The Press FRIDAY, MARCH 11, 1966. Butter Quotas

Press, Volume CV, Issue 31006, 11 March 1966, Page 10

The Press FRIDAY, MARCH 11, 1966. Butter Quotas

The pact with the United Kingdom granting New Zealand the right to send unlimited quantities of butter to Britain has been virtually in abeyance since quotas were first imposed in 1962. The existence of the pact, however, has been a strong card in New Zealand’s bargaining hand ever since; New Zealand’s negotiators have been able, whenever the haggling appeared to have reached a deadlock, to remind the British of their “obligations” to New Zealand. In this year’s negotiations, however, it might not have been good tactics for the New Zealand team to over-emphasise Britain’s obligations. The pact is due to expire next year; and if Britain’s obligations were made to seem too onerous in 1966 Britain might be less willing to renew the pact in 1967.

In these circumstances, New Zealand’s negotiators did as well as could have been expected. Before Britain’s quotas for the year beginning April 1 were fixed the British were keen to maintain or increase the “ supplementary ” quotas. New Zealand asked for supplementary quotas to be abolished. The outcome was a reduction in the supplementary quotas from 39,000 tons to 5500 tons; but the basic quota was raised from 420,000 tons to 430,000 tons. Authorised imports in 1966-67 will therefore be 23,500 tons less than the total authorised last year, of which some 8770 tons did not eventuate. Stocks held in Britain are nearly 5000 tons higher than they were 12 months ago, and British butter production is expected to rise 5000 tons this year. It will be the aim of all suppliers to reduce excessive stocks to a more manageable level. This will necessitate increasing consumption by about 6 per cent —from little more than 9000 tons a week to nearly 9500 tons. There is little prospect of any increase on the current price of 303 s per cwt being paid for New Zealand butter.

Although this price falls short of the London equivalent of the butterfat price by more than £1 per cwt, the shortfall is less serious for New Zealand than it would have been a few years ago. Proceeds from butter today account for a smaller proportion of New Zealand’s export income than they did 10 years ago, or even five years ago; cheese exports continue to be profitable; and other dairy products—notably casein—are fetching much higher prices than previously. Perhaps most important of all, New Zealand’s share of the basic import quota has been maintained at 40 per cent. This fact may prove to be of more significance than New Zealand’s former “ guarantee ” of duty-free access for unlimited shipments of butter when the all-important negotiations for the renewal of New Zealand’s pact are held next year.