Quota 'Partly Welcome’

Press, Volume CV, Issue 31007, 12 March 1966, Page 3

Quota 'Partly Welcome ’

(N.Z. Press Assn. —Copyright)

LONDON, March 11.

New Zealand would welcome the over-all reduction in Britain’s butter intake “so far as it goes,” the “Financial Times” said in an editorial on Britain’s new butter import quotas today.

‘ “That country, which supplies 40 per cent of our imported butter, has become increasingly concerned about the effects on prices of supplementary quotas allowed to European suppliers,” the editorial said. “Last month the Minister of Overseas Trade pointed out that the drop in prices from 322 s to 303 s a hundredweight would cost New Zealand £3,500,000 in foreign exchange and the Government even more in increased agricultural support. “Mr Holyoake, the Prime Minister, went on to suggest that the less they earned from exports to Britain the less they would be able to buy in exchange. “The negotiations leading up to the setting of next year’s quotas have evidently been brisk. “It is far from certain, however, that the price of butter will now harden. “What has been happening in London only reflects the fact that production of butter has been rising in many countries, partly because of good weather and high grass yields, partly because of a steady increase in the size of dairy herds to meet the growing demand for beef. DEMAND STATIC “Demand for butter itself is relatively static, however, and relatively insensitive to price changes—though more intensive advertising might change the situation,” the “Financial Times” said. “Stocks in Britain are already high, and if good weather increases the domestic milk yield the price of butter may slip still further. “It is not yet clear, in fact, how far the cut in supplementary import quotas is intended to help New Zealand producers and how far to help producers at home. “A sharp increase in the size of our own dairy herd will be needed to meet the beef production targets mentioned in the national plan and this will entail a corres-

pondingly sharp rise in the output of milk. “It may well be that the standard quantity of the guaranteed price will turn out to have been increased next week, when the results of the annual farm price review are published. In that case, although butter-making is not particularly profitable in British conditions, the output of British butter may well rise to make good the drop in imports.

“In the long run, certainly, production of butter seems bound to continue rising in Europe as a by-product of beef, world surplus is likely to become more troublesome, and New Zealand and Australia can hardy hope to expand their market in Britain.”