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Milk Quota

Volume 404: debated on Tuesday 6 May 2003

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To ask the Secretary of State for Environment, Food and Rural Affairs (1) what assessment she has made of the impact of the proposed milk quota replacement compensation scheme on producers of high butterfat milk; [110169](2) if she will make a statement on the method of calculation that she proposes to adopt for the purposes of the milk quota replacement compensation scheme. [110168]

I assume that the hon. Member is referring to the dairy premium, which it is proposed should be paid in compensation for dairy support price cuts. Under Agenda 2000, these cuts are due to take place from 2005, and under the CAP reform proposals published on 22 January, from 2004. Under the Agenda 2000 agreement, eligibility for the dairy premium was to be based on the net litreage of quota held at the end of the quota year in each year of payment, and set by EC Council Regulation—it was not within national discretion to determine the eligibility criteria. This remains the case under the Commission's current CAP reform proposals, with (decoupled) payments still currently to be based on the net litreage of quota held, but fixed as at 31 March 2004 (that is, they would not vary from year to year).We have no evidence to suggest that producers of high butterfat milk would suffer any particularly adverse consequences as a result of these proposals, as compared to other dairy producers. Indeed, the reverse might prove the case, as high butterfat milk producers tend to supply the high-value, as opposed to bulk commodity, markets, and could continue to command some premium under the new support arrangements envisaged.