DAIRY CONTROL TANGLE.

Evening Star, Issue 19634, 13 August 1927, Page 6

DAIRY CONTROL TANGLE.

Tuoit.h tho experiment of absolute control by tho Dairy Export Control Board is being discontinued because of results to the producer the reverse ot what he was promised, there docs not seem to ho any likelihood of the abolition of the board. Tho idea whence it sprang was based on the belief that the holding apart of producer and ultimate consumer was the function performed by the middleman rather than tho bringing of them closer together. That belief has not been eradicated by the thrust the board has made at the middleman and tho recoil from that thrust. Passing opinions given in Parliament, the body finally responsible for the setting up of tho hoard and the bestowal on it of wide arbitrary powers, do not seem to favor the undoing of the legislative work done in 1923. Even those members of Parliament who are most condemnatory of the board’s policy and methods (ami sometimes of its personnel) seem to draw tho line at the total abolition of the board. The producer feels that lie needs some protection against what ho is convinced are preventable losses in the process of marketing. In particular. the board itself, whether in its own interests or as representative of those of tho ' producers, seems to ho firmly convinced that its continuance is essential. This is perhaps quite

natural on the hoard’s part, despite its past performances. But is it consistent with the board’s arguments when it was proceeding step by step to the exercise of its fullest powers? Going back in the history of the industry, there was first of all a free market. Then the board was constituted and it exorcised limited control. After short experience of this it said no real progress towards making middleman’s . profits shrink, by the squeezing ho would undergo through bringing closer producer and consumer on cither side of him, was possible unless absolute control superseded limited control. Finally it was declared that absolute control was futile without price fixation. By tins the board simultaneously reached the apex of its powers and achieved the maximum of harm to the producer. The descent then begun. First price fixing was abandoned, leaving absolute control. Now absolute control is superseded by limited control, and logically the next step should be an entirely free market; for, on the board’s own past declaration, it functions without any effect unless it wields the full powers Parliament granted it. The producer may then well ask of what use it is to maintain and pay a hoard which can do nothing—except perhaps to retard the final settlement of accounts which would have been squared up long ago but for the operation of the pool, and to prevent factories from doing a class of forward business by which greatly needed funds become available at ■ the earliest opportunity. For now. under limited control, selling on the f.o.b. basis lias received a check which was not experienced under the original era of limited control. Such transactions had been begun in respect of the coming season’s early output, and fairly attractive prices were procurable. But they are not to-day obtainable. Buyers have suddenly withdrawn their offers. An essential condition from the purchaser’s point of view is early delivery of the produce, and it is in the board’s power to block this. Under limited control the regulation of shipments is in the board's hands, and the lulo is that the first produce into store is the first to go out of store into the ship. Lack of the right and power to ship the produce lie lias bought as soon as the factory releases it intensifies the risk of markets declining during what may be an indefinite interval until it is too great to bo faced. The board’s rule as to priority of shipment is an excellent one in respect of butter forwarded to store for shipment on the consignment basis. The board lias that justification for adhering to it, but the board thereby adds to the levy payable on f.o.b, shipments a much stronger deterrent to that form of business, of which from the first it has always strongly disapproved, ft looks as though the Home buying linns are now determined to force the issue to a head. The cessation of f.o.b. buying offers is a challenge—a demand for the return to an absolutely free market, which may mean the cxUiu-iion of the hoard in cii'cct, if not also in name. The question is whether this would bo altogether a good riling. The relinquishment of absolute control was followed by a halving of the levy payable by producers, amt presumably the board is correspondingly cutting its expenditure, which hitherto has certainly not been on a cheese-paring scale. Some services are due by. the board to the producer for the present levy, and seemingly those 'ervLes are to comprise only the regulation cl' shipments and advertising. Since flip regulation .of shipments may eliminate one form of business which some producers at least wish to pursue, and which nominally the board sanctions, the board, in justice to itself and to a section of those who elected it, ought to do something to straighten out. a very tangled position which its own backing and filling baa created.