§ Mr. Peter Mills
asked the Minister of Agriculture, Fisheries and Food if he will make a statement on the outcome of the 1981 annual review of agriculture.
§ Mr. Peter Walker
The conclusions of the annual review are set out in a White Paper which is presented to Parliament today. Agricultural production in 1980 rose to its highest level ever, with net product in volume terms some 11 per cent. higher than the previous year. The main contributory factor was a record cereals harvest of some 19.2 million tonnes. Farming income fell by some 10 per cent. because the prices of inputs rose by more than those of outputs. The relatively low increase in farm-gate prices last year was one of the main reasons why retail food prices rose by much less than the prices of other items. The volume of new fixed investment in farming has also fallen and the level of bank borrowings is much higher. Within the average figures there are considerable variations between different parts of the country, with greater difficulties in Scotland and Northern Ireland.
Since this Government came to office we have taken many steps to help farming including several devaluations of the green pound, the negotiation of a highly advantageous regime for sheepmeat and the introduction of the suckler cow subsidy. The benefits from the latest increases in the hill livestock compensatory allowances and the price of milk do not affect the results for 1980 but will accrue to the industry in 1981.