§ Mr. Deakinsasked the Minister of Agriculture, Fisheries and Food what assessment he has made of the effect of the abolition of the milk co-responsibility levy on retail milk prices.
§ Mr. Buchanan-SmithThere would be no direct effect on retail milk prices as the levy is charged on deliveries to dairies by milk producers. However, if the levy were abolished, as we have continued to advocate, prices could be set correspondingly lower without reducing producer returns.
§ Mr. Deakinsasked the Minister of Agriculture, Fisheries and Food what assessment he has made as to the level at which producer milk prices in the European Community would need to be set to stop the expansion of production.
§ Mr. Buchanan-SmithProduction in the dairy sector is influenced by many factors other than milk prices, including changes in production costs, technological developments and producers' own expectations of the 189W future prospects for dairying. To tackle the dairy surplus needs real restraint on prices and that is why we have argued that the Commission proposals for increases in support prices in the milk sector this year are not justified.
§ Mr. Deakinsasked the Minister of Agriculture, Fisheries and Food on what grounds the European Commission has proposed the continuation of the milk co-responsibility levy.
§ Mr. Buchanan-SmithThe European Commission has proposed the continuation of the milk co-responsibility levy because it believes it helps
to establish a better balance on the market for milk by creating a more direct connection between production and the scope for disposal of milk products.We do not share this view and shall continue to press for its abolition and for more effective measures for tackling the problem of surplus milk production.