PRODUCE EXPORT CONTROL

Dominion, Volume 19, Issue 165, 9 April 1926, Page 9

PRODUCE EXPORT CONTROL

(To the Editor.) Sir,—There are two points in. the letter of Mr. A. Macintosh published on the Bth, upon which it is desirable to give some information. I will not trouble to deal with the general principle of compulsion, because in the same issue, Mr. Grimsdale Anderson most effectively covered that point, and Mr. Macintosh himself admitted that he, although an advocate of freedom and in no way interested in the produce trade, had had to yield to compulsion to head the deputation! Really, this is becoming amusing. The Welfare League, Mr. Macintosh, and others in the deputation of protest, base their protest against the dairy farmers’ effort to improve their own lot by parading the fact that they are not interested. Well, if they are riot interested, whv this concern? Why worry?

The two points in Mr. Macintosh’s letter with which I wish to deal are his statements that the board is “a most expensive body,” and “when the figures are added up and the bill presented, who is likely to be benefited? The middleman may be eliminated, but will that advantage the producer. And as for the third and silent party—the consumer—he is apparently of no account.”

Mv reply is: The board is not an expensive body, ft is a very cheap body, and in its first 18 months’ operation saved the industry ss. for every Is spent. Analysis of that period shows that each ton of flutter exported contributed Ils. Bd. to the board’s funds, of which the audited expenditure absorbed less than ss.’ Now what did the industry definitely gain for that -ss. ? It gained a reduction in shipping freight of £1 per ton, and a reduction in insurance of nveragelv 6s. Bd. per ton of butter. The •ss. expenditure therefore showed a definite cost reduction of £1 Gs. Bd.—a clear profit of £1 Is. Bd. to all exporting factories. In the case of cheese, each two tons contributed Ils. Bd., of which the board spent under 5s The shipping reduction in freight on these two tons amounted to 355., and the insurance approximately 75., equalling 425. gained bv spending 5s. —a gain of 18s. 6,1. per ton to all exporting cheese factories. These savings have been effected without touching marketing. But the margin offering for gain in marketing is infinitely greater than any of the avenues so far touched by the Dairy Board. The average difference between the price of Danish and New Zealand , butter last year was £23 16s. Bdper ton' which on our output represents a difference of £1,560,000. Mr. Macintosh’s banking experience will tell him just how welcome that million and a half would be to New Zealand to-day if it were available. It is the aim of the Dairy Board to make some part of it available to our producers, and their objective should be assisted rather than hindered by all who have anv real appreciation of ou< national welfare.

These figures, I think, go a long way towards answering Mr. Macintosh’s question, "When the figures are added ur> and the bill presented, who’ 1s likely to benefit?” The producer sees vyy clearly where the benefit lies and can appreciate at its true worth the degree of opposition entered against the proposal.

To Mr. Macintosh’s next sentence strong exception must be taken. He says, "The middleman may be elimiriated, but will that advantage the producer?” It is surely fair to suggest that a gentleman of Mr. Macintosh’s standing, before attacking an organisation like the Dairy Board, should inform himself of the policy proposed, in order to state the facts correctly. The board does not propose to “eliminate the middleman.” Only last week there was published a detailed list of the distributors in Tooley Street who bad agreed to issue letters of credit to the Dairy-Board in the usual manner. The board has stated time and time again that it does not in any way propose to dispense with the services of Tooley Street distributors, ana that the produce will still go through the usual channels of distribution, 't here is no justification, therefore, for Mr. Macintosh’s statement.

Finally, Mr. Macintosh says: “As for the third and silent party—the consumer—he is apparently of no ae. count.” That is far from being the case. The board appreciates to the very fullest the prints importance ot the British consumer, and seriously contends that its policy of regularisation will tend to stabilise prices on a standard level which will be very much to the advantage of the consumer. The consumer, it must be remembered, has not been getting the benefit of the periodic si imps which have characterised the marketing of our produce for the past four years. One incident will make this plain. O,ne season when New Zealand butter was down to 1575., one large firm controlling chain shops invested ;’250,00() in New Zealand butter, stored it, and gradually quitted at prices from 186 s. to 2265. as the wholesale market recovered. This was very good business on their part, but in that transaction the British consumer did not benefit., except in the very lowest depths of the slump when the retail price would lie dropped temporarily. As the market recovered, however, the consumer would pay the current retail price based upon the wholesale price, while the seller would benefit by his reserves of cheap butter. The difference between the wholesale price returned to the producer and that paid bv the consumer—some £60,000 or £70,000 on this one transaction—would-, naturally go to the firm that invested its capital so judiciously But that transaction benefited neither the producer nor the consumer To stabilise deliveries so as to prevent such slump periods will not penalise the consumer one iota—it will, on the contrary. bv a steadier level of price, conduce to the dcve’opment of wider and more confident consumption. The board’s policy is aimed directly to the a”-round impro -ement of our marketing service, which means superior service to the consumer, full utilisation of the distributive facilities of the middlemen, and finally the fullest possible legitimate return based upon world prices to the producer.—l am, etc., A. J. HEIGIIWAY, Editor. "N.Z. Dairy Produce Exporter.” Wel'ington, Apr.l 8, 1926.