RESTRICTIVE U.K. FOOD POLICIES

Press, Volume CII, Issue 30280, 5 November 1963, Page 7

RESTRICTIVE U.K. FOOD POLICIES

Recent “restrictive” tendencies in United Kingdom agricultural policy are described in an article in the quarterly bulletin of A. J. Mills and Company. Ltd., Tooley street mechants.

“Although the United King, dom was refused entry into the Common Market, British official thinking nevertheless seems to be becoming more and more restrictionist on agricultural matters,'' the bulletin says. “There are signs that the traditional policy of unlimited agricultural output together with free imports of food is being abandoned in the face of the rising cost of government support to home agriculture, which has increased from a (total of £2o6m in the : financial year ending 1956 to an estimated £3som in the | current year. Output Encouraged “Successive governments, after the end of the war and up to the early 1950'5, enicouraged home agriculture to : work for the maximum increase in total output in order to reduce food purchases from overseas and thereby strenghten the balance of payments. Net output increased by 60 per cent and at the same time world food production was also rising rapidly. Between 1951 and 1961 prices of world agricultural exports fell by over a third, which led to a ■ gradual change cd emphasis j in the United Kingdom, The ■ need for more efficient production became pressing as I the Exchequer's liability to I the farming industry rapidly j increased

“The subsidies rose because of the system employed to support agriculture. While horticulture was protected mainly by tariffs on imports and all farming activities benefited from remission of local taxation, the main structure of support has consisted of a system of deficiency payments. £lMm In Subsidies “The Government was thus committed from year to year to make up the difference between market prices and guaranteed prices for cereals, milk, fatstock and eggs, the cost of these deficiency pay- ; ments advancing to £ 190 m I in the year ending (March. 1963. Increasing subsidies had to be paid because ! world market prices for the i main food commodities were I falling at the same time as ' domestic production of them , was rising. Consumption lag-

ged behind the increasing world supplies, even though there was a marked change in the pattern; consumption of starch foods—cereals and potatoes—declined in the United Kingdom, while that of protein foods—meat and dairy products—increased. However, whereas before the war two-thirds of all the United Kingdom’s food was imported, the proportion has fallen to only about one-half, in spite of a 10 per cent rise in population. “The principal features of the new policy which is emerging are firstly, a limitation in the 'standard quantities' of home production to which guaranteed prices for various commodities will apply, as has been the case with the milk guarantee for a number of years. The second aspect seems to be a system of control of imports and import prices which, it is stated, is not intended to restrict supplies in order to raise prices but rather to avoid excessive price fluctuations and to put a floor into the market. This can only mean higher prices on average to consumers, as in the E.E.C. system. Prices Increased “The first essays in this new food policy have not been fortunate. Import quotas were imposed on butter last year and resulted in a sharp rise in market prices which became notably higher than world market values. In an i attempt to moderate the effects of restriction on prices the Government has three times raised the quota quantities for the current year, in a vain attempt to control prices. The farmers’ unions have suggested an international commodity agreement to regulate the market but it is difficult to see how

it would improve on the present state of affairs. The moral seems to be that there is no substitute to the free market for efficiently providing quantities of butter at the times they are required at the prices consumers are prepared to pay "Talks are currently being held with the object of imposing quotas on imports of bacon. Previous rather halfhearted attempts to control shipments of some types of Argentine beef were unsuccessful in a similar way to butter, but an agreement has now been reached to limit Argentine beef shipments in I the period up to April next ' year, when a more comprei hensive system of control may (begin to operate," the article I concludes.