The Press MONDAY, NOVEMBER 29, 1971. The levy on lamb

Press, Volume CXI, Issue 32776, 29 November 1971, Page 14

The Press MONDAY, NOVEMBER 29, 1971. The levy on lamb

The chances that the British levy on New Zealand lamb will be removed, or that planned increases in the levy will be postponed, are now very slim. Although many people are convinced that the British consumer is not carrying the burden of the levy there is no way by which this can be proved. When the first part of the levy was imposed in July the price of lamb on the British market fell. Prices have dropped at this time in other years; and even if the price had remained steady this year no firm conclusions could have been drawn about the influence of the levy on the price. The purpose of the import levy is to raise the price of meat in Britain, including the price of locally-produced meat, so that the British taxpayer can be relieved of the burden of paying agricultural subsidies. Obviously the only time at which a levy on imported meat can be added, as intended, to the consumer price is when the supply and demand in the market for meat puts imported meat, and New Zealand lamb in particular, in a strong position. At all other times, the buyers of meat can ignore the levy, just as they can ignore all the other costs involved in bringing meat to the market.

It is fair enough to argue that New Zealand should divert lamb from the British market, though that is more easily said than done at present. On its own, the levy on imports is not a way of raising the price of meat, domestic or imported; the consumer will not pay more for either if the supply is ample or if he can satisfy his requirements with other food-stuffs. In recent weeks the price of lamb has increased in Britain. No-one can say that this increase is the result of the levy; they can merely say that the levy can now be paid without the New Zealand farmer’s being worse off than before. The change is only a reflection of demand and supply in the meat trade. The best that can be hoped for is that in the long run a seller’s market for meat will establish a new level of prices sufficiently high to accommodate the new cost of putting New Zealand lamb on the British table. Since it is the British Government’s intention to raise all meat prices, it might well concede that it would be wise to impose further increases in the levy only when the market for meat is buoyant. The timing of changes in the levy is as important to British policy as it is vital to the New Zealand farmer.