Mr. Vaneasked the Minister of Agriculture, Fisheries and Food the grounds on which Her Majesty's Government, while increasing the guaranteed price for fat sheep for 1957–58 by 1½d. per pound, decided to leave unchanged the guaranteed price for wool.
Mr. AmoryThe guarantee arrangements for wool differ from those for other products in that they include a stabilisation fund. This fund was created when wool was added in 1950 to the schedule of commodities guaranteed under the Agriculture Act, 1947, and is an essential part of the agreed financial arrangements between the Government and the British Wool Marketing Board.
The Exchequer transferred to the fund in 1951 a sum of£14½6 million representing the profits realised on the sale of the 1950 clip. This sufficed until 1956 to meet deficiencies between the guaranteed price and the market price, but such deficiencies are now being met from the Exchequer.
A stabilisation fund of this kind cannot operate if the guaranteed price remains continuously above the market price. But since 1950 the average market price for wool has been below the guaranteed price in every year. The fund can in future make no contribution to the stability of producers' returns unless on 232W occasion the market price exceeds the guaranteed price.
In reaching their determination for 1957–58, therefore, the Government took account of this factor, peculiar to wool, along with other relevant factors, including cost increases. They noted, however, the firmer tone of the market for wool over the recent past, and they concluded that in all the circumstances the guaranteed price should be left unchanged.