HC Deb 17 December 1984 vol 70 c34W
Mr. Austin Mitchell

asked the Minister of Agriculture, Fisheries and Food to what extent common agricultural policy prices are linked to changes in the value of the deutschmark against other currencies in the European currency unit currency basket; and if he will publish in the Official Report the percentage increase in United Kingdom common agricultural policy prices which would result from, respectively, an increase of 10 per cent. in the value of the deutschmark and a fall of 10 per cent. in sterling, all other things remaining the same.

Mr. MacGregor

For three years from April 1984 the creation of new fixed positive monetary compensatory amounts (MCAs) will be avoided. During this period at each realignment of currencies in the European monetary system (EMS), the coefficient used in calculating MCAs will be adjusted to the extent that the "strongest" currency — that is the currency which revalues most — is revalued. The currency concerned can in principle be any one of the currencies maintained within the narrow margins of fluctation under the EMS and would not therefore necessarily be the Deutschmark.

Adjustment of this coefficient would not directly affect CAP prices but could lead to extra negative MCAs for some member states. Removal of these negative MC As by green rate devaluations would increase national support prices in the member states concerned but the Commission has undertaken to take account of the need to avoid disturbing the market balance for agricultural products or to aggravate inflation in the countries concerned before proposing any such devaluations. A change in the value of the Deutschmark or of sterling has no affect on CAP support prices in the United Kingdom. Only a change in the level of the representative rate for CAP purposes— the "green pound" — or a change in common prices expressed in European currency units affect support prices.

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