Community agrees to curbs on milk and beef

Press, 18 December 1986, Page 2

Community agrees to curbs on milk and beef

NZPA-Reuter Brussels The European Community yesterday agreed on curbs on milk and beef surpluses in what officials described as the first major overhaul in 25 years of its costly and controversial agricultural subsidies system. Officials said the deal was clinched by Agriculture Ministers after a seven-day negotiating marathon in which Britain sought a complete overhaul of Community farming before handing over the rotating presidency to Belgium next month. Officials said the beef reform was agreed after concessions to Ireland, which had earlier vetoed the deal affecting a sector of its economy that accounts for 3.5 per cent of its gross national product.

The agreements were described by the British Foreign Secretary, Sir Geoffrey Howe, at his last news conference as president of the European Community Council of Ministers as a remarkable achievement.

Officials said they were expected to cut milk production 9.5 per cent by April, 1989, and to reduce by half the estimated beef over-production of 600,000 tonnes next year. The reforms were the biggest change to date in the Community’s Common Agricultural Policy since it was adopted in January, 1962, to bolster European

farming after the ravages of World War II and to secure Europe’s food supplies. It has developed into an unwieldy system of farm price guarantees that has produced enormous surpluses of wine, cereals, beef and milk which are either stored at huge cost or exported at subsidised prices to cries of unfair competition from the ■E.C.’s trading partners. C.A.P. reform is vital for the Community’s efforts to avoid a cash crisis next year and to convince trading partners of its resolve to end the worst excesses of its subsidies system. The beef and milk deals will pave the way for reforms in other agricultural sectors but the negotiations promise to be as tough as those which ended in Brussels yesterday.

The commission has estimated a four billion European Currency Units (dollars) shortfall in next year’s 36 billion Ecus budget, mainly because of higher than expected farm costs.

The European Parliament has effectively rejected the budget because of this shortfall and diplomats said this first step in the reform may enable the Parliament to pass the budget.

The reform could also help the Community to fight an expected onslaught on its policies in

the new round of world trade liberalisation negotiations and in a dispute with the United States over grain exports to Spain. New Zealand’s Minister of Agriculture, Mr Moyle, said yesterday that, any move by the European Community to cut production of meat and milk was welcome news for New Zealand.

The Community’s beef and milk product mountains had a direct influence on the prices New Zealand farmers were able to obtain, Mr Moyle said.

“The European Ministers have a painful nettle to grasp and it will not be easy for them, but the reports now coming from Europe indicate that the hard economic realities of the Common Agricultural Policy are making themselves felt,” Mr Moyle said.

Mr Moyle said New Zealand’s chief concern must be that the proposed cut in milk production might be used as a weapon against its exports of butter to Britain.

“We have steadfastly fought for our right of access to the United Kingdom. The European Community is our biggest trading partner and that trade is very much in their favour. We have every right to expect and to ask for continuing fair treatment,” Mr Moyle said.