Intervention Beef (Hansard, 23 January 1996)

§ Mr. Douglas Hogg

[holding answer 17 January 1996]: I have asked the chief executive of the Intervention Board to reply to the hon. Member direct.

Letter from G. Trevelyan to Dr. Gavin Strang, dated 23 January 1996: The Minister of Agriculture, Fisheries and Food has asked me to reply to your Parliamentary Questions (9467, 9468 and 9469) tabled for answer on Wednesday 17 January 1996: To ask the Minister of Agriculture, Fisheries and Food what is his estimate of the average cost in the United Kingdom of storing one tonne of intervention beef for one year, excluding the depreciation of the value of the beef. (9467) To ask the Minister of Agriculture, Fisheries and Food what is his estimate for the average cost in the United Kingdom of storing one tonne of intervention beef for one year, including the depreciation of the value of the beef. (9468) To ask the Minister of Agriculture, Fisheries and Food what is his estimate of the difference between the value of a tonne of beef taken into intervention in the United Kingdom and the value of that beef upon leaving intervention after one year in intervention. (9469) Intervention beef is stored in commercial cold stores. The rates paid by the Agency are determined by open competition and can vary in line with changes in the demand for cold storage. The average costs of storing intervention beef for one year, including inspection, receipt, handling and delivering out charges is about £120 per tonne (excluding VAT). For budgetary purposes the EC Regulations require the book value of beef taken into intervention to be depreciated on entry by 60% of its purchase price to bring it more into line with the foreseeable price at which it might subsequently be sold. Beef is purchased in the form of fresh carcasses which have a higher market value than the stored frozen product. Currently depreciation on entry would be £1,759 on a tonne of beef purchased at £2,932. Decisions are taken by the Commission at the end of each of their financial years, ending 15 October, as to whether further changes in the valuation of stocks are needed to reflect market price movements. It is not possible to predict the extent to which this may give rise to further costs in the form of depreciated stock values. I am sending a copy of this letter to the House of Commons Library and the Public Information Office.