SOCIETY TODAY
The price of not making butter
Jane McLoughlin
Forecasts of gloom from farmers are often treated as a music hall Joke, but now it seems there's not much for the consumer to laugh at. The grocery trade are predicting that by the end of September, production of British butter will have to cease altogether because of a shortage of milk, and their wholesale suppliers are already giving credence to that belief by a 25 per cent cutback in their allocation of Present stocks. They may manage to eke out supplies to keep the Shops going over the winter, but by the spring, British butter will Probably be unobtainable. Of course, there will be butter in
the shops European butter. Britain holds nearly 6,000 tons of the 282,000-ton European butter mountain, and this will be available to the housewife. But the point is that because of the absurdity of government policy, the British taxpayer will be paying twice virtually to put their own butter Producers out of business.
Britain is the only Common Market country to clonsume large quantities of liquid milk, but we are also the most efficient producers of ItNow by putting sudsidies on domestic cheese and liquid milk and thus encouraging the housewife to buy at an artificially low price, the Government has boosted demand for these products. To fulfil this new demand, the milk Which once went into butter-making has been diverted into cheese and liquid milk production. To fill the demand for butter, we are having to buy it from Europe, whose relatively inefficient milk producers taxpayers already subsidise through Common Agricultural Policy funds. The European farmers have the benefit of the intervention Price system so that if the price drops, the Market buys in surplus
milk as butter. To keep European milk producers in business, the price he gets for his milk is maintained through CAP funds. Thus by paying both a producer subsidy in the EEC, and a consumer subsidy at home, the taxpayers of this country have become the victims of the failure of successive governments to come to grips with a single policy. The situation has been made worse by the present Government's putting a subsidy on products — liquid milk and cheese — already in short supply.
There's little chance, either, that milk production in this country can be increased. Before we joined the EEC, many small dairy farmers were changing their speciality in milk because they could not get an economic price for their product. Now that our efficiency in producing milk from our good cows and quality pasture should ensure that in open competition in theMarket we could operate the intervention price system to our advantage, any possibility of our farmers doing this has been ruined by the subsidies on milk which have artificially boosted demand and not only made certain there will be no surplus, but actually created the shortage.
At the same time, there is no incentive to the farmer in this country to increase production, partly as a result of the rejection of the projected Common Market marketing levy which would have ensured the best possible price for the 'stored' milk — butter and cheese — throughout the EEC by putting aside a sum — say lp on every gallon of milk produced — towards the more efficient marketing of the product. If the farmer could thus see he might make a profit out of milk, he might have the confidence to expand. Britain, which might have taken advantage of this levy system because we are the most efficient milk producers in Europe, was largely instrumental in overthrowing that addition to Common Agricultural Policy.
The only forlorn hope might be for the Government to risk losing the housewives' vote by taking the subsidies off milk and cheese so that the demand can find its own natural level, and then British farmers might be encouraged to take advantage of the milk intervention price level. But it''s the British taxpayer — who is, after all, the consumer — who is the victim of this government chaos. Short term, we may imagine we are benefiting from paying less for milk and cheese, but the subsidies which make us think that come out -of our pockets, and we're having at the same time to subsidise European farmers for doing what we could in fact do far better for ourselves.
Jane McLoughlin is on the staff of the Daily Telegraph.
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