THE LAND AND ITS PRODUCTS

Evening Post, Volume CXIX, Issue 33, 8 February 1935, Page 44 (Supplement)

THE LAND AND ITS PRODUCTS

UNTIL quite recent times, New Zealand's economy was based on the assumption that quality and competitive price were the only keys to the free trade market of the United Kingdom, and that so long as New Zealand could sell her primary products at world prices (having regard to quality) there was no practical limit to their sale and therefore to the expansion of her primary industries. Only yesterday or the day before, New Zealand, when looking into future of her export trade, anticipated that at the very least she would enjoy, in the United Kingdom, an open market. In. New Zealand's view, favourable United Kingdom tariffs were possible, an unfavourable tariff"was most unlikely, and a quantitative restriction, or "quota," was unheard of. But the Elliot policy in a very short time showed that this assumption was by no means an axiom, and that a British quota policy limiting the quantity of primary products admitted, irrespective of their competitive merits, was far from "unthinkable." " The Elliot quantitative restriction campaign suddenly faced a country that has, in less than fifteen years, doubled the number of its dairy cows. About two million New Zealand cows send oversea more than a quarter of the United Kingdom's imported butter and more than three-fifths of its cheese. But now the claims of the United Kingdom's own 2,763,000 cows are heard in' Westminster. It maybe pointed out here that not all New Zealand's staple' exports are confined to the United Kingdom market in the same degree as are dairy produce, lamb, and mutton. Wool, one of the oldest and always the greatest- of bur exports, sells in many countries; but although the wool exporters do not place^.all their eggs in. the British market basket, the events of 1934 have shown how disturbing, to wool prices world-shaking events in the older world, political and economic, can be. At the moment, no ■ export seems to be safe "economic nationalism." ■'■•!•; UNFORESEEN LIMITATION. 'Until the Elliot policy, such growth,as had occurred in New Zealand's imports from and exports to foreign countries had not disturbed New Zealand's faith in a practically unlimited British market. It was tacitly accepted that New Zealand's limit in the. way of primary producing—and therefore of importing and borrowing—was simply the limit to which she could improve and increase her pastures. In short, it was accepted that, given production at a competitive level, the selling (except, of course, the "middleman" issue) would look after itself. The gross factor was believed to be£ the determining factor. It is only a few years ago'that the dairying board's selling policy, in its impact on Tooley Street, caused a deep commotion, yet a significant fact is that 'throughout that controversy such a thing as 'quantitative restriction was never mentioned.

'""■ The prolonged dispute concerning the board and the position of "middlemen" in the dairying trade left undisturbed the then current idea that no.danger lurked in the one-market charjacter of New Zealand's policy. Seven or eight 'years ago many: of our farmers distrusted Tooley Street; none feared Downing Street. Did not the Empire bond and the creditor-debtor

relationship imply an essential reciprocity, almost a guarantee of unrestricted trade? Of course, it was not doubted that Britain had as much right to impose a tariff as had anyone else. But some writer had observed that "trade follows the flag"; another had written that "trade follows the mortgage." Honour and interest seemed to combine in an Anglo-New Zealand commercial exchange—at prices not too dear for the British worker. Given a competitive article, the "open door" was taken for granted. FAITH IN BRITISH MARKET. Another reason for believing in the permanency of the British open market was its venerable record -of nigh a century. New Zealand's faith in grass (that is, in wool, meat, butter, and cheese) as the thing-that buys the imports and pays the interest, her faith in a secure British market was fortified by the pro- . 'longed dominance of consumer interests in British policy. So long as the New Zealand export could hold its own against world competition in the world's only big untariffed consumers' market, the possibility that British policy would swing back about a century to any form~of agricultural protection (whether by tariff or quota) was not weighed. Therefore,, when foreign countries gradually reduced their imports from the •United Kingdom, and the British Government itself took up importrestriction in the light of a new economic and military situation, the result to New Zealand was dramatic. It created a new angle of approach to New Zealand's policy of pastoral ex- • pansion, to her standard of living, and to her capital position (including external and internal debt and land values). It erected a new selling problem, with an increasing willingness to sell to foreign countries —who mostly replied , with a decreasing readiness to buy. WeddePs import figures of the United King-, dom (excluding the Irish Free State) for the year ended June 30, 1933, show that New Zealand supplied more than a quarter (in fact, nearly 28 per cent.) of Britain's imported butter, and1 nearly-two^thirds (in fact, 64 per. cent.) of Britain's imported cheese, besides great proportions of. lamb and mutton. ■■.■"■TKat wonderful' position was built up in.preOttawatimes without a friendly tariff in the United Kingdom market, and without any exportboasting measure at the New Zealand' end—without "any Paterson Plan such as Australia initiated years ago to aid,her butter export-The Paterson Plan has now been succeeded in Australia by a statutory plan to aid export. Note that in .1928 Australia's exports of butter to the: United Kingdom;were 33,582 tons and New Zealand's we're 67,343 tons; but; in 1933 (five years later) \ Australia exported 97,447 tons to the United : Kingdom, New Zealand 118,604 tons. In five years, according to Weddel, Australia's exports of butter to the United Kingdom had almost trebled. All this export of meat and dairy produce to the United Kingdom is due to refrigeration,- ---• which began in the eighties, and enabled New i Zealand to add foodstuffs to raw materials as a means of paying her way overseas. : Roughly, this country's export , trade may !be divided into/two periods—refrigeration (beginning with the eighties) and pre-refrigeration. • Facts stated.above raise the question whether

we are now at the beginning of a new period, ; the keynote of which will be a permanent limitation of the United Kingdom market —a period of world trade for New Zealand instead of merely United Kingdom trade. At the time of writing the Elliot policy, and general economic nationalism, are both fluid; permanent trends cannot yet be foreseen. The^ question is far too big, its collateral issues too^immense, to dogmatise on in a time of economic stress. But neither can it be ignored. If the policy of the refrigeration period is to be continued; if there is to be an oversea market sufficient to absorb the surplus production of our maximum effort in the way of intensive dairying and lamb-raising; if we are to continue passing from the 1501b butter-fat cow to the 2501b butter-fat cow, and ultimately to the cow of 3001b butter-fat or more; if, in other .words, the determining factor is perfected grassland, and New Zealand is to become in fact "the "Empire's dairy farm" and lamb ranch —in that case the path is more or less familiar. We have been treading it in varying degree ever since refrigeration enabled the sheep to export its meat as well as its fleece, and enabled the cow to send butter and cheese to Britain. With the help of artificial cold in the handling and transport services, the ewe was able to contribute her lamb to the discharge of New Zealand's obligations overseas, and the cow was able to give the milk which Nature in an earlier and less artificial time had intended for the calf. By capitalising the energies of the ■ female animal and by refrigeration, New Zealand interest and imports came to be fairly soundly based. But by following that faith New, Zealand has raised a herd of cows exceeding her own population—a herd that New Zealand's , population in itself does not nearly justify. THE CATTLE POPULATION. A few figures will show how the cow procession has grown since refrigerating, and particularly during the post-war boom and crash. In round figures, the number of New Zealand cows working in the interests of the national economy in 1895 was a quarter of a million; in 1906, half a million; in 1921,.a million; and now the dairy cows- number nearly two millions. Thus they doubled in 1906 (as compared with 1895), doubled again in -1921, and once more they have doubled in less than fifteen years. New Zealand has been growing cows much more quickly than,she has been growing (or importing) people. , She has done that on the as-, sumption that people in the United Kingdom require their milk, or its derivatives. But if Britain is really going to impose a barrier, the ratio of cows to people or of people to cows .in this country will have to be reconsidered. New Zealand may have to import milk-con-sumers from oversea countries in lieu of sending them her milk products—which would be quite a reversal of the "Empire dairy farm" idea 'and a modification of fundamental policy. ■ A new approach to the immigration question, and a new balance between primary and secondary industries in New Zealand, would be connoted. : Two million New Zealand dairy cows marching to the bails night and morning carry in their udders much of the wherewithal to buy New Zealand's share of British goods and to pay the lender. Hitherto it has looked like a;

good arrangement. But what about the United Kingdom's two million (or, rather, 2J mil- ! lion) dairy cows? Are both these herds to be : increased, and in what degree? And what i about Australia's herds? If Britain is not to : be paid either in milk or in meat, how shall she be paid? If the increase in cows (whose market, as : stated above, is mainly the United Kingdom) is checked, it is expected that sheep (whose market for wool is a world market, but whose meat goes mainly to the United Kingdom will increase. Statistical records of half a century or more show that sheep were under three millions in 1861, were twenty millions in 1901, and for a while (in 1930) were over thirty millions. As at April 30, 1934, sheep were estimated at 28,646,222. A VOICE OF AUTHORITY. Looking both backward and forward, the Assistant Director-General of the Department of Agriculture, Mr. A. H. Cockayne, has lately made the memorable statement that if restriction is to be imposed by external circumstances as outlined above, "then it is obvious that, small as we are, there is too much land devoted to the production- of those materials for which in the past we were confident there were un- . limited markets. . . ." He estimates that scientific development could raise New Zealand's dairying area from five million to seven million acres, and that the seven million acres could be made to yield an average of 1401b (perhaps more) of butter-fat per acre (the present average is about 851b), and that New Zealand might produce 500,000 tons of butter instead of the present 170,000 tons. But the question now is whether this policy of complete development of potential'dairying production must give place to a policy of development on selected lands. "Should the attempt be made to further lower the costs of production on land where such can readily .be brought about, and to eliminate from production, for the time being at any irate, land which can be viewed as economically unsound under present conditions?" Leaving the issue as thus summed up by the voice of authority, let us now glance at New Zealand exports in detail, including those that do not rely on refrigeration and which are neither food nor clothing, such as gold, timber, and phormium. • . During the year ended June 30, 1934, only six items in the Government Statistician's export list passed the million mark in New Zealand currency. They were wool,' butter, lamb, cheese,. and mutton (these .five -are all from the sheep or the cow, but, of course, are not the total of sheep and cow products), and gold. -In order of value they were: Wool, £13,287,458; butter, £11,830,070; lamb, £7,358,435; cheese, £4,7.32,089; mutton, £1,398,^09; gold, £1,332,049. No more eloquent comment can be passed upon the times than to say that in 1932-33, ac- : cording to the Government Statistician, an export of 801,633 bales of wool was worth . £6,703,359, and in 1933-34 an export of 822,396 bales of wool was' worth £13,287,458. >In the above list of six leading commodities C the only non-pastoral product is gold. Gold

was discovered at Coromandel in 1852, and Dr. A. S. Thomson ("Story of New Zealand") records that after £1100 worth of gold (300 ounces) had been won at an expense of £2000 in labour, the field was deserted (to be revived with magnificent dividends in the sixties). It was in 1857 that a goldfield was opened, with more result, at Collingwood, Nelson, and Thomson records that "during the year ending December, 1858, £92,104 worth of gold was exported, beside a considerable quantity sent away privately." The Government Year Book records value in export of gold in 1859 at £28,427, but it is possible that other gold found its way oversea in that year. In the sixties and later the' Coromandel-Thames, the Otago, and the West Coast goldfields boomed. The peaks of production in gold mining are indicated by the following export values: — 1866, £2,844,517; 1906, £2,270,904. Observe that forty years separate the peaks. Each of these figures tells its own story; 1866 tells the story of easily-won alluvial gold harvested by small men as well as big in the South Island, and 1906 brings into the picture a quite different factor—northern reef mining plus southern dredging. The company, not the small man, was the gold-getter in the second era; low grade ore mining in Waihi is a big-capital undertaking. In 1919 the gold export of New Zealand was valued at £1,334,406, but, after that, fell continuously below the million mark and down to below the half-million mark. Not by any notable gold discovery, but by the rise in the price of gold, the export figures are improved for the two last recorded years. Reporting, in terms of New Zealand currency, the export of gold for the years ended June 30, "1933 and 1934, the Government Statistician gives the following figures:—l 932,33, 193,9700z, valued at £1,199,002; 1933-34, 172,1970z, £1,322,049. Thus in the latest year gold exported was less in quantity but higher in value. . TIMBER, FLAX, GRAIN. Among other non-pastoral exports timber has a long record, kauri spars being one of New Zealand's earliest exports, but in any one year of the last half-century the value of exported timber (sawn and dressed) has never been above £697,608 (returned as export yalue in 1920). In 1933-34 the value (New Zealand currency) was £239,547. A high light (or, better, a low light) of the limber trade has been the waste of kauri, approaching extinction. Phormium (flax) has a record as old as, or . older than, kauri spars, and has fluctuated 1 amazingly. Taking two years half a century apart, the value of the. phormium export was only £26,285 in 1881 and .only £30,930 in 1931. Yet. in the interim "it was occasionally high, and in three', successive war years the value of phormium exported went well above one million sterling a year. In 1933-34 phormiurr. exported was valued "at £45,448. Thomsor writes' that even in the eighteenth century this New Zealand • plant was being industrially tested in Ireland, France, and New South Wales Phormium is, perhaps, destined to have a bril liant future. Plants producing high-quality cellulose are in great demand today as the resul of the invention of artificial silk and other pro

ducts from dissolved plant tissue, including the übiquitous wrapping material, cellophane, and New Zealand flax may play an important role in this new but already vast industry, as w;ell as in. the manufacture of such rough textiles as woolpacks, and of ropes and cordage. Like other plants, it is no longer confined to its native country; it will grow in many countries, and New Zealand, as a flax producer, will have to meet the rivalry of other lands that succeed in acclimatising and cultivating it on a commercial scale. ! Kauri gum had its highest recorded export value in 1903, £631,102; in 1933-34 it was worth £86,811. In recent years New- Zealand's export commodities have been reinforced by apples and by grass and clover seeds, both of which aim to build by quality. In 1933-34 their export values in New Zealand currency were: Apples^ £723,264; seeds, grass/and clover, £151,045. •-, How many people today realise the place taken by wheat and oats in New Zealand's exports in the eighties and up to. the first couple of years of this century? Grain exports were worth over a million sterling in 1883, 1890, 1900, and 1901. . ; In the last fifty years wheat threshed exceeded ten million bushels in the following five seasons:—lßß2-83, 1891-92, 1898-99, 1921-22, 1932-33. The number of bushels threshed, the number of bushels exported, and the value of the export compare as follows for the last two seasons:—l 932-33, wheat threshed 11,054,972 bushels, wheat exported 705,580 bushels, value exported £88,714; 1933-34, wheat threshed, 9,036,319 bushels, wheat exported 300.240 bushels, value exported £50,145. -. - ' . Oats threshed had a peak year of 21,766,708 bushels in 1902-3, and for thirty years, down to 1914-15, returned generally over ten million bushels. Since then oats have gone the way of the horse. The export in 1932-33 was worth £2065, in 1933-34 only £739. Returning to animal products, the following ' export values are shown by the Government Statistician for 1933-34: Frozen beef £962,145, frozen pork £950,183. Beef is profoundly affected by the developments in chilling. Other items in the Statistician^ list are:— Tallow (which has felt whale oil competition), £487,819; sausage casings, £544,620; skinssheep with wool £652,895, sheep without wool £760,310, calf £235,259, cattle hides £463,982, rabbitskins £254,745, opossum skins £66,457.' The export of pig meat depends largely on . the future of dairying. Pigs in New Zealand ; never exceeded 400,000 till 1923. In 1928 they were 586,898; as at January 31, 1934, they 1 were estimated at 660,387. Frozen pork ex» ■ ported was worth £393,726 in 1932-33, and ; £950,183 in 1933-34. . [ Viewed either in retrospect or in prospect, "' primary industries tell the same story of ups 1 and downs and sudden developments. Their 1 fate today is wrapped up in the question whether 3 there shall continue to be international trade. r If the answer to that question is "Yes," then surely food and raw materials will always have - their price, if. produced competitively and not f over-produced. The internal adjustment waits t on world-factors, the decisive definition of which cannot long be delayed. .