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Milk Quotas

Volume 130: debated on Wednesday 30 March 1988

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To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the level of milk quotas in England and Wales in 1987–88 and 1988–89.

We announced on 31 March 1987 the arrangements for transferring quota from Great Britain to Northern Ireland. We implemented an outgoers' scheme to obtain sufficient quota to meet this requirement but none was offered. The provisional cut of about 0·3 per cent. that was imposed in 1987–88 will therefore be made definitive because the outgoers' scheme was unsuccessful. Compensation will be paid at the rate already announced that is, 27·49p per litre spread over seven years.Turning now to the arrangements for 1988–89, the House will already be aware of the agreement in the Community to reduce quotas permanently by 1 per cent. This is in addition to the 2 per cent. cut imposed in 1987–88. A Community outgoers' scheme to obtain as much as possible of this quantity voluntarily achieved only a very small percentage of the 1 per cent. target quantity required in England and Wales. The balance will now be achieved by making uniform cuts in each producer's quota, compensated at 27·49p per litre spread over seven years. This means that, compared with 1987–88 quotas, the reduction required in England and Wales will be very close to 1 per cent. in both wholesale and direct sales quotas.Also as a result of Community decisions, the temporary suspension of wholesale quotas in 1987–88 was 4 per cent. of 1986–87 allocations. This will be replaced by a suspension of 51/2 per cent. of 1986–87 allocations in 1988–89. Producers will be compensated for this at the rate of 6·8p per litre.The Government's policy has been to maximise the amount of quota which producers can use by allocating the whole national quantity; this means that if new requirements arise there is no pool of quota from which they can be drawn. Some small additional adjustments are now needed within England and Wales to allow for various needs. These include the award of quota to the beneficiaries of expropriated land awards and those producers who have successfully pursued judicial reviews of allocations made to them by the Dairy Produce Quota Tribunal. It would be prudent to reduce all quotas by about one thousandth (0·1 per cent.) to meet these requirements. This will be done on a provisional basis pending a final assessment of the amount of quota actually required to meet the needs which I have mentioned.Finally, an amendment is also being made to the prescribed quota per hectare under the end of tenancy compensation provisions. This will reflect the compulsory 1 per cent. reduction in quotas required as from 1 April 1988 and the provisional cut mentioned above. This is in accordance with the assurances regarding adjustments to standard quota given in the House of Lords on 2 July 1986.