The EEC sheepmeat regime: arrangements and implications

Abstract

The focus of this paper is on arrangements made by the EEC to establish a common market in sheepmeats. A system of intervention buying or deficiency payments ensures that producers are guaranteed a minimum price. In addition, compensatory payments up to a Reference Price level give farmers additional income support during the transition period from 1980 to 1984. The whole arrangement is protected from imports from third countries with a system of tariffs, licences and Voluntary Restraint Agreements. EEC exports, subject to a clawback tax under the Variable Premium System, and to refunds under the Intervention System, are maintained at traditional levels to current markets. Any increased production in the U.K. is likely to be exported to the Continent, so the British market should remain stable. New Zealand has agreed to limit sales to the EEC at 245,500 tonnes in return for a reduction in the import levy to 10%. There are a number of disadvantages and benefits for New Zealand attached to this agreement, for example no allowance for market growth but higher per unit returns. Whilst there is guaranteed access to the market for this quantity up to 1984, exporters need to keep a close watch on any further long term developments within the EEC.