§ Sir Eldon GriffithsTo ask the Minister of Agriculture, Fisheries and Food what is his estimate of the cost of the common agricultural policy to the United Kingdom expressed in terms of the average cost in food bills and tax for a family of four.
§ Mr. CurryThe Government have long recognised that the CAP system of agricultural support, in common with the support policies of other industrial countries, gives rise to substantial costs to taxpayers and consumers compared with a situation in which foodstuffs were imported at world market prices with no support to domestic producers. Estimates of these costs, and the savings that could be secured if current policies were ended, are possible only by making many assumptions. Important judgments are necessary about the current levels of world prices—no simple matter given the wide variations in quotations and substantial fluctuations from year to year—and the changes in these prices if present policies were abandoned. The latter depends on how producers and consumers throughout the world might respond to the new circumstances and on the impact on such factors as exchange rates.
Estimates made by the Organisation for Economic Co-operation and Development, using a particular set of assumptions, imply that the transfers from consumers and taxpayers in 1989 resulting from agricultural policies in the European Community as a whole—separate figures for the United Kingdom are not available—were equivalent to £14 per week per family of four. (This is derived from the OECD estimate of the aggregate cost of 88.5 billion ecu for 1989, assuming the EC12 population is 324.8 million and that 1 ecu = £0.6733.) This is one estimate of the extent to which the CAP raises the cost of food and agricultural products, and incurs budgetary costs, compared to existing "world" prices. Those who quote this figure ignore the authors' note that the estimate is a static one: it takes no account of the effect that removal of farm support would have on world prices, and other variables, and thus gives no indication of the extent to which taxpayers and consumers might be better off if current policies were removed. A family of four would benefit by considerably less than £14 per week if all agricultural support were removed.