Farm Economist Discusses E.E.C. Implications

Press, Volume CI, Issue 29772, 15 March 1962, Page 15

Farm Economist Discusses E.E.C. Implications

"The recent suggestion by the United Kingdom High Commissioner in New Zealand (Sir Francis CummingBruce) that New Zealand may face an imposed control on the shipment of lambs to Britain was much more disturbing to me than the current difficulties in the Brussels negotiations on the European Economic Community,” said Dr. J. D. Stewart, of Lincoln College, last evening. Dr. Stewart, who recently returned from Britain, where he studied for his Ph.D. in economics at Reading University, was addressing the Christchurch South Rotary Club on the implications of the E.E.C. for Britain.

"New Zealand may have soft-pedalled enough in respect of Britain.” he said. “This may have been a good move in the early days of negotiation. It certainly attraated a more sympathetic response in Britain than the uproar from Canada and Australia."

Dr. Stewart said that perhaps New Zealand should test the elaborate declarations of Mr Butler, Mr Thorneyoroft. Mr Heath, and Mr Macmillan about the unity of the Commonwealth by asking them to make decisions on New Zealand's exports. “We could challenge them to make a decision about butter marketing, and to give some valid reason why the support price for lamb in Britain should be retained at twice the market level. These are the things which are most damaging to New Zealand right now—quite apart from any consideration of the effect of Britain’s accession to the E.E.C.,” he said. Dr. Stewart said he did not know what form would be taken by the concessions which Britain was confident of obtaining in respect of the produce of temperate agriculture. “I assume that someone in Wellington knows, otherwise we should not have been soft-pedalling as we have done. French Attitude

“One thing I am certain about. This is that France sees Britain’s accession as the golden opportunity for unloading potential increases in the output of meat and dairy produce. An eminent French agricultural economist told me that France is easily capable of doubling meat and dairy production in a reasonable period. The potential in grassland production barely has been tapped High prices behind the rigid barrier to cheap imports which at present is envisaged are the stimulus that French agriculture needs.”

Dr. Stewart said that when the announcement was made in October that Britain would apply to join the E.E.C. there were confident prophecies that negotiations would be completed this year and Britain’s accession would date from January, 1963. “This may still happen, but it is clear that negotiations have proved much stickier than public opinion, if not professional opinion, expected. Last week the ‘Economist’ reported a growing sense of frustration; a loss in the impetus of last spring’s favour-

able swing in public opinion." said Dr. Stewart. He said that to appreciate the reason for these delays it was necessary to know the social and political background of European agriculture.

“Over-populated' * The first important fact was that, in relation to the economics of modern industrialised societies, the agriculture of Continental Europe was critically over-populated. Percentages of the total active population engaged in agriculture’ were:—Belgium, 12; France, 26; West Germany, 23; Italy, 31; Netherlands, 19: Britain, 5. “These are crucial figures. In France they represent 5m persons, in Italy 6Jm, in West Germany sm. These persons operate on farms wthich can only be described as antique. In Belgium 77 per cent, of the farms are less than 24 acres; in West Germany the figure is 08 per cent.; in Italy 93 per cent.: and in the Netherlands 65 per cent. “In France the situation is rather different. There 47 per cent, of the holdings are less than 24 acres. In Britain, and this is significant, 25 per cent of the holdings are less than 24 acres. “The British industrialists, in general, seem to be quite prepared for the cold shower of Continental competition—they certainly need it But the British farmers’ leaders

have shown a remarkable disinclination to compete with the less well-endowed farmers of the EJEX. Cost of FrotecUoP

“The cost of tbe protection for tbe British farmer is more than £3oom a year - more than the total export earnangs of New Zealand agriculture,” said Dr. Stewart.

Dr. Stewart Mid that the outside observer was handicapped in commenting on the agricultural policies of the Ei.C. because of lack of information on certain developments. For instance, he did not know what decisions had been taken at the Brussels conference early ths year on import levies. The original proposal on import levies was that imports of certain agricultural products also produced tn the E.E.C. should be controlled ay means of variable levies. Dr. Stewart said. The amount of the levy on a particular product would be varied from time to time according to the quantities produced each year within the E£C.

’There was also provision in the original proposal for the revenue earned from these levies to be paid into an agricultural fund, which could be used, if required, to subsidise exports of these products. This is obviously a potential threat to our butter and cheese sales in other markets," Dr. Stewart said. He did not know whether this provision had been altered at the Brussels conference.