QUOTA PROBLEM

Evening Post, Volume CXV, Issue 130, 5 June 1933, Page 12

QUOTA PROBLEM

DAIRY BOARD'S STAND

ACTING-CHAIRMAN EXPLAINS

Mr. W. Dynes Fulton, acting-chairman of the New Zealand Dairy Produce Control Board, gave to the Dunedin dairy conference a full explanation of the attitude of the board on the question of a British quota or restriction of exports of dairy produce from New Zealand to the United Kingdom. He first described the impositions of quotas by France and Germany on imports—additional to high tariffs—and the resultant diversion of Danish supplies of butter from Continental markets to that- of Great Britain. The result of the action of France and Germany, especially the latter, the largest importer had been that 17,000 tons of Daish butter had to find another market. No other market than Britain had been open to her. Danish butter exports, 'in tons, had been: — To 1930. 1931. 1932. United Kingdom 113,700 121,300 127,250 Germany 40,950 29,800 13,250 Belgium 3,900 6,700 9,950 Switzerland ... 3,000 5,400 1,950 France -2,300 4,850 2,000 Other countries . 1,500 900 1,350 166,350 168,950 155,750 While Danish exports to the United Kingdom showed an increase the total exports had declined. It was also of interest to note that, taking all European countries together, Danish exports showed a decline over the past three years. They were as follows: — Tons. 1930 328,047 1931 310,100 1932 261,096 This additional weight of Danish butter on the British market had greatly augmented normal supplies of butter from all sources. OTTAWA AGREEMENT. Mr. Dynes Fulton then reviewed proceedings at the Ottawa Conference in so far as they related to exports of New Zealand dairy produce to the British markets. It had been evident to New Zealand delegates, he said, that unless some restriction was placed on the flood of foreign supplies entering the United Kingdom no tariff could save prices from falling. Mr. William Goodfellow, who had represented the New Zealand dairy industry at the Ottawa Conference, had submitted proposals under which the United Kingdom would restrict her imports of butter to 400,000 tons. Supplies from the Dominions would be unrestricted, and foreign supplies would be admitted only to such an amount as would make, up the 400,000 tons. This proposal had been unacceptable to the British Government, which had agreed to a tariff on foreign dairy produce of 15s per cwt on butter and 15 per cent, on cheese. Between the date of the Ottawa Conference and tho end of 1932, prices for dairy produce had dropped, heavily (butter from 107s to 84s). In view of tho seriousness of the position the board's London office had submitted an analysis of the 1933 prospects to the High Commissioner for New Zealand (Sir Thomas Wilford), in which it had been submitted that foreign imports should be restricted to 75 per cent, of their 1932 level. Mr. Dynes Fulton then entered fully into the discussions on the restriction proposals between the representatives of the New Zealand Government arid the British Government in London and between the Dominion Government and the board in New Zealand, and he read correspondence on the subject, references to which have already been made iv the New Zealand Press. . ' . THE COATES PAMPHLET. ' Next Mr. Coates's pamphlet, "The Butter Quota, or a Free Market," was criticised by Mr. Dynes Fulton. He outlined its contents to the conference and described the broadcasting of Mr. Coates's opinion on the'subject as "a breach of Mr. Coates's understanding with the board. The market had settled down, and indeed improved, after the board had definitely made its decision not to restrict, but the publication of this pamphlet had unsettled the whole position again. Mr. Coates's statement was a very specious one, but its conclusions were lamentably weak for. three fundamental reasons:— "(1) It assumed the world economic situation was never going to improve on what it was at present, and that world conditions would be unchanged. "(2) It assumed that the reduction of dairy production in New Zealand was a simple matter. "(3) It ignored the competition between New Zealand butter and margarine in the United Kingdom market." Mr. Dynes Fulton said he had already asked Mr. Coates how he reconciled advocacy of restriction with the adoption of a small-farm plan. If restriction of production was necessary, why add to that production? DAIRY BOARD'S PROPOSALS. In view of the misapprehension that existed in the public mind as to what the quota meant to a country in New Zealand's peculiar economic position, the act-ing-chairman said he had considered it necessary to make a statement on the matter. This had been circulated to all factories. The response had been most gratifying, and he appreciated the support he had received from the bulk of the dairy factories. He pointed out that the quota was to apply not only to dairy produce, but also to fruit and other primary products. Meat was already under-a quota. If the quantity of butter imported into the United Kingdom were restricted and the price raised, there would be an immediate swing oSrer consumption from butter to margarine. Competent authorities were definitely opposed to the quota, doubting both its economic necessity and also whether it would actually raise prices materially. s Should the Economic Conference be a success, and he believed it must be, and when the world emerged somewhat from its present abnormal depression, the apparent excess production would be speedily absorbed at remunerative prices. Even at present there was relatively little sutecumulation of' stocks. Restriction of exports would mean the flooding of the local market, rendering it absolutely unprofitable. Even were this controlled, farmers would make their own butter and endeavour to sell it locally. The control of this envisaged an endless list of rules and regulations. < REDUCTION OF DUTIES. s "You will naturally ask what alternatives we suggest to meet the' present position," Mr. Fulton continued. "In the first place let me say that I .deeply appreciate the difficult position of the British farmer, but I submit that restrictions and quotas will not lead to any permanent improvement of the position. History indicates that these impositions do not bring about any real improvement. ' "I would sum up our proposals as "(1)' Fulfil our side of the Ottawa agreements by reducing tariffs on British goods. "(2) Improve the quality of our butter and more especially our cheese. _ "(3) Advertise more extensively, in the British market. . . . "(4) Promote greater consumption ot cheese and milk in New Zealand. "(5) Endeavour to develop new markets, .wherever possible. _ "The whole question of tarifts is one of trade for trade, and if we show we are in earnest about taking British goods, Britain will take all our prOcluee." The following resolution was carried:— "This conference strongly affirms the action of the Dairy Control Board in its opposition to the suggested restriction of our exports to Britain." The Australian Mutual Provident Society has a total ■ holding in Australian Commonwealth loans of more than £23,000,000, or a total of more than £48,000,000 in Government and other public securities spread over the Commonwealth, Great Britain, the Australian States, New Zealand, and other dominions. Heavy damage was done to British telephone and telegraph lines by the blizzard in- February. About 1600 poles were smashed, 45,000 subscribers' lines were disconnected, and 450 exchanges put out of action. The cost will probably amount to £200,000,