§ Mr. Walter Harrisonasked the Minister of Agriculture, Fisheries and Food if he will make a statement about prospects for pig production in the coming year.
§ Mr. PeartThe latest forecast of pig certifications under the guarantee scheme for the year from this April to March, 1966, has just been made. It lies near the middle of the band 13.6 m. to 14 m. and is substantially above the comparable forecast made in February for the calendar year 1965. As a result, under the flexible guarantee arrangements, there will be an automatic reduction of 9d. per score in the standard price for pigs from next week. The purpose of the flexible guarantee arrangements is to influence future pig production to help to keep it in line with market requirements. This principle is generally accepted.
In 1964–65 the number of pigs certified was 12.6 m., on which the average rate of deficiency payment was just under 7s. a score. Total deficiency payments on pigs that year amounted to nearly £30 m.
Following this year's Annual Review, we raised the top of the middle band of the flexible guarantee system—the point beyond which automatic reductions are made—from 11.75 m. to 12.8 m. Even 69W so, the latest forecast indicates a level of certifications of almost 1 m. pigs above this new level.
The effect of production in excess of market needs is of course to lower the market price and increase the cost of the subsidy. Last month, when certifications were running at an annual rate of about 13.2 m. pigs, the deficiency payments rose to over 11s. per score. It is clear that continued expansion at the present rate would soon lead to a very weak market and very heavy Exchequer cost; and I hope that the price reduction now called for will have the moderating influence intended.