§ Mr. Iain Millsasked the Minister of Agriculture, Fisheries and Food (1) if he has decided on the percentage of the national milk productivity quota to keep back for hardship cases and on the method of allocation to hardship cases and their right of appeal;
(2) if he has now decided on what yearly production will be the basis for calculating farm quotas on milk production under the new European Economic Community system.
§ Mr. JoplingDifficult decisions have had to be taken to bring the Community milk surplus under control. Despite the efforts to restrain the milk surplus, including such earlier measures as the co-responsibility levy, milk582W production in the Community has continued to outrun consumption. Unless something had been done immediately, milk deliveries to dairies in 1984 could have been expected to rise to over 106 million tonnes. At the same time, consumption looked like being only about 86 million tonnes. This substantial surplus is extremely cosily to get rid of and the markets for it are very limited indeed The aim of the supplementary levy is to cut back the deliveries to dairies over the next 12 months to just under 100 million tonnes. In the discussions leading up to this decision the United Kingdom pressed the case for price cuts to right the balance of the market and to stimulate consumption. None the less, I do not think we should underestimate the difficulties that this course of action, supported by the MMB, would have caused. There is no painless solution to an acute surplus problem. However, most Community countries were opposed to the size of price cut that would have been necessary and a supplementary levy and quota scheme as proposed by the Commission was the only possible alternative. It had been under detailed consideration in Brussels since July last year and subject to extensive discussion in Parliament and with the interests concerned. As adopted by the Council the scheme provides for a higher ceiling for quotas in the first year. To have extended the transitional period would have greatly increased the financial cost of the surplus production. As it is, it has been necessary to increase the co-responsibility levy to finance the extra disposal costs involved.
The decisions taken in the Council of Ministers lay down the main framework of the new quota scheme, but a number of important details have still to be settled. These are being discussed urgently in the management committee in Brussels and officials are keeping in close touch with representatives of the industry and the trade. In the meantime I have sent all milk producers a note (a copy of which I have placed in the Library) explaining as fully as possible at this stage how the scheme will work.
In England and Wales the Milk Marketing Board will be responsible for implementing the supplementary levy, both for those producers who sell their milk to the board and for those who sell direct. The board has sent to each individual producer who sells direct to the board an indication of his provisional initial quota, together with an indication of how the board will administer the scheme. In England and Wales a reserve of some 2.5 per cent of the total MMB quota will be set aside to make some allowance for special cases and, after making allowance for that, the average producer selling through the MMB will be given an initial provisional quota 9 per cent. less than his 1983 deliveries.
Those producers who sell milk direct will be notified of their individual provisional quotas as soon as the relevant details have been settled in Brussels.