Food prices
Sir: Mr Douglas Jay's article in The Spectator last week on food prices and the Common Market is an extraordinary web of half truths, misconceptions and false assumptions. Probed and set against the factual situation his case collapses like a pack of cards.
A consistent anti-Marketeer, Mr Jay has for years based his opposition almost entirely on the Common Agricultural Policy, which, when food used to be cheap and plentiful in the rest of the world, was expensive for Britain. Imagine his chagrin when the relentless and rapid growth of the world's population and the inability of agricultural production to keep up with demand, altered the picture fundamentally.
The last two years have seen world prices responding to this new situation. In spite of record harvests in Europe, America and Russia last year, many world prices have shot up well above CAP intervention figures. Instead of being a burden for Britain, the CAP is now of direct benefit to us in assuring adequate supplies at stable and lower• prices than we would have to pay, had We not joined the European Community.
He desperately clutches at straws following the recent drop in grain prices on the Chicago market. He omits to mention that even with these reductions, London's future market for this autumn and next spring will leave wheat and barley prices well above CAP intervention figures.
The reductions in Chicago, as Mr Jay rightly says, are the result of expectations of larger yields, due to increased acreage under crop production in the US. The lower prices assume, however, record harvests throughout the world again this year, which will depend upon good weather, adequate supplies of fertiliser and no sudden famines in the underdeveloped world. This is a risky assumption when fertiliser production is already short of demand and India, for instance, will require a further seven million tons of grain to avert famine.
His hopes of cheaper food supplies from New Zealand and the sugar producers of the Commonwealth are bound.to,be dashed, if one considers that New Zealand has not even fulfilled her permitted quota of butter and cheese exports to Britain, and the sugar ...suppliers have similarly underdelivered their permitted quantities, because they can get much better prices elsewhere. , Mr Jay should cease to cling to illusions belied by facts. Only last week Mr Fred Peart, Labour's Minister for Agriculture, not known as a proMarketeer, adm,itted publicly, that there was no longer any cheap food available in quantity in the world today, and that the cheap food policy went away years ago. He adcLed that no industrialised country could any longer expect to live on cheap,, imported food.
Mr Jay's specific criticism of intervention b,uying of beef ignores the fact that no such intervention purchases take place in Britain, but that, '6`h the contrary, large subsidies are actually ' lowering prices of imports. And all this is permitted under the much maligned Common Agricultural Policy, which itself is undergoing fundamental reforms as a result of the changed world situation.
Another whopper is Mr Jay's comparison of food price rises in Britain, Denmark and Ireland, which went up three times as fast as those of Norway, Sweden and Switzerland, countries which did not join the Community. What he misleadingly fails to mention is that food prices in these last three, largely self-sufficient, food producing countries were already much higher than in the Common Market. Thus they were less affected by world price increases. While Britain sought long transitional arrangements before it had to adapt its prices to Community levels, Norway on the other hand sought exemption for her farmers, whose earnings were already 20 per cer cent higher than CAP figures, when they negotiated for entry.
Mr Jay's most disgraceful statement reads as follows: "The story even of 1973 clearly shows that EEC membership was the main cause of the headlong rise in prices and living costs in Britain, which caused such industrial strife 'and disrupted our whole economy." This outrageous claim is totally contradicted by Labour's new Minister for Prices, Mrs Shirley Williams, who put the facts in Parliament on April 3 as follows: "Over the most recent period of twelve months for which figures are available, December 1972 to December 1973, prices of imported food and feeding stuffs rose on average by 42 per cent. The whole effect of EEC membership on UK food prices is currently estimated at to 1 per cent.
rinally, Mr Jay recommends that we should leave the Community and rejoin EFTA countries which did not join, but now enjoy industrial free trade with the EEC. He forgets Britain's frequent and abortive efforts to negotiate free trade with the Community in the past. It was only because we joined that, at our bidding, the enlarged Community of 255 million consumers agreed to accommodate the remaining EFTA countries, which altogether have a population of 39 million. Were Britain to leave the Community and break our treaty obligations, there is no chance that the Community would offer us free trade in industrial goods. They would not only raise tariffs against us again, but give the remaining EFTA countries the option of free trade either with the Community of 200 million consumers or with Britain of 55 million. Is there much doubt as to their choice?
Leaving the Community would spell disaster for our exports, for investment and future employment prospects. Already 50 per cent of our sales abroad go to the Community and its free trade partners in Western Europe. Free access and all the benefits that go with it would be lost, were we to follow Mr Jay's misguided advice.
Ernest Wistrich The European Movement (British Council), Europe House, IA Whitehall Place, London SW1
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