THE PRESS WEDNESDAY, JANUARY 20, 1982. Down on E.E.C. farms

Press, 20 January 1982, Page 18

THE PRESS WEDNESDAY, JANUARY 20, 1982. Down on E.E.C. farms

Although New Zealand has no say in the debates in which the European Commission fixes farm- prices for ' European farmers each year, this country Teels the force of the results. High prices set for milk or sheepmeat are likely to stimulate production and, as in the past, high prices for milk have led to huge, surpluses of butter. Such surpluses create resistance to New Zealand’s exports to the European Economic Community; they also create problems in New Zealand’s other markets. Setting high prices for the farmers and protecting the consumers is still the habit of E.E.C. countries because, in spite of the degree of recession in some countries, the budget revenue from Europe’s industrial base can be used to provide subsidies for agriculture. The extent to. which this revenue should be so used remains a subject of debate.

The question of farm prices is intertwined with a number of other unresolved issues in the E.E.C. Failure to resolve these has caused a postponement of the price fixing. Chief among these issues is the E.E.C. budget itself and a decision on. how the contributions to the budget are to be made. Britain considers that it pays an exorbitant amount towards the budget and has received some rebates' in the past. Britain is likely to receive further rebates, but seeks a fresh, way ■ of?, its contributions To the Budget and bas linked /, its proposals to the reform of the Common Agricultural ' Policy under which agriculture is governed in the Community. The problem, as Britain sees it, is that too much of the Community budget is devoted to supporting agriculture and that, if the support were reduced, the Community

would find it easier to live within its** income.

Britain has been arguing for a formula that would assess contributions based on national income. Although concern about the amount of the Community budget being spent on agriculture has long been, expressed by some other members of the E.E.C., only limited changes have been made. One of these ; has been that dairy farmers have had to pay a levy for overproduction. Even’this measure has become bogged down in its application because of the question of whether • small-scale farmers as well as large-scale farmers should pay the levy; The severe weather in Europe may have an upsetting effect on the production of lambs this year. Most sheep in Britain will be in the early stages of pregnancy. If stock losses have been great — and it is too early to say that they have — fewer

lambs will be born. The damage done by the weather may be lessened, because a large number of sheep are now being kept indoors during the winter. A reduction in the number of lambs produced is likely to increase the demand for the New Zealand product and may increase the prices for. imported lamb. The effect: of the cold weather-on dairy production is expected, tff be slight. Britain, which has. been worst hit by the storms, is not one of the Community’s major dairying countries. In .Continental Europe many dairy cattle are kept under cover and, even after bad storms in Europe two years ago, dairy production was not much upset. New Zealand farmers are well acquainted with the disastrous.'effects of bad weather and New Zealand is an interested spectator of both the weather and the pricing debates in Europe.