LOCAL CONSUMER TO PAY

Evening Post, Volume CXV, Issue 15, 19 January 1933, Page 8

LOCAL CONSUMER TO PAY

The New Zealand Farmers' Union, the Dairy Produce Control Board, and other interests ' supporting the thinly-disguised^ Paterson . butter plan proposed by Mr. Sinclair are making a mistake. If they are successful they will extract £400,000 a year from butter-consumers in the Dominion, but they will embitter and antagonise the buying public and forfeit a great measure of public sympathy. ;The Sinclair plan is briefly this: by organisation and agreement to eliminate price-cutting in the local sales of butter and substitute therefor, not a price based on export parity, but a price based on what export parity, would be if New Zealand were as near as Denmark to. the English market. The butter producers propose to say: "We how obtain, say, lOd a lb for our exported butter at the New Zealand ports; but if we could sell that butter in England fresh we could get Is. New Zealand has it fresh, so Is is the fair price.' It is a plausible argument, but it is not in accord with commercial practice. It is so far from according with Commercial practice that compulsion in some form,.possibly legislative, will be needed to support it. We do not suggest that fresh butter in.this country is not as good value as fresh butter in England, but the local consumer is entitled to the benefit which he gains from living in a ; primary producing country. He has to suffer disadvantages and he cannot complain. For his manufactured goods he pays the price in the country of manufacture plus .the cost of sending the goods here. Overseas manufacturers do not say: "If New Zealand werenext door to Birmingham the people could buy pur goods at the Birmingham price. To equalise matters we will charge less so that freight, and all marketing costs will not fall on the consumer."

The butter producer is within his rights in endeavouring to eliminate price-cutting, though even in this effort compulsion is not desirable; but the consumer, will be resentful (and with justification) if he is compelled to. provide an extra twopence a pound to -.subsidise export. He will" feel .that, when business goes against him, he is expected to bear it, but when it turns a little to his relief, he is not allowed to reap the benefit. It is reasonable to recall that this very fact is illustrated from the history of the butter market. When export parity rose to unheardof heights in war-time, the Government attempted to ease the lot of the consumer with a butter equalisation fund furnished by an export tax so as to reduce the local price. Mr. Massey, on his return from England, promptly stopped this, insisted that the producer was entitled to export parity all the time, and refunded the export tax from the Consolidated Fund. If that principle were right then it is right now. Nor can an extra twopence be justified by the argument that it is very little, and the consumer can pay it. It is sixpence a week to the average house-, hold, but one cannot fairly state it as "only sixpence a week." There are other pence demanded from the consumer for the wheatgrower and flourmiller. These pence mount up, and the undeniable fact is that the majority of food buyers in New Zealand to-day are compelled to look carefully at every penny. They are not prosperous and they cannot say "only sixpence" with a light heart.