§ Mr. Arthur Lewisasked the Minister of Agriculture, Fisheries and Food to166W what extent Great Britain will be affected, on entry into the European Economic Community and on the implementation of the regulation of the European Economic Community concerning the minimum price of £146 per ton being imposed on the import of tomato and paste for manufacture from third countries; whether he has discussed this with representatives of British interests and with what results.
§ Mr. Anthony StodartI would refer the hon. Gentleman to the answer given on 27th March to a Question from my hon. Friend the Member for Derbyshire, West (Mr. Scott-Hopkins).—[Vol. 834, c. 13–14.]
§ Mr. Arthur Lewisasked the Minister of Agriculture, Fisheries and Food to what extent he has been consulted by the European Economic Community in its recent discussions on higher farm prices; and to what extent the proposed two-stage increase of 8 per cent. to 12 per cent. in meat and cereal prices will increase British food prices and/or Great Britain's cost of entry if Great Britain enters the Common Market.
§ Mr. Charles Morrisonasked the Minister of Agriculture, Fisheries and Food if he will make a statement on the recently announced price increase for agricultural products in the European Economic Community.
§ Mr. PriorThe Council of Ministers of the E.E.C. has now reached agreement on price increases for agricultural products for the 1972–73 season. These are set out in the following table.
The United Kingdom was formally consulted under the interim period procedure, but I had also previously expressed my views to many of my European colleagues about the various proposals being put forward. We reminded the Community of the effects which unduly high prices would have for this country, particularly for consumers; and pointed out that the long-term interest of the enlarged Community was to contain, in real terms, the costs of the common agricultural policy.
It has to be recognised, however, that the Community was bound to have some regard to immediate problems, including 167W the effects of price restraints in previous years on the economics of agriculture and on farm incomes in the Six. It also had to take account of the effects of parity changes at the end of 1971, which resulted in a reduction of the values of common prices in some member States. It concluded, therefore, that some increase in farm prices was necessary. Nevertheless it is clear from the table that the Community took our views into account in reaching its decisions for 1972–73.
Discussions on Community farm prices for the 1973–74 season are due to start later this year, and are unlikely to be settled before the beginning of next year, when the United Kingdom will be participating fully in Community decisions. It should be noted that the increased price levels will have no immediate effect for United Kingdom consumers since we do not start the transitional moves towards common prices until the beginning of the 1973–74 season.
In July, 1971, the White Paper "The United Kingdom and the European Communities" explained that membership of the E.E.C. would affect food prices in the United Kingdom over a period of about six years, and estimated that the increase in retail prices would amount to about 2½ per cent. each year. This estimate relates, of course, basically to the difference between prevailing E.E.C. and world price levels. The farm prices increases now agreed in Brussels affect only a limited number of commodities; and the continued rise in world prices of certain commodities, notably milk products, has brought about since July, 1971, a narrowing of the gap between world and E.E.C. prices. After taking account
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C.A.P. Prices for 1972–73 Price for 1972–73 Commodity Units of account metric tonne £per imperial unit Percentage increase over I971–72 price Period of application Durum wheat: Target price* 132.60 £56.14/ton + 4.0 1st August, 1972–31st July, 1973 Minimum guaranteed producer price† 153.80 £65.11/ton +4.0 Single intervention price 117.34 £49.68/ton — Soft wheat: Target price* 113.80 £48.18/ton +4.0 Basic intervention price* 104.75 £44.35/ton +4.0 Barley: Target price* 104.25 £44.13/ton +4.0 Basic intervention price* 95.70 £40.51/ton +4.0 Rye: Target price* 105.45 £44.64/ton +5.0 Basic intervention price* 97.45 £41.26/ton +5.0 Maize: Target price* 101.75 £43.08/ton +5.0 of both factors, it is now estimated that the effect on retail food prices in the United Kingdom would be about 2 per cent, per year over the transitional period. Similar considerations apply to the estimate of the effect on the food import bill, and the combined effect of the E.E.C. price increases and changes in world prices is to reduce somewhat the White Paper estimate. The Commission has not yet produced an assessment of the effect of these price changes on the Community budget.
As part of the settlement, the Community has also agreed on proposals to provide assistance from the guidance section of F.E.O.G.A. for the improvement of agricultural structure, by means of aids for farm modernisation, incentives for out-goers from farming, and socio-economic advice and training; and the relevant draft directives lay down principles to which certain national aids available for these purposes should conform. Following consultations, however, the Community has given assurances about the need to take account, where necessary, of different conditions obtaining in the United Kingdom and other acceding countries. These will be expressed as a series of formal declarations, serving as guidelines for the subsequent implementation of the directives. The general result is to allow sufficient flexibility in the application of the arrangements to enable us to see that our own grant system can continue broadly as at present, and on lines considered appropriate to our own particular circumstances. We shall be having further consultations on the detailed application of the proposals.
Following is the table
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Price for 1972–73 Commondity Units of account per metric tonne £p per imperial unit Percentage increase over 1971–2 price Period of application Husked rice: Target price 211.50 £89.54/ton +4.7 1st September, 1972– 31st August, 1973. Sugar: Minimum price for beet 17.68 £7.48/ton +4.0 1st July, 1972–30th June, 1973. Price for beet between basic and maximum quotas 10.40 £4.40/ton +4.0 Target price for white sugar 245.50 £103.93/ton +3.2 Intervention price for white sugar 233.40 £98.81/ton +3.2 Olive oil: Target producer price 1,247.00 £527.92/ton +5.0 1st November, 1972–31st October, 1973. Oilseeds: Target price for rape and colza seed 208.50 £88.27/ton +3.0 1st July, 1972–30th June, 1973. Target price for sunflower seed 210.50 £89.12/ton +4.0 Basic intervention price for rape and colza seed 202.50 £85.73/ton +3.1 Basic intervention price for sunflower seed 204.50 £86.58/ton +4.1 Wine: Guide price Various Various +7.0 16th December, 1972–15th December, 1973 Tobacco: Indicator and intervention prices Various Various +5.0 1st June, 1972–31st May, 1973. Pigmeat: Basic price 825.00 £3.12/score +3.1 1st November, 1972–31st October, 1973. Milk: Target price for milk‡ 117.70 22.9p/gall. +8.0 1st April, 1972–31st March 1973 Intervention price for butter 1,800.00 £762.04/ton +1.1 1st April-14th September, 1972 1,860.00 £787.44/ton +4.5 14th September, 1972–31st March, 1973. Intervention price for skimmed milk powder 540.00 £228.61/ton +13.0 1st April, 1972–31st March, 1973. Subsidy on skimmed milk powder for animal feed 176.20 £74.59/ton +35.6 No change Subsidy on skimmed milk powder for animal feed 16.50 3.2p/gall. No change Beef: Guide price for adult cattle§ 750.00 +4.0 £15.88/cwt. 3rd April-14th September, 1972. Guide price for calves§ 942.50 £19.95/cwt. No change 1st April-14th September, 1972. Cottonseed: Acreage subsidy 80/ha £13.49/acre +14.3 1st August 1972–31st July, 1973 Flax: Acreage subsidy 135/ha £22.76/acre +22.7 Hemp: Acreage subsidy 115/ha £19/39 acre +43.8 * Prices shown are for August. †At wholesale level. ‡Delivered to dairy. §Prices from 15th September, 1972 to be fixed later.