PRIMARY INDUSTRIES

Evening Post, Volume CXXIV, Issue 60, 8 September 1937, Page 14

PRIMARY INDUSTRIES

COSTLY PROTECTION

PROFESSOR COPLAND'S

VIEWS

"Evening Post," September 8,

The general consuming public may not know it, but New Zealand's primary products, through the Customs tariff, enjoy a fainy substantial protection, apart from the advantage they enjoy in the excnange rate on London. For example, butter and cheese, although none may actually be imported, carries a duty of 20 per cent, if of British origin and 45 per cent, if foreign. On foreign cheeses such as gorgonzola, gruyere, limburger, or Edam, which are not made in New Zealand, this duty, plus exchange, makes the importation of these articles from the Continent practically . prohibitive, at the same time limiting the choice of the consumer to New Zealand cheese. Honey carries a duty of 4d per lb, but Id per lb under the British preferential rate. Poultry and meats pay 45 per cent, ad valorem duty under the general tariff and 2i) per cent. British preference and 10 per cent, if Australian. Bacon and hams pay.4d per lb duty and half that duty if coming in under the British preferential rate. Every pound of sausage skins coming into'the country pays a duty of 3d Chaff and hay also pay high duties, if from foreign countries, but free if from British countries. The fruit producer is also heavily protected. Australian canned pineapples pay 50 per cent, duty from, say, Hawaii, and half that duty if from British countries, although New Zealand does not grow pineapples. Duties on other fruits are shown as under:—

Brltlsh\ General, pref. s. d. s. d. Dried apples, per lb 0 4 01 Dried apricots, per lb .... 0 2 tree Peaches, per lb ;... 0 2 Ireo - Fresh apples, per lb 0 1% 0 1 Lemons, per lb 0 2 0 1 Grapes, per lb 0 2 o - Oranges, per lb 0 1 Free Passion fruit , 0 2 0 2 Plum 3 and peaches 0 « « f Tomatoes ° J ° -

Barley for humans, per cental 2 0 - 0 Maize, per cental 2 0 i o Wheat, per cental J.. JJ * JJ Beans and peas, per cental 2 0 2 0 Cherries from Australia pay 2d per lb, from the United States 3d per lb. The list is not complete, but it is sufficient to indicate that the primary producer (to say nothing of exchange; is afforded substantial protection— which the consumer has to pay through the Customs tariff. Duty and exchange are outstanding factors in totting up the cost of living. From the statistical branch of the Customs Department the quantities ot imports of some primary products during 1931 and 1936 have been obtained an% they show that the collection of the above rates of duty on foodstuffs must have been considerable, all contributing to the cost of living.

■"■■■. . ' ' 1933. 1930.. - Butter, -cwt ~ \ .' ■ f Cheese, cwt » . '" Honey, lb , ■ },l] Bacon, lb. . -.MO •« IpX.V:::;:::: »r.»l ' • SSSSSSfShA,"::::: »•«» $™- Grapes, lb 484,06.. oG-,009 |=,f»,-:::::: >.£ >.%;; . Plums, in •• "'.,„ acli) Vegetables, tons .... ... J; 1" <t<n «S SAW .d^ .isi:!S «$$ All these carry duties protecting .the J»e\» Zealand primary producer.

Professor Copland has been discoursing on this subject of advantages eSed by the primary. producer, of Australia trough protection by tariffs arid subsidies of various kinds. In an address which he recently, deliveied in Sydney he specially instanced the costliness of the Australian sugar and butter industries. BURDEN ON THE POOR. "Obviously," Professor Copland explained, "a tax on food is regressive; it falls with greater.relative^.severity, on the poor than the rich., Similarly, the incidence of the home-price for a common foodstuff is regressive. But the fact that the producer has his own organisation to collect the excess proceeds of the home price appears to make all the difference. ' "The consumer, if he knew that he was paying so many pence a pound on butter or sugar, would probably revolt. "By levying direct taxes on income or wealth, or by imposing indirect taxes on other commodities less widely consumed, the Government could make the tax less regressive and reduce the proportion of the cost that enters directly or indirectly into industrial costs. "Moreover, the mere fact that the Government was raising trTe 'bounty fund' through taxation would direct attention to the desirability of keeping the total' cost within reasonable limits. ■-.:.•■■■ > ;

HIGH COST OF BOUNTIES. "Eyery expansion of production for export merely serves to increase the burden on, domestic consumers if the new producers are to receive the same bounty as the old.

"Under the Australian system no attention is given to this problem, except in the case of sugar in Queensland, where efforts are being made to limit the expansion of production. On the contrary, every increase in primary production is welcomed by both State and Federal Governments, whether the commodities produced are imposing additional burdens on consumers or not. "The predominant form in which the bounties are now paid is through the device of the home price operated with the tacit or open approval of Governments by the producers acting in their own interests. This is the application to agriculture of the cartel familiar in heavy industries." Professor Copland also pointed out that the unsheltered exporting industries bore about one-third of the excess costs arising from the device of the home price, and most of it fell upon primary producing industries themtselves.

■STo this extent the home price was a device for robbing Peter to pay Paul It depressed land values in unsheltered export production, whilst raising land values in protected primary, production.