E.C. moves to limit butter surplus

Press, 5 March 1987, Page 10

E.C. moves to limit butter surplus

NZPA-Reuter Brussels

European Community Farm Ministers finalised details yesterday of an accord to cut overflowing dairy production and reduce its record stocks of unwanted butter. After almost 36 hours of negotiations, the 12 Ministers agreed on tough new limits on a farmer’s right to sell surplus butter at guaranteed prices.

Problems over technical details had threatened to hold up full implementation of the accord and

delay a review of reforms for other farm surpluses. An outline agreement was reached in December to cut E.C. milk production by 9.5 per cent over two years.

It was hailed as the most radical reform yet of surplus-creating farm policies, but has since run into a spate of problems over the small print.

Under the new rules agreed yesterday, the E.C.’s Brussels Commission will have the right to stop accepting butter sales when public stocks exceed

180,000 tonnes. After strong objections by West Germany and Ireland, the Commission has undertaken to re-in-troduce direct purchases if market prices slump below 92 per cent of the average price in an individual country or in the Community as a whole.

The E.C.’s “butter mountain” has reached about 1.2 million tonnes, and the dairy sector alone swallows one fifth of the entire annual budget of around 36 billion European Currency Units ($7l

billion).

The Ministers also agreed to spend some 350 million Ecus ($7OO million) to cushion the poorest of the Community’s 12 million farmers from the worst effects of the continuing campaign to reform farm policies and end food surpluses. The latest proposals moderate only slightly the original Commission plans, which some Ministers had feared would lead to cuts of almost 10 per cent in butter prices.

They would allow the Commission to suspend sales of butter into E.C. cold stores in some or all countries in about four months time provided market prices were within eight per cent of the guaranteed prices. Taking into account changes in payment procedures also proposed, trade sources said the new rules could cut E.C. butter prices by between 3-4 per cent and were therefore considerably less stringent than those originally proposed.