QUOTA SYSTEM

Evening Post, Volume CXV, Issue 110, 12 May 1933, Page 8

QUOTA SYSTEM

BRITISH POLICY

OVERSEAS SUPPLIES

CLEAR INTENTION

A clear indication of the trend of BritisH policy in regard to the importations of foodstuffs was given by Mr. Walter Elliot, Minister of Agriculture and Fisheries, in a broadcast speech on pig and bacon marketing. His remarks show clearly that the Home authorities have adopted a policy of regu-_ latlng the supplies of produce coming on,to the English market, and although in this instance his address refers to pigs and bacon only, it must also be remembered that Great Britain has a quota system in operation in respect of meat, and she has the right to Teview the dairy produce agreement made at the Ottawa Conference within two years. At Ottawa a tariff was piaced on foreign dairy produce, but the' Dominions were allowed free access to the British market for three years. In view of Mr. Elliot's announcements and the trade treaties which have been signed with Argentina and Denmark, there is every likelihood of different conditions operating after the termination of the Ottawa pact, and where in his speech Mr. Elliot refers to pigs and bacon, one might in future substitute butter and cheese. '; .. . . ■ "The bacon and ham trade is a worM trade—or, rather, it starts all over the world, though it finishes, in every case, practically, here in Great Britain," stated Mr. Elliot. "I have mentioned some of * the countries supplying our market, but there are many more. The Lithuanians, the Latvians, the Estonians, the Poles, the Russians, are already in the market, and many more are just on the edge. To many of these countries the market here is of vital importance. To Denmark alone, for instance, the trade is worth £21,000,000. It was for this reason that when we decided —the Government and the farmers in Great Britain—to undertake seriously the business of- bacon and ham supply in this country, we realised this could not bo done at short notice or without binding national decisions, but would'have to be the result of longterm policy carefully thought out and brought step by step into operation. WHY MATTER IS URGENT. "There was another reason for attacking the problem this year, and that was the catastrophic drop in the prices of pigs-and pig products which was taking place all last autumn, and, as far as we could see, was likely to go on and intensify, if the Government had not stepped in. There were quantities being hurled upon the market which the market was totally unable to absorb and consume. Last year, imports, excluding lard, rose from a normal level of about 450,000 .tons to the previously unheard-of figure of nearly 625,000 tons —175,000 tons moro pigmeat and no more people working! We arc accustomed in the pig industryto what is called the pig cycle, a period where tho pig populations of the world rise to a maximum every four years and decline again with a corresponding movement of prices. But this cycle appeared to be getting completely out of gear. The numbers were, falling off according to expectation in some countries, but were rising1 abnormally in others; and, as nearly every pig killed for export in the world is landed in Great Britain somo time or- pthcr, it meant that, instead of a rise in prices to compensate the fall, nothing but a further fall was in prospect. This is not a good thing for anybody. It is a catastrophically bad thing for the British farmer. What is more, it is a bad thing for the consumers themselves. You ask me, 'How can it be said that one may buy a thing too cheap?' I answer, that if you are buying anything below replacement value, you are buying it too cheap. Replacement value means the cost of putting back again the thing that you have consumed, plus a reasonable remuneration to the producer for having produced it. At that level, the process of production and sale can go on indefinitely. If the remuneration falls below that, the process is running down, and inevitably, sooner or later, will havo to come to a stop. If it is continued by subsidies from the Government, that means in itself higher taxes, which adds to tho burden on the country as a whole. LOSS ON PRODUCTION. "The wholesale prices of bacon last autumn meant that everywhere in .the world bacon-pigs were being produced at a loss, and that is not a process which can continue for long with any advantago to anyone concerned. And besides, and over and above all this, if prices go to smash, farming will go to smash; and if farming goes to smash, one of the greatest consumers in Great Britain goes to smash; and, above all that, the oldest thing in Great Britain goes to smash. An England and Scotland which were all paved streets and cinemas would not be what we know or what our forefathers knew, or what prosperity would know very long, either. Something, therefore, had to be done about the pig and bacon situation. The Agricultural Marketing Act of 1931 indicated the line of advance. That Act laid the foundation of the reorganisation of agricultural marketing in this country, and made it possible for farmers to get together and to act in organised unity in the modernisation of their marketing methods: The drafting of a nation-wide scheme of marketing reorganisation is no easy, task, and the authors of the Agricultural Marketing Act foresaw that producers might find difficulty in themselves finding the time fln3 money for it. The Act therefore provided that the Minister might appoint a body of five* members, called a Reorganisation Commission, ■ whose duty would be to prepare schemes under the Act for specified products. At the request of the industry, advantage was taken of this provision last April and a Commission, under the Chairmanship of Colonel iane-Fox, was appointed to prepare schemes for regulating the marketing of pigs and of bacon! This Commission reported ■ last October. Their ' recommendations fall into two parts. ■ First, they, made proposals relating to the control of supplies of bacon, whether from overseas or from home sources, coming on to the United Kingdom market. Second, they put forward proposals for the internal reorganisation of the home-bacon-pig rearing and bacon-curing, industries. The first of these raised a question of policy and necessitated a decision and action by the Government: the Govern* ment decided it and the Government took action. They undertook that, if the producers would organise at Home, the Government would see that they were'not swamped out! from abroad. In pursuance of that decision, an arrangement was made with the bacon-supply-ing countries to restrict imports of bacon. • The second of these, home organisation, was the.sole concern of the producers. ESSENTIAL POINT OF PLAN. "The essential point of the whole plan is that the market should be supplied with quantities, not excessive, either'from home or from abroad, to enable a reasonable return to be J)b' tamed, and that the homo producer should contract ahead with the bacon factories so that the housewife, may be sure that, if a Danish or a Lithuanian is kept off the market, she can count on British supply, of equally good

quality, and- at no exaggerated price. People are apt to say, ' AVhat is to be the Government scheme for this, or the Government scheme for that?' a» if everyone was compelled to sit still and wait for a Government department to produce a complete 100 per cent, scheme, and impose it on them. That is not the way we are proceeding. The Government's job is to confine itself to doing what only it can do effectively, and to leave as much as it can to the people whose business it is v The crux of the. market situation here is the stocks on the market., These stocks come from both' home and overseas. The Government alone can control the second source, the imports. It therefore intends by limitation of imports to create, so to speak, a steady foundation of price on which the pig and bacon industry can operate with reasonably; economic prospects. But, upon the' foundation thus created, it is for the home interests concerned—producers and eurers—to complete the structure. This lias to be done by schemes under the Marketing Act; and, in | fact, is being done. I-jhave: in my hand, now, two booklets—-one blue, one green, price 6d each. In the blue booklet is a scheme submitted by the National Farmers' 'Unions of England, and Scotland at Bedford Square, London, for regulating the marketing of bacon-pigs in this country: in the green is a scheme for regulating the marketing of bacon, prepared by the Bacon Curers' Section of the Food Manufacturers, Federation, at Buckingham Gate in London. These are not Government schemes, but schemes voluntarily submitted for approval by representative people in the interests concerned. They will require approval by Parliament,'it is true, but they were originated by the interests concerned, and cannot .come into full operation until a substantial majority of the producers or curers themselves have endorsed them. Thus we see not mere bureaucracy, farming of trading from "Whitehall, but a true combination of effort and action in their' appropriate spheres by Government, producers and curers, respectively. . :