GLUTTED MARKET

Evening Post, Volume CXVI, Issue 60, 12 March 1934, Page 9

GLUTTED MARKET

DAIRY PRODUCE

POSITION OF INDUSTRY

BRITISH POLICY

The paramount economic and political problem facing New Zealand at the ' present time is the plight of the dairy industry. Currehqy depreciation, subsidies, and other forms of assistance have failed to cope with the position adequately. The;- have been more than offset by the depressed state of the United Kingdom market—the only market into which New Zealand has free entry—and unless .other steps are taken to deal with the situation there is a danger of a serious fall in production in future seasons. The gap between costs and prices continues to exist, and no industry can carry on indefinitely in such circumstances. Roughly speaking New Zealand sends 80 per cent, of her dairy produce overseas, the figures for butter and cheese being:— Consumed locally. Exported, per cent, per cent; . Butter : '... 23.2 76.8 Cheese 5.5 94.5 Of the 2,185,545ewt of butter exported in 1932 (the last figures given in the Official.Year Book.), 2,156,127cwt was marketed In the United Kingdom, and for the same/period the United Kingdom took 1,758,989cwt of cheese out- of a total export of 1,790,431ewt. These figures show conclusively the absolute dependence of New Zealand on the British market, and the price level at Home is an infallible index of the position of the dairy farmer in the Dominion. lii spite of the steady iuerease in the volume of exports of butter and cheese during the past few years, the aggregate price for these products has not been maintained,' and warnings have been given by authorities in Great Britain that unless there is some regulation of supplies coming on to the United Kingdom market, there Aau bo no future improvement in the] price level on that market. Th© following tables give the exports of butter and cheese in domestic values and quantities for the five years ended June 30, 1933 (Official Year Book statistics): — BUTTER.

,1932-33 4,508,14S 1,919,155 INCREASING-OUTPUT. New Zealand is not the only country that lias been increasing her Output. Her competitors on the -English market have also been making every effort to offset low prices by increased volume^ and most of them have had assistance from their respective governments. Since 1928 Australia has doubled her exports of butter, and European countries have also made progress in production, although not. to the same extent as th% Dominions. The position was put frankly before the Dominion delegates at the Ottawa Conference, and it was at Ottawa that the British Chancellor of the Exchequer (Mr. Neville Chamberlain) hinted at the possibility of a planned system of importations into the United Kingdom. During the course of his address at the conclusion of the Conference, 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 be brought into the plan. But it is the view of the United Kingdom delegation that the British Government could make a valuable, and, indeed, indispensable contribution to the actual working of such a scheme by reaspn of the fact that they would be in a position to control entry into the sole market for the commodities concerned." ■ .. • . MAJOR. ELLIOT'S POLICY. _ This hint of .British policy, has developed, considerably since the Ottawa: Conference, and the' British Minister of Agriculture (Major Walter Elliot), has repeatedly "stated that if the British farmer is to be saved from economic annihilation both foreign and Empire importations of food I supplies must be subject to quantative regulation. .In.his. opinion, this is the only effective method of raising prices, and he points to the fact that meat prices have already reacted favourably under a system of quotas, whereas the lack of regulation in dairy produce has resulted in a choked and glutted market and depressed values. In other words one may infor from Major Elliot's announcements and policy that Ottawa did the right thing by regulating meat supplies on the Home market and failed to deal effectively with dairy produce by a system of tariffs. He now wants butter and cheese' to be brought into line with beef, mutton, bacon, and pork, and it would appear that in his desires he has the support of the British National Government. His huge scheme for the marketing of liquid milk comes into operation on April 1, and during the course 6f a speech in the House of Commons on was worried over the heavy imports February 22 last, he indicated that he of butter and cheese. • \ Ho explained that there was in Britain a surplus milk supply amounting to 20 per cent, in the winter and 40 per cent, in the spring and summer over liquid requirements, which must find a market in manufactured form such as butter and cheese. Owing to the present heavy cheese and.butter imports and market conditions generally, the prices of these commodities were at a very low level, and there was a danger, unless the Government intervened, that the price structure of the whole milk-production industry of Britain would be undermined. . It is obvious that Britain cannot.allow her farming industry to perish. Upon her farmers she depends for 40 per cent, of her total food supplies. A huge aggregate of capital is involved in British farm lands, and the 4,000,000 farmers form a big market for English industry.' The' British farmer is capable of buying more of the products of British industry than any one of the Dominions, because \he Dominions themselves have substantial industries of their own. It has been pointed out, in fact, that industrial unemployment in the United Kingdom has been in part due to the glut in the wholesale food markets. POSITION "FACING NEW ZEALAND. Unless'there is a change of Government in the meantime, it would appear almost certain, therefore, that New Zealand and the other Dominions will have to fall into line with the British Government's declared policy as soon as the Ottawa Agreement comes to an epdAgfsstogea^-and.this .fact must be

miamuy. & ,1328-29 .... 12,744,902 1929-30 .... 13,022,957 1930-31 .... 9,918,280' 1931-32 .... 10,121,507 1932-33 ..... 10,S97,894 Cwts. 1,567,393 1,817,799 1.S00.232 1,968.686 2,430,234 CHEESE. Value. £ ' 1928-29 .... 6,889,993 1929-30 6,361,329 1930-31 .... 5,226,600 1931-32 ;■-'... 4.570.132 Quantity. Cwts. 1,661,000 . 1,675,906 1,789,871 1.R2S.402