Butter issue back to Farm Ministers

Press, 27 November 1980, Page 2

Butter issue back to Farm Ministers

NZPA-Reuter Brussels E.E.C. Foreign Ministers yesterday failed to break a deadlock over sales of New Zealand butter to the EuroB Community, . and ed the argument - back to Common Market Farm Ministers. ' r Senior British; officials said that France was still Opposing any deal on New Zealand butter imports for longer than one year, and was demanding a sharp reduction in the amounts proposed. The Farm Ministers agreed earlier this month to let Foreign Ministers try to reach a political compromise on the issue, after their own repeated failure to make any headway.. . Failure to reach any agreement on future imports before the end of this year, when arrangements dating

from Britain’s entry to the Community, in 1973 expire, would halt the supply of cheap New Zealand butter to British supermarkets. The E.E.C. produces far more butter than it consumes, exporting the surplus at subsidised rates on world markets, and France and Ireland are both fighting to reduce E.E.C. imports from New Zealand to protect their own farmers’ interests. ' New Zealand earlier this year agreed to cut its 1980 butter shipments to Britain by 15,000 tonnes to 95,000 tonnes, in return for lower import tarriffs, to help reauce the E.E.C.’s butter mountain.

E.E.C. butter has long been a politically sensitive issue, and plans for huge sales of subsidised E.E.C. butter to the Soviet Union — since banned by the E.E.C. Commission —

brought it back to the headline? earlier this month. .The E.E.C. Commission has suggested a new threeyear agreement allowing New Zealand to send 95,000 tonnes to the E.E.C. next year, 92,500 tonnes in 1982, and 90,000 in 1983, but both France and Ireland have said that these amounts are too high. . French diplomats said that Britain itself is producing more butter and consuming less, with the result that it is expected this year to export almost as much as it buys from New Zealand, v. The French Farm Minister (Mr Pierre Mehaignerie) said earlier this mon,th that there could be no question .of any arrangement for longer than one. year, entailing significant costs to the E.E.C. budget, as long as the Community had not sorted out its own budget problems.