The Press TUESDAY, MARCH 28, 1967. British Farm Supports

Press, Volume CVI, Issue 31329, 28 March 1967, Page 12

The Press TUESDAY, MARCH 28, 1967. British Farm Supports

The United Kingdom has a unique method of protecting its farmers while ensuring that its consumers pay low prices for food. Food prices are held at low levels by keeping the British market open to imports. Except for small tariffs on foreign imports, giving Commonwealth producers a slight advantage, most of these imports are still duty-free. Until the quotas qn butter imports were reduced several years ago to prevent dumping, there was no restriction on quantities imported by Britain. The produce of British farms was sold in competition with imported foods. But the cost of producing milk or lamb in the United Kingdom, with its rigorous winters and labourintensive methods, has always been higher than the price of food imported from countries with more equable climates or more efficient farming methods, such as New Zealand and Denmark. Since the Second World War the system of “ guaranteeing ” the British farmer his cost of production has evolved as part of a policy of encouraging farming. (Whether the production of more food in the United Kingdom has really made Britain more self-sufficient is debatable; for the growth in livestock numbers has been accompanied by an increase in imported stock foods.) The farm guarantees have been as high as £3OO million a year. Last year they totalled £234 million, but this year they are to be increased to about £260 million. Higher prices for milk and bigger subsidies on the production of cattle and sheep account for most of the budgeted increase. The increase in the farm guarantees this year may well be linked with Britain’s hopes for entering the European Economic Community a few years hence. If Britain’s latest bid for membership succeeds, it will no longer be economic to import the bulk of her food requirements from non-E.E.C. sources. The levies on imports from third countries are used to subsidise the production of high-cost food by E.E.C. farmers. The higher the level of production of British agriculture before Britain enters the E.E.C., the less food Britain will need to import, and the smaller the levies on imports Britain will need to contribute to the E.E.C. coffers.

In the meantime, the British Government continues to ensure that domestic food prices are held down. The quota for butter imports has been increased this year, and the increased price for milk should encourage greater home production of butter. Cheap food for Hie workers and higher incomes for the farmers are good politics in the United Kingdom. The price is higher taxation to pay for the higher guarantees; but higher taxation is not necessarily bad politics in the United Kingdom if the Labour Government levies most of the higher taxes from the Opposition’s supporters.

Until Britain enters the E.E.C. New Zealand’s main competitor on the British market is the British farmer. Higher guarantees for the British farmer mean lower prices for the New Zealand exporter. The latest increase could be quite damaging to the New Zealand dairy industry, and will certainly delay the recovery of this economy from its balance-of-payments crisis. Does Mr Wilson hope to use the damage he will cause to the New Zealand economy to persuade President de Gaulle that he is no longer a “ Commonwealth man ”, but has become a real “ European ”?