DAIRYING CRISIS

Greymouth Evening Star, 20 April 1934, Page 7

DAIRYING CRISIS

GOVT. TAKES ACTION

COMMISSION OF INQUIRY

[PEB PBESS ASSOCIATION.]

WELLINGTON, April 19. The following statement on the dairy

industry position, announcing Government control, was to-night made by the Prime Minister: — “After giving very full and anxious consideration to the condition of the dairying industry, the Government are impressed by the seriousness of the position; by the uncertain and changing outlook for the future; and, particularly, by the bearing of recent developments on our relations with His Majesty’s Government in the United Kingdom. The New Zealand Government have decided to assume full responsibility of the problem, and all- necessary tseps wil Ibe taken in accordance with this decision. In the face

of the crisis, it is not possible to act effectively with divided and uncertain control. The Government now accept responsibility < definitely and clearly. This is the decision of Cabinet, and it is one that has not

been lightly made. “The difficulties which confront the Dairy Produce Board are appreciated; but the Government realise that the problem is not confined to the dairy industry, and is now extending in other directions, and is raising issues beyond the Board’s jurisdiction. The indication of the policy of the Imperial Government, together with the near approach of the termination of the Ottawa Agreements, justifies the Government’s decision to take such steps as may be deemed advisable in the circumstances.

“The public is aware, generally,

• that, for well over a year, an import- • ant question before the Dominion has • been whether the New Zealand Govi ernment and the dairy industry should • agree to the quantitative regulation of . the exports of dairy produce from New i Zealand to Great Britain. This situation has arisen owing to the glut of dairy produce on the markets of Great ’ Britain, which followed the rapid ex-. ■ Lpansion of production in all foreign ■ and Empire countries, and the closing l of alternative markets by tariff and • other trade barriers imposed by all countries hitherto importing butter and cheese. The resulting serious fall in the price level of dairy produce in Great Britain and its far-reaching influences raised the problem of regulating supplies, so that all producers supplying the United Kingdom markets might be placed in a better position. The launching of the British milk marketing scheme brought in an additional factor, since it was widely felt that this scheme would be endangered should the Government not be free to put into operation their declared policy of regulated markets for overseas dairy produce, LOSS OF GOODWILL. “The New Zealand Government referred the matter to the Dairy Produce Board, which expressed its opinion very definitely against the suggestions of a policy o’f regulation; and the Government accepted, and transmitted the decision to the British Government. The British Government thereupon accepted the situation, and, in order to safeguard the operation of the milk marketing scheme, arranged, recently, for temporary financial advances to the British dairy producers by a subsidy scheme, guaranteeing a fixed [price level for all surplus milk iprocessed. It has become apparent, how- j ever, that the refusal of the dairy industry to negotiate along the lines of the regulation of supplies has given ! rise to a straining of the hitherto- [ friendly relations towards New Zea- j land of a large section of the British 1 public, and to a definite loss of good- ( will towards New Zealand and its ex- , port produce. J “The Government will approach the British Government with a view to re- . storing conditions to a mutually satisfactory basis for the future disposal of our dairying products in the United J Kingdom. In thus acting on behalf of ’ the dairying industry and of the Do- ’ minion, the Government will endeav- ( our to find some aceptablce arrange- . ment. The Government recognise 1 that the British Government’s policy, ‘ as stated in their cablegram of the 1 22nd December last, must override any 1 local considerations, and must be seri- : ously taken notice of. We cannot 1 allow any temporary misunderstanding I to disturb the friendly relations which have always existed between the pro- e ducers of New Zealand and those of ' Great Britain. It will be recalled that £

it was recogised by all parties at Ottawa as a guiding principle that the interests of the British producers should have first consideration on their own markets, and that it was admitted that the interests of Dominion producers should come next in order of preference —i.e., before foreign. “The improvement of the quality and suitability of our products for markets, and the necessary co-ordin-ation of authority, will be the keynote of the policy to be followed. The quality factor must stand first in our considerations, and necessary expenditure in this connection will be a wise investment. In addition to re-open-ing negotiations, as indicated _ above, the Government are of the opinion that urgent action is neecssary in the direction of improvement in the conditions under which dairy industry is operated within, the Dominion, and in the development of addtional markets for its produce. Accordinglyq they have decided to accede to the request of the recent Dairy Conference, and to set up a Royal Commission to report on whatever action may be deemed necessary, whether legislative, regulatory or developmental, and to investigate “inter alia”:

RANGE OF INQUIRY.

(1) The economic administration of :he dairy industry.

(2) The methods and conditions of farms, and factory-production of dairy produce in their relation to quality, as required by the consumer, and any practical improvements in these me thods.

(3) The necessity, or otherwise,, of affording further Governmental assistance in the immediate future for the maintenance and reasonable development of the industry, and the best means by which any Governmental assistance should be afforded.

(4) The economic practicability of the utilisation of raw dairy products for purposes other than the manufacture of the present standard lines of butter and cheese.

(5) Diversification of production of dairy lands.

(6) The organisation and stabilisation of local marketing. (7) The adequacy of the provisions of the Dairy Produce Export Control Act, having regard to the special conditions now affecting the industry in regard to the extension of markets. The Government have already taken considerable steps to negotiate treaties to this end. • This policy will be actively pursued, and the Government is further prepared to co-operate financially with the industry in establishing trade channels, and subsidising new avenues of trade abroad, including shipping, to countries in any part of the world that offer opportunities for the sale of New Zealand produce. Conditions abroad are changing, and a passive marketing policy in the face I of such changes will not meet requirements. The Government will be

prepared to co-operate with the industry in the development of existing and new markets where possibilities exist, and will be prepared to share ini the establishment of such trade organisations as are shown to be necessary.

“The Government will have an investigation made in Great Britain into the causes that have led to the great discrepancy between the prices of New Zealand dairy produce and those of competing countries, and, if found! necessary, will assist the industry in removing them. The whole problem, which has arisen mainly as a result of developments outside of New Zealand, is such as to amount to a crisis, and the Government have, frankly, taken the view that responsibility in tackling it must be accepted by them. The public of New Zealand will realise fully that the situation calls for planned action, and this action will only be effective, and confidence restored, Lt the measures proposed by the Government receive the sympathy and practical help of all concerned directly or indirectly in the conduct of the industry. The Government, therefore, confidently appeal for that co-operation and support without which no policy can be effective. I

BOARD’S PROPOSALS

NEED FOR DRASTIC ACTION

i WELLINGTON, April 19. In its proposals for the rehabilitation of the dairy industry submitted to the Government by the New Zealand Dairy Produce Board, released to-night for publication, the Board states its considered views are that the best plan for the dairy industry is to work on the following lines:— Internal: Pay a subsidy on exports; reduce costs wherever possible; diversify production; cull inferior stock; maintain and improve quality; organise the local market, and stimulate consumption of milk, cream, and cheese on local market. To this end legislation ~is necessary. External: Improve and extend marketing wherever possible, and, do the utmost to negotiate favourable reciprocal trade treaties; regulate shipments; stimulate United Kingdom consumption of New Zealand butter and cheese by advertising; co-operate With the British Milk Marketing Board to stimulate milk consumption in the United kingdom. The Dairy Board', in its report, says regarding rehabilitation proposals that there is, apparently, no plan that can be put forward which will definitely and immediately increase export prices. It submits that only by taking action along the lines suggested by the Dairy Conference can immediate relief be given to dairy farmers. The Board submits that the imposition of quantitative restrictions and tariffs on foodstuffs, in view of an unsatisfied demand in many countries, is wrong in principle. The Board, however, regretfully agrees that if, eventually, no other alternative is offering which will im-r prove next season’s pride level, it must accept the principle of restriction.

The Board is of opinion that if this Dominion is faced with quantitative restrictions, then the problem is of such national importance that it must be dealt with by the Government, and not by any section of primary interests. Such development will require reconstruction of the whole of the Governments policy of land development, and settlement advances, and loans to settlers, rural credit associations, policy of the Department, of Agriculture and every phase of Government activity which tends to increase production of any type of produce.

Further, if one section of primary industry is being restricted, the reflex action must in the very near future bring every class of farmer under review, so far as possible restrictions are concerned. In other words, it would lead to central planning, with public control. The Board admits that there is no easy way out of the present situation with material gain for everyone. It submits that, in the meantime, everything possible should be done to encourage dairy farmers to adopt a more diversified type of farming, so that their revenue might not be wholly dependent upon the direct production of dairy produce. Something might be done to assist the British authorities in their efforts to increase the consumption of milk. If the imports of dairy produce into Great Britain must be restricted, then every effort must be made to have it made applicable to the importation of all edible fats, as well as raw material for the manufacture of margarine. Consideration must be given to the position in every country, and in particular to .those countries enjoying high prices in restricted' markets and any other privileges. MR POLSON’S ACCEPTANCE. STRATFORD, April 20. Addressing a large meeting of farmers at Whangamomona, Mr Polson endorsed the Government’s decision to appoint a Royal Commission to examine the whole economics of the dairy industry, internallv and externally, which the Farmers’ Union, including all sections of the organisation, unanimously asked for. He agreed with the Government, that the problem to-day raised issues beyond the jurisdiction of the Dairy Board. The quota involved a wide question of Imperial Policy, and it seemed to him that, just as it was necessary sometimes to sacrifice a limb to save the tree, some unpleasant regulation of our major industry may be forced upon us, not merely in the interests of the farmers of Britain, but in the interests of the nation. It was unpleasant to think of it, but the fact must be faced that Great Britain was no longer invulnerable. The command of the seas, even if it were retained, was not to-day sufficient to maintain the policy of isolation, and alliances were necessary.

Speaking without specific knowledge, Mr Polson said that the major policy of the British Empire may necessitate international agreements, which would involve serious alteration

[in the Dominion plans of production. The proposed order of reference of the Royal Commission covered the whole field. He thought that the Government’s policy was bold and courageous.

Asked to explain the attitude of the Auckland Farmers’ Union, Mr Polson said that he could not understand it,

as the Auckland delegates to the Dominion Executive endorsed the ddr mand for a Royal Commission, and, including the Auckland President, had taken part in the deputation to the Government, asking for a Royal Commission.

MANUFACTURERS’ REPLY

CHRISTCHURCH, April 19.

A reply on behalf of the New Zealand Manufacturers’ Federation to Mr W. Goodfellow’s statement that a low tariff policy should be adopted in New Zealand, was made by Mr F. L. Hutchinson.

J “In a blind attempt to avoid the inevitable result of market conditions lat Home, Mr Goodfellow is attack- , tag our industries,’’ said Mr Hutchinson. “He is really hitting at the people of New Zealand.” .Mr Hutchinson said that the contention of Mr J. A. C. Allum, President of the Auckland Manufacturers’ Association, was thoroughly sound. The proposals of Mr Goodfellow and his associates would cost the community very much more than any possible gain to the dairy farmers and to the dairy factories. Mr Goodfellow greatly over-estimated the possible lowering of farm production costs, [were free trade to be established; and he did not realise the extent to which taxation and unemployment would bear upon the farming community if the urban industries were to be destroyed, or made unable to exist except under very low wages and conditions. Mr Hutchinson said that such short-sighted selfishness was probably unequalled in modern historv.

AUSTRALIAN AIM.

SYDNEY, April 19.

Speaking at Grafton, Doctor Earle Page, declared the Australian Country Party must fight for the unrestricted entry of Australian exports into Britain. He said: We must take British imports in return! If our creditors will not take our goods, we cannot pay them our debts.

LIBERAL PRESS COMMENT.

LONDON, April 19

The “Manchester Guardian,” commenting on the New Zealand White Paper, asks: Is it any wonder that New Zealand, the most devoted of the Dominions, should smart under the rebuff, and regard Ottawa as a sham | and a fraud. Britain took two months to devise a formula for the rejection of New Zealand’s offer, with a jumble of Elliotian phrases. When New Zealand tried again, she was put off with a still more cloudy and more evasive answer, about which the only certain thing was that Empire trade must be more restricted, not freer. Is it not strange that Australia, also threatened by Mr Elliott, should be stiffening herself against further concessions in the tariff on British goods? Mr Thomas might as well be frank about it. Previously, he has been merely misleading.

MEAT NEGOTIATIONS.

(Recd. April 20, 10 a.m.) LONDON, April 19

The “Guardian” understands that negotiations are shortly being opened with the Dominions in respect to meat. The Government hopes the Dominions will agree to a percentage restriction, commensurate with supplies at present entering Britain. If the negotiations are successful, Argentine will be approached for a pro-rata increase in the restriction of meat imports. In the Commons, Dr. Burgin, replying to Mr. Herbert Williams, said the imports of foreign beef in March and in the quarter ended March, were lower by seven and two per cent, respctively than in 1932-33, but imports from all sources were three and seven per cent, higher, respectively. This was largely attributable to larger supplies from Empire countries.