Mr. Mark Hughesasked the Minister of Agriculture, Fisheries and Food what price control arrangements will apply to milk from 1st January 1978; and if he will make a statement.
§ Mr. John SilkinAs required by the Treaty of Accession to the EEC, the guaranteed price arrangements for milk producers will end on 31st December 1977. After consultation with interested organisations the Government have decided that the following arrangements will apply thereafter.
The prices realised by the Milk Marketing Boards for milk for manufacturing purposes will continue to depend on the market prices of milk products which in turn will be related to the sterling values of the common intervention prices of butter and skim milk powder. In the case
552Wof milk for liquid consumption the Government have decided, given the importance of milk in household expenditure and the continuing need to combat inflation, that maximum retail prices of milk will continue to be determined by Agriculture Ministers under Section 6 of the Emergency Laws (Re-enactments and Repeals) Act 1964. Related to the maximum retail price, Ministers will also determine the maximum wholesale price of milk for liquid consumption under the same legislation. This will replace the existing arrangement whereby Ministers set the price to be charged by the Milk Marketing Boards under the terms of the financial arrangements which form part of the guarantee system. The maximum retail and wholesale prices will be set at levels which will not interfere with the operation of the CAP mechanisms. The prices to operate from 1st January 1978 will be announced later in the year. The 553W cost of liquid milk processing and distribution will continue to be measured from information collected from surveys of the dairy industry.
Discussions are continuing with the organisations concerned on the detailed mechanisms for the implementation of these arrangements, including the procedure for reviewing processors' and distributors' costs and the maximum retail price.