BULK PURCHASE

Evening Post, Volume CX, Issue 37, 12 August 1930, Page 10

BULK PURCHASE

DISPOSAL OF PRODUCE

EMPIRE ARRANGEMENT

CONFLICTING VIEWS

The proposal that a system of bulkpurchase of primary produce should »c established between the British xnd Dominions Governments received * good deal of consideration by members of the House of Representatives yesterday when the Imperial Conference agenda was under discussion. Opinions on the question differed. The member for Stratford, Mr. Polson, who is also president of the New Zealand Farmers' Union, was more or less sympathetic to the idea because it tended to make for stability of price to the primary producer. Other members were afraid that buffi purchase would result in low prices and standardisation.

The Leader of the Labour -Party (Mr. H. E. Holland)'said -that the principal items at the Conference would be economic rather than political, and the most important of these'would be the proposal for the bulk purchase of the primary products of the Dominions by th« British Government. The desire for such a move had grown rapidly duringthe last seven or eight years, and the British Government had taken the initial steps by establishing the British. Empire Marketing Board and the Imperial Economic Committee. lne Imperial Economic Committee had already made a move for the better marketing of the products -f. the overseas Dominions on the Home markets. In the markets of Australia and New Zealand the United States of America had gained ground at the expense of British industries, in spite oi the tact that Britain was the best buyer ox the primary products of both countries. The balance of trade was heavily i tvith America, and it should be the duty of New Zealand to give preference to British goods wherever possible. As the volume of ouv products increased the need for markets would also increase, and the proposal of bulk purchase deserved most serious consideration, as it'also made for the stabilisation of prices. The Imperial Economic Committee had decided to give preference to Dominion products over foreign, anJ. the Empire Marketing Board lad <nven the Dominions further encouragement by giving grants for research into primary production. A DECLARED POLICY. 'it. was the declared policy of the Labour Government in Britain, said Mr Holland, that arrangements should be made for bulk purchase of the products of the Dominions, ai-u. he was convinced that this was the only system that would enable the farmer to. estimate what return he would get ior his produce. The system would minimise the effects of the middleman, and not only would the producer get a better price, but the consumer wonlo. pay less than he did at the present time. It had been said that there was a danger of the wartime commandeer aneasures being reintrodueed, but the Dominions could safeguard their position by making the contracts terminable at one year's notice. Mr. Holland considered that the Prime Minister, in view of the importance of the proposal, should have asked the different farming interests ■ throughout the Dominion to express their opinions on the matter. ON BROAD NATIONAL LINES. Mr." D. G. Sullivan (Labour, Avon) expressed regTet that the Prime Minister had not seen fit to consult with the producers of the Dominion on the subject of' bulk purchase of produce. It appeared that the Dominion's attitude at the Conference would be a colourless one, and that our voice would be ineffective. The Prime Minister: "We have communicated with the producers and asked their opinion." 'Mr Sullivan said the question was one of vital importance, and was designed to eliminate the speculator and jive direct benefit to the producers. He hoped the Prime Minister would vjew the matter on broad national "Mr. W. Nash (Labour, Hutt) made > plea for the establishment of anjm7>orting board in Great Britain., This would stabilise prices for New Zealand produce and at the same time guarantee a permanent market for our products. The leading economists were of, the opinion that something must be done to stabilise prices, and the importing board was a means towards this end. At the same time a purchasing board could be established to take British v goods in return. A DANGEROUS SYSTEM. Dealing with the subject of prefer«nce, Mr. D. Jones (Reform, Mid-Can-terbury) said the Labour Government at; Home was discussing purchasing in Toulk instead of preferential trade. When he was at Home he had found that Labour's idea of buying in bulk ■was to buy in bulk wherever they could "buy the cheapest. The Imperial Conference of 1923 discussed and produced s. very valuable report on bulk purchase, and they dismissed the question of/subsidies as impracticable. On the method of import licences and stabilisation of prices they stated that a system of prohibition and licence would be required that would involve the establishment of a State put-chase board .and price control. They reported strongly against such a proposal. New Zealand's delegates should ' follow along the linos that had been laid down in previous Conferences, instead of branching out on a new and dangerous system of bulk purchases that might easily be \ery dangerous to the Dominion. 3* was important that they should avoid anything that would create continuous irritation and friction between Great Britain and the Dominions and Foreign Powers and Great Britain. DANGER OP MIDDLEMAN. Mr. W. .T. Poison (Independent, Stratford) regretted that the member for Mid-Canterbury, as chairman of the Meat Board, had taken such a definite stand. Ho would liku to have seen the whole question discussed by the producers. The farmers had v to have stable markets. It seemed to him that the idea of bulk purchase, had uome from the British Labour Party, but if it made for stability he did not care where it came from, as agriculture could no longer bo a haphazard industry in the Dominion. It was an age of combination, and he hoped that the .Prime Minister would investigate' this important question. It was proposed by the British Government to establish a 3?ood Coaneil in order to combat th© trusts, which were having a disastrous effect on the markets. They would never succeed in getting a preference to the extent of getting a taxation on goods, and they ought to investigate any alternative system. A bulk purchase system would have to be inanguratcd with the strongost guarantees. 1$ wouH haw to foe for a term

of years, it would bo necessary to have reasonable notice of cancellation, and stability of prices. During tho war commandeer, the farmer in New Zealand was never more stable.

Mr. Jones: "What about tho land speculation during that period?" Mr. Poison: "We can stop speculation as they have done in other countries. Land speculation depends on a number of other factors. It depends on the price of money and the ease with which it might bo obtained." Mr. Speaker: "Tho honourable^ gentleman is not keeping to the subject."

Mr. Poison said that, when a con-] tract for bulk purchase was terminated, the primary producer was afraid that the trusts and combines might control. If the former could bo assured that the middleman would be rendered ineffective, he would be in favour of any scheme for bulk purchase. EVEN A PART CONTRACT. Mr. H. G. Dickie (Reform, Patea) said it was vital to the farmers that prices should bo stabilised, and any effort towards stability of prices would be welcomed by the New Zealand producers. Things could hardly be worse than they were at present so far as fluctuations were concerned. There was no preference to British . goods going into Great Britain, and the market was liable to bo flooded by goodsfrom foreign countries. Even though they might not arrive at a general bulk-purchase arrangement, he thought it would be advantageous to secure a contract confined to supplies for the Army-and Navy. BRITISH LABOUR IDEALS. Mr. P. Fraser (Labour, Wellington Central) said that the Prime Minister would be doing his duty if he- examined sympathetically the proposals for bulk purchase and tho stabilisation of prices. The statement that the present British Government was desirous of buying in the cheapest market was inaccurate. The policy of the Labour Party in Britain stated that the party would provido facilities for the marketing of overseas produce and for the elimination of tho middleman. The British Labour Government also recognised the beneficial results of interEmpire trade. Britain, .like New Zealand, was prepared to explore other markets, but she was especially keen to organise trade with the Dominions. In Great Britain there was an agitation for Empire Free Trade, which was an utter^ impossibility, but on the other hand'were they to say, like the member for Mid-Canterbury, that nothing could be done for,better organisation between the Mother Country and the Dominions! The people of New Zealand had voted repeatedly in favour of organised marketing in order to eliminate wasteful competition, overlapping expenditure, and the middleman's profit, and he would be sorry if they turned down tho scheme as impracticable without proper investigation.' '

Captain H. M. Rushworth (Country Party, Bay of Islands) said it was not only necessary to stabilise prices, but it was necessary to stabilise costs as well. SCHEME OP DIFFICULTIES. Mr. A. E. Aiisell (Reform, Chalmers) said that New Zealand was under a great debt-to Great Britain-for-what the Dominion had enjoyed in the past, and. he hoped that this country would not attempt to shoulder any of the present burden on to the British taxpayer. The--dangers of standardisation under bulk purchase could not be over-emphasised, because the quality of New Zealand produce was very high. There were many difficulties in the scheme, and one of these was tho law of supply and demand, especially in a contract over a term of years. What would the British consumer say if, after a contract had been made for a term of years, the world's price was to fall? It would then mean a tax on food. They should get as near to the ideal of Empire Free Trade as they could, and if .they could not achieve this they could aim at Empire preference. One of the great arguments; in favour of a preference was that a \igher. standard of wages was enjoyed within the Empire than in the countries of Europe. The whole question was not what New Zealand could'get out of such a scheme, but how could the Dominion help Britain. Owing to the development of motor transport, there had been a drop in the percentage of British importations. That brought them1 to. tho delicate question of pre-. ferenee to Canada, and in this matter they would have to tread carefully. MIDDLEMAN'S PROFITS. Mr. J. T. Hogan (Independent, Rangitikei) said that he had 310 faith in bulk purchase by the Imperial Government, but he had great fajth in co-operation between tho New Zealand producers and the Government, and assistance from the British Government in eliminating much of thes wasto in distribution. There were a number of middlemen in the Old Country making too great a profit out of the Dominion producer. Free trade within the Empire was not practicable owing to the varying wage standards. In India, for instance, they were manufacturing cotton goods and exporting iron ore. SMALL BEGINNING NECESSARY. The Prime Minister (the Hon. G. W. Forbes) said no details had been given in regard to the bulk purchase, and it was difficult to form a definite decision. Mr. Poison said it. was months since bulk purchasing had been mentioned at Home. Mr. Forbes said he remembered it being discussed twenty years ago, but at present there was an absence of details. Whatever happened, there would have to be a small beginning. It had to be remembered that there were big combinations controlling the position at both ends, and there should be a thorough investigation of tho position. At present he did not see how it would be possible for Britain to buy all New Zealand's produce. The present position was not entirely satisfactory, and anything that might bring about an improvement was worthy of inquiry. _^________ — _