§ Mr. Austin Mitchellasked the Minister of Agriculture, Fisheries and Food what steps have actually been taken by the European Economic Community to reduce agricultural output; with what results; and if he will provide the corresponding information for the United States of America.
§ Mr. MacGregorAt the meeting on 30–31 March the Council of Agriculture Ministers agreed a package of measures including prices for common agricultural policy commodities in 1984–85 and other related measures. This included the introduction of a quota-supplementary levy scheme in the milk sector, with the aim of curbing excess production in that sector. Further details of the package are set out in explanatory memorandum on draft instrument 6059/84 submitted by the Ministry of Agriculture, Fisheries and Food on 27 April 1984.
In the United States of America voluntary inducements to farmers to restrict their output have been a feature of United States support arrangements for arable crops and have gone under a variety of different names —"set aside", "diversion", and so on. In recent years the most usual method has been that a farmer is not eligible for support unless he restricts plantings of the crop concerned to a given level. In some cases additional incentives have been offered in the form of a cash payment in respect of some of the diverted land. The crops that may be grown on the diverted land are strictly controlled: they may, for example, be limited to grass or other crops that can only be grazed or used for hay or silage.
In addition, arrangements, referred to as payment in kind (PIK), were introduced for 1983 crops of grain, cotton and rice. They were an additional incentive to individual farmers to restrict plantings, the only difference being that farmers were "paid", not in the form of eligibility for support arrangements or in cash, but with free supplies of the commodity concerned from Government-owned stocks. PIK was open only to farmers already participating in the arrangements described above.
From October 1982 enabling powers were introduced in the dairy sector for a levy of 50 cents per 100 lb to be imposed on the proceeds of all milk sold commercially by producers if net support purchaes in the year beginning October 1982 were expected to exceed 5 billion pounds of milk equivalent, and for a further levy of 50 cents from April 1983 if purchases in the same period were expected to exceed 7.5 billion pounds. This latter levy would, however, be refundable to producers who cut their production by a specified amount. Collection of the initial deduction began in April 1983 and collection of the second 50 cents deduction has also now begun.