§ Mr. Colin Shepherdasked the Minister of Agriculture, Fisheries and Food if he is able to announce the guaranteed price for wool for the 1986–87 marketing year; and if he will make a statement.
§ Mr. JoplingTogether with the Secretaries of State for Scotland, Wales and Northern Ireland, I have reviewed the state of the wool market and prospects for the 1986 clip. When last year we increased the wool guarantee by 9p/kg to 129p/kg, the price of British wool stood at about 143p/kg, well above the new level of the guarantee. The longer-term prospects for wool also looked good. In the event, however, this situation lasted only a few months. As sterling strengthened against the major wool trading currencies, the auction prices for British wool fell and prices are now 22 per cent. lower than a year ago. As a result, the deficit in the Board's stabilisation fund (which had been reduced from £18.8 million to £8.6 million between December 1983 and July 1986) has risen again, and now stands at £12.9 million. Further Exchequer
365Wadvances to the fund will also be necessary until the Board's remaining stocks of wool from the 1985 clip have been sold.
My colleagues and I are however aware of the need to provide stability in producer returns and an adequate incentive to maintain and improve the quality of British wool. We have therefore decided that the guarantee should be maintained at its present level of 129p/kg for the 1986 clip. For the future however producers should recognise that, until there has been a substantial reduction in the deficit in the stabilisation fund, they should not look for any increase in the level of the guarantee.