§ Mr. Biffenasked the Minister of Agriculture, Fisheries and Food if he will make a statement on the agreement reached with the Community on 21st November to apply the European Economic Community rules for dairy products after 1st February; what is the estimated impact of these arrangements on the wholesale and retail price of pastural skimmed milk, cheese, and butter and upon the incomes of United Kingdom dairy farmers; and if such arrangements require the parity of sterling to be fixed.
§ Mr. Kinseyasked the Minister of Agriculture, Fisheries and Food what agreement has been reached on transitional arrangements for milk and milk products; and what the implications are for the United Kingdom.
§ Mr. GodberOn 21st November the Council of Ministers (Agriculture) reached a provisional agreement on transitional measures for milk and milk products, which will be finalised when agreement is also reached on satisfactory provisions to implement the Protocol on New Zealand butter and cheese, and on the intervention arrangements for butter of the type normally manufactured in the United Kingdom (i.e., salted sweet cream butter of 80 per cent. fat content). The agreement provides for an intervention price in the United Kingdom for butter of 82 per cent. fat content of about £357 per ton on 1st February (rising to at least £428 on 1st April). The intervention price for skimmed milk powder would be at the same level as in the original Community, i.e., about £229 per ton. The compensatory amounts for the other main milk products are derived from those for butter and skimmed milk powder. Compensatory amounts for milk for liquid consumption and for fresh cream for direct consumption are established on the basis of the difference between our market prices and those of the original Community.
The main implications for the United Kingdom are that on this basis there should be no reasons for increases in the average wholesale and retail prices of butter and cheese over the next few months; and that for United Kingdom producers there would be continuing safeguards for the liquid milk market 36W and, for the first time, guaranteed minimum prices available in the milk products sector. It is understood that these arrangements are subject to appropriate adjustments in the event of a change in the sterling parity. The agreement is in my view a satisfactory one for the United Kingdom.