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Butter

Volume 115: debated on Thursday 7 May 1987

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asked the Minister of Agriculture, Fisheries and Food if he will make a statement setting out the price, in terms of pence per pound, at which the EEC management committee of the common agricultural policy agreed to the sale of 181,000 tonnes of butter to the Soviet Union under regulation 765/86 at its March meeting; and what will be the cost which the EEC will require to fund after 1989 when member states are repaid the sums involved in subsidising these exports.

[pursuant to his reply, 5 May 1987]: The price set by the Commission in the light of the advice of the milk management committee was 211 ecu/tonne. Converted to sterling at the current green rate this is equivalent to about 6p per lb. Sales of butter under regulation 765/86 no longer qualify for export refunds but are still subject to MCAs. Because of the large negative United Kingdom MCA the effective price out of United Kingdom stores would have been about 20p per lb had any butter been sold from the United Kingdom. In fact the majority of the butter sold came from Germany and the Netherlands, where, because of the relative strengths of the green currencies involved, the effective price to traders was approximately 8p per lb.

The total amount on the sale of this butter which will be reimbursed to the Member States concerned after 1989 is about £329 million at current United Kingdom green rates.

asked the Minister of Agriculture, Fisheries and Food if the representative of Her Majesty's Government serving on the management committee of the Common Market's agricultural policy supported the decision to extend the scope of regulation 2409/86 to enable the subsiding of butter sales for experimental industrial uses: and if he will make a statement setting out the possible experimental industrial uses which the committee had in mind and the price, in terms of pence per pound, at which butter will be made available for these experimental industrial purposes.

[pursuant to his reply, 5 May 1987]: Regulation 2409/86 was introduced to enable the oldest stocks of intervention butter, for which no other outlets was likely, to be sold for use in animal feed. But given the disppointingly low level of returns under this scheme and a number of inquiries from potential purchasers for other non-food uses, the Commission has decided to make available a limited quantity of butter at the animal feed price of just over 2p per lb in order to evaluate these possibilities. The United Kingdom supported this approach in principle in the hope that it may result in a less expensive stock disposal policy, but we abstained on the detail of the proposed experimental arrangements, as we felt that the two month period specified would not allow sufficient time for proper assessment of the results and as there were other unsatisfactory points in the text. The regulation as amended invites interested parties to submit projects to the Commission for prior approval. No particular uses are envisaged in the regulation itself, but the ideas previously suggested to the commission include use in cosmetics, as a high-grade fuel additive or in paint.