REPORT ON E.E.C. PUBLISHED

Press, Volume CXI, Issue 32561, 22 March 1971, Page 15

REPORT ON E.E.C. PUBLISHED

(N.Z.P.A.-Reuter—Copyright) LONDON, March 21. The European Economic Community’s Common Agricultural Policy has been over-costly; has failed to give farm-workers and farmers a better living, but has benefited consumers, according to a report issued by two British agricultural economists.

The report, compiled by John Marsh and Christopher Ritson of the department of agricultural economics at the University of Reading, was by two research groups, Chatham House and Political and Economic Planning. Ltd. The authors, although critical of some aspects of the Market’s agricultural policy, acknowledged that it had been a significant political achievement and might still work if certain changes were made.

They made these criticisms after making a thorough economic appraisal—one of the most searching yet published in Britain: The policy had not established a single Market, in a manner consistent with the concept envisaged by the Treaty of Rome, although in a legalistic sense it had done so. Although very costly, it had failed to protect the incomes of agricultural workers and fanners. The impact of the policy on world trade had, on balance, been damaging. The authors conceded that consumers were better off now than they were when the Treaty of Rome was signed, but they believed their position would be improved even more if the Market adopted an agricultural policy which avoided prices fixed at a higher level than that needed to ensure adequate supplies. Three ways were suggested by which present policy-devices might be further employed to strengthen the Market’s agricultural policy:

(1) Minimum adaptation of existing arrangements, including a limited use of quotas. (2) A comprehensive reliance on the use of quotas to avoid surpluses and to distribute income more favourably to small pro- ." ducers. (3) More substantial, direct income-support to farmers, while at the same time allowing prices to determine the level of production.

The paper said that under such a scheme the Community price system could be based on a five-year average

of world prices and include a measure of protection for European farmers equivalent to the common external tariff on industrial goods. On British membership of an enlarged E.E.C., in relation to the C.A.P., the paper said unless special steps were taken, the burdens imposed might seriously impair any dynamic benefits expected. In addition to handling over the levies from food imports, tariffs and the valueadded tax, Britain might also expect to lose traditional markets in Australia, New Zealand, South Africa and Argentina. This might be balanced in part however, by a rise in British agricultural production when the higher Community agricultural prices were applied.