THE PRESS THURSDAY, FEBRUARY 26, 1981. Possible pause in butter battle

Press, 26 February 1981, Page 16

THE PRESS THURSDAY, FEBRUARY 26, 1981. Possible pause in butter battle

Although the saga of access to the British market for New Zealand butter is not over, some progress has been made and the action may halt for a time. The quantities for butter sales which have just been agreed to by the Council for Agriculture Ministers of the European Economic Community are not as large as those previously agreed to by the New Zealand Government and the former Agricultural Commissioner of the E.E.C., but they have not been reduced greatly. In the next two years, New Zealand will have to send 1500 tonnes less butter than the European Commission had recommended —94,000 tonnes this year instead of 95,000 tonnes and 92,000 tonnes next year instead of 92,500 tonnes. The agreement is not yet final: it depends on the approval of Italy. This is because the butter deal became part of a package that included Australian beef, changes in the internal E.E.C. structures, and the production of sugar. Italy opposes the limits on its sugar production. If it continues to oppose these, the whole package might have to be renegotiated. Some confidence.is held that Italy will approve by March 10. The new arrangement removes from New Zealand the difficult position of being allowed to send butter in according to a monthly quota. Earlier, the chances were that this kind of restriction would last until after the French Presidential elections in May. New Zealand will benefit in other ways as well. The new arrangement provides for a fixed levy instead of a levy that could be varied according to whether the Community wanted to discourage imports at a particular time. The fixed levy should make it easier for the Dairy

Board to make its plans. The new arrangement will be reviewed by August, 1983, which at the very least is an admission by the Community that there is a place for New Zealand butter after 1983 when the new arrangement will end. For its part, New Zealand has undertaken to market butter in Britain in an orderly way; this is a way of telling New Zealand’s competitors, particularly Denmark, that New Zealand will not undercut prices to sell more. New Zealand hoped, but failed, to obtain an agreement to export butter to Community members other than Britain. The point was one of principle and probably does not matter. In practice, the market New Zealand has had, and wants to keep, is Britain. Unless Italy decides that, after all, it will not accept the sugar part of the package, New Zealand should not need to enter into any new butter negotiations with the Community until 1983. Considering the unpredictable nature of the E.E.C., it would be rash to say that the present visit to Europe by the Minister of Foreign Affairs and Overseas Trade, Mr Taiboys, will be his last on the subject of butter; with luck,'it will prove to be his last. Mr Taiboys andthe officials who have worked with him have fought a hard fight and creditable results.. New Zealand’s butter sales to Britain /have eroded; but the ■ result might Have been much worse. ' The Dairy Board,f which has already diversified its markets considerably, will be given no respite in the battle to find other markets for dairy produce that Britain will take no longer. The gradual reduction that is foreseen should at least avoid any great disruption in production and marketing.