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Intervention Prices

Volume 932: debated on Thursday 19 May 1977

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asked the Minister of Agriculture, Fisheries and Food what proposals he made at the recent meeting of Agriculture Ministers of the EEC to rationalise the Community's intervention prices for skimmed milk and butter.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food
(Mr. Gavin Strang)

Our main objective in the Council of Ministers was to keep the price increases to an absolute minimum in order to discourage excess milk production in a manner which did not prevent efficient producers in the United Kingdom and elsewhere from increasing their share of the market for milk and dairy products in the Community.

Does the Minister agree that there is a need to rationalise the approach of the Community's agriculture policy in order to allow for variations in the cost of production in individual countries? What proposals did the Government put forward at the meeting or what do they have in mind to put forward at subsequent meetings?

The hon. Gentleman will know that the system of green currencies means that the prices paid to producers in various countries are different. In the vast majority of countries, the decision on this year's price-fixing has meant a fall in real terms in the producer's milk price and this should help to reduce the structural surplus. The United Kingdom butter subsidy was an important step towards disposing of the surplus sensibly.

My hon. Friend referred yesterday to butter ships. Is there any chance of having these butter ships operating off this country to the advantage of our consumers?

The measures that we secured at the Council, which involved a substantial butter subsidy for United Kingdom consumers, are an important step in the right direction and are probably better than butter ships.

Whatever may be the wish, does not my hon. Friend agree that the increased cost of the food package, according to Press reports, is 400 million units of account? Will he confirm that figure and comment on reports in the Press on Wednesday that the long-term future of the green currencies is in doubt? If those reports are true, will not this increase prices still further?

The increase in the Community budget was a result of the changes made to the Commission's original proposals. One major element in this increase was the decision that all non-delivery premiums to encourage dairy producers to cease production were to be wholly financed by FEOGA. There are only proposals in relation to the green currencies. No decision has yet been taken.