A PLEA FOR REASON

Evening Post, Volume CXV, Issue 105, 6 May 1933, Page 12

A PLEA FOR REASON

Whether we. like the principle or not, it appears inevitable that we shall be compelled, in the near future to consider the application of a quota to our produce in the United Kingdom market. If has been applied already to meat, but so lightly that, coinciding as it did with • a check in production, we have had the benefits without the drawbacks. But if further restrictions are necessary it will not be possible (as the AngloArgentine Trade Convention shows) to make them so largely at the expense of the foreign supplier. In the meantime -we may, by standing on Ottawa Treaty rights, resist the application of a quota to butter. Bui can we hppe that such resistance- will solve the problem of over-supply? The advocates of resistance' do not offer convincing proof. They .have nothing constructive to' suggest — unless We accept the proposal that local, , manufactures should be thrown.to the lions. That is not hopeful. Even if the manufacturers and the Government agreed to the sacrifice, rthe British Government would probably not agree to such a drastic measure of foreign exclusion that the market would recover. And in a little more than two years our treaty right to the free market expires. What shall we do then? The question'should be considered now, anii on the lines followed by Mr. Coates in his memorandum on "A Butter Quota or a Free Market?" The memorandum sets out clearly dangers to which producers cannot safely close their eyes, ll presents a strong,case for the unprejudiced study which Mr. Coates urges. The probable gains and losses, he submits, cannot be- determined by abstract consideration. The possibilities of a quota should be worked out. The correct attitudo is to got down to details and examine the possibilities of tho quota, accepting tho fact that .conditions have changed and that new conditions call for new ways of thinking. The memorandum itself is the strongest argument for open-minded examination of facts. Mr. Coates does not blink the fact that there are strong objections to quantitative regulation, that it will check the extension of farm production'which is the Dominion's settled policy, that it will involve. control and interference with enterprise, and that the disposal of the surplus is a problem yet unsolved. But he argues that the alternatives are hopelessly inadequate to meet the crisis and even more inadequate to deal with the position as it promises to develop in the future. Inaction would be even worse. It would mean a price debacle and ruin for many producers. This would', reduce production just as surely as export restrictions, and il would force the reduction in a ruinous Way. The choice, as the memorandum'presents it, is between reduction under an ordered plan and reduction by chaos from economic causes. If ive chooso to s accept the quota now, and to take a share voluntarily in working out a plan, wo may avoid tho worst of the debacle that otherwisp promises. And oven if it will tie some embarrassment to us to work under, a quota,.it will certainly be a great gain to us if other sources of supply are regulated, and this will not happen unless we, too, accept regulation. Though the memorandum covers more ground than any previous published statement it does not examine in detail all aspects of the quota. For example, the difficulties of quan*

titative regulation are admitted but not analysed. Such regulation carries with it the danger of monopoly, the capitalising of monopoly rights, and *••« enrichment of well-organ-ised producers (we are referring to production generally) at the expense of consumers who are more numerous but lack organised strength. This, however, is a problem for the future, if the quota, now on its trial with other commodities, becomes a permanent feature of economic life. We cannot say that, it will become.permanent or more than temporarily necessary. It may ! be rendered unnecessary by such plans as that of Mr. Keyncs for strengthening purchasing power and by the restoration of world trading capacity. The plea made in Mr. Coates's memorandum is for reasoned examination of the quota as a means of meeting an unprecedented crisis. Mr. Coates has made his plea strongly and he will probably be criticised strongly, perhaps misrepresented, as deserting the farmers in their figlit fof a free market. But if he sees that such a fight will end in a Pyrrhic victory j it is his duty to give warning, and j producers should be grateful for I his courage in doing so. , They, on j their part, should meet the arguments, not with an obstinate refusal to budge, but with a willingness to discover what course will best serve the industry. The problem is one which affects the whole community," not only those directly engaged in butter production.