Role Of Farm Subsidies In N.Z.-British Trade

Press, Volume CI, Issue 29908, 23 August 1962, Page 15

Role Of Farm Subsidies In N.Z.-British Trade

It should be recognised that one of lhe reasons for the reduction in British exports to the Commonwealth had been the degeneration in the terms of trade for agricultural exporters, brought about largely by the high level of non-tariff support of British agriculture, said Dr. J. D. Stewart, senior lecturer in farm management and rural valuation at Lincoln College, commenting on the series of articles in “The Press” on the European Economic Community. Dr. Stewart said that another reason, of course, was the tendency of countries like New Zealand to nourish uncompetitive secondary industries. But nevertheless, New Zealand still had a high propensity to import British goods. “In the theme of his admirable articles on the Common Market, your staff correspondent rightly draws attention to the downturn in British exports to the Commonwealth. This is considered against the increase in value of trade with .Western Europe and with the Six in particular,” said Dr. Stewart.

“The inference is that in view of this, Britain is justified in judging that her economic future must be more closely intertwined with Europe's. This is now probably true,” he said. That the importing of British goods had been heavily dampened down was

due in a large measure (although how large it was difficult to determine) to the heavy stimulation of British lamb and milk production by very high support prices in recent years, said Dr. Stewart. “It should not be imagined that ‘unrestricted right of entry’ associated with very high domestic support prices in Britain is necessarily more in New Zealand’s interest than the imposition of a tariff against us. “For example, if as appears possible, Britain persuades the Six to have lamb treated as a special product outside the common agricultural policy, it may seem that a major concession has been won for New Zealand. It would also be good political stuff for the Conservatives.

“But, if by the same manoeuvre, it were not possible to continue to support British fat lamb producers to the tune of 3s 2d per pound, then we should be much better off, with lamb embraced by the common agricultural policy,, with a tariff of 25 per cent,” he said.