§ Mr. Jim CunninghamTo ask the Chancellor of the Exchequer if he will make a statement on the effect of reform of the common agricultural policy on the European Union budget.
§ Sir John CopeThe effect of reform is to reduce the overall economic burden of the common agricultural policy.
Reform results in payments to farmers based on area of land rather than output produced, and this, combined with a set-aside obligation, reduces the encouragement of surplus production. Area payments to farmers increase budgetary costs, while the accompanying lower support prices reduce consumer and resource costs.
The budgetary costs of CAP reform continue to be met within the agricultural guideline.