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17 Nov 2003 : Column 624W—continued
Dairy Sector
Mr. Hoyle: To ask the Secretary of State for Environment, Food and Rural Affairs what measures she is taking to support dairy farmers in (a) Lancashire and (b) the UK. [136036]
Mr. Bradshaw: Dairy farmers in Lancashire, in common with the rest of the UK, benefit from expenditure on the dairy CAP worth nearly 2 billion euros across the EU15. This expenditure will increase with the introduction of direct payments to dairy farmers from 2004.
We believe that in the long term the future of the dairy sector is best secured through pursuing the objectives of our Strategy for Sustainable Farming and Food. We have made a grant of nearly £0.5 million to the Food Chain and we have supported the establishment of English Food and Farming Partnerships, a new industry led body that has been set up specifically to support and encourage collaborative activity across all agricultural sectors. Furthermore my noble friend Lord Whitty has been chairing meetings of a Dairy Supply Chain Forum made up of senior figures from across the diary sector. This Forum and its sub-groups have been examining ways in which collaborative action can promote supply chain efficiency, and how levels of innovation and new
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products development might be increased, and considering the likely impact of the CAP reform package on the dairy sector. It also intends to consider the kinds of changes that the sector might need to make to adjust to the new environment created by the reforms.
Gregory Barker: To ask the Secretary of State for Environment, Food and Rural Affairs how many dairy firms went out of business in the last year; and what assessment she has made of the causes. [137285]
Mr. Bradshaw: Data from the Office for National Statistics shows that in 2002, 50 enterprises classified as manufacturers of dairy products were de-registered for VAT. This compares to 525 enterprises under this classification registered for VAT at the end of 2002. Although these figures may be indicative of the number of firms which went out of business, the Government have made no assessment of the reasons for these de-registrations, and it should be noted that de-registration can occur for reasons other than an enterprise ceasing to trade, such as its turnover falling below the VAT threshold.
Mr. Hayes: To ask the Secretary of State for Environment, Food and Rural Affairs (1) what arrangements she has put in place to evaluate the effect of the farm gate price of raw milk on average net (a) income and (b) profit of dairy farms in the United Kingdom; [137893]
- (2) what estimate she has made of the threshold of the farm gate price of raw milk that would enable dairy farming to be economically viable. [137894]
Mr. Bradshaw: The Department monitors incomes on dairy farms through the annual Farm Business Survey and also, from time to time, via special studies into the economics of milk production. Incomes for the years ended February 2002 and February 2003 on a range of farm types, including dairy farms, will be published by the Department at the end of this month. Forecast incomes for the year ending February 2004 will be published in January 2004. In regard to economic viability, there are a number of factors that influence economic performance, including milk yield, milk price and efficiency of input use and these all vary from farm to farm. The wide range in economic performance across dairy farms is reflected in the wide range in the break even ex-farm milk price.
Mr. Hayes: To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the likely effect of the current proposals for Common Agricultural Policy reform on the farm gate price of milk. [137895]
Mr. Bradshaw: When fully implemented, the reforms agreed in June in Luxembourg will reduce the support price for butter by 10 per cent. more than the 15 per cent. reduction originally agreed for both butter and skimmed milk powder under Agenda 2000 (i.e. a 25 per cent. cut in the support price for butter). If farm gate prices were to fall to the same extent, the price per litre might be reduced by a further 0.95p beyond the impact of Agenda 2000. However, we share the European Commission's assessment that farm gate prices are unlikely to settle at this level: indeed, the overall package of compensation agreed reflects this. (Producers will be compensated through an increase in
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the level of direct payments of a further 0.74ppl over and above the compensation originally agreed in Agenda 2000.) The figures quoted above are based on an exchange rate of 70p/euro.
Our economic assessment indicates that decoupling of direct payments from production will have a beneficial effect on farm incomes; we would expect the main dairy-specific price impact to be in relation to the value of milk quota.
Gregory Barker: To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the competitive position of the dairy processing industry in each EU member state. [137246]
Mr. Bradshaw: KPMG, in its report on "Prices and Profitability in the British Dairy Chain", which was commissioned by the Milk Development Council and published earlier this year, found that in 1997 (the most recent year for which UK data was available), apparent labour productivity in the UK dairy processing sector was somewhat below the EU average and significantly lower than in the Netherlands, Ireland, Austria and France. However, there has been significant investment in larger, more efficient, dairy plant in the UK since 1997 and this gap may well have closed.
Mr. Hoyle: To ask the Secretary of State for Environment, Food and Rural Affairs what recent discussions she has had with (a) supermarkets and (b) dairy farmers regarding the price of milk. [136035]
Mr. Bradshaw: While the Government share producers' concerns over the low farmgate price of milk, price negotiations between producers and processors, or processors and supermarkets, are a private commercial matter in which the Government cannot and should not get involved, as long as competition rules are respected.
The Secretary of State has had no formal meetings with representatives of the dairy industry or retailers to discuss milk prices. However, Ministers frequently meet with representatives from all parts of the dairy supply chain and are therefore aware of the issues. Matters affecting the whole dairy supply chain are regularly discussed at the forum chaired by my noble friend Lord Whitty.
Gregory Barker: To ask the Secretary of State for Environment, Food and Rural Affairs what estimate she has made of the growth of the United Kingdom milk and milk products industry over the next (a) five, (b) 10 and (c) 15 years. [137292]
Mr. Bradshaw: A study commission by Defra, the Scottish Executive, the National Assembly for Wales and the Department for Agriculture and Rural Development, Northern Ireland by the Centre for Agriculture, Food and Resource Economics at the University of Manchester, which was published in April 2002, concluded that on balance the elimination of dairy market support and milk quotas, together with compensating decoupled direct payments would not result in a significant change in UK milk production. It also concluded that such a reform of the dairy CAP would result in dynamic benefits to the processing sector as it moved from the production of commodity products to value-added products. Nevertheless, this study could not predict and could therefore not consider the actual
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outcome of the agreement reached on CAP reform in June. Under the umbrella of the Dairy Supply Chain Forum, which is chaired by my noble Friend Lord Whitty, Defra is co-funding with the Milk Development Council and the Dairy Industry Association, supported by the National Farmers Union, a study on the impacts of the agreement on Dairy CAP reform and some of the options available to the UK. Preliminary results for this work should be available in December, with a final report published in January. Once this is complete, we intend to work with the industry through the Forum to consider the long-term implications and the adjustments the sector will need to make to the new environment.
Egg Industry
Mr. Hayes: To ask the Secretary of State for Environment, Food and Rural Affairs what procedures she has put in place to assess the effect of tariff reductions on egg imports on the UK's egg industry. [138034]
Mr. Bradshaw: There is still a considerable way to go in the WTO negotiations on tariff reductions before consideration can be given to the level of reduction applying to individual products. But we are well aware of the egg industry's concerns and we will do all we can to ensure the most favourable outcome possible for UK producers.
Mr. Hayes: To ask the Secretary of State for Environment, Food and Rural Affairs what direct subsidies are available to egg producers in (a) the United Kingdom, (b) France and (c) Germany. [138035]
Mr. Bradshaw: Given that the CAP regime for eggs is a very light one, it does not provide direct subsidies for EU egg producers. Some limited financial assistance is available to the UK egg industry under the England Rural Development Programme and Regional Selective Assistance. We do not hold information on the extent to which other member states make similar assistance available to their egg producers.
Mr. Hayes: To ask the Secretary of State for Environment, Food and Rural Affairs what conditions producers are required to meet to be licensed to receive export refunds for egg and poultry products; how many licences have been issued to UK farmers; and what level of export refunds are available to licence holders. [138036]
Mr. Bradshaw: In order to receive export refunds for egg and poultry products the applicant must be registered with the Rural Payments Agency (RPA). Export licences are required where quantities to be exported exceed certain amounts. Applicants for export licences must be natural or legal persons who, at the time applications are made, are able to prove to the satisfaction of the RPA that they have engaged in trade in the egg, or poultry, sector for at least 12 months.
Within the period of 1 November 2002 and 1 November 2003, 162 egg licences and 395 poultry licences were issued to UK farmers.
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The level of export refund is determined by product (CN) code. Different egg/poultry products will have different product codes and rates of export refund, however for the period 1 November 2002 to 1 November 2003 the highest and lowest rates prevailing were:
- Egg products—lowest 1.70 euros/100gs; highest 75 euros/100kgs
Poultry Products—lowest 0.80 euros/100kgs; highest 40 euros/100kgs
Mr. Bradshaw: The future of enriched cages will be reviewed on an EU basis when the Welfare of Laying Hens Directive 99/74/EC is next considered by the Agriculture Council in 2005.
Mr. Hayes: To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the conclusion of the European Union's Agricultural Research Department report that under EU Council directive 99/74/EC on the Welfare of Laying Hens, EU countries will not be able to compete in their home egg market after 2012; and if she will make a statement. [138078]
Mr. Bradshaw: The Government will consider this report along with other economic assessments in preparation for the review of the Welfare of Laying Hens Directive 99/74/EC in 2005.
Mr. Hayes: To ask the Secretary of State for Environment, Food and Rural Affairs what steps she has taken to assist UK egg producers to compete in (a) European and (b) world wide markets. [138079]
Mr. Bradshaw: Subsidies to compete in the EU market would be incompatible with the principles of the Single Market. The EU egg regime provides for some limited export refunds in respect of egg exports to third countries.
Mr. Hayes: To ask the Secretary of State for Environment, Food and Rural Affairs if she will press the European Union to bring forward measures to enable EU countries to maintain their market share in the European egg market. [138080]
Mr. Bradshaw: The UK will continue to play an important role in formulating EU policy in this area.
Mr. Hayes: To ask the Secretary of State for Environment, Food and Rural Affairs what volume in tonnes of shelled eggs was (a) produced by United Kingdom farms, (b) produced by United Kingdom farms and sold at United Kingdom retail outlets and (c) produced by United Kingdom farms and exported in the last 10 years for which figures are available; and to which countries shelled eggs were exported. [138083]
Mr. Bradshaw: (a) The following table shows the production of shelled eggs in the United Kingdom for the last 10 years:
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| Of which: For human consumption | ||||
|---|---|---|---|---|
| Total production of eggs(97) | Total | Eggs sold in shell | Eggs processed | |
| 1993 | 202 | 180 | 158 | 22 |
| 1994 | 202 | 179 | 155 | 24 |
| 1995 | 199 | 176 | 151 | 26 |
| 1996 | 200 | 177 | 150 | 26 |
| 1997 | 206 | 181 | 153 | 29 |
| 1998 | 206 | 181 | 151 | 30 |
| 1999 | 194 | 169 | 138 | 32 |
| 2000 | 195 | 170 | 139 | 31 |
| 2001 | 209 | 184 | 153 | 31 |
| 2002 | 222 | 196 | 164 | 32 |
(97) Includes eggs for human consumption, eggs for hatching, hatching eggs for export and waste
(b) There are no figures available on the volume of United Kingdom production of shelled eggs that is sold at retail outlets in the United Kingdom. However, the following table provides the volume of total UK production for human consumption less exports which will provide an indication of the volume of UK
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production sold onto the UK market (including retail, catering, food processing and hatching eggs) UK Production of shelled eggs less exports (thousand tonnes).
| Thousand tonnes | |
|---|---|
| 1993 | 191 |
| 1994 | 195 |
| 1995 | 190 |
| 1996 | 192 |
| 1997 | 191 |
| 1998 | 178 |
| 1999 | 181 |
| 2000 | 184 |
| 2001 | 201 |
| 2002 | 212 |
Note:
Includes table eggs, hatching eggs and other eggs for human consumption
(c) The following table provides details of shell egg exports over the last 10 years. This will be mainly of UK origin but may include some re-exports of imported eggs.
| Country | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 |
|---|---|---|---|---|---|---|---|---|---|---|
| Irish Republic | 2,853 | 1,868 | 2,142 | 4,875 | 6,529 | 3,790 | 3,808 | 4,896 | 4,177 | 4,241 |
| Netherlands | 4,052 | 2,280 | 2,666 | 693 | 5,074 | 5,407 | 582 | 258 | 184 | 120 |
| Italy | 352 | 419 | 713 | 549 | 262 | 3,091 | 2,054 | 3,126 | 260 | 63 |
| France | 216 | 400 | 436 | 398 | 350 | 3,235 | 4,334 | 900 | 372 | 198 |
| Germany | 438 | 373 | 176 | 494 | 1,372 | 2,334 | 695 | 788 | 684 | 349 |
| Denmark | 57 | 200 | 89 | 79 | 321 | 4,191 | 110 | 39 | 23 | 18 |
| Belgium-Lux | 1,690 | 464 | 1,518 | 174 | 562 | 191 | 8 | 29 | 41 | |
| Spain | 204 | 442 | 478 | 276 | 363 | 798 | 484 | 488 | 550 | 591 |
| Saudi Arabia | 19 | 0 | 0 | 0 | 132 | 271 | 747 | 1,612 | ||
| Bulgaria | 2,470 | 1 | ||||||||
| Hungary | 3 | 21 | 9 | 28 | 8 | 422 | 6 | 48 | 167 | 905 |
| Czech Republic | 2 | 4 | 19 | 1,222 | 11 | 29 | 57 | |||
| U.S.A. | 131 | 177 | 69 | 24 | 8 | 35 | 95 | 136 | 84 | 23 |
| Croatia | 4 | 8 | 4 | 13 | 126 | 285 | 176 | 103 | 19 | 27 |
| Austria | 4 | 4 | 31 | 0 | 7 | 572 | ||||
| Turkey | 0 | 5 | 12 | 11 | 4 | 169 | 279 | |||
| Greece | 2 | 3 | 1 | 0 | 331 | |||||
| Others | 188 | 169 | 278 | 275 | 101 | 202 | 240 | 75 | 94 | 246 |
| Total figure | 10,212 | 6,828 | 8,589 | 7,913 | 15,105 | 27,673 | 12,737 | 11,174 | 7,605 | 9,632 |
Note:
Please note that figures of 0 are less than 0.5 tonnes.
Mr. Hayes: To ask the Secretary of State for Environment, Food and Rural Affairs what volume in tonnes of whole egg powder was (a) produced in the United Kingdom, (b) produced in the United Kingdom and sold in United Kingdom retail outlets and (c) produced in the United Kingdom and exported in the last 10 years for which figures are available; and to which countries whole egg powder was exported. [138084]
Mr. Bradshaw: No figures are available on the production of whole egg powder in the United Kingdom, nor on the volume of egg powder sold through United Kingdom retail outlets.
Mr. Hayes: To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the reasons for the egg production costs in the United Kingdom; and what assessment she has made of the reasons for the primary egg production costs in (a) Poland, (b) the Ukraine and (c) the USA. [138085]
Mr. Bradshaw: We have made no assessment of the costs of egg production in those countries, but some of this information has been produced by the egg industry. Costs will depend on a number of different factors such as the costs of land and labour, inputs, transport etc.
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