DAIRY CONTROL

Dominion, Volume 28, Issue 29, 29 October 1934, Page 10

DAIRY CONTROL

Proposals Criticised STATE DOMINATION Views of Mr. W. Goodfellow ' Dominion Special Service.

Auckland, October 27. Strong disapproval of the measures proposed for the control of the dairy industry was expressed by Mr. W. 'Goodfellow, when discussing the report of the Dairy Commission. In Mr. Goodfellow’s opinion the legislation now before the House would place the dairy industry and agriculture in general under the complete domination of the Government. The dairy industry should and could run Its: own business much more efficiently than was possible by any Government. All that was required was that Parliament should give the dairy-farmers the legislation asked for in 1923, which was an improvement on the Danish system, and a thoroughly efficient organisation would rapidly develop. The farmers would then own and control their own business and would accept full responsibility. “Failure of Planners.” What possible excuse was there for Government control, which would mean another army of inspectors and board officials, which must I>e paid for by the producer? Economists or planners in other countries had been proved wrong and discredited. Even in the United States there was an indication that saner counsels would prevail now that the planners had failed. Mr. Goodfellow said that the commission rightly drew attention to the need of acceptance 'by the dairy industry of the probable fact that it faced a long period of low prices for primary products. No improvement of a permanent nature appeared possible until Germany was once again in a position to pay for foreign dairy produce with manufactured goods. This position had ’ been recognised tin London for some considerable time, whereas the whole policy of the New Zealand Government in regard to the primary industries had been one of anticipation of an early return to high prices “with .prosperity just round the corner.” Had this diagnosis proved correct, the exchange depreciation to '45 per cent, would have been justifiable, but, as a long-term measure, it had several serious defects. It should be replaced by a guaranteed minimurii price, which would enable the efficient farmer to carry on. The British Manufacturer. ' > Tb.c main objection to the high exchange, apparently overlooked, by the commission, was that it penalised the British manufacturer to the extent of preventing this country honourably carrying out the Ottawa Agreement. Further, it raised many internal costs and prevented a further fall in the price of goods, and it had proved to be unfair in its operation, as it paid a big bonus to the farmer when prices were high, and a small bonus when prices were low. If butter were 1/- per lb., the exchange would be worth 3d., but wlien butter fell to 6d., the exchange was worth only lid. "The elaborate reasons for not paying a subsidy, as set out jn the report, are not convincing,” said Mr. Goodfellow. "The British Government cannot object to a subsidy payment, as Britain has adopted it.” The commission’s scheme for providing regional restrictions on butter sales was characterised by Mr. Goodfellow as an unwarranted Interference with trade. He said that Waikato butter was not to be allowed to go to Wellington, and a contract of several years’ standing, with many years to run, was to be arbitrarily cancelled. The value of the butter yet to be delivered under this contract would probably exceed £1,009,000. It wits like preventing, say, the boot and clothing manufacturers of Wellington from sending their goods to Auckland, and vice versa. The commission’s suggestion that pat butter should not be put on the British market because Denmark had found it to be unsatisfactory was an unfortunate conclusion, and rather absurd in view of the experience of others. The obvious reason why pats were withdrawn was that Danish butter was made for a quick consumption. On the other hand, New Zealand butter was an excellent keeping butter, and, for that reason, it was very suitable for the pat trade, as many merchapts had already discovered.

Inquiry Into Marketing. The commission suggests that a delegation should be sent to London to inquire into marketing, and to ascertain from the British Government how far they were going in the matter of agriculture. There was no need to send another delegation to London. All the information was available in New Zealand, and this question had already been answered by Major W. Elliot, British Minister of Agriculture, in stating that he was moving toward stabilisation of the agricultural posi tion and a reasonable expansion in the production of food. It was suggested that, after obtaining the information, the British Government should be asked to arrange for a, conference of re presentatives of all dairying countries which supply the British market, both Empire and foreign. This was about the most stupid suggestion that had yet been made, and New Zealand would be well advised to allow the British Government, which had a favourable trade balance with these countries, to handle all such negotiations. Referring to the Mortgage Corporation plan, Mr. Goodfellow said that he was of the opinion that no system in any country was -better than that of the New Zealand Advances to Settlers Department. It borrowed at lowest rates and spread repayment of interest and capital over 364 years. If this department were supplied with ample funds, and were allowed to advance up to 70 per cent, of to-day’s values, the mortgage situation would rapidly solve itself without further Government interference. In the past, 1 per cent, redemption had been required, but this should be reduced to 4 per cent, so as to ease the gross amount which the farmer would require to pay. Money could then be lent at 4 per cent., including redemption of 4 per cent. Further, ample money would bo available for long term security, if the Government would make mortgages free of income tax for a definite period of years.

‘•The Mortgage Corporation idea ap jiears to be designed to clean up the national balance-sheet by transferring a lot of bad and doubtful loans to a new account, which would then be gradually written down over a long period of years,” said Mr. Goodfellow “The huge loss on loans made by the Government, due to political control, is only further evidence of the failure of Government in business,” :