords, the question asked by my noble friend Lord Cockfield was not on the same point that the noble Lord makes. But neither relates to the Question that we are discussing. I was being extremely broadminded in answering at all.
In case noble Lords are interested, I have remembered the second part of the question asked by my noble friend Lord Campbell of Alloway. Only the Commission can make proposals. The Commission proposes and the 12 countries concerned feed in their views and opinions and seek to get allies as hard as they can. Only a fool discloses his whole hand in the middle of negotiations. We have made our ideas known but we cannot propose such matters.

Lord Bruce of Donington
My Lords, in that case, will the noble Baroness please inform the House what the Government's views are?

Noble Lords
Order!

§ Lord Wade of Chorlton
My Lords, does my noble friend agree that the Dunkel proposals which are now on the table continue to support the export of commodity products but put a liability on the export of added value products? Does she accept that Great Britain's opportunity relates to added value products and that the proposal is against the interests of Great 341 Britain? Is my noble friend also aware that, although the United States makes a great stand against export refunds, it is offering three years' credit for milk products that it will offer to markets outside the EC? That is a far greater incentive to export than the export refunds given by the CAP.

§ Baroness Trumpington
My Lords, I shall confine my reply to the first part of my noble friend's question which referred to the impact of an agreement on UK farming. An agreement would indeed mean continuing downward pressure as in recent years. The aims of the round make such action inevitable. We believe that the terms proposed will allow farmers time to adjust. My right honourable friend the Minister is working to ensure that the burden is equally spread. A cut of 20 per cent. in support does not mean a 20 per cent. cut in prices. Credit for reforms since 1986 will also apply.

§ Lord Williams of Elvel
My Lords, I am sorry to press the noble Baroness on the matter. However, the House does not appear to have the information that the noble Lord, Lord Mottistone, sought. Leaving aside the action that is being taken by the Government, will the noble Baroness at least undertake to put in the Library—I do not ask for the information across the Floor of the House—the Government's estimate of exactly what the damage would be to processed foodstuffs under the Dunkel proposals?

§ Baroness Trumpington
My Lords, I can tell the noble Lord what the present Dunkel proposals would mean. The internal prices would come down very little so that Community processors would continue to face higher raw material costs than their overseas competitors. But export refunds might be so constrained that they could no longer bridge the gap and the reduction in border protection would simultaneously expose processors to greater competition from imports.
We have put all those points to the Commission. We have had support from certain countries. The Commission has taken our points on board and is negotiating on the points that we have raised against the proposals as they now stand. I cannot say fairer than that.