§ Mr. MorleyTo ask the Minister of Agriculture, Fisheries and Food what estimate he has of the effect of the recent devaluation of the pound sterling and the resulting effect on the monetary compensation amount scheme on the average food bill of a family of four.
§ Mr. CurryMonetary compensatory amounts are due to be abolished when new agrimonetary arrangements compatible with the single market are put in place on 1 January 1993. Under the new system, the green exchange rates used to convert EC prices into sterling will be kept in line with market exchange rates. If the present market exchange rate for sterling continues until the end of the year, a further devaluation of the green pound will be necessary, in addition to the 7 per cent. devaluation agreed at the Agriculture Council on 16 November. While the recent devaluation will increase farm support prices, food prices will not increase proportionately. EC price support arrangements only affect a limited range of commodities and the cost of raw materials is only a small proportion of the cost of many foods. It is estimated that the 7 per cent. devaluation will raise the food price index by less than 1 per cent. It is too early to say what the effect of any further devaluation food prices would be.