Agricultural Subsidies "Act Like Tariffs"

Press, Volume XCIX, Issue 29265, 25 July 1960, Page 10

Agricultural Subsidies " Act Like Tariffs"

Although manufacturers in New Zealand regarded it critically, Professor B. P. Philpott, professor of agricultural economics ait Canterbury Agricultural College, told i a meeting ■of the Canterbury branch of the New Zealand Institute of Agricultural Science he believed that New Zealand should stick to the General Agreement on Tariffs and Trade with all its life. His reason was that this organisation, Which banned the use of import controls and quotas, was the only agency in the world Where New Zealand could keep “bellyaching" about agricultural protectionism and it was the only organisation with the teeth to get that protection reduced. “We should stick to it with all our life, eVen if it forbids us the luxury of import controls,” he said. Emphasising the need for New Zealand to be continually fighting against agricultural protectionism, Professor Philpott said that the effect of subsidies on agriculture in Britain was as if a tariff I was placed on imports of New Zealand meat and dairy produce. > The result wag that this country ; was getting a smaller share of the market. But for these subsidies he said that the difficulty of selling lamb, butter, and particularly cheese, would disappear overnight. Naive The reason ’of the National Farmers’ Union of Britain for subsidies—that Britain could not afford to pay for all her agricull tural requirements and that it t was a balance of payments issue ! —was very naive. There was a ■ subtle and more correct answer. I By paying £8 a heed or about £24om, which wag about a tenth - of' the national- budget, in sub--1 sidles, ' the British nation was i seeking to get more food more : cheaply than if it relied entirely 5 on trade with New Zealand. ' The system, he said, had worked strongly to ■ New Zealand's dis- • advantage. Whether or not it had > been to Britain’s advantage de- • pended on whether or not the - extra output of lamb produced in , response to Subsidies was greater than the extra’ imports of lamb

■ that could have been ultimately , secured by paying higher prices • to New Zealand. In this respect this country I might have only itself to blame in that the main concern in economic policy in the post-war years seemed to have been to shut I out imports and to build up local : industries rather than to increase : exports. The upshot of this was that New Zealand was now limited in ' its export sales and this was i tending to lead to a situation in which it was considering subsii dising manufacturing industries because of a balance of payments problem. On the other hand, the ; United Kingdom was having difficulty with its export sales. Thus . the pattern of an almost farcical I Situation could be seen developi ing. Professor Philpott said he wondered whether this was the sort of fanciful situation that de- ! veloped when politicians took over from economists. Professor Philpott said that • with typical subtlety Britain had : got round the Ottawa agreement ■ with subsidies which* had the . same effect as tariffs but did not ■ strictly break the spirit of the ’ agreement. Long Standing Mr R J 3. Stuart, an economist . with the Department of Agriculture, in Christchurch, who accompanied the Director-General of Agriculture, Mr P. W. Smallfleld, to the tenth meeting of the Food ■ and Agriculture Organisation in ; Rome last year, said he doubted • whether the world would ever : be clear of agricultural protec- • tionism. A Finnish delegate had i said in Rome that if every other , country agreed to remove agri- ; cultural subsidies they were so i integrated into the economy of • his country that it would be im- ; possible to separate them out. Pilot’s Body Returned.— The United States Embassy in Mosl cow announced today that the • Russians would deliver tomorrow I the body of Captain Palm, the • pilot of the plane a Soviet fighter ■ shot down in what the Soviet i Government claimed were its • own waters, American Associatßd > Press said.—Moscow, July 21.