PRICE OF BREAD AND BUTTER.

Press, Volume LVII, Issue 17116, 11 April 1921, Page 7

PRICE OF BREAD AND BUTTER.

DEPUTATION OF M. P.'S TO PRIME MINISTER. ME. MASSEY'S HOPES POE THE FUTURE. (SPECIAL TO "THE PRESS.") WELLINGTON, April 9. Protests against the increase in the price of bread and the threatened increase in the price of butter were made by Wellington city members of Parliament, who interviewed tho Prime Minister (Mr Massey) and the Minister for Industries and Commerce (the Hon. E. P. Lee) this morning. The deputation consisted of Messrs J. P. Luke (Wellington North), G. Mitchell (Wellington South), R. A. Wright (Wellington Suburbs), and Dr. A. K. Newman (Wellington East). The Director of Agriculture (Dr. Reakes) was present. Mr Luke said the deputation might claim to represent not only the citizens of Wellington, but the Parliament and people of the Dominion as a whole. He was decidedly of opinion that tho payment of subsidies by the Government on foodstuffs ought to cease. He thought that the producers ought to obtain a free market. But he objected to the fixing of artificial prices for the local market by combinations of producers. The introduction of trust methods would not be in tho interests of the community. Dr. Newman suggested that when conferences were being held behind closed doors to discuss prices, the consumorß should have representation. Conferences had been held regarding the local prices of both wheat and butter, and t'he people generally had no means of knowing what was going on. He thought that the Government ought to protect the consumers against having to pay famine prices in the winter, by buying and storing produce in the summer months. This should apply to fish, butter, fruit, and eggs. No difficulty seemed to arise in connexion with meat, but winter famines of other products were of almost annual occurrence. Dr. Newman suggested also that the Government should cheapen bread by re-' quiring the use of a browner flour, which all authorities were agveed would be very muoh more wholesome than the very white flour now in use. The World Parity. Mr Mitchell thanked the Prime Minlater for, the stand he had taken in connexion with butter. He thought the people of New Zealand as a whole were grateful. The world was trying to get back to normal standards, and th>s dairy fanners would have to move with the rest. An attempt to maintain war prices for one set of producers obviously was unfair. The butter producers during the war claimed the world's market value for their butter, and they got it. The 16cal consumers had to pay. But now tho world prices were falling the producers were ehnnging their ground arid were talking about the cost of winter production and other factors. Everybody knew, a| a matter of fact, that the dairy farmers engaged in supplying tho factories milked their cows for a definite and that the cost of -winter production really did not enter into tho question at nil. They did not provide for winter production. The men who supplied the cities with winter milk were in a different position. They had to make special arrangements for, winter production, and they secured a special price. Bub that was no reason why oil the other dairymen should got an extra price. The .prices, for produce ought to be bared on the London prices. That had been the argument of the producers in the past, arid it was a sound argument. But New Zealand, unfortunately, was being required to pay an increased price for its thread at a time when the world's prices of wheat -and flour were falling. He agreed that it had been riecessary to give the farmers some guarantee in order to induce them to grow wheat. Mr Wright endorsed what lhad been said by the other speakers. The people liad'• paid in the period of high prices} and now they were entitled to the benefit of lower prices. The farmers ihad insisted that a special price ought to be paid for milk by tho cities because winter production was required, and how they were turning round and saying thntCbeoause the cities paid a special price, the butter producers ouffht to get more. ■ That was not reasonable. Butter and bread were the chief foods of the people. Mr M*ssey: What do you suggest? Mr Wright: Wo suggest that the price of butter should be governed by the world's market price. What we fear is that the butter producers are putting their heads together, and are goingto fix a price for tide lccal market regardless of what the butter is worth in tho open market. We feel, that tho wheat producers ought to be eneourr aged, but wheat prices are falling 'throughput'-the- world, and it is very difficult to convince the people that the price of their bread ought to rise just at this time. Mr Luke added that the interests of the 'consumers were not being protected, and would not be protected unless tli9 Government took up a strong stand.

PRIME MINISTER'S REPLY. The Prime.Minister said he had not much to say in reply to tho expressions of opinion by the members. There were differences of opinion as to the arrangements that should be made in order to do justice to both producers and consumers, but he would ask them to remember ft that right through the difficult war years the Government had .endeavoured to do justice to both parties, and had done it. The right thing had been done, and if it had not been done tho Dominion would havo had very 3erious difficulties, particularly with respect to tho supply of wheat. Wheatgrowing had been threatened with extinction in New Zealand. The cost of producing wheat had risen to such an extent that the farmers had been disposed to turn to other production. Farm machinery had risen threefold in cost. Wages had doubled. Mr Mitchell: Have they increased during the last twelve months? Mr Massey: I don't think so. I think there is now a downward tendency. But you know that we had to import huge* quantities of wheat from Australia. That was an extraordinary position, and wo had to do something to meet it. What we have done during the last two years—and it has had a good effect—has been to guarantee a price to the farmers for twelve months m advance. .'- Mr Mitchell: Would not the fall in tho prices of other products have caused farmers to turn back to wheat without extra inducement?

The Wheat Arrangement. Air Massey replied that arrangements for the growing of wheat had to be mado many months in advance, and if a price was to be fixed at all it had to bo fixed for a season ahead. The price agreed upon twelve months ago was in operation now. He quite agreed that subsidies should be stopped. The Government was doing that now, and the flour subsidy had already been reduced by two-thirds. Tho withdrawal of part or the subsidy and the slight, increase in the price paid for wJieat had accounted for-the increase of one penny in the price of the two-pound loaf. The subsidy would stop altogether at the end of, this rear, and the producers

had accepted a reduced guarantee for their wheat. They were looking forward to a decline in the cost of production. He thought that after this year the Dominion would get back almost to normal conditions as far as wheat was concerned. But if the Dominion had continued to depend upon supplies from Australia, it would have had to pay famine prices sooner or later owing to one of the periodical droughts m that country. Even now the price of bread in New Zealand was not as high as in Australia. Tho Butter Position. He did'not wish to say much about butter, since the position was awkward and difficult. He did not doubt that a satisfactory arrangement would be made, but ho did not want to express any opinion that might be referred to when the conference of producers met next week. The producers know exactly where ho 'stood, and so did the consumers. The production of butter in winter was about the most slavish business that anyone could engage in, but ho had to admit that it was not necessary in this country for much production to bo done in the winter months, because enough butter could be stored during the summer to meet winter requirements. That had been done in the past. The only difference during the last two or three years between the prices of butter in the Bummer and in the winter had been the cost of storage, and perhaps a little by way of interest. Dr. Reakes: And a little extra cost in running the factory, because the turnover is less, while o f .her expenses run on. Mr Massey t added that tho point would be considered by the conference that was intended to be held about the middle of next week. The Government would be represented at this conference, and he knew the representatives of the butter producers so well that he could not imagine that they would hold out for anything unreasonable. The butter that was in store in New Zealand at present did not belong to the Dominion. It had been bought by the Imperial Government. Some withdrawals from the stocks had been made lately for the local market. Dr. Reakes-: We had to draw upon it. during the first two or three days of April. .• Mr Massey said that before the end of March there was a rush to get all •the available buttor from'the factories into the stores, in order to take advantage of the Imperial contract price, and some of the local distributors were'' left without supplies. Dr. Reakes then saw that adequate supplies were withdrawn from the Imperial stocks. _ It would be unfair to ask the Imperial authorities to sell this butter here at a lower price than the Dominion was prepared to sell to its own producers. He thought the deputation could rest assured that an arrangement satisfactory to both -parties would be made. Anybody coiild 'seo that the price of butter was falling on the London market, and he believed that by next summer the price' would be lower than it had been "during the last twelve or eighteen months. Ho thought everybody realised that, and was prepared for it. Mr Mitchell: What is going to be the factor governing the local price? Mr Massey: Leave that until the conference. . I don't want to express any opinion that might prejudice the position wEen the conference meets. •'