DAIRY PRODUCTS

Evening Post, Volume CXV, Issue 39, 16 February 1933, Page 12

DAIRY PRODUCTS

QUOTA PROPOSED

DIFFICULT SITUATION

EARLY CONFERENCE

Although no official information is yet available, it is reliably stated that there will be a radical change in the riear future in the policy adopted by the British Dominions of marketing dairy produce on the English market. Owing to the glut of dairy produce on the British market, prices have shown a steady decline, and the consensus of opinion seems 'to be that, unless some quantitative restriction is placed on the supplies on the Home market, there is no chance of a recovery in the price level. It is considered that the only way out of the difficulty is a quota system, on the lines of the meat agreement, and it is expected that an announcement of arrangements giving effect to this suggestion will be made in a day or two. It will be remembered that during the Ottawa Conference, the Right Hon. J. G. Coates, on behalf of New Zealand, urged that the principle of the quota should govern the importation of nonEmpire products into the Empire markets, but that in no case should the restriction apply to products of the Empire. This course was not acceptable to the Conference, which adopted a scheme for the regulation of the meat supplies from both Empire and foreign sources, and relied on the tariff on foreign dairy produce to regulate the supply of butter, cheese, poultry, eggs, and other milk products on the English market. However, in his speech in reply to the representations of the Dominion delegates, the British Chancellor of the Exchequer (Mr. Neville Chamberlain), hinted at the possibility: of a planned system of importations into Great Britain. He said:— "It is obvious that this Conference cannot deal effectively with the prices of commodities, which are governed by a world market. That must be the task of a world conference. But when we come to consider the commodities which are sold almost exclusively in the sterling market the United Kingdom delegation wish to suggest to their fellowdelegates the advisability of considering the regulation of supply rather than of importation into Great Britain. To form a stable working scheme, it is obviously necessary that all the main sources of supply—Home, Empire, or foreign—must b.e brought into the plan. But it is the view of the United Kingdom delegation that tho British Government could make a valuable, and, indeed, indispensable contribution to the actual working of such a scheme by reason of the fact that they Would be; in a position to control entry into the sole' market for the commodities concerned." . . ■ ■ ■

VOLUNTARY BASIS,

It appears evident that the proposals outlined' iiy Mr. Chamberlain are now taking effect, but they will probably be on a voluntary basis, as under the Ottawa Agreement the Domiiiions have the free entry to the British market for dairy produce for the next three years.

Since the war the importations of dairy-produce into England have steadily increased, and for the last two or three years it has become evident that the Home market is not a bottomless pit. The importations of butter into the United Kingdom from 1926 to 1931 inclusively have been as follows:—

THOUSAND CWTS.

. On the other hand the cheese importations have over the same period shown a slight decrease, but reports to hand indicate that all countries selling dairy produce in the United Kingdom are desirous of marketing greater quantities than ever. On butter the tariff has not affected Denmark and she is still selling as freely as ever. In New Zealand the returns for the first half of the season show, an. increase of 13 per cent, over last Beason, and the Australian producer, who has been sitmulated by a bounty, expects a record year. On top of this the purchasing power in England has declined. It is an axiom in economics that if the supply of necessaries is reduced the price goes up much more than in proportion, and that while there is a glut of supply the price falls very low. Here is the principle of the quota system. Such a scheme restricts the supply, and thus causes a rise in price. The great difficulty which exporting countries will experience under a quota system will be the disposing of their surpluses, but even if these are stored, or even destroyed, the rise in prices on the smaller amount sold should more than compensate for the restriction of sale on the United Kingdom market. This problem will be discussed tomorrow at a conference between the Dairy Produce Control Board and the Government.

.926 .927 .928 .929 .930 .931 1 Foreign. : 3351 3489 3456 3745 3751 4051 Empire. 246S 2329 2657 2653 3070 4000 Totals 5819 5819 6113 6397 6822 8071