§ Mr. Austin Mitchellasked the Minister of Agriculture, Fisheries and Food what further plans have been put forward by the EEC to eliminate the surplus production of milk; to what extent the existing quotas on production permit surplus production; what effect the various price and other proposals will have on United Kingdom milk producers' returns in the current marketing 276W year; and if it is his intention to reduce the returns to producers to bring supply and demand into balance within the quota system.
§ Mr. MacGregorAt present the Community milk quotas permit production of some 13.5 million tonnes in excess of consumption.
The Commission has proposed an increase in the target price of 1.5 per cent.; this is accompanied by a cut in quotas of approximately 1 per cent. and a reduction in the rate of the corresponsibility levy from 3 per cent. to 2 per cent. of the target price. These proposals are currently being discussed by the Council of Agriculture Ministers in the context of this year's price fixing negotiations, and it is not possible at this stage to predict the outcome.
The Government place high priority on improving the balance of supply and demand in the milk sector and reducing the heavy financial costs to the Community budget. It is for this reason that we are continuing to argue for a price freeze in these negotiations.
Actual returns to producers in the United Kingdom are dependent upon the prices for milk obtained from the different outlets for milk by the milk marketing boards or by producers themselves where they sell direct. How far these reflect changes in institutional prices depends upon the market circumstances for the different outlets and the marketing skills of those supplying them.