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Milk Quota

Volume 405: debated on Wednesday 14 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 economic impact on the dairy industry of a delay in deciding the base year for milk quota; and if she will make a statement; [112206](2) when she expects to reach a decision with her European partners on the base year for milk quota; and if she will make a statement. [112207]

Under the current CAP reform proposals, published on 22 January, eligibility for the dairy premium, which is planned as compensation for the price cuts, would be based on quota held on 31 March 2004. We, and some other member states, have expressed concern that the current proposal to base eligibility on quota held at a date in the future has already given rise to speculation on the quota market. We have suggested that it should instead be based on quota held on 31 March 2003, and confined to active producers as at 31 March 2004.No formal assessment has been made of the economic impact on the dairy industry, including the effects of quota speculation, of any delay in coming to a decision on the eligibility criteria for the premium. This would in any case be very difficult to determine, as its effect would vary enormously according to producers' individual circumstances.The earliest that a formal agreement will be reached on the dairy premium, along with the rest of the CAP reform package, will be the meeting of the Council of Agriculture and Fisheries Ministers on 11 and 12 June 2003.