HC Deb 03 May 1976 vol 910 cc224-5W
Mr. Mark Hughes

asked the Minister of Agriculture, Fisheries and Food whether he will make a statement about the outcome of the meeting of the Council of Agricultural Ministers on 29th April 1976.

Mr. Peart

The Council considered the cost to the Community budget of increases in monetary compensatory amounts resulting from changes in the market rates for the lira and the pound sterling. It agreed that the representative rate for the lira should be adjusted by about 6 per cent. The Commission did not propose a change in the representative rate for the pound and its proposal to apply a corrective factor which would have had the effect of reducing the monetary compensatory amounts which act as subsidies on our food imports was not adopted.

The Council also agreed that from 17th May the monetary compensatory amount payable on imports into the United Kingdom and Italy from the other seven member States would be paid in the exporting country. This will not involve any reduction in the amount of money being paid on a transaction. There will be a saving on the agricultural budget in units of account, since more payments will be made in the strong currencies and fewer payments will be made in sterling or lira. The new arrangements may tend slightly to reduce food prices in the United Kingdom: importers will no longer need to meet the cost of obtaining so much foreign exchange, because the purchase price will already benefit from the full monetary compensatory amount paid in the exporting country.

Since the MCA payments on our imports from other member States, except Italy, will be made in the exporting country, the United Kingdom will no longer receive these payments from FEOGA directly, but the balance of payments effect of this will be offset by a corresponding cut in the price of our imports. United Kingdom public expenditure will not be increased, and in due course there should be some administrative savings both in the public service and for traders.

Apart from these monetary changes the other main decision taken by the Council was to extend the suspension of the common external tariff on new potatoes to 20th May.