§ Mr. Mackintoshasked the Minister of Agriculture, Fisheries and Food whether, in view of the Government's policy of requiring agriculture to play a special rôle in replacing imports, the supplement and abatement system on the guaranteed price for livestock will be abandoned so that farmers will know that whatever the state of the market and whatever number they produce, the guaranteed 162W price will remain the same; what such a change would cost in the next 12 months; and what effect this would have on the production of beef and mutton.
§ Mr. PeartProducers collectively are assured of the annual guaranteed price however many eligible fat cattle and sheep they produce, since this price is compared at the end of the year with their average total returns from the market and from weekly deficiency payments. Any shortfall is then made up by a final payment.
The system of making abatements and supplements to the weekly deficiency payments is designed to encourage farmers to watch the course of market prices and sell their stock to the best advantage. It also discourages the practice of seeking certification, when deficiency payments are high, of stock that could still be retained on farms and slaughtered when market prices recover.
It is impracticable to estimate how much the Exchequer cost of the guarantees would rise in 1968–69 if this system were abandoned. There is no reason to assume that total production would be affected.
I see no justification for ending the system.