Time running out for milk-powder pile

Press, Volume CXV, Issue 33966, 6 October 1975, Page 2

Time running out for milk-powder pile

(By

DAVID BARBER.

N.Z.P.A. staff correspondent.)

LONDON, October 5. European Common Market agriculture experts have a week to thrash out some acceptable plans to begin moving the community’s million-ton stockpile of skim-milk powder.

It will be no easy task. Agriculture Ministers of the Nine shelved the problem after failing to reach agreement on two preliminary measures in Brussels last week, and asked their top advisers to report back to the Ministerial meeting on October 13.

There is some urgency, because milk powder deteriorates in store and a good proportion of the surplus has

been there for longer than is advisable. At least 80,000 tons — equal to about one-third of New Zealand’s entire annual export production — has already been classified “manure" by dairy experts and i no longer suitable for human 1 consumption. The E.E.C. Commission recommended that it be sold as animal feed, but at least three Ministers — those of Britain. West Germany, and Italy — blocked this last week, saying that it would effectively be subsidised and the sale could interfere with their own export markets. Another bid to sell 20,000 tons, again at subsidised prices, as part of a longterm trade deal with Egypt, was opposed for partly the same reasons, Denmark reportedly joining the other three.

The Egyptian deal, which includes wheat, sugar, beef, and cheese as well as powder, has proved bitterly controversial for many reasons, but it has focused attention on the powder pile, at present the E.E.C.’s most embarrassing surplus. No-one seems to know how to get rid of it, and despite the world’s malnourished millions, the Community cannot even give it away. It is estimated that it would cost about sl.2m to give the surplus as food aid. But the United States, another important producer, also has a surplus, and has traditionally dominated the the market for hand-outs. The world’s underdeveloped nations do not have the capacity to handle gifts of this size, and any large new donations would play havoc with the international commercial market — which would be of immense concern to New Zealand, at present accumulating its own unwanted surplus.

New Zealand officials in Brussels are already concerned about E.E.C. plans to sell 100,000 tons of powder at 25 per cent of the Community’s support price, or under half the current world price of about SUS63O a ton. It is feared that the Egyptian deal—the first of its kind—which includes 10,000 tons at world prices and a similar amount at the cut rate, might be the forerunner of others designed to reduce Community stocks. Objectors within the community are dubious about the deal, and any others, because they see it encouraging over-production of foodstuffs in Europe at a continually mounting cost to taxpayers who have to foot the bill for subsidies and storage.