Common Agricultural Policy (Hansard, 22 May 1989)

§ Mr. MacGregor

Provisional outturn for class IV, vote 1, is £180 million, which is a saving of £379 million against the supply estimate provision. Excess appropriations in aid of £507 million are being surrendered to the Consolidated Fund. The total expenditure provision, which is-expressed net of receipts for intervention sales and levies etc. in the supply estimate was £1,552 million, while estimated outturn was £1,173 million. The outturn figures on a commodity basis are:

£ million
	Supply-estimate	Outturn	Difference
Cereals	350	195	-15
Milk	295	124	-171
Beef	244	190	-54
Oilseeds	176	178	+2
Sheep	228	265	+37
Sugar	148	117	-31
Others	112	105	-7
Total	¹1,552	¹1,173	-379
¹ Total figures do not equate because of roundings.

A number of external factors, such as market prices, levels of production, exchange rates and trade volumes affect expenditure on this vote. The more significant factors affecting expenditure in 1988–89 were the drought in the United States, the increasing strength of sterling and lower than expected cereals yields in the United Kingdom in 1987 and 1988.

The largest savings were on purchases into intervention of cereals (£147 million), following two successive relatively low United Kingdom cereals harvests, and butter (£107 million). The reduction in butter purchases can be attributed to additional savings to those forecast as a result of the policy changes made to the milk regime in December 1986, which had a greater impact on intervention than had been anticipated. The other major saving in total expenditure arose from £98 million additional receipts for sales out of intervention of cereals, butter and beef. The excess appropriations in aid largely consisted of receipts from the European agricultural guidance and guarantee fund for depreciation of new stocks on entry to intervention and for depreciation of old intervention stocks which took effect from 1 October 1988.