‘Balance’ advocated for E.E.C. butter imports

Press, 2 November 1981, Page 10

‘Balance’ advocated for E.E.C. butter imports

NZPA London The European Community should have “more balanced” arrangements for New Zealand butter imports, the European Commission says in its mogt recent proposals for reform of the Common Agricultural Policy. The commission says the approach to' New Zealand imports should take into account, among other factors, butter consumption within the Community and the need to ensure stable world prices for dairy products. The proposals for C.A.P. reform, unveiled in Luxemburg by Mr Gaston Thron, president of the European Commission, do not go into detail of how the “more balanced” arrangements for

New Zealand butter can be achieved. But the commission refers to “long term” arrangements for New Zealand which is seen by observers as a tacit acknowledgement that it has a continuing place in the European market.. “It seems a step in the right direction from New Zealand’s point of view,” one source- familiar with New Zealand’s trade with the E.E.C. commented. The commission seemed to have accepted that the EuroK;an Community needed ew Zealand’s co-operation on world dairy prices and that this should be balanced against New Zealand’s need for access to the European market, another source said. The proposals contain favourable references to New Zealand’s efficiency as a dairy producer.

The main thrust of the commission’s proposal is to control the cost of the C.A.P. and curb over-production by Europe’s farmers. Mr Thron said the suggested reforms would keep the growth of C.A.P. spending below the annual increase in the E.E.C.’s revenue.

The commission’s proposals for the dairy sector — which.takes 40 per cent of the E.E.C.’s farm budget — include the retention of the 2.5 per cent co-responsibility levy which all farmers at present pay towards the cost of disposing of surplus milk. But small dairy farmers, producing less than 30,000 kg a year, would be exempt from this levy.

The commission has proposed a new “super levy” on farmers who increase milk production by more than 0.5 per cent a year. Milk produced by “intensive” farming methods, using imported animal food, would also be subject to a “super levy.” The commission’s proposals to curb milk production are seen as important for New Zealand which has always regarded the heavily subsidised surpluses as a -threat to its traditional markets in Europe and its efforts to develop alternative markets elsewhere. “The proposals constitute a pretty determined assault by the commission on surpluses created by subsidised production,” one trade expert said. The commission has taken a tough line on grains, involving a pricing policy aimed at bringing E.E.C. prices paid to farmers for cereals more into line with lower world prices. It has proposed a five-year programme, with a production ceiling fixed each year, aimed at a target figure of 130 million tonnes of cereals in 1988” compared with 118 million tonnes last year. For beef, the commission aims to keep increased production in line with the growth in consumption, with a target of 7.6 million tonnes in 1988 compared with 7.2 million last year. The commission suggests production targets should be fixed for apples and processed tomatoes and says there should be better con-

trol of wine and olive oil production. John Wyles, the “Financial Times” correspondent in Luxemburg, said, “The commission’s approach incorporates several familiar ideas which have failed to win the support of governments in the past, but it has cast its proposals in such a way as to exploit the general E.E.C. commitment to make the C.A.P. more economical while' trying to steer a middle line between conflicting national interests.” lan Murray, in “The Times.” said, “the proposals seem to represent a careful balance between the conflicting interests of Europe’s agricultural communities.’ J The big question now is how much of the commission’s proposals the E.E.C. Foreign Ministers will buy. It immediately became clear that there would be strong opposition to some of the suggested changes. The Irish Foreign Minister, Professor James Dooge, firmly rejected the proposed “super levy” on increased milk production. “There should be no misapprehension about the determination of my Government to protect this vital sector of the Irish economy,” he said. Noting that Irish farmers’ incomes had fallen 60 per cent over the last three years, he said Irish agriculture must be allowed to exploit its potential for development. This meant no hindrance of production possibilities, especially in beef and milk, Professor Dooge said.