HC Deb 06 January 2003 vol 397 cc13-4W
Tony Worthington

To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on reform of the EU(a) sugar and (b) dairy regimes. [87568]

Mr. Morley

The Government strongly supports reform of the CAP sugar regime, particularly in view of the increasing access for developing countries already agreed as part of the Everything But Arms initiative. The Council of Ministers is committed to a further review of the regime next year and we will be pressing for early decisions to allow for orderly adaptation to these more liberal trading arrangements, which will make the regime unsustainable in its present form. We also want the future regime to take account of the wider CAP Mid Term Review process on which negotiations are currently taking place.

With regard to the dairy regime, there have already been some moves towards reform under Agenda 2000—a 15 per cent. cut in support prices phased in from 2005 to 2007, with direct aid as compensation. However, this still leaves dairy support prices well above world levels, distorting both internal and external markets, and resulting in a continuing need for milk quotas (a financial burden to producers which rigidifies farming structures and the market) to contain budgetary expenditure.

The UK and other like-minded member states managed to secure a mid-term review of the milk quota system as part of the Agenda 2000 Agreement, under which Commission was charged with writing a report `with a view to letting the current quota arrangements run out after 2006'. One of the four options in the report, which the Commission published in July, is for quota abolition in 2008.

We are now calling upon the Commission to come forward with a legislative proposal based on this option, which is the only one to fully meet thecommitments set out in the Agenda 2000 Agreement. In order to bring support prices closer to world levels, in preparation for quota abolition, we would favour bringing the Agenda 2000 price cuts forward to 2004, deepening them, and phasing them over four years, to 2007–08.