The Press THURSDAY, MARCH 22, 1962. Butter Quotas

Press, Volume CI, Issue 29778, 22 March 1962, Page 12

The Press THURSDAY, MARCH 22, 1962. Butter Quotas

New Zealand has come very well out ot the latest negotiations on the res trie tion of butter supply to the British market, being allotted a quota not far short of probable exports to Britain. The whole affair should be both a warning and an encouragement to New Zealand. The plain warning is that after the year covered oy the new arrangement something else will have to be done to stabilise butter prices either on a relatively free butter market or under conditions framed by the European Economic Community. The encouragement is in two parts—the practical sympathy shown (particularly by Britain) in making special arrangements to help New Zealand, and the evidence this gives ot the skilful way in which the New Zealand case was presented, notably by Mr Holyoake and Mr Marshall Taking warning and encouragement together, we may cautiously hope that whether Britain joins the E E C. or not, consideration w ill be given to the peculiar circumstances or New Zealand—not as much consideration as we should like, perhaps but more than it once seemed we might receive. At the worst the impact of great economic changes will be cushioned, giving New Zealand an interval in which to adjust its economy and trading pattern to conditions over which it has little control These conditions are unlikely to lead to any marked improvement in the butter price in the foreseeable future.

By limiting butter supplies, the British Government has courageously and generously accepted a political risk. Many British consumers are not likely to be much interested in the maintenance of a high standard of living in New Zealand if that deprives them of the traditional blessing of their competitive market—a cheap breakfast table. They are not going to like anything that holds or raises the price of a staple foodstuff. On the other hand the British Government may derive some advantage from the butter quota scheme in its E.E.C. negotiations. One of the difficulties there has been the agreement guaranteeing New Zealand unrestricted

access to the British market for another four years. The original members of the E.E.C. have been shown that this agreement need not be an obstacle and that New Zealand, as well as Britain, is prepared to waive its rights for reasonable compensation. The argument yet to come is what that compensation should be. It would be foolish to imagine that New Zealand will be able to fix its own terms. The fact is that in this New Zealand is largely dependent on the goodwill of other countries, primarily Britain. We should be gratified by the latest demonstration of this goodwill in the hope that it promises similar treatment later. If we come as well out of the affair in the finish as we have out of the latest quota arrangement we shall do quite well.