New Zealand Butter Quota (Hansard, 12 October 1982)

§ Lord Beswick
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers)
My Lords, the quota for New Zealand butter imports under the special arrangements has always been set on a degressive basis. In the arrangements for 1981 to 1983 we ensured that New Zealand was not deprived of outlets which are essential to her and that the British consumer could continue to buy New Zealand butter. This remains our policy.

§ Lord Beswick
My Lords, I thank the noble Earl for that Answer. May I ask further supplementary questions? Is it not the fact that since 1973 the New Zealand butter quota has been cut, at Brussels' insistence, from 166,000 tonnes a year to 92,000 tonnes a year? Am I not correct in saying that, as the result of discussions in Brussels last week, there will be another cut of something like 3,000 tonnes a year? May I also ask the noble Earl this question: would he not agree that this year, after 100 years of mutually beneficent trading with New Zealand and 100 years since the first refrigerated ship left a New Zealand port, it would be quite intolerable to accept another cut against our best friend and our most loyal ally?

Earl Ferrers
My Lords, I understand the noble Lord's concern. In 1973 the imports of New Zealand butter were 165,811 tonnes; in 1977 they dropped to 138,176 tonnes; in 1981, they were 94,000 tonnes and in 1982 they were 92,000 tonnes. The noble Lord will be aware that the arrangements always did entail a cut in New Zealand supplies to Europe. But, on the other hand, the noble Lord will be aware also that there has been a decrease in the amount of butter consumed and that over the period between 1975 and 1981 the sales of New Zealand butter on the United Kingdom market declined by only 7.3 per cent., whereas the consumption in the United Kingdom as a whole declined by 31 per cent. Therefore, the share of New Zealand butter in the United Kingdom market has remained virtually the same at 33 per cent.

§ Lord Peart
My Lords, may I congratulate my noble friend on putting his Question. I believe that our friends in New Zealand always accept that there should be a place for them in our market. Indeed, when we carried out the negotiations in Europe we were always conscious of the importance of New Zealand products. I should like to say that all of us recognise the importance of New Zealand as a trading partner.

Earl Ferrers
My Lords, I entirely agree with the noble Lord the Leader of the Opposition. It is our intention to see that, while the effect of the lowering of the butter demand in the European Community is a fact, New Zealand's sales should remain an important part of the United Kingdom's efforts in Europe. It is our intention to ensure that there are proper supplies of New Zealand butter. If I can assure the noble Lord, the discussions which are going on at the moment which insinuate a figure of 89,000 tonnes have the approval of the New Zealand Government.

§ Lord Mackie of Benshie
My Lords, is the noble Earl aware that this is part of a much wider problem, and that if the Government could persuade the EEC to adopt sensible policies such as the super levy on production of excess milk then much of the problems of New Zealand would be helped as well?

Earl Ferrers
My Lords, not entirely; because the fact is that butter demand is decreasing. As I tried to explain to the noble Lord, Lord Beswick, although New Zealand butter imports to the United Kingdom have gone down, their share of the United Kingdom market has remained the same as it was before we joined the Community.

Lord Chelwood
My Lords, when the quota is next considered, will the Government bear in mind the fact that exports of EEC butter to New Zealand's traditional markets accentuates the problem of that country in disposing of her very large dairy products abroad? May this please be borne in mind and does my noble friend have any comment on it? May I ask him to bear in mind also that there is every bit as much sympathy and understanding of New Zealand's problems on this side of the House as on the other?

Earl Ferrers
My Lords, I am grateful to my noble friend for that last remark, and I endorse it. We have every intention of doing all that we can to ensure that New Zealand's butter supplies continue in the appropriate and the best fashion. My noble friend is quite correct in saying that the disposal of surplus Community butter on to the world market affects New Zealand, as indeed would the disposal of American butter or butter from anywhere else. We want to see that the amount of butter coming from New Zealand remains a reasonable and proper amount, and that is what we intend to do.

§ Lord Cledwyn of Penrhos
My Lords, while the demand for butter may be reducing, as the noble Earl says, is it not the case that milk production in the Community this year is likely to rise on average by 2.6 per cent? Will not this result in a big increase in butter production in the Community which will create enormous problems for the Commission and for every member of the Community? Will the noble Earl say what the Government's attitude will be to this new butter mountain and how it is going to affect imports from New Zealand? This is a matter of interest to the whole House.

Earl Ferrers
My Lords, without going into too much detail, the short answer to the noble Lord, Lord Cledwyn of Penrhos, is that in 1981 94,000 tonnes of butter were imported from New Zealand; in 1982 92,000 tonnes were imported; and in 1983—and this has not yet been decided—the Commission's proposals were for 89,000 tonnes. This has the approval of the New Zealand Government. The noble Lord, Lord Cledwyn, referred to the butter mountain. I would remind him that at one time the butter mountain amounted to 200,000 tonnes in intervention and it now is only 54,000 tonnes, which is about three day's supply for the Community.

§ Lord Cledwyn of Penrhos
My Lords, what would it be if there is an increase in milk production of 2.6 per cent?

Earl Ferrers
My Lords, it depends where the milk goes. It may go into consumption; it may go into butter or cheese. I cannot answer that question.

§ Lord Beswick
My Lords, the noble Earl makes a point that the consumption of butter has gone down. But would he not agree that given the opportunity, the British housewife would buy more New Zealand butter because it is better value? May I ask the noble Earl whether it is not a fact that there is now a net levy of £358 a tonne on New Zealand butter, and that this money, when collected, is used to undercut New Zealand butter in other world markets? Can this possibly be right?

Earl Ferrers
My Lords, there is a levy on New Zealand butter, as there is on all imported butter, but the levy which is applied to New Zealand butter is at a concessionary rate and is lower than that applied to other butter. The noble Lord says that if there was more New Zealand butter—if it was cheaper—people would buy more. Maybe they would, but the fact is that people are buying less, and the fact is that part of the agreement when we joined the Community was that we would protect and there would be a protection for New Zealand butter supplies, even though they are on a degressive basis. That we have striven to ensure is a fact.

§ Lord Molloy
My Lords, is the noble Earl aware that there is an aspect of this entire discussion—I am sure he is aware of this—which has not yet been touched on but ought to have been? During the last war the New Zealanders imposed on themselves precisely the same rations that were extant in the United Kingdom from 1939 to 1945. They could have laid massive amounts of dairy produce and food on the table of every New Zealand family but they did not. They saw that that was sent to the United Kingdom—

Several noble Lords
Question!

§ Lord Molloy
My Lords, have we therefore not a moral responsibility to ensure that New Zealanders are given a fair deal in any aspect of Great Britain's involvement?

Earl Ferrers
My Lords, I do not think anybody in any part of the House would disagree with what the noble Lord, Lord Molloy, has said about New Zealand's contribution in the last war and her total and great allegiance to this country, particularly during recent events. What we have tried to do—and have succeeded in doing—is ensure that as part of the Community regulations they will have an agreed amount of butter coming into this country. It is the Government's intention not to agree a figure of which the New Zealand Government would not approve, and that we have not done.

The Lord Privy Seal
(Baroness Young): My Lords, I think it will be the wish of the House that we should now move on to the next Question.