QUOTAS AND POOLS

Dominion, Volume 28, Issue 287, 31 August 1935, Page 10

QUOTAS AND POOLS

Address by Mr. Appleton The questions of quotas and pools were dealt with by Mr. Will Appleton. Independent candidate for the Otaki seat, in an election address given at Ohariu last night. There was an indication that some restrictions on production were to be brought into operation as far as the Dominion was concerned. He pointed out that the restriction schemes, pools and cartels which have come into being within recent years with the idea of obtaining fair prices had not been successful.

In theory a Government might elevate prices to a satisfactory level, establish the output needed to meet the consumption demand, and place an industry on a better footing, but in practice the plan has proved full of difficulties and dangers. The Brazilian coffee scheme collapsed because it was impossible to keep a tight rein on domestic production. The primary cause in the breakdown of these various schemes was the fact that buyers turned to alternative products. This was the major factor in the failure of the rubber restriction plan, and it was inevitable that if the butter ]K>sition was not carefully watched, margarine would be called for. The Chilian nitrate restriction was also defeated by the competition of other products. , Mr. Appleton also quoted the experience of the bacon quota scheme in England. The net effect was to reduce the bacon imports by 33 per cent., but it cost the British consumer just as much money. In practice it has tieen found that the fall in imports has not been compensated for by anything like a corresponding increase in home production, and what has occurred is that the consumer merely gave up eating bacon because it was too costly, but this was not very satisfactory to the British stomach. The Danes were the people who benefited. “In a world hungry for primary products,” said Mr. Appleton, “the idea of restriction of output in a country like New Zealand is only a policy of despair, and any notion of cutting down our production capacity would mean suicide as far as this Dominion is concerned.” The speaker touched on the question of guaranteed prices, and said that this was the bait chosen by the Labour Party in angling for the farmer’s vote. Like the “usehold” land policy of a few years ago, tlie latest scheme was not easy to explain. The sugar scheme of Australia had been quoted by the Labour Party but what was the actual position? Australian consumers had to pay and still have to pay, prices much above competitive rates, and it was estimated that the excess annual cost to the Commonwealth compared with prices ruling in New Zealand, was £4.000,000. The Australian butter scheme had also meant exploiting the consumer so that the consumption per head was considerably lower than in this Dominion, and! the export surplus, which had been increased as a result of the plan, was now a real difficulty. Experience, said Mr. Appleton, had shown that a guaranteed price, even if it could be maintained, was a two-edged weapon. If the producer received an initial advantage it must be at the expense of the consumer as workers should know, and in the long run even the farmer would lose more than he gained, because of the slackening of demand.