Brussels Agricultural Council (Hansard, 26 July 1989)

§ Mr. Gummer

The major issue at this meeting was the completion of the nine-month long negotiations over reform of the Community sheep regime, in which changes are required as part both of the CAP reforms generally and of the completion of the single market. After long and difficult discussions, in which many conflicting interests had to be reconciled, the Council reached agreement on the main elements of a new regime. Our key objectives —fair competition and no limit on the number of ewes eligible for premium—have been achieved. Other major points arethe introduction by 1 January 1993 of a single system of ewe premiums applicable throughout the Community; the replacing of intervention buying by provision for private storage aid; arrangements for transition from the various arrangements which member states apply now—including the phasing out of the variable premium in Great Britain by 1993; phasing out of clawback charges on Great Britain exports; after 1990, the sensitive area arrangements which have protected French and Irish markets from New Zealand imports will end; the separate stabiliser for Great Britain will end along with the variable premium; a separate all-Ireland region while the variable premium is being phased out, to protect the returns and competitive position of producers in Northern Ireland.

This was a very satisfactory outcome for the United Kingdom. The new regime will provide United Kingdom producers with a stable basis for the future and improve prospects for exporting. When the variable premium ends the new regime will be operating in such a way as to give our producers full and fair opportunities for trading within the Community. Flexibility will be allowed over the time table for phasing out the variable premium, and I shall be having discussions with the industry on this.

The proposals for headage limit were very significantly improved at the end of the negotiations as a result of sustained pressure from my right hon. Friend. The Commission had, with the support of most member states, proposed setting ceilings on the number of animals on which each producer could claim premium. It has been agreed instead that the full rate of premium will be paid on up to 1,000 ewes in the less favoured areas and up to 500 ewes elsewhere, and producers will receive 50 per cent. of the premium on all additional ewes without limit. This is a significant benefit for producers compared with the original proposals.

Some important details remain to be worked out and legal texts will come to the Council for consideration in the autumn. The Commission, however, has given clear assurances that it expects the measures to be budgetarily 755W neutral from the end of transition. The Commission is to make proposals before the end of this year on changes in the stabiliser for the sheep sector.

The Council indicated willingness to adopt new arrangements for the import of mutton and lamb from New Zealand, on the terms negotiated some months ago by the Commission, when regulations on the new sheep regime are adopted, but was not—because of Greek opposition—able to achieve the required unanimity to pass new arrangements for the import of New Zealand butter. It was agreed instead to extend the present arrangements by a further two months.

The Council reviewed at length the state of the cereals sector including the operation of set-aside and the impact of drought. Many member states argued that because of reduced yields the Commission should take early action to suspend the operation of the additional coresponsibility levy. My right hon. Friend was prepared to agree with this if the Agriculture Commissioner proposed action, on condition that it was accompanied by provisions for a correction when firmer information was available and that next year's levy should be adjusted to take account of any inaccuracy this year. The Agriculture Commissioner, however insisted that, with information about the Community harvest still being uncertain, such action would be premature. My right hon. Friend yet again pressed the case for a fundamental review of the coresponsibility levy system for cereals, urging the Commission to come forward with the report promised in the last price review.

The Council had a first discussion of Commission proposals for changes in the milk quota system designed to bring down the volume of production in excess of quota, and to make additional quota available for certain groups of producers. These proposals will be considered further in September.

Finally, to give effect to part of the programme of assistance for Poland on which the Community recently decided, the Council agreed the emergency supply to Poland of stocks of various foodstuffs.