HC Deb 16 March 2004 vol 419 cc159-60W
Mr. Drew

To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on her Department's response to the Colman Report on the dairy industry. [156443]

Alun Michael

The Dairy Supply Chain Forum, commissioned this report with funding from Defra, the Dairy Industry Association and the Milk Development Council, together with project advice from the NFU, in order to help inform decision making on the dairy aspects of CAP reform. The conclusions of the report were considered, along with a number of other factors, in our decision on the implementation of the Single Farm Payment in England.

Mr. Drew

To ask the Secretary of State for Environment, Food and Rural Affairs what account she took of the impact on milk prices of moving to a dynamic hybrid system of Common Agricultural Policy reform. [156444]

Alun Michael

The model of decoupled payment instituted in England should not impact on milk prices, if farmers treat their payments as decoupled. Decoupled payments are by their nature not linked to production and should not therefore be used to offset the cost of production. If some farmers treat their payments as coupled and use them to subsidise production, this will tend to reduce prices for all dairy farmers. We believe that the transition to an area based payment will result in a purer form of decoupling that will more completely break the link between production and subsidy.