Struggle In E.E.C. Farm Policy

Press, Volume CVII, Issue 31530, 18 November 1967, Page 7

Struggle In E.E.C. Farm Policy

(Special Crspdt. N.Z P A ) LONDON, Nov. 17. A political and economic struggle of considerable significance to New Zealand has begun within the European Economic Community over future farming policy. On the one hand agricultural experts of the E.E.C. Commission have come to the conclusion that less emphasis

should be placed on the production of milk products, particularly butter, while, on the other, politicians fear reprisals from discontented farmers should such a policy come into effect. The commission has concluded, and recommended, that an expansion of beef, and veal supply, rather than milk, take place and put forward price support proposals which it feels will lead to this.

It is convinced that increased output of beef and

“feed grains” is needed, because demand for beef and veal is growing much faster in the long term than production, whereas milk products, particularly butter, are being produced in excess of demand within the Community. But the politicians, undoubted masters of the Brussels’ bureaucrats, are well aware of the discontent among farmers and have already shown their hand by calling, in effect, for this policy not to be put into effect.

The commission wanted an increase in feed-grain prices but little, if any, increase in the price for bread-grains. It felt a rise in feed-grain prices .would encourage farmers to grow more and that this in turn would lead to higher beef output. But when its proposals came up for discussion in the European Parliament politicians demanded, by a large majority, an increase in the price of both. Their rejection of the idea was taken to reflect an even harsher reception to come from national Parliament of the Six, which are of far more significance. The dispute on grain prices, however, is but part of what promises to be a “very longterm” struggle between the parties Both agree that the farm incomes situation in the Community is critical. They seem to differ strongly on the best means of tackling it. The commission feels that higher prices alone, which

would mean a greater burden for the Community’s farm fund and excessive surpluses, is not the right way to tackle the problem. The politicians, judging from the attitude adopted within the European Parliament, believe it is the right way. Mr Sicco Mansholt, the E.E.C. vice-president responsible for agriculture, recently made his attitude clear in speeches to the Community’s economic, and social committee and to European journalists. He said a policy which affects only market prices cannot achieve, as laid down in the Treaty of Rome, a fair standard of living in reasonable time for agricultural workers. Farmers’ incomes could be increased by higher prices but there would then be a risk of creating “useless surpluses” in certain sectors The community, he said, could not increase producers' incomes by considerably stepping up production because it had already reached the limit. There were, he believed, only two ways of closing the income gap between industrial and farm workers—either by supporting prices to a greater extent or by modifying the structure of farming. He ruled out the first solution and said the only way out was the reshaping of community agriculture.

There were too many smallscale farms in the community and it was necessary, he

believed, to increase the number of medium-range farms—those of 25 to 50 acres and those of 50 to 125 acres. A study of the future role of agriculture would be completed by the commission early in the new year. The object of the study was to set out the aims, means and cost of restructuring the farm economy.

The cost would be heavy but he thought it would be better to invest a great deal in remodelling in a way which would bear fruit in 10 years, rather than lose, millions down “a bottomless; pit” through relying on price-1 support and stockpiling policies. Mr Mansholt’s views reflect the mounting unease of a number of European economists, particularly those within the commission itself, not only at the high cost of price support policies but also at the widening gap in costs between food sold on world markets and that sold within the community. The community has decided to allocate some 5U.5.131.7 million to price support programmes for milk products in the 1967-68 year. The fact that few people believe even this large sum will lessen the gap between the incomes of industrial and farm workers, let alone do anything to stop the rise in almost undisposable butter surpluses, in itself testifies to the magnitude of the problem facing the community.