§ Mr. Nicholas Bakerasked the Minister of Agriculture, Fisheries and Food if he will consider the introduction of an outgoers scheme for dairy farmers following the recent EEC price agreements.
§ Mr. Jopling[pursuant to the reply, 14 May 1984, c. 56]: I recognise that the introduction of the supplementary levy scheme presents special difficulties to small producers, particularly those who have no alternative to milk and who have little scope to adapt their dairy enterprises to a lower level of production under the quota scheme.
560WMy aim is to make quota available as quickly as practicable to assist those small milk producers who wish to stay in milk. On the other hand, there are some milk producers who will wish in the new circumstances to give up milk production altogether.
In order to facilitate the release of quota, the Government have decided to make funds available for the payment of compensation to producers, particularly those with smaller enterprises seriously disadvantaged by the supplementary levy scheme, who wish to give up milk production. The compensation payments offered will be at the rate of £650 per 5,000 litres of quota, and this sum will be payable in equal instalments over five years. Those accepting compensation payments will be required to give an undertaking that they will give up milk production for at least as long as the quota scheme, or any successor scheme, continues and will not directly or indirectly return to milk production.
The quota released by the outgoers will be reallocated to those producers who wish to stay in milk. In England and Wales, my right hon. Friend and I intend to give priority to those who produced less than 200,000 litres in 1983 calendar year — about 40 cows. This group represents some 40 per cent of milk producers.
The aim will be to reallocate available quota so that producers in this category are able as soon as possible to return to their 1983 levels of sales without incurring supplementary levy. But the achievement of this objective will, of course, depend upon how much quota becomes available for reallocation from outgoers and how quickly it can be released. Similar arrangements will operate in Scotland and Northern Ireland, though the details for reallocation of quota may differ.
There will be a limit of £50 million over five years on expenditure under this scheme in the United Kingdom which will enable up to 2.25 per cent. of quota to be bought up in England and Wales, and Scotland; and up to 5 per cent. in Northern Ireland where there is a greater concentration of small milk producers. This expenditure will be contained within the planned totals of public expenditure. Community regulations permit payments of compensation to milk producers who give up milk production. The necessary United Kingdom legislation will be sought as soon as possible.
We shall be consulting they interests concerned on the detailed arrangements for implementation.