Sheepmeat rules blamed for poor lamb prices

Press, 7 August 1981, Page 14

Sheepmeat rules blamed for poor lamb prices

The former chairman of the Meat Board, Sir Charles Hilgendorf, attributes what he describes as “the disastrously low” prices at present ruling in Britain for New Zealand lamb to “the bad deal” that New Zealand got under the European Economic Community’s sheep meat regulation, which came into force late last year, in spite of the promises of the present British Government and its predecessors.

It became less likely that New Zealand would get the best possible deal, he said last week after recently visiting Britain, when on the one hand Britain exerted pressure on the European Economic Community for relief from the contribution it was making to the common agricultural policy funding while France and the Republic of Ireland pressed for a sheep meat regulation which Britain had been opposed to. In return for relief from its

financial contributions. Britain became more pliant to proposals for the sheep meat regulations. It then became almost inevitable that New Zealand should end up with a less favourable arrangement. Under the arrangement in return for agreeing to quantitative restrictions on New Zealand exports to the Community. including Britain, New Zealand was granted a reduction in the common external tariff oh sheep meat imports into the Community from 20 to 10 per cent; but there were also conditions that made it inevitable that the British market would be oversupplied with locally produced British lamb.

The British farmer was given a high. guaranteed price for his product, but if it was to be exported from Britain to the Continent then under the so-called clawback the supplement had to be repaid, and this had in practice meant that some 60,000 tonnes of British lamb, which had been exported to the Continent, had remained on the British market creating a situation of over-sup-ply. Very little British lamb had in fact been exported at all since the introduction of the sheep meat regulation. The present price for lamb being received by the British farmer compared very well with other products so that lamb production was also likely to increase slowly. As basically responsible for New Zealand’s lamb marketing problems in Britain, Sir Charles believes that New Zealand should be

pressing for an adjustment of the regulation as it related to the claw-back to allow exports of lamb from Britain to resume. It was true that some efforts had been made to improve this condition, but so far they had. not got anywhere being unacceptable to the British.

Normally Sir Charles said that, when New Zealand agreed to a restriction oh the size of its market in the Community, it would have been expected that a high price would be received for the smaller quantity of product. He believes that this might have been obtained if the New Zealand Government had accepted more readily that a sheep meat regulation was in fact inevitable. Over the years, however, the Government had said that such a regulation was unnecessary and had therefore tended to assume that there would not be one. Sir Charles holds the view that the British Minister of Agriculture, Fisheries and Food, Mr Peter Walker, had brought off “a spectacularly successful” deal under the regulation from his (Mr Walker's) point of view. It was seldom, he said, that it was possible to get the interests of the portfolios of agriculture and food to mesh in so well together. Mr Walker had succeeded in getting a high guaranteed price for the British farmer paid for by the Community and a low price for the consumer paid for by New Zealand. Asked about the Meat Board’s role in New Zea-

land's negotiations over the regulation, he said that while the board had been kept informed it had. not been consulted.

Although New Zealand lamb is currently meeting a poor market in Britain, Sir Charles Hilgendorf said it was actually selling better than the home prodticed product. which was most unusual for this time of the year, but he said he did not expect that there would be any improvement in the market until, the British autumn — about October or November — when British lamb had been disposed of. The new regulation had certainly not improved New Zealand’s meat trading opportunities on the Continent. In fact, New Zealand’s ability to trade on the Continent as a whole had declined rather than improved, and as far as France, in particular, was concerned, the quantita-

five restrictions had become more rigid and no sales at all were being made to that country. One of the effects of this

situation, if it was to continue, was that it would encourage New . Zealand to sell more of its lamb on the British market in the first half of the year as was the case about 20 years ago. Over the last 20 years, however, ah increased proportion had been sold in the second six months and this had meant that lambs going to slaughter late in the season in Southland and in the North Island had become very profitable. But if more was to be sold in the first half of the year and if the Middle East wanted lamb quickly and in the early part of the season, early lambs could be a better proposition than in recent years, which would suit Canterbury well.