HC Deb 23 May 1985 vol 79 c552W
Mr. Foulkes

asked the Minister of Agriculture, Fisheries and Food (1) what estimate he has made of the extra expenditure in the European Economic Community budget resulting from each 1 per cent. cut in cereal prices up to 3.6 per cent.; and whether the inter-governmental agreement for 1985 will be modified to take account of this increased expenditure;

(2) which year's expenditure counts as the base for future agricultural spending as specified by the European Economic Community document on budgetary discipline; and what estimate he has made of the effect on future budgets of a cut in cereal prices below the 3.6 per cent. on which the budget was based.

Mr. Jopling

The European Commission has estimated that each 1 per cent. increase in the intervention price for cereals, after taking account of consequent changes in payments for the carryover of end-of-season stocks, would increase EAGGF expenditure by about 3 mecu in 1985 and 60 mecu in 1986. The draft budget for 1985, including the additional finance to be provided through an intergovernmental agreement, has been drawn up on the basis of the Commission's original price-fixing proposals. Any increases in expenditure, arising from changes to these proposals or other factors, will however be accommodated within the budget provision as the Commission has stated that it will take whatever measures are necessary in the management of agricultural markets to avoid a supplementary budget for 1985.

In accordance with article 4 of the Council's conclusions on budget discipline, the financial guideline for agriculture is calculated by reference to agricultural expenditure in 1984 and 1985 and the rate of growth of the own resources base.