“Market Saved By Decision”

Press, Volume CI, Issue 29778, 22 March 1962, Page 7

“Market Saved By Decision”

(N.Z Press Association)

WELLINGTON, Mar. 21. The Prime Minister (Mr Holyoake) said today he was greatly relieved the British Government had decided to take effective steps to prevent a serious collapse of the British butter market.

New Zealand’s quota is 156,000 tons of 390,000 tons “Because of the important principle involved, it is only with great reluctance that New Zealand has agreed to a 12 months’ waiver of our butter agreement with Britain, which the quota scheme has made necessary," Mr Holyoake said. There had been intensive consultations between the British and New Zealand Governments over recent weeks. The New Zealand Dairy Board had been closely associated with the Government and all the steps taken had been in complete agreement between the board and the Gov'ernment. In all the circumstances the Government had decided that the British proposal should be accepted. “The alternative would have been the collapse of the butter market and a dangerous aggravation of our already weakened balance-af-payments situation.” “We have expressed serious misgivings over some of the features of this quota scheme,” said Mr Holyoake, “but we recognise that our wishes and the British Government’s requirements cannot be reconciled at all points.’’ Heavy stocks of butter had been “over-hanging” the market and estimates of new supplies were very high. Had this flood of butter been released on the British market prices would have fallen disastrously—possibly to less than 260 s a cwt. “New Zealand’s allocation of 156,000 tons out of a total import figure of 390,000 is reasonably satisfactory when considered in relation to average exports over recent years,” he said. However, with total imports set at 390.000 tons, prices were unlikely to rise appreciably. “As the present price of 285 s a cwt. is about 30s a cwt.

below the price being paid to New Zeaiand dairy farmers this level of imports cannot be regarded as entirely satisfactory. But it is the minimum the British Government is prepared to contemplate.” Mr Holyoake emphasised that New Zealand had conceded the waiver for one year only, simply because the circumstances of the butter

market at the beginning of this year necessitated urgent and special arrangements. The Government had indicated to Britain that it did not regard the arrangement as necessarily establishing any precedent for the negotiations which Britain would be conducting with the E.E.C. on any temperate agricultural products.