§ Mr. Teddy TaylorTo ask the Minister for Agriculture, Fisheries and Food what expenditure by the European Economic Community on food policy is permitted under the February 1988 agreement on legally binding spending controls; if possible additional spending on the consequences of exceptional circumstances as determined by the Council falls to be contained within the spending controls; and if he will make a statement.
§ Mr. RyderThe financial guideline for expenditure in the guarantee section of the CAP covers all expenditure on agricultural market support and 50 per cent. of expenditure on set-aside. The guideline for 1989 is 28,624 million ecu (£18,500 million), which is 1,863 million ecu (£1,200 million) above the corresponding provision in the 1989 Community budget.
There is no general provision which would permit expenditure to exceed the guideline in exceptional circumstances. However, there is a monetary reserve of 1,000 million ecu (£650 million) to cover additonal expenditure or savings arising from significant movements in the dollar against the ecu. If the dollar falls to such an extent that extra spending of more than 400 million ecu (£260 million) is generated, the excess amount is transferred from the reserve. Conversely savings of more than 400 million ecu resulting from a rise in the dollar are transferred from the agriculture budget into the reserve. If the dollar/ecu exchange rate maintains its current level payments into the reserve will take place in 1989.