LABOUR'S DAIRY POLICY

Evening Post, Volume XCII, Issue 108, 3 November 1926, Page 8

LABOUR'S DAIRY POLICY

THE BOARD'S BACKER

CRITICISM OF MR. COATES'S ACTION

TARIFF PREFERENCE DERIDED,

The following official statement of the New Zealand Labour Party is important not only in its bearing of Labour policy but on the dilemma of the New Zealand Dairy Producers' Board. The Dairy Produce Export Control Act of 1923 was supported by the Labour Party, because it promised to transfer the control of butter and cheese from the speculator to the producer. With the exception of the opposition to the departure from the democratic principle in the method of electing tho , members of the board, the Labour Party ' has consistently upheld the Control ' Board in all their decisions which would assist them to control the produce for the bene"fit of the Dairy farmer. The board's policy .was doubly beneficial in that to the extent to which it cut out speculation it advantaged consumers in Britain, as well as producers in New Zealand; but the latest decision of the board contains elements of danger to producers and consumers, and the position calls for a restatement of the board's policy—so that the Labour Party and the public may know exactly where they stand. The board has now agreed to allow the importers to elect a committee of three, and that this committee, in conference with the Dairy Board's representatives in London, will determine the selling prices of butter and cheese from time to time. Does this mean that unless the prices are in accord with their London wishes Tooley street will not function, or does it mean that the London manager has been regulating the price at so high a level that the Tooley street merchants could not sell, and they have used their powers to bring the board to heell OVERBEARING AND AUTOCRATIC. The action of the Prime Minister in the matter appears to have been overbearing and autocratic. The chairman of the board, Mr. W. Grounds, is in London. Why did Mr. Coates overlook him? Should not the Control Board work through its own chairman rather than'\throueh the Prime Minister, who cannot possibly be fully informed of the • situation. The action of the Prime Minister has seriously jeopardised the board's position in London, and may react detrimentally to the board in New Zealand. The dairy industry in New Zealand is in a very doubtful position. Prices will probably ..go still lower than at present, the ruling prices for land are such that every penny reduction in the price of butter takes many farmers nearer the road to bankruptcy. Some of the critics and some of the enemies of the Dairy Control Board art using the present slump in butter and cheese prices in London to discredit the policy and activities of the board, but a little reflection will show that the board is in no way responsible for the slump, which is due partially to the reduced purchasing power owing to industrial trouble in Great Briain, and chiefly to the operations of speculators who held up supplies prior to the introduction of absolute control. Under th,e powers of the Dairy Control Export Act the board assumed control of export of dairy produce from New Zealand on Ist September last, and at the time of writing (30th October), there are only 100 boxes of butter and 2779 crates of cheese in London under the control of the board. SPECULATORS ORGANISING. Speculators have been organising for past twelve months, and the present slump is almost entirely due to their manipulation of stocks in both New Zealand and London. On 31st March last the value of the stocks of butter held in New Zealand exceeded the stocks held at 31st March of last year by approximately £1,000,----000. This butter, together with the butter held in Londonj has been apparently thrown on to the market irrespective of demand. Taking the normal run of the London market the price for New Zealand butter rules high between July and De-, cembcr. The average price in 1924-25* season in July to December, 1924, 207s 9d—January to July, 1925, 172s 9d— and the speculators have apparently held up supplies hoping to reap the benefit of the high prices ruling during the short supply period, but the high prices period never came, and New Zealand's new season's supplies were drawing near. The speculator evidently saw the possibilities of heavy losses, and started to swamp the market, the result is that not only the speculators, but the New Zealand farmer will have to pay part of the price of this speculation. It cannot be too strongly emphasised that the present slump in prices is due entirely to private speculators, and is not in any_ way due to the policy of the Control Board. ABSOLUTE CONTROL IMP BRATIVE. The large scale marketing system which is coming into operation in all countries renders it imperative that the country shall be the unit instead of individuals as in tho past. The efficiency of the Danish marketing system has been quoted the world ever, and despite statements to the contrary, the method adopted ensures control of supplies for the London market. The Russian Government controls the export of all produce. In Australia, Canada, America, and the majority of other countries, organisations are operating to control export not only of dairy produce, but wheat, meat, and other primary productions, and if the dairy farmers of New Zealand are to effectively compete with these forces it is essential that the whole of the industry shall act as a unit —arid to do this requires a control organisation with sufficient power to act when necessary. Outside complete control by the State, the Labour Party believes the constitution of tho Dairy Export Control Board to be in the best interZest of the people of the Dominion. The twelve members of the board are fully acquainted with the industry, nine are elected by the producers, two are appointed by the Government, and one by the merchant and proprietary interests. The board has decided to control export to North America and Great Britain. This decision was mads twelve months ago. It was endorsed early in the present year by the largest meeting of dairy farmers ever held in the Dominion. It has faced all types of criticism and misrepresentation by opponents —and in spite of this control became operative in New Zealard on Ist September last. If the board uses its power wisely it has a.unique opportunity of making the country the efficient unit in the marketing of its primary produce. The board with its powers is the most potent factor in the life of the dairy farmer. For good or ill it controls his future. The need for wisdom and foresight Is illustrated by tho fact that we have a comparatively limited market. Ninety-two and a half per cent, of our cheese is consumed by our kinsmen in Great Britain. The retention and extension cf the British market is dependent on the

resources of the board being used to promote good quality at economic prices. In addition, however, to quality and price there are other factors. Price is closely connected with wages in Great Britain. The prosperity of the New Zealand dairy farmer is dependent on cheese and butter consumers in Great Britain. The consumption of butter and cheese is detci-mined by the wages paid. Low wages mean reduced demand. Reduced demand means lower prices. FOOD IMPORTING BOARD IN GREAT BRITAIN. One method suggested whereby demand and prices could be stabilised and a definite market retained is by the establishment in Great Britain of a Pood Importing Board. This board would contract with the Dominions for the supply of wheat, meat, butter, cheese, etc. These contracts could have a currency of from three to five years. The organisation of such a board and the placing of the contracts would need much care, but is urgently necessary in that the time is coming when steps will have to be taken to secure the food supplies of the Old Country. If the Food Importing Board in Britain contracted with the New Zealand Dairy Control Board to take the Dominion output up to a named quantity for a period of, say, five years, it could not be other than beneficial to both countries. Proposals on the above lines were considered by the last conference of the British Labour Party, when the following resolutions were carried, on the motion of the Hon. J. R. Clynes, M.P.:— "This conference is of opinion that the Government should institute: (a) Bulk purchase of food supplies and raw materials in the Dominions and elsewhere, either by a Government monopoly or by organisations acting under its control and supervision so as to secure stable prices. (b) The control and cheapening of transport of food supplies to this country. (c) The provision of facilities for overseas producers in the marketing of their produce in this country with a view to stabilising prices and eliminating unnecessary intermediaries. DOMINION AND BRITISH FARMERS. "This conference is of opinion that it is of the greatest importance to secure a larger production from the land and a full use of the produce grown in this country, and calls upon the Government to prepare plans for the ascertainment of food supplies to be expected from this-country, and for the regulation of purchases from the Dominions or from foreign nations, so as to secure a regular market for British produce at stabilised prices. ';<This conference is further of opinion that in order to assist British 'farmers to market their produce financial and other assistance in marketing should be given with a view to dispensing with unnecessary intermediaries. " In New Zealand the placing of such a contract for butter and cheese would: (a) Stabilise the value of dairy land, (b) Abolish the gambling element in our primary production system, and (c) Make the success of dairy farming dependent on getting the maximum quantity of butter-fiat from the land. x IMPERIAL PREFERENCE. " All the Imperial preference in. the world by tariffs, etc., will not help tho Now Zealand primary producer. No sane person would suggest that a duty on butter, cheese, wool, etc., imported into Great Britain will increase consumption—and it is along the line of increased consumption that our hope lies. The Dairy Control Board is the first step in producers' control, which should lead to a more economical, more just, and more sane distribution of our primary produce. The decision of the board to aliocate £20,000 for the advertising of New Zealand dairy produce, if wisely spent, cannot bring anything but good. This would have a peculiar advantage in that it would benefit both producer and consumer,-which is more than can be said for the majority of advertising campaigns. The benefis of co-ordination have already been illustrated by lowered insurance rates and reduced _ shipping freights, and selling commissions. The abolition of speculation at the selling end should eliminate a lot of waste by cutting out the manipulator who lives on fluctuations in prices. PRICE FIXING. There is a lot of humbug talked about price fixing. It appears to be all right for the merchant to fix his price, the shopkeeper to announce the price he will take for his goods, the manufacturer to send out his catalogues .with quotations for Ms manufactures, the dealers to quote from day to day the goods they have on hand —but when the representatives of the organised producers quote the price for the commodity they have for sale, someone shouts "price.fixing," and if you knocked at the office door of the shouter, the chances are that the speculator would open it. The method which the board proposes is the same as that operated in the past. They propose to quote from day to day for the butter and cheese they have on hand —and this quotation would have to be in accord with the demand, or no sale will take place. The only change is that the board quotes the price instead,of Tooley street, and other speculative operators. TOOLEY STREET FIGHTS. Tho transfer of power from the Tooley street operators to the board was bound to raise a storm—and the firms in London engaged in handling butter are not without resources. After a little agitation—they take advantage of the presence of tho Prime Minister in London to bring matters to a head, and a deputation is arranged. No one will question the right of the Prime Minister to receive a deputation from any organisation handling or interested in New Zealand's produce; but unless the London minebcrs of the board were present' at the conference, and unless they were subsequently consulted by the Prime Minister, his action in cabling the New Zealand Board was an unwarrantable slight that should be resented by every dairy farmer. ■ The chairman of the board —Mr. "W. Grounds —is at present in London, and it would appear that any communication to the New Zealand members of the board should have been made either through or by its own chairman. There is a lot of information required, and a statement from the board would clear the air. COURAGEOUS AND CONFIDENT. If the board is courageous and confident enough to carry through its published policy (a policy which has not yet been effectively challenged) it can render a splendid service to the struggling dairy farmer, whose margin between factory cheques and mortgage interest is very small —but if it vacillates between ono policy and another — if it allows its policy to be determined by proprietary companies—if it accepts the interference of a Prime Minister whose little knowledge of finance and marketing is so dangerous, then it has lost its vision—and, like all things of this type, will perish unless the vacil-

lating members get out of the road; but if the board refuses to allow speculators to dictate its policy—or to bo influenced by an ill-informed Minister, then it can go ahead with confidence. We have the means to produce some of the finest butter and checso in the world. Outside the iniquitous cost of land and credit, butter and cheese can be produced in New Zealand as cheap— if not cheaper—as in any other country. The British market under normal conditions is one of tho best in the world. With Canada and Australia we enjoy a privileged position in that market. The objective of the board is to get the produce to tho consumer with tho least possible waste in transmission. If tho present distributors will not act —let the board go a step further and provide, for distribution themselves, and if the present Government will not help them —then the remedy is in the hands of the farmer. A retreat by the board at the present j stage will bring unqualified disaster to I the dairy farmers of tho Dominion— who can only be served by insisting on the board carrying out its published policy, and instructing the board member for their district to act accordingly. .