§ Mr. Peter Millsasked the Minister of Agriculture, Fisheries and Food if he will make a statement on the outcome of the 1982 annual review of agriculture.
§ Mr. Peter WalkerA White paper setting out the conclusions of the 1982 annual review of agriculture is presented to Parliament today. This shows that the volume of agricultural production in 1981 was marginally down on the record level of 1980. Contributory factors were a slightly smaller cereals harvest and a reduced potato crop.
120WFarming income rose in 1981 by 14 per cent., mainly because of the continuing high level of production, high returns on some crops, and the fact that the cost of all inputs rose less than the value of sales. When deflated by the retail price index it showed a small increase. The sum of farming income, net rent and interest rose by 10 per cent., which represents a small fall in real terms. The volume of new fixed investment in fanning fell for the second year and the level of bank borrowings increased, although at a slower rate. The cost of servicing the higher debt was, however, offset by the lower average level of interest rates in 1981. Within the average figures there are considerable variations between different parts of the country and different farming sectors, including a substantial increase in returns on potatoes after the depressed levels of earlier years, and on sheep and lambs following the introduction of the Community sheepmeat regime in October 1980.
During the year there have been increases in certain hill livestock compensatory allowances and in the retail price of milk, and these will benefit farmers in 1982. More generally, since this Government took office in May 1979, the industry has benefited from successive devaluations of the green pound and from the favourable Community price settlements which we have negotiated.