Agriculture Council (Hansard, 27 June 1988)

§ Mr. MacGregor

As I reported in a written reply to ray hon. Friend the Member for Derbyshire, West (Mr. McLoughlin) on 20 June, these negotiations almost reached a conclusion at the end of a meeting of the Council of Agriculture Ministers which finished on 17 June, but were blocked by the need for further discussion on one issue of particular importance to Greece. At that point 11 member states were prepared to vote for the package and agreed that there should be no further changes to it with the exception of the one Greek point. This was further confirmed at an informal Council in Germany from 19–21 June.

I am glad to report now that further discussions last week resolved that difficulty. Final agreement was reached on this issue by the presidency, Commission and Ministers concerned towards the end of last week which enabled the whole package to be formally endorsed at a Council meeting in Luxembourg on 23–24 June.

My major objectives during these negotiations were to ensure that a settlement was reached within the limits for CAP expenditure set by the meeting of Heads of Government in February; and to ensure a fair outcome for United Kingdom farmers which would improve their competitive position. Both these objectives were achieved.

The Commission confirmed that cost savings in the management of the CAP, including on the subsidisation of 87W skimmed milk powder in animal feed, will enable expenditure to be kept within the provision in the 1988 budget and the preliminary draft budget for 1989 for agriculture guarantee expenditure.

So far as our farmers are concerned, I secured a devaluation of the "green rate" at which support prices fixed in ECU are converted into sterling greater than that agreed for any other member state except Greece and Portugal, where exceptional circumstances apply. It will therefore improve our farmers' position relative to those in all the remaining nine member states. This devaluation will reduce monetary compensatory amounts by 3.2 percentage points, more than double those for France and Ireland. It will take effect on 1 January 1989 for all commodities except beef, for which decisions on green rates are to be taken later.

The agreement included a declaration of the intention of the Council and the Commission to dismantle remaining monetary gaps in four stages between now and 1992. At first it was proposed that this should apply only to countries which belong to the EMS exchange rate mechanism. At my insistence, it was accepted that parallel measures must apply to other member states as well.

So far as the rest of the package is concerned all basic support prices fixed in ECU will remain unchanged for 1988–89, except those for some varieties of tobacco, which will be reduced. But the basic support prices are in several cases liable to be cut automatically, under the budgetary stabiliser arrangements agreed earlier this year, if output exceeds a given level. In addition there will be indirect reductions in support for certain commodities, through lower monthly price increases for cereals and oilseeds, and through changes in the intervention arrangements for beef, where sales into intervention have remained at a high level despite the reforms agreed in 1986. There are also to be reductions in the prices at which some surplus wine is taken off the market, to complement the stabiliser system for wine previously agreed.

The package includes the extension of stabiliser mechanisms to three further horticultural crops, namely, oranges, lemons and peaches, as well as the detailed arrangements for operating the stabiliser for tobacco.

A solution was agreed to the long-standing problem of the inadequate margin for the refining of raw cane sugar. The margin will be supplemented by direct payments to refiners. This will ensure our ability to continue to fulfil the Community's commitment to import and refine sugar from the ACP countries.

A proposal from the Commission for a sharp increase in the levies on imports of birdseed, which would have led to a considerable increase in the price of birdseed, was dropped following strong United Kingdom criticism.

Overall, this is a good settlement for United Kingdom interests. It keeps within the budgetary limits. It will maintain pressure on the prices of surplus commodities in

	In-patient cases	Out-patient attendances	Day patient attendances	Average length of stay	Number of district nurses
1976	4,010	1,452	¹	196.7	n/a
1977	4,700	1,396	¹	172.6	n/a
1978	4,686	1,571	¹	178.6	n/a
1979	4,586	1,546	¹	184.3	673
1980	4,994	1,725	¹	170.8	667
1981	4,716	4,287	23,216	176.9	654
1982	4,719	4,289	15,073	¹	651
1983	5,365	4,501	20,123	165.7	624

88W

line with the stabiliser mechanisms already agreed. And it does at the same time further improve the competitive position of United Kingdom farmers.