§ Mr. Hordernasked the Minister of Agriculture, Fisheries and Food if he will estimate the saving to European Economic Community funds if the prices of all cereals now covered by price guarantee were reduced to 257W the level of world prices; and what would be the effect on food prices in the United Kingdom, and on the retail price index if this were done.
§ Mr. MacGregorThere is no single world market price for cereals, and prices may vary widely between qualities and between markets. Nor is it clear how Community producers and consumers would react to the alignment of Community prices with those applying elsewhere. The extent to which changes in support levels would affect market prices, and hence prices paid by consumers, is also uncertain.
Clearly, however, if Community support prices more closely reflected those practised in other producing countries there could be substantial savings in export refunds, which cost some 1,525 mecu in 1983, although this would be offset by reduced receipts from import levies.
In the absence of other influences, each 10 per cent. reduction in market prices can be estimated broadly to reduce the index of retail food prices by about 0.5 per cent. and the retail price index by about 0.125 per cent.