§ Mr. Gouldasked the Minister of Agriculture, Fisheries and Food if he will set out in detail in the Official Report the method by which the effect of the common agricultural policy on food prices is calculated, with particular attention to the effect of any common agricultural policy-induced increase in producers' prices on the extent to which wholesalers' and retailers' are increased proportionately.
§ Mr. BishopThe following information indicates the broad approach we adopt when calculating the effect on food prices of changes in the CAP support price arrangements which lead to increases in producer prices.
The calculations assume that changes in support prices in the United Kingdom are reflected in food prices at the point of first sale. The precise effect involves a judgment because the influence of CAP price support arrangements on the market price varies considerably from commodity to commodity. It is also necessary to take account of any changes in EEC levies on imports from third countries and of MCA payments on imports from other EEC countries. The calculations assume that margins between the firsthand and the retail stage are unchanged in cash terms, except for a small rise to cover the marginally increased cost of carrying higher valued stocks.