E.E.C. asks N.Z. to reduce butter exports

Press, 18 August 1979, Page 1

E.E.C. asks N.Z. to reduce butter exports

PA Wellington The European Economic Community has asked New Zealand to reduce its butter exports for 1979 and 1980. The move was sharply criticised yesterday by the Deputy Prime Minister, Mr Taiboys, and the Dairy Board, who described the request as damaging to the future of New Zealand’s dairy

farmers. An E.E.C. report also suggests that after 1980 there should be a reduce tion in the quantity of butter New Zealand is entitled to sell to the E.E.C. The chairman of the Dairy Board (Mr K. F. Mehrtens) said that New Zealand dairy producers would follow events closely because their livelihood was at stake. Mr Taiboys said he was somewhat discouraged that the Community’s dairy problems, which had been of its own making, should be seen by the commission as requiring a measure of sacrifice by New Zealand.

The report suggested that because of the Community butter surplus and the state of the British market, New Zealand would be asked to agree to quota reductions for 1979 and 1980.

Mr Taiboys said the Community’s Commissioner for Agriculture (Mr Finn Olav Gundelach) had raised this possibility in New Zealand in May. It was discussed in the context of the over-all arrangements for New Zealand’s continuing butter sales to the E.E.C. “I explained that New Zealand had regretted that the Community might wish to renegotiate commitments already made to us for 1979 and 1980,” he said.

“I made it clear to Mr Gundelach, however, that such a proposal could be considered by the New Zealand Government only if it was put forward in the context of a satisfactory over-all package, including appropriate pricing arrangements and quantities for the period after 1980.” This was the approach suggested in the commission’s report, said Mr Talboys. Of even greater significance was the suggestion that after 1980 there should be a reduction in the quantity of butter New Zealand was entitled to sell to the Community.

New Zealand’s entitlement in 1973 was 166.000 tonnes. The 1980 entitlement was only 115,000 tonnes.

Mr Taiboys said he had explained to Community ministers, and Mr Gundelach, the difficulties that would be caused by any further decline in New Zealand’s entitlement.

“Clearly this is a key point for the New Zealand Government to follow up in the months ahead,” said Mr Taiboys. “It will also be necessary to take up the fact that, at the same time as the commission is proposing to reduce New Zealand’s access to its traditional market in Europe, it acknowledges the lack of alternative markets and yet has reaffirmed its commitment to an active community export policy for milk products.” Mr Taiboys said the framework established in the report for dealing with

New Zealand’s butter access was on the whole reasonable. “It contains some good and some not so good aspects from New Zealand’s point of view.” A serious problem for New Zealand, and particularly for its dairy industry, had been the continuing uncertainty of future terms of access. He welcomed the report’s conclusion that an arrangement must be made for continuing New Zealand’s exports to the Community on a more lasting basis. Mr Taiboys said the commission had also rec-

ognised, ’ in its suggested new fixed levy system, the administrative problems of , the present arrangement. ; “There have been problems over the level of special levy with New Zealand butter being priced off the market, and this is the . type of difficulty we would hope to see eliminated,” he said. ' ' The commission’s suggestion raised questions of the “utmost seriousness,” for New Zealand' dairy producers, said Mr Mehrtens. Alternative markets were quite inadequate to provide' for any significant

diversion of New Zealand butter away from the E.E.C. ,!f “Clearly the Commission would like us to help them with a problem, within the whole Community market, of an imbalance between production and consumption which is of the Community’s own- making;” said Mr Mehrtetls. Mr Mehrtens said the E.E.C. produced a quarter of the world’s mijk, and the whole of the international dairy trade had for 13 years been dominated and depressed by surpluses generated within the Community.