HC Deb 02 May 1989 vol 152 cc84-5W
Mr. Teddy Taylor

To ask the Minister of Agriculture, Fisheries and Food what estimate has been made of the additional cost to consumers in Europe of the recent price package; and what estimate he has made of the extra cost reduction to the European Economic Community.

Mr. MacGregor

I estimate that the effect of the price settlement on the retail prices index (all items) in the United Kingdom will be very small, at most one twentieth of 1 per cent. I have no estimates for other member states or for the Community as a whole. The proportion of the overall European Community budget represented by CAP guarantee expenditure is expected to fall from 61 per cent. in 1988 to 60 per cent. in 1989.

Mr. Ralph Howell

To ask the Minister of Agriculture, Fisheries and Food (1) if he will state his estimate of the increase in(a) the price of wheat and (b) the price of sugar beet that producers can expect as a result of the recent European Economic Community agricultural prices settlement;

(2) how the estimate of £155 million extra United Kingdom farm income resulting from the various European Economic Community farm price adjustments was calculated; how much of the £155 million is allocated to each type of product; and what effect on prices the settlement would have for each commodity.

Mr. MacGregor

The £155 million is the estimated full-year effect of the change in the green pound. Since the aggregate effect of the decisions on common support prices intervention arrangements and producer levies is estimated to be neutral, it is also the effect of the package as a whole. These effects are calculated using current annual volumes of production and adjusting for increases in the cost of purchased feedingstuffs, seeds and livestock. The breakdown between products is cereals, £65 million; other crops, £10 million; sheep, £30 million; milk, £40 million; other livestock products, £10 million. It is estimated that the aggregate effects of the Council's other decisions are neutral.

The settlement in itself is estimated to increase support levels in sterling by cereals, 3.5 per cent.; sugar beet, 2 per cent.; oilseeds, 4 per cent.; sheep, 4.2 per cent.; beef, 2.7 per cent; butter, I per cent.; and other milk products, 3.2 per cent (plus a further 1 per cent. or more in the less-favoured areas and 0.5 per cent. elsewhere, due to the reduction in the milk co-responsibility levy). Producer returns will, of course, be affected by various other factors, in particular the impact on support prices of the stabiliser mechanisms for cereals, oilseeds and sheep, which will be operating to reduce the support prices in accordance with formulae agreed last year when maximum guaranteed quantities and defined ewe numbers are exceeded.