HC Deb 03 April 1981 vol 2 cc609-19
The Minister of Agriculture, Fisheries and Food (Mr. Peter Walker)

With permission, Mr. Speaker, I wish to make a statement on the Council of Agriculture Ministers which took place in Brussels from 30 March to 1 April. My hon. Friend the Minister of State in my Department and I represented the United Kingdom Government.

Agreement was reached upon prices and related matters for the marketing year 1981–82, and I shall, in the normal way, be making full details available as soon as possible in the Library of the House.

The price negotiations took place this year with a background of farm incomes having fallen substantially over the last two years throughout the Community, and in the United Kingdom, as my recent White Paper disclosed, farm incomes declined in real terms last year by 24 per cent.

As I stated in the recent debate in the House, we had three main aims in these negotiations: to obtain some budgetary measures to contain the cost of the common agricultural policy; to take proper account of the interests of consumers; and to obtain appropriate improvements to benefit the stability and the future of British agriculture.

Important measures were agreed which will assist in restraining the future costs of the common agricultural policy. On the basis of a British proposal, the Council agreed on the need to ensure that the 1981 budget appropriation for milk was not exceeded and the Council of Ministers confirmed that it would take measures, should they prove necessary, to limit surplus production and contain budgetary costs. The 1981 budget provision for milk is fixed at 10 per cent. below that of the previous year.

Agreement was also reached to bring in co-responsibility arrangements for cereals in the marketing year 1982–83 which will provide savings estimated at £39 million.

More flexible intervention arrangements for beef will show savings of approximately £38 million, and in one of the areas of fastest growing expenditure—that of processed fruit and vegetables—arrangements were reached which will put a limitation on expenditure and show savings of approximately £40 million.

Therefore, in four areas of surplus or potential surplus, important new economy measures were secured.

The overall budgetary effects for the entire European Community in 1981 of the total package will be £186 million and in a full 12 months £596 million. Such an increase is equal to approximately 8.5 per cent. of the current CAP budget.

The Council took note of a Commission declaration which stated that there would be no need for any supplementary budget for agriculture for 1981, and that for 1982 the decisions taken in this package were consistent with ensuring that the rate of increase in agricultural expenditure should remain close to or, if possible, below the rate of increase in the Community's own resources, and the Council undertook to adopt in good time any further measures which should prove necessary to achieve this objective. With the support of the German and Dutch Governments, we recorded very strongly in the minutes of the Council our view that the rate of increase of agricultural guarantee expenditure should, from 1982 onwards, be markedly lower than the rate of growth of own resources.

For the consumer, I am pleased to report that we resisted Commission proposals supported by other member States to reduce the United Kingdom butter subsidy. We retained the beef premium, and, of course, the lamb premium schemes continue. Next year these three schemes will bring subsidies likely to be worth about £300 million of direct benefit to the British housewife—benefits that are not available to consumers in other countries in the Community.

The overall effect of the price increases will be less than one-quarter of 1 per cent. on the retail price index and approximately 1 per cent. on food prices as a whole, over the course of an entire year.

We also secured final agreement to continue special arrangements for the import of New Zealand butter and to the passing of the regulation providing refunds to the whisky industry.

The overall price increases will have an important effect on helping to restore farm incomes. The package will provide £325 million of additional receipts to British agriculture in a full year. I successfully resisted proposals by the Commission, strongly supported by other member States, for a revaluation of the green pound, and I obtained for Northern Ireland a special package of additional aid similar to that offered by the Commission to the Irish Republic. This will be worth between £8 million and £9 million.

We obtained agreement that there should be no clawback on exports of British lamb to third countries and an agreement that the management committee should consider arrangements to modify the current clawback provisions for intra-Community trade.

In total, therefore, the package agreed in Brussels was in compliance with all the requirements that I outlined to the House in the debate that we had prior to the price fixing. For the consumers we secured the premium and subsidy schemes, which are of direct benefit to them, and arranged a price fixing that over the course of the full year will increase food prices by only 1 per cent.

We built into the proposals important safeguards for the future, which will assist in further reducing the increasing cost of the agricultural policy, and we provided important increases in incomes to British agriculture without those increases being dramatically reduced by a revaluation of the green pound. We also resisted measures which would have discriminated against British farmers. It is a package that will enable the British food industry and British agriculture to continue to make an important contribution to the British economy.

Mr. Gavin Strang (Edinburgh, East)

Is the right hon. Gentleman aware that this settlement is profoundly damaging to the real interests of the British people? It is almost certainly the worst farm prices settlement to come out of Brussels since Britain entered the Community in 1973.

Will the right hon. Gentleman admit that the £500 million increase in the nation's food bill will bear most heavily on poor families, who already spend a high proportion of their income on food and who are already suffering from high unemployment and the Government's cut in real benefits and a refusal to increase tax allowances?

Will the right hon. Gentleman also recognise that an across-the-board increase in common prices is a wasteful method of supporting Britain's farmers, and that the two hardest-hit sectors—pigs and poultry—will suffer as a consequence of the increased feed prices?

Above all, is the right hon. Gentleman aware that his phrase important new economy measures were secured is sheer hypocrisy, and that the figure of £596 million which he quotes for the increased cost of this settlement does not adequately take account of the increased production and surpluses which will arise out of these higher prices, especially the increased prices on the Continent, in countries such as France?

Does not the right hon. Gentleman recognise the enormity of the future increase in Britain's budget contribution as a result of this settlement? Surely there is only one rational explanation for this deal, and that is that the Government have decided to sacrifice the interests of the British people to help to secure the re-election of the French President.

Mr. Walker

First, I should like to comment upon the suggestion that, in the hon. Gentleman's view, this is the worst settlement. Does he think that it is worse than that in the year in which the Labour Government increased prices by about 14 per cent., or that in the year in which they increased prices by 9.6 per cent.? In summary, in terms of this settlement, let us recognise that during the years of the previous Labour Government the proportion of the European budget taken by the CAP rose from 75 per cent. to 80 per cent. As a result of this settlement, next year, on the Commission's estimates, it will come down to 69 per cent. Therefore, the difference is that under the previous Government the proportion of the total European budget rose dramatically; under the present Government it has come down substantially.

Taking the percentage increase in the CAP budget, in the last three years for which the Labour Government were responsible the CAP budget rose by over 20 per cent. every year. In the last two years for which I have been responsible it has risen by an average of 11 per cent.—half of the increase rate of the Labour Government.

I am surprised that with his knowledge of the Department in which he was previously a Minister the hon. Gentleman should take up the irresponsible, inaccurate remarks that appeared yesterday about the effect on food prices. For example, one read that beef prices were going up. Under the proposals, food prices will go up by 1 per cent. over an entire year. Under the previous Labour Government food prices went up by 1 per cent. every fortnight. That is the difference between the two Administrations.

With reference to across-the-board increases, I do not think that the hon. Gentleman can have read the details of the settlement, because there were no across-the-board increases.

The hon. Gentleman specifically mentioned feed prices. In the negotiations over the last three days we reduced the increases proposed by the Commission on feed prices.

With regard to pigs and poultry, we have ensured that the increases in cereal prices are lower than the increases elsewhere.

As for the effect on the overall budget, it is very hard to argue that at a time when the Commission is estimating that input costs into agriculture are rising across Europe by about 12 per cent. an increase of 9 per cent. will stimulate food production. What we have here is a recognition that for two years farm incomes in Britain and throughout Europe have gone down faster than in other areas of the British and European economies.

With regard to the hon. Gentleman's remarks about the French elections, I can only point out to him that prior to the price fixing the French Minister of Agriculture and the French President both stated categorically that the primary aim of the price fixing was to see that the green pound rate of the British was substantially reduced because of the adverse effect that it was having on French trade. I am glad to say that the French failed in that respect, although, judging by the views of the hon. Gentleman, he would have liked them to succeed.

Mr. Anthony Nelson (Chichester)

Will my right hon. Friend accept my warmest congratulations and the congratulations of the farming community not only on an outstanding personal achievement in reaching this speedy agreement but on reaching an agreement which will add a considerable amount of funds to a much haltered industry?

Will my right hon. Friend accept that many of us find that the predictable response of the Opposition has a distinct whiff of sour grapes about it, as it was the previous Labour Government who consistently abandoned and failed to defend our industry over many years? Will he also accept that there seems to be something of a paradox? Those who, on the one hand, would criticise my right hon. Friend if he failed to achieve any increase in prices, because that would be abandoning British agriculture, criticise him, on the other hand, for increasing structural surpluses of products.

Will my right hon. Friend say something about the horticulture industry? I understand that he had hoped to be able to make an announcement.

Mr. Walker

I am grateful to my hon. Friend for his remarks. I do not think that anyone can argue but that if we had not obtained substantial increases in farm incomes for British agriculture this year there would have been substantially increased unemployment not only in that industry but in many other industries, such as the fertiliser industry and the agricultural machinery and tractor industries, which have already had to make substantial redundancies and would have had to make far more in the future. Hon. Members cannot claim to be interested in full employment and at the same time want to reduce farm incomes in British agriculture even more than they have been reduced in recent years.

With regard to the horticulture and glasshouse industry, I apologise to my hon. Friend. I had been given to understand that the Dutch Government would be making their announcements about the changes in their fuel prices prior to 31 March. In fairness to my Dutch colleague, who was the President of the Council at the recent meeting, understandably for the last two weeks he has been totally engaged in the Community price fixing. I am informed by the Dutch Government that they expect to make their announcements within the next two weeks, and I shall make a statement after that.

Mr. Donald Stewart (Western Isles)

Whatever play the right hon. Gentleman makes about minimum percentages, is he aware that the poorest sections of the community will find out, as they have from experience, that they will be obliged to agree with the Consumers Association that this was an outrageous settlement. There is no way round that. If the right hon. Gentleman intends to negotiate in that manner for the fishing industry, the death sentence has already been passed on it. What has happened to all the pledges that we have had that the CAP is to be altered at some time for the benefit of the United Kingdom?

Mr. Walker

I am sure that Scottish farmers will note the view of the right hon. Gentleman. They will take note that he considers that this is an outrageous settlement. They may consider it to be outrageous because the increases are not big enough, but they will now have clearly on record the view of the Scottish National Party on this issue.

With regard to the effect on consumers, I repeat that, alone of European countries, we have secured for lamb, beef and butter, premium subsidies on a substantial scale that are available in no other European country. For that reason the Consumers Association is totally wrong in its statement. Its statement is applied to Europe as a whole, where it says that there will be a 3 per cent. increase, and even that is exaggerated. But in this country, over the course of the year, there will be a 1 per cent. increase at the maximum. The right hon. Gentleman has said, therefore, that in his view Scottish agriculture should have been sacrificed further because of that 1 per cent. increase.

Mr. John G. Blackburn (Dudley, West)

Will my right hon. Friend accept the warm and sincere congratulations of Conservative Members for not the worst but the best settlement that this country has ever achieved in Europe? Will he agree thaat the finest thing tht he has brought to those in need and the poor is a settlement involving an increase of only 1 per cent. in consumer prices?

Mr. Walker

After a year in which farm incomes have been reduced in real terms by 24 per cent., to arrange a settlement in Europe on a commodity by commodity basis, and with appropriate premium payments and subsidies, so that there is such a minor effect on the British consumer and a substantial beneficial effect on the British farmer, is something that the whole country will applaud.

Mr. Stephen Ross (Isle of Wight)

We welcome the statement. We believe that the right hon. Gentleman has achieved the absolute minimum to restore the flagging fortunes of the agriculture industry. We welcome the extension of the extra help to Northern Ireland and the protection of New Zealand imports.

Will the right hon. Gentleman tell us a little more about the position of milk producers? What will be the average increase for them over the year? Will he give us an estimate of that?

Mr. Walker

The increase in milk prices over the year will be 9 per cent., so that the net figure will be 6½ per cent.

In case there are to be more misstatements in the press about the effect on milk prices, I point out that there will be no effect whatever on the liquid milk price in this country. To the extent that it assists the price received in the manufacturing milk sector, the pressure on liquid milk price increases will be that much reduced. That is the effect of the overall settlement on the dairy sector. I add to that the important provision that the United Kingdom obtained in the settlement—the agreement by the Council that the budget for the milk sector, which has been fixed at 10 per cent. below last year's figure, will be strictly adhered to.

Mr. James Kilfedder (Down, North)

Does the right hon. Gentleman realise that he has achieved the near impossible of bashing the British farmer and the British consumer in offering this settlement, which is a sort of sop to the French? Will he say whether the Ulster farmers' income will now be brought into line with the English farmers' income, which the Minister says is disastrously low?

Mr. Walker

That was a typically Irish remark, if I may say so, by hon. Gentleman. He will be delighted to know that I have already received the thanks of the Ulster farmers for the package that I have achieved for them. They will note that the hon. Gentleman is out of line. On top of the structural package that I agreed at a previous Council meeting but which was held up by the Italians, the package for Northern Ireland was approved. In addition, a further package of £9 million for Irish farmers was approved. For the consumers in Northern Ireland, there will be virtually no price increase.

On reflection, I think that the hon. Gentleman will recognise that his remarks were totally unfounded.

Mr. Wm. Ross (Londonderry)

Does the right hon. Gentleman understand that Northern Ireland Members on the Official Unionist Bench are very pleased that he managed to get the package for Northern Ireland which was also proposed for the Republic? However, does he appreciate that the simple extension of this package will cause very severe problems not only at present but potentially in the future? Therefore, when may we have full details of what this entails? Will there be anything for the pig and poultry sectors, which are suffering very severely? Will there be anything towards the restoration of milk aid? Can the right hon. Gentleman say anything about the additionality factor?

Mr. Walker

The latter points are matters for my right hon. Friend the Secretary of State for Northern Ireland. As for the hon. Gentleman's general question, details of the methods will be placed in the Library. They include a range of proposals, some of which specifically help the livestock sector. For example, there is an improvement in the suckler cow premium for Northern Ireland which is financed 100 per cent. by the Community. As I say, it is a range of measures. As the hon. Gentleman knows, the original measure included proposals to assist marketing in Northern Ireland. But in total these two measures together result in a considerable injection of benefit to Northern Ireland farmers.

Mr. Marcus Kimball (Gainsborough)

Is my right hon. Friend aware that the whole agriculture industry is grateful to him for having ensured the health of British agriculture by way of preference in the negotiations, despite the pressures on the health of certain Continental politicians? My right hon. Friend's stalwart defence of the green pound is the most fundamental issue at the moment. The whole package of increases which we have obtained for British agriculture could be nullified by any change in its value.

Will my right hon. Friend confirm for the efficient grain farmers of Lincolnshire that the co-responsibility arrangement for grain will ensure that there is a premium for producing good bread wheats and good malting barleys and that this co-responsibility arrangement is in no way related to the hated standard quantities?

Mr. Walker

I can confirm the latter point. We shall always see that the proper return is achieved for the quality producers who operate in the area which my hon. Friend represents.

As for the green pound proposals, I said earlier that it had been stated as the No. 1 aim and objective of the French Government to achieve a substantial revaluation and one which would have resulted in the disappearance of our advantage in that respect over a period of two years. They failed totally in their objective. It was an objective that they wanted to achieve because they knew that the present arrangement, in reversal of what had happened for many years, was positively advantageous to British agriculture and a considerable disadvantage to the competition which we experience from the Continent. Therefore, we were correct to stand by the proposals. If we had accepted the Commission's proposals on the green pound it would have meant the improvement in prices for British farmers being halved.

Several Hon. Members

rose—

Mr. Speaker

Order. In order to lessen the impact on private Members' business, I hope that the questions and answers on the statement will not run much beyond 11.30. If questions and answers are brief, I hope to call all those hon. Members who are seeking to catch my eye.

Mr. Nigel Spearing (Newham, South)

Will the right hon. Gentleman reconsider his reply to my hon. Friend the Member for Edinburgh, East (Mr. Strang)? He compared the 1 per cent. increase which he claims comes from the settlement with a past increase in food costs relating to all reasons. Will he reconsider that? Unless he does, he will be open to the accusation of misrepresentation. Can he explain how an increase in farm gate prices of more than 8 per cent. is represented by only 1 per cent. at retail level?

Mr. Walker

First, let me make it clear to the hon. Gentleman—I have said it already—that the Opposition are complaining that the result of this overall settlement will increase food prices by 1 per cent. over a full year whereas, under the previous Labour Government, food prices rose by 1 per cent. every two weeks.

Mr. Spearing

For different reasons.

Mr. Walker

Of course, for different reasons. The main reason was that we had a Labour Government. I am glad to say that the rate of food price increases halved under the period of a Conservative Government.

Mr. John Bruce-Gardyne (Knutsford)

rose—

Mr. Spearing

What about the other half of my question?

Mr. Anthony Fell (Yarmouth)

The hon. Gentleman must not dictate. If my right hon. Friend does not choose to answer it, why should he?

Mr. Bruce-Gardyne

Can my right hon. Friend shed a little more light on the milk arrangements? He says that there is to be a 10 per cent. cut in the budget support for milk in the year ahead. Surely the increase in prices, coupled with the adjustments to the green pound for the major Continental surplus producers, is calculated to produce a considerable increase in surplus production from the Continent. How are these two factors to be co-related?

Mr. Walker

If my hon. Friend considers the total milk increase he will see that the big adjustment in terms of the green pound which benefits incomes on the Continent is for Italy, which is not an important milk producer. For those countries which are important for milk production, there are increases which are between 2 per cent. and 2½ per cent. above the increases agreed in this report. Subtracting the co-responsibility arrangement, one is left with 6½ per cent. net. Even if one adds the 2 per ent. or 2½ per cent., with the current estimates of input costs for dairy production, it still represents a fall in incomes in real terms and therefore is by no means a stimulation to increased production. However, much more dangerous in terms of an increase in milk production, which is the reason why I insisted on the freeze on the budget for milk, are national aids for milk production. If, for example, the French Government continued to top up with income supplements to dairy producers, we could get an increase in milk production which would bust the budget. That is why I put in that provision.

Several Hon. Members

rose—

Mr. Speaker

Order. If we are to have answers as long as the last one I shall not be able to call all those hon. Members who are seeking to catch my eye.

Mr. Michael English (Nottingham, West)

What is the estimated percentage increase in British farmers' incomes resulting from this settlement?

Mr. Walker

I am sorry; I cannot give the answer, for this reason. The hon. Gentleman asks for details of "incomes". If he means net incomes after costs, it is likely that the input costs of British agriculture will rise more this year than the £325 million extra in receipts. Therefore, in terms of incomes, purely on this settlement, there is likely to be a continuing fall in farm incomes in real terms.

Viscount Cranborne (Dorset, South)

Will my right hon. Friend accept that the county of Dorset has per herd the highest number of cows of any similar English county and, therefore, that it is widely welcomed in Dorset that my right hon. Friend recognises so clearly the effect of the drop in farm incomes over the past two years? As a result, the increase of 9½ per cent. is the bare minimum that can be accepted for farm incomes because so much of the decrease has borne more heavily on milk producers than on grain producers.

I wonder whether my right hon. Friend will also accept that farmers in the Isle of Purbeck, because it has such poor land, will find it difficult even at this level to keep going. They had hoped for somewhat more than the 9½ per cent. that they are to receive.

Mr. Walker

I realise that with the increase in bank borrowings over the past two years and the fall in incomes in real terms, obviously a substantial adjustment was necessary if we were not to see a very real fall in British agricultural production. If that fall had occurred, it would have been replaced by foreign imports. I recognise that with these increases there are still considerable difficulties in certain sectors of British agriculture.

Mr. Neil Thorne (Ilford, South)

I have no fanners in my constituency, which is unusual for a Conservative Member. However, I have a substantial anti-Communist lobby, especially among the Jewish community, and I should be grateful for my right hon. Friend's assurance that this settlement is not likely to lead to any further farm surpluses which could be sent to aid the cause of Communism in the world.

Mr. Walker

The position of the British Government has always been one of opposition to the export of subsidised food. I am pleased to say that one of the results of putting the firm limitation on the budget for the milk sector at 10 per cent. below what it was last year is that it will assist us in that objective.

Mr. Tony Marlow (Northampton, North)

As there are ways of providing for the necessary sustenance of farm incomes other than by increasing basic food prices by 9½ per cent., with consequent effects upon inflation, with consequent effects on the amount of money that we have to put into the Community budget, and with consequent effects on the amount of money which our housewives have to pay for that 30 per cent. of temperate foodstuffs which come from the rest of the Community, as my right hon. Friend has failed entirely to take the opportunity to change radically the hated CAP, with its manifest disadvantages for this country, as we gave a solemn commitment to the people on 3 May 1979 that we would insist that there would be no price increases at all on those items in structural surplus—and my right hon. Friend has unfortunately been unable to do that—and as he has been so completely compromised both in this and in future negotiations, is not the honourable thing for him to do to resign and let somebody else take over?

Mr. Walker

My hon. Friend is as good at this subject as he is on footwear. He has well-known and exaggerated views. I am sorry that his excitement and enthusiasm at being anti the Community even made him yesterday make factually totally incorrect statements upon press reports which were made before the Council of Ministers had concluded its consideration. Alas for my hon. Friend, we have a settlement which has a minor effect on food prices. Alas for him, we have a settlement which will slightly reduce Britain's contribution to the budget. The settlement starts for the first time to tackle a number of important areas of surplus. I am sorry that the settlement is so totally disappointing for my hon. Friend's propaganda campaign.

Mr. Ivan Lawrence (Burton)

Is my right hon. Friend aware that, with one exception, Conservative Members are not in the least surprised at the opportunistic rejection by the Opposition of this fine settlement, or at the complete lack of interest in the farming community of the Social Democratic Party, whose members are absent?

We support my right hon. Friend in his stout defence of the achievements of the last couple of years which he has maintained for the farming industry, although he was helpful to the French and the Germans in the settlement. Is he aware that we look for a return offer of help and some enthusiasm from them when we reconsider the fisheries negotiations after the French elections?

Mr. Walker

I have always maintained that there should be no link between a fish settlement and an agriculture settlement. I am afraid that my colleagues from Germany and France would not share my hon. Friend's view. They wanted substantially to reduce the British butter subsidy, towards which they make a contribution in the budget. They wanted to insist on the revaluation of the green pound, which is giving British food producers an advantage over their European competitors. Their main objectives in those spheres were not achieved, so I do not think that they will share the view that I was helpful and co-operative. However, they know that it was a sincere negotiation in which every objective that I outlined in the debate prior to the negotiations was achieved.

Mr. Tristan Garel-Jones (Watford)

Will my right hon. Friend confirm that the restoration of the butter subsidy will be of particular help to low-income families and pensioners in Britain? Will he further confirm that this satisfactory package which he negotiated on behalf of the British consumer was possible only because our commitment to the defence of the interests of the British consumer was matched by our commitment to the Community itself? Will he comment on the remark by the hon. Member for Edinburgh, East (Mr. Strang) that the domestic elections in France inhibited the negotiations? If domestic elections inhibit comment on the EEC, would not the Labour Party be permanently disqualified?

Mr. Walker

I agree. It was not much help to the French Government for their main objective in the negotiations to be rejected. The butter subsidy is unique and is enjoyed only by the United Kingdom. That continues. Newspaper reports that, for example, the price of beef would rise as a result of the settlement are untrue because of the beef premium scheme. Reports that the price of bacon would rise massively as a result are untrue because there is no intervention on pigmeat. Competition for the British bacon market will continue as it always has, based on straight market conditions. The settlement brings considerable benefit to British consumers.

Mr. Mark Hughes (Durham)

Can the Minister confirm that when the butter subsidy was first acquired for the British people his party opposed my right hon. and hon. Friends who achieved it? Is not there an element of hypocrisy in claiming that as a jewel in his own crown? Does the right hon. Gentleman accept that he is in danger of misleading the House by quoting the figure of 6½ per cent. increase for milk? There is already a 2 per cent. co-responsibility levy. Therefore, a 9½ per cent. increase plus an extra ½ per cent. co-responsibility levy leaves net a 9 per cent. increase this year over last year.

How can the commitment on the budget be achieved if extra butter is already in intervention storage and has to be sold with export restitutions? I am authorised by my right hon. Friend the Leader of the Opposition to say that we should be happy if next week's business were to be rearranged so that we might have a full debate in the House on the heroic capitulation by the Minister.

Mr. Walker

I welcome that suggestion. I should like to examine the achievements in depth.

When the butter subsidy was negotiated, for political reasons I was not responsible for statements made by the then Opposition. When I became responsible for the butter subsidy, I arranged at my first negotiation for it to be doubled. It is, therefore, double what it was under the Labour Government. The subsidy was one of the few achievements that the Labour Government could claim, but we doubled it.

The hon. Gentleman is correct about the co-responsibility levy. The increase in co-responsibility is 0.5 per cent. Before it was 2 per cent. basic. Therfore, the net improvement is 8½ per cent.

The 1981 budget for the milk sector is based on current experience. In the past year there has been a substantial reduction in butter in store. It has been put on to the world market at better prices than before. Therefore, the Commission is certain that on that basis it can keep the milk budget at 10 per cent. below what it was last year.