The Evening Star THURSDAY, OCTOBER 14, 1920.

Evening Star, Issue 17483, 14 October 1920, Page 4

The Evening Star THURSDAY, OCTOBER 14, 1920.

Our daily bread and butter is now Statesubsidisod. In saying so The Butter we take it for’ granted Subsidy. that the Parliamentary

Butler Commission’s report will be adopted. Tor the most part the general trend of yesterday’s debate was in favor of further relief for the consumer, if a way could be found; and tho Prime Minister, despite the fact that he has to find £600,000 a year extra to enable the Treasury to pay the subsidy, seems quite prepared to fall in line. On the whole he did so with a fair show of grace. There is no reason why he should not. His negotiations with the Home Government during tho war showed him a shrewd and hgr-d bargainer on behalf of the New Zealand dairy producer, but in this case there was no suggestion of interfering with the price which herdowners get for their butter fat. Had the more heroic remedy of an export tax on butter been recommended, we might have seen Mr Massey in quite another vein. He would then have been torn between his devotion to the interests of the primary producer and his passion for office; for it is unquestionable that the recent jump in the price of butter caused angry mutterings, among which revilmgs of the Government were not wanting.' As matters stand, the State will see to it that enough butter for the Dominion’s needs (nearly thirty million pounds a year at a rough guess) will be held back from export. The price will ho on a par with that received for the butter commandeered by the Imperial Government, who have contracted to take all our available supplies at 2s 6d per lb till March 31, 1921, and may probably want to extend this arrangement until September, 1921. In the absence of fuller information, we take it th\t in ensuring that consumers may buy butter at 2s 3d per lb retail the State subsidy amounts to at least 7d par lb, for unless there had been intervention the price over the counter would presumably have at least remained at 2s lOd—for those who were able and willing to pay it. Subsidies often are more a delusion than a reality simply because the State as a whole has to provide the money for the assistance of all the individual members of the State.. We are to he taxed more heavily to help us pay the grocer. But, as Mr Massey says tho taxation to meet this subsidy is to take the form of higher stamp duties, chiefly death duties, the incidence, theoretically, will fall on those best able to bear it—the rich will shoulder some of the burden of tho poor. We make the qualification “theoretically,” because past experience in such readjustments has shown that only an optimist will overlook the likelihood of portion at least of the load being “ passed on ” downward through the strata of society. And an optimist has recently heen defined as a man who will buy from a Jew in the hope of selling at a profit to a Scotsman.

As has been stated, the butter subsidy is expected to amount to £600,000 a year, while the subsidy on the loaf comes to about £450,000. Thus together the bread and butter subsidies will cost the State over £I,OCO,OCO a year, or nearly £1 per head of the population per annum. And yet, subsidy and all, the housewife is paying approximately double for bread and butter what she remembers paying in happy pre-war days. As applied to butter, the purchasing power of the sovereign has fallen to 11s compared with then. But those days are only a memory; and, coming to more recent times, the purchasing power of the sovereign has fallen to 15s 6d in regard to the old and new season’s butter tariffs. In a- producing country such as this the fact is humiliating, more so in regard to butter than to° bread. While we yield to other countries in the matter of wheat production, we pride ourselves as being in the front rank with Denmark as leaders among dairy producing countries. Such being the case, what are the reasons that, contrary to Scripture warning, there is anything in the nature of muzzling the ox that treads the com? Primarily it is because of war’s wastage and a consequent world’s shortage. In part we are making our contribution to a world famine fund. It would perhaps be a consoling thought if we could avoid the strong suspicion that in the process there was no leakage—that the operation of administering relief and gradually rectifying matters did not provide |the opportunity for middlemen to make fat fortunes.. The fact of the Imperial Government handling the whole of our exports does not eliminate that by any means. There is still another consolation; the dwellers in this foremost butter-producing country on earth are not being officially recommended, or economically forced to cat margarine instead of butter. Such an event would have been such a scathing, silent commentary on our administration, such an evidence of bad government, that, metaphorically as well as physically, the people’s gorge would have risen up against it.

Why, it may be asked, should there be any need for the new season butter beim* any dearer at all than the old? The stock answer to that is London parity, to which the natural counter is impose an export tax. This would have been more in accordance with the trend of British practice, for there the wartime experience of the Food Ministry has induced an attitude of abandonment of the subsidy system after trial. In Mew Zealand’s case the imposition of an export tax, according to the evidence put before the committee, would have hit some butter producers 50 hard that they would have had to canyon at a loss. We have not, in general, a great deal of faith in political investigation of the financial results of private business. Generally, such commissions find that profits are most extraordinarily medest, when the public know well, and these running the business know even better, that in many cases they verge on profiteering, to put it mildly. In this case, however, at the very foundation of the industry, there can be found no common basis. Mot only do districts vary, but in the same district adjacent dairy farms run on exactly the same methods -may show financial returns as wide asunder as the poles. Everything hinges on the terms on which the occupier sits on his land. The man who got in on reasonable terms is on clover; the man who paid through the neck is engaged in a perpetual struggle. Steadily-rising world markets induced a boom in land values, which in some cases have advanced faster than what should have been the basis—i.e., the land’s productive capacity, measured in terms of London prices for products. This is proved by the fact that, as the committee reported, many dairy farmers have bought a property, worked it at a loss, and then more than recouped themselves by selling out to a newcomer at a fancy- price. This process cannot go on ad libitum. The dairying industry must not be treated as a counter in "wild land speculation. It must be put on a much sounder basis than t the flimsy props of land sharia and got*

rich-quick adventurers. The Government are in part blameable. They too have paid such high prices to put returned soldiers on dairying land that many of the new tcnanti could not cany on unless they got prices for their butter-fat which would mean the equivalent of 3s per lb for butter in the grocer’s shop—so it is commonly alleged. Tli£ subsidy is only a palliative. Land reform is the real remedy. If the Government had made real efforts in past years to appease the land hunger', the demand would not have sent prices to the present unsafe heights. The present position seems to be that the tendency is to the aggregation rather than the 'subdivision of estates. If so, there could be no more reactionary and harmful threat to this Dominion. The Government have certainly had many harassing tasks to distract their attention, but if they were really in earnest over this vital matter they would not have shut their eyes to a dangerous drift.