E.E.C. move on butter criticised

Press, 26 July 1984, Page 2

E.E.C. move on butter criticised

Parliamentary reporter The proposal of the European Commission to dispose of up to 150,000 tonnes of butter annually at a special price in the Middle East, Iran, and the Soviet Union could only result in a drastic disruption of the limited international commercial butter market, according to the incoming Minister of Overseas Trade, Mr Moore.

New Zealand was the major exporter of unsubsidised butter to the international market and would be affected seriously if this proposal went ahead, he said.

Additional markets for such quantities of butter were simply not available and increased European sales would only be, to a large extent, at the expense of New Zealand.

New Zealand had tried to co-operate with Europe on butter sales, but this proposal would place this cooperation under enormous pressure as the Dairy Board would have to match E.E.C. prices. Mr Moore said he would urge the E.E.C. to proceed with the greatest caution. The E.E.C.’s plan was “irresponsible,” said the Dairy Board’s chairman, Mr Jim Graham, yesterday.

The proposed action ignored the Community’s international obligations and commitments to New Zealand, Mr Graham said. “Other exporters, and we in particular, wjll have no alternative but■ to reduce our prices to match those of the community." New Zealand and the United States are Europe’s main competitors on the shrinking world butter market. |

The E.E.C. Director-Gen-eral for Agriculture, Mr Claude said the

European Commission hoped to dispose of at least 50,000 tonnes of butter older than six months by the end of this year and up to 150,000 tonnes in 1985 and subsequent years. Mr Villain said the Community would respect the General Agreement on Tariffs and Trade minimum price of $2400 a tonne. The commission had also approved a programme to transform 50,000 tonnes of older butter a year into ghee, a cooking oil used widely in the Middle East and Far East, Mr Villain said. Reuters reported yesterday from Brussels that while the new moves could start a price-cutting war on the world market, they might do little to lower the 10-nation group’s controversial surplus butter mountain, which it now pays $640 million a year just to store. Officials say that in spite of milk production quotas agreed to by Community Agriculture Ministers in March, the butter mountain will go on rising indefinitely at a rate of about 200,000 tonnes a year. Yesterday’s measures alone would therefore only maintain the surplus at its present level.