THE PRESS WEDNESDAY, MARCH 28, 1979. Butter after 1980

Press, 28 March 1979, Page 20

THE PRESS WEDNESDAY, MARCH 28, 1979. Butter after 1980

Probably the most important trade issue facing New Zealand at the moment is the amount of butter the country will be allowed to export to Britain after 1980. Reports from London that the European Commission is likely to recommend that New Zealand should get 25 per cent of the British market are depressing because the British market is declining each year. A fixed tonnage would have enabled this country' to plan its future with more certainty. The recommendation has still to be announced officially by the European Commission and may undergo some changes before it goes before the Council of Agriculture Ministers. New Zealand must hope that it will. The figure of 25 per cent means that New Zealand could sell about 90,000 tonnes of butter to Britain in 1981. When the European Economic Community itself has plenty of butter to supply the British market, that would seem to be a happy accomplishment. The 120.000 tonnes which New Zealand was seeking to sell was closer to an opening bid than something that could reasonably be expected. But the decline in sales which would inevitably follow under the percentage formula cannot be viewed with equanimity. The question might reasonably be asked as to why' New Zealand persists in trying to sell butter to Britain when it is clear that Britain can get all the butter it wants—and win friends as well —from the Community itself. The answer lies partly in the disruption the

Common Agricultural Policy of the E.E.C. brings to the world dairy trade, and partly in price. New Zealand wants to sell its produce where it gets the best price. The E.E.C.’s subsidies create surpluses which find their way on to world markets at cut rates. New Zealand has been badly hurt by this process and the E.E.C. recognises a continuing responsibility to help New Zealand sell some of its butter at an economic price.

The timing of the release of the recommendation from the European Commission will be of importance to New Zealand. If the contents were known for sure within the next few days, New Zealand could hardly help but launch a campaign to change the aspects it wanted changed. Such a campaign would be likely to get mixed up in an election campaign in Britain, which appears imminent.

The British Minister of Agriculture, Mr John Silkin, who also deals with consumer affairs, is likely to use New Zealand’s plight to appeal to the antiE.E.C. feeling among some British voters. That might be one of the best planks the Labour Party has in the election.

But New Zealand’s interests are not likely to be served in the end if New Zealand’s difficulties are a highlight of the British election. This will be especially true if the Conservatives, as the polls are predicting, win the election.