SURPLUS FARM PRODUCE

Press, Volume LXXXIX, Issue 27075, 25 June 1953, Page 9

SURPLUS FARM PRODUCE

N.Z. Concern At U.S. Plans For Disposal (N.Z. Press Association—Copyright) (Rec. 7 p.m.) WASHINGTON, June 23. The New Zealand Government told the Eisenhower Administration in a Note today that the disposal overseas by the United States of its huge farm produce surpluses would cause a “serious disturbance” to the markets of nations dependent on dairy produce exports. The proposed legislation to authorise the Mutual Security Agency to distribute abroad up to 2,000,000,000 dollars’ worth of surplus farm products, including butter, cheese and dairy commodities purchased under the Administration’s price support programmes, is now before Congress. Mr D. W. Woodward, commercial counsellor of the New Zealand Embassy in Washington, delivered his Government’s Note to the State Department.

The Note expressed “grave concern” at the possibility that the United States surpluses of dairy products would be disposed of in such a way as to cause serious interruption in New Zealand’s export trade.

The Note said: “Apparently as the result of expectation of drawing upon United States stocks, certain countries have already diminished or closed markets hitherto enjoyed by New Zealand.”

It added that the rapid growth of surpluses of farm products in the United States had been noted with

“great anxiety” by New Zealand. “The mere existence of heavy surpluses of butter, cheese, and milk powder in the United States has had a depressing effect in world markets for these commodities. The operation of the United States price support programme, leading as it apparently has to levels of production having little relation to effective demand, has caused a curtailment of New Zealand’s trade with the United States itself. “It would be of much greater consequence if the United States domestic situation were to create further hardships to New Zealand in other markets. The entire economy of New Zealand is heavily dependent upon the export of dairy products, which represent over one-third of the value of all New Zealand’s exports, and the standard of living of the people of New Zealand could be lowered considerably by any action on the part of other countries to dispose of substantial quantities of dairy products on world markets at prices below the cost of production. “Serious Disturbance” "The conclusion is inescapable that the distribution of such products at discount prices or as gifts or by means other than through normal trading practices would cause serious disturbance to the markets of countries dependent upon the export of dairy products.” New Zealand urged the United States to study New Zealand’s interests when considering measures for the export of surplus dairy products. The Note said New Zealand trusted that the United States Government would be impressed by the very real concern felt in New Zealand over the dangers inherent in the United States surplus dairy situation. It called for consideration of a highlevel discussion between New Zealand and United States government representatives before any final decisions were taken about the export of surplus products.

Tlie New Zealand Note also mentioned that Mr Eisenhower’s decision to put into effect the recommendations of the Tariff Commission further restricting dairy imports into the United States from July 1 under the Agriculture Adjustment Aet operated “most harshly” against New Zealand. It added: “It seems unnecessary at this time to recapitulate the adverse effects of these restrictions upon New Zealand’s economy and upon her ability and that of the sterling area to earn sufficient dollar exchange to cover urgently-required purchases.” The proposed legislation to authorise the Mutual Security Agency’s distribution of surpluses was introduced to Congress in separate bills proposed by Senator Milton Young and Senator Andrew Schoeppel both Republicans. Senator Young’s bill provides for the distribution abroad of 2,000,000,000 dollars’ worth of surpluses, while Senator Schoeppel’s bill would authorise half this amount.

Both bills have been sent to the Senate Agriculture Committee for consideration. They contain clauses that the Mutual Security Agency should dispose of surplus products in “new market areas” or in such a way as not to upset the markets of friendly nations. ’