PRODUCE & MARKET REPORTS FROM DAY TO DAY

Evening Post, Volume CXI, Issue 71, 25 March 1931, Page 12

PRODUCE & MARKET REPORTS FROM DAY TO DAY

[TRADE WITH CANADA

THE BUTTER DUTY

WHY WAS IT RAISED ?

•Evening Post," 25f.1i March

Stimulated in part, at any rate, by the high duty of S cents or 4d per pound mi butter from New Zealand, Canadian dairy farmers liave substantially increased their production of butter. This is shown in a letter just received in Wellington from Dr. J-. A. Kuddiek, Chief of the Department of Agriculture, in Ottawa. Writing on 19th February, Dr. Kuddick said precise figures had not then been received, but dairy production in the prairie 'provinces "this winter" was increased from oO per cent, to 70 per cent, over that of last winter. Ho had sufficient information to hand, however, to estimate thai the increase in Canadian butter production in 1930 will be about 10 million pounds over ]020, and added: "It is freely predicted that in another year or so we shall have sufficient butter for our own requirements. HIGHEST IN THE WORLD. "At present, the butter market in Canada is the highest of any in the world." Dr. Ruddick continued: "The creameries are receiving about 32 cents (Is 4d) for current production. "Some Australian and New Zealand butter is now being imported from London. On shipments which orginato there the full duty of 8 cents (4d) per pound is paid, but there are some shipments with through bills of lading from Australia, which will come under the trade agreement at 1 cent (%d) per pound, but, subject to the arvangement made between the Minister ot Markets for Australia and the Canadian Government, this butter is not being put on the market at less than 32 cents (Is 4d). . , "Business generally is very quiet, although . there is considerable work being done in the construction line, under the relief work of the Federal Government nf 20,000,000 dollars (£4,000,000). Take it on the whole, it looks as though Canada was in about as good a position as any other country, and better than some. According <o reports, the conditions in the Middle West and Southern States arc very serious, owing to the extreme drought which still prevails." A LOST TRADE. New Zealand's excellent trade with Canada is now practically extinct. For the period Ist August to 28th February this year it amounted to 1439 tons, as compared with 16,676 tons for the corresponding part of the season 1929-30. The position is regrettable for dairy farmers ot this Dominion, who found the Canadian butter trade a valuable second string. But they are not alone in deploring the loss of the market. On general grounds the ''Financial Post of Toronto deplores the estrangement (if the term will pass) between the two Dominions attributable to this S cents duty on butter from New Zealand. In a letter to the editor of the "Evening Post" the Toronto journal states, "There are many business men in Canada who feel that if Canada and New Zealand were to make a serious attempt to iron out the trade problems between the two f-oimtries that a treaty satisfactory to both nations could be worked out. Canadian manufacturers are anxious to retain their hold in the New Zealand market. At the same time, they feel that Canada is in a position to absorb each year n considerable quantity of New Zealand butter and other commodities." HAS OTTAWA BUNGLED? The "Financial Post" devotes a leading article to the subject, in which it describes the duty on New Zealand butter as a "mystery." Why the duty was raised, the journal professes to be unable to explain. But it remarks that Canada has been producing less butter than it conBumes necessitating importations during winter months. "Canadian dairymen did not object to the importations; rather they were inclined to feel that the deficit in home production worked in their favour, for it tended to establish a higher level of prices than would have prevailed if Canada had a surplus production and-was forced to export butter. Under these circumstances they feared that the export price would also fix the domestic price." But dairymen agitated for an increase in duty and got, it, the Mackenzie King Government undertaking to increase the duty to 4 -cents per pound. Then Mr. Bennett, the present Prime Minister, who had won several seals in dairy constituencies, promised to look after the dairy interests. But, the "Financial Post" observes, "The dairymen did not ask for an 8 cent duty; some of them may have wanted it, but officially they did not." The president of the National Council informed the journal quoted that a duty of 4 cents per pound was not wanted, because it was recognised that such a tariff rate would so stimulate production as_ to. provide a surplus for export, which was against the interests of the industry. Mr. Bennett, however, put on the duty of 8 rents. This had irritated New Zealand Government officials, and diverted New Zealand importers from Canadian goods "because they find the sales resistance high in the case of any product from this country." The "Financial Post in the best interests of both Dominions.urges the Ministers to get together in. an open mind. In the absence of evidence that the 8 cent duty was needed, that a genuine compromise on the matter was ever seriously attempted," Canadian business men will continue to hold the view that New Zealand trade has been bungled by Ottawa."