What’s the Problem?

A familiar problem faces the Agricultural bosses of the European Common Market: too much food. This time it’s butter, a surplus of 350,000 tons. The annual cost of just storing it is equal to a third of its value, so the EEC are desperate to get rid of the stuff.

“In effect the butter surplus seems to be a problem almost beyond the wit of man to solve.” That is the conclusion of the Financial Times (30 October 1968).

One suggestion is to feed the butter back to the cows. This was seriously considered, but it has the drawback that the cows’ milk yield would zoom up further, causing an even bigger crisis.

An alternative idea is to put the stuff on the market at half its present price (at a cost to the Common Agricultural Fund of 500 million dollars) but even such a drastic cut wouldn’t increase sales enough.

Yet another proposal is to treat 27,500 tons so that it can’t be spread on bread, then sell it as something other than butter. That scheme would cost 43 million dollars (Guardian 19 October, 1968). The Agricultural Ministers have also considered selling the butter at cut prices to barracks, hospitals and boarding schools, or to food manufacturers for use instead of cooking fat.

Comments the Financial Times:

In the last analysis, these measures are merely palliatives because the Community seems faced with an inexorable surge in milk production. Output in France, with 10 million cows, is rising fastest of all. But per animal it still has a long way to go from the present 600 gallons per year to the level current in Holland of over 1,000 gallons a year.

One likely course of action is that four million cows, out of the Common Market s total of 22 million, will be slaughtered.

Other diary products present a similar problem of superfluity. In September the Financial Times mentioned the “alarming increase” in UK skimmed milk stocks to 34,000 tons at the end of June 1968 compared with 20,000 in June 1967. This is a world problem, hitting the UK, the US, the EEC, Canada, Australia and New Zealand. As in the case of butter, it is especially aggravated by the heavily-subsidised farming interests in the Common Market. The Financial Times freely admitted that:

there is not an overall surplus if the theoretical needs of the developing countries are taken into consideration.
It is estimated that a daily ration of only 10 grammes of skimmed milk powder for populations suffering from severe protein deficiency would on today’s basis require more than 3m. tons of skimmed milk powder annually.
The problem is that the surplus countries would have to supply the produce free and probably pay for the cost of distribution too— a less attractive economic proposition than selling even at very low rates or paying the cost of storage.
The immediate outlook for skimmed milk producers is, therefore, a gloomy one. They can either encourage consumption at rock bottom prices, pay to give away vast quantities to developing countries in the form of food aid, or face the prospect of massive, and costly, stocks continuing to undermine world markets.
In the long term, however, it should be remembered that it was not many years ago when there was an acute shortage of dairy produce. The wheel may well turn back sooner than expected, as the pressure of low prices eventually discourages output and encourages consumption.

The Common Market also has a problem with sugar: a million ton surplus of which 600,000 tons will have to be exported and the rest “denaturised.”

“Coffee Prophets Gloomy” was a recent 11 November Times headline. Sadly the Times explained the source of gloom: “There is too much coffee in London or on its way here, while manufacturers appear to have covered their requirements well into the new year. The painful erosion of prices is likely to continue.”

Last summer brought the usual complains of too much fruit from many parts of the world, France in particular. The Scotsman 16 August informed us that the fruit glut:

has come to be something of an annual event in France, but it is an event which gets bigger and more worrying with every passing harvest.
This year half a million tons of fruit and vegetables have already had to be destroyed and with a bumper apple harvest about to aggravate the crisis, the Government has just banned the sale of all but top-quality apples.
Nobody benefits from the situation. The growers earn, for example 50 centimes (about 10d) for a kilogramme of peaches and make up their incomes with Government subsidy. The consumers in the towns pay three times or more what the growers get. And the taxpayers contribute to an agricultural subsidy which next year is going to cost France an extra £83 million.

Tourists passing through the fruit-growing country of the Vaucluse and the Gard had to drive over piles of peaches tipped onto the roads by the lorryload. Fruit-growers handed them free gifts of the unsaleable fruit together with tracts which stated: “We can no longer put up with this destruction, while you, the purchasers cannot buy at reasonable prices and while there are people suffering from hunger.”

Overproduction hit grape growers too. Excess grapes were dumped into rivers, abandoned at the roadside and sometimes thrown by frustrated farmers at Government buildings. The farmers are reported to have claimed: “it is more a problem of marketing than producing.” But it’s doubtful whether they realised the full significance of those words.

David Ramsay Steele