HC Deb 19 February 1987 vol 110 cc781-2W
18. Mr. Bellingham

asked the Minister of Agriculture, Fisheries and Food what assessment he has made of the impact on British cereal growers of a two-tier pricing policy.

Mr. Gummer

A two tier price policy of the sort advocated by the right hon. Member for Plymouth, Devonport (Dr. Owen) would inevitably discriminate against producers in this country. The average United Kingdom cereal farmer would suffer a £6,000 per annum cut in revenue.

48. Sir Peter Mills

asked the Minister of Agriculture, Fisheries and Food what assessment he has made of the effect on the net income of the average-sized beef livestock farm in the United Kingdom of a policy of two-tier pricing of beef.

49. Sir Hector Monro

asked the Minister of Agriculture, Fisheries and Food what assessment he has made of the impact on British beef producers of a two-tier pricing system.

Mr. Gummer

A two-tier pricing system in the beef sector would presumably operate so that after a certain fixed number of cattle had been sold per holding, further sales would be on the basis of a reduced level of support. An approach of this kind involving a beef premium with a 50 beast headage limit per farm was proposed last year by the European Commission. We rejected it since it would have discriminated severely against United Kingdom producers. Instead, we secured agreement to the continuation of our beef variable premium scheme for a further two years.

54. Mr. Latham

asked the Minister of Agriculture, Fisheries and Food whether he will make a statement on the prospects for beef producers in the light of the recent European Community agreement on dealing with surplus commodities.

Mr. Gummer

The EC beef support arrangements have been resulting in the production of huge surpluses which could be disposed of only at very substantial cost. The beef regime is now estimated to have cost the Community some 3.5 billion ecu last year (about £2.4 billion) and reform was essential.

The changes agreed by the Council in December ensure that the support regime takes greater account of market realities. The emphasis on intervention buying is reduced leaving support through premia to play a more important role. Some cut back in support was essential but we secured arrangements which protect the interests of our producers. The beef variable premium continues for 2 years and now applies at a higher rate as a result of the 6 per cent. devaluation of the green rate for beef. We have scope to increase the suckler cow premium from £24.74 to over £33 per head. The impact of the changed intervention arrangements is reduced in the United Kingdom by the green pound devaluation and by the adjustment to steer buying-in prices which will follow their harmonisation with those for young bulls. The support level will fall around £36 in the United Kingdom compared with over £40 on French steers and over £80 on French bulls. In Italy and Germany the drop is around £115 to £120 a beast.

The Agriculture Council recognise that the reforms agreed for the milk sector could result in cow culling which would put pressure on the beef market. Accordingly 435 mecu have been set aside for use by the Commission to provide extra support for the beef sector as necessary. The Commission has also accepted that it must be ready to institute emergency support measures if there is undue market weakness.

These arrangements give beef producers firm guidance for the next two years and set the industry on a path towards a better balance between supply and demand.

55. Mr. Nicholas Baker

asked the Minister of Agriculture, Fisheries and Food what assessment he has made of the effect on the net income of the average-sized cereal farm in the United Kingdom of a policy of two-tier pricing of cereals.

57. Mr. Key

asked the Minister of Agriculture, Fisheries and Food what representations he has received on the implications of adopting a policy in the European Economic Community of two-tier pricing.

70. Mr. Neil Hamilton

asked the Minister of Agriculture, Fisheries and Food what assessment he has made of the effect on British agriculture of a system of two-tier pricing.

Mr. Gummer

I refer my hon. Friends to the answer I gave today to the Member for Norfolk, North-West (Mr. Howell).

56. Mr. Cockeram

asked the Minister of Agriculture, Fisheries and Food what assessment he has made of the effect on the net income of the average-sized sheep farm in the United Kingdom of a policy of two-tier pricing of sheepmeat.

Mr. Gummer

I refer my hon. Friend to the answer I gave earlier today to my hon. Friend the Member for Banff and Buchan (Mr. McQuarrie).

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