10 November 1995

CAP claims are exaggerated

RECENT reports suggesting the CAP has more than doubled milk, sugar and beef prices are exaggerated and misleading, farm minister Douglas Hogg has claimed.

In a written Commons reply Mr Hogg said the reports appeared to be based on an inaccurate understanding of the consumer subsidy equivalent. That is a measure of the subsidy element in farm gate prices and relates to the extent to which they exceed world prices.

Recently published estimates wrongly applied this measure to retail prices rather than farm gate prices, said Mr Hogg. MAFF officials had put a note in the Commons library showing that the overall cost of the CAP to UK citizens in 1993 was about £4 a person a week. About £3 was due to higher food prices.

"Even this estimate is likely to be on the high side because the effects of the CAP on world prices have not been taken into account. But the cost of the CAP, and its effect on food prices, is one of the reasons why the government is pressing for its reform," he said. &#42