Better Butter Price For N.Z. Unlikely

Press, Volume C, Issue 29435, 10 February 1961, Page 19

Better Butter Price For N.Z. Unlikely

(Special Correspondent N.Z.P.A.)

LONDON, February 8. New Zealand would appear to have slight ground for hoping the United Kingdom Government can or will take any action to improve the price of New Zealand butter on the London market.

This was the opinion of officials and those associated with the industry when questioned on the report in the "Financial Times” that the New Zealand Dairy Board made representations to Mr W. Gillespie, Minister of Agriculture, and recommended undisclosed “courses of action” to be followed with the British and French Governments. Even if Mr Holyoake, the Prime Minister, contemplates broaching the subject with Britain’s Prime Minister (Mr Macmillan) during the Commonwealth Prime Ministers’ conference it can be fairly confidently forecast that he will not be successful.

At most JVIr Macmillan will probably refer Mr Holyoake to Mr Reginald Maudling, president of the Board of Trade, or Mr Christopher Soame, Minister of Agriculture. The last time Mr Macmillan took action over the price of butter on his return from New Zealand—against official advice so it is said—it was not long before the British housewife was paying very high prices for all butter. He is unlikely to "Interfere” with the free market again. There are several other reasons for thinking New Zealand can hope for little official action over the present situation.

Britain, gravely concerned about her economic position and her exports, has trade ties with the European free trade

area countries (many of whom are sending butter) and is contemplating association with the European Economic Community. It would be difficult for Britain to warn these countries about dumping since every country except New Zealand is technically "dumping” butter—that is selling it below the current price in their domestic markets. The British Government has to see that 50 million Britons who elected it are fed as cheaply as possible. It knows that the price of butter varies for several reasons, one being the vagaries of the English and the Continental summers. The price is low now; but no British housewives are weeping. It was high a little time ago and no doubt it will increase again. More Home Production

Britain herself is producing more milk and dairy product*, including butter, and her dairy farmers whigh are practically unsubsidised have to compete in the only free butter market in the world, too. This is some of the background to the present position. There are other points. It has not passed unnoticed that New Zealand is steadily increasing her butter production—the estimate is by 1 to 14 per cent, every year for the next 10 years. Can New Zealand reasonably expect Britain to buy this increasing quantity and at the same time to tell foreigners to keep away? “We would all like Heaven,” one trader commented. “It would be wonderful for New Zealand to be able to send more and more butter, for her competitors to be checked or warned off and for the price to remain high and steady. But this is impossible." It is understood there have been Anglo-New Zealand talks at official Government levels in London about the present price and also informal consultations by the New Zealand Legation in Paris with the French but neither appears to have come to anything. The most that Britain may do about checking foreign supplies is perhaps to talk informally with officials of foreign governments. None of this makes cheerful reading from New Zealand’s point of view but it is the position as seen in London by shrewd, competent observer*.

It may be that some help can be given New Zealand but it is unlikely to be much. The stark fact is that the dairy industry, like every other agricultural industry, is dependent on so many factor* which cannot be rigidly controlled by the action of any government.