The Government have reached agreement with the British Wool Marketing Board and the Farmers' Unions on new arrangements to start on 1st May, 1955, which is the beginning of the next wool year. In future the guarantee will be to the Board instead of to individual producers and the guaranteed price will take account of the Board's marketing expenses, instead of there being a separate marketing allowance.
There will continue to be a stabilisation fund, known as the Special Account, but full settlements, at which any credit is taken out by the Board or a debit is written off, will take place at 15-year intervals instead of five-year intervals as at present. At the end of each intermediate five-year period, there will be a partial settlement when any debit balance in excess of £3 million will be writen off and any credit balance in excess of £5 million will be available to the Board. By agreement between the Government and the Board the first 15-year accounting period under the new arrangements will be deemed to have started on 1st May, 1950; whatever credit balance remains in the Special Account at the end of the current wool year will therefore be carried forward.
At present the Board receives 10 per cent. of any surplus by which the market realisation price in any year exceeds the guaranteed price, the remaining 90 per cent. being paid into the Special Account. This arrangement will continue when the Special Account is in credit, but the full amount realised for the wool will in future be paid into the Special Account if it is in debit.
These new arrangements require some changes in the provisions of the British Wool (Guaranteed Prices) Order, 1951, and a new financial agreement between Ministers concerned and the Board. A new Order has been laid before the House, and a new agreement will be completed as soon as possible.