QUOTA PROBLEM

Gisborne Times, Volume LXXX, Issue 12201, 13 March 1934, Page 4

QUOTA PROBLEM

UNEASY DAIRY FARMERS

ONE EFFECT OF RESTRICTION AN UNSALEABLE SURFERS

A contribution to the controversy regarding quotas was "made ,by Mi A. J, Sinclair, of Te Awamutu, at a. conference convened by the South. Auckland Dairy Association and held in Hamilton last week, In his address AH Sinclair said that as a delegate for Ward' 2 he was gladj /the deputation decided to eliminate any reference to the question of monetary reform as a subjects for discussion ' at the Wellington conference. The subject of monetary reform was no more a problem of the dairying inudstry than was the question of the cancellation of war; debts. •

‘‘The most important subject for discussion will be the possible imposition of a quota”, he continued- “ The greatest uneasiness exists in the dairying industry to-day because certain members of the Government appear to be toying with the ideq, of a quota, in the hope that the industry may be induced to accept the inevitable, and agree voluntarily to a restriction of exports to Great Britain. The industry will never do so; if a quota is imposed upon us, we must face it, but Major Elliot will never be able to assure the people of Great Britain that New Zealand voluntarily agreed* to the quota. “Another very serious problem directly arising from the imposition of a quota is the question of our unsaleable surplus. We shall probably be faced with a surplus of 10,000 to 15,000 tons of butter. We have only one possible outlet—namely, our local market. It is possible that butter may have to sell very cheaply in: this country in an attempt to stimulate consumption. I do not believe, however, that a reduction in the retail price on the local market would have any appreciable effect in the re duction of the unsaleable surplus.

‘Tti has often been noted that the consumption of butter in this Dominion does not appreciably increase when the retail price drops from Is 2d to lOd per lb. New Zealanders are the largest butter-eaters in the world to-day, and it is questionable whether we are not very close to the point of saturation so far as our local market is concerned..

“One thing is obvious, however — if the quota leaves us with this prob lem, we cannot allow the present ‘Rafferty 7 rules’ on the local market to continue. We have a disorderly system of selling butter locally at present, and if that continued under the quota system, dairy companies would attempt to sell as. high a proportion of their output- on the local market as possible. Price-cutting would be increased ten-fold. If we have to sell cheap butter in this country, the loss must be spread evenly over the whole industry, and, in my opinion, the problem of the quota and the institution of ail orderly system of selling butter on the local market must go hand in hand. ‘Personally, I do not consider that the unsaleable surplus would be a serious problem after the first year under the quota system. This industry would not follow tile eample of the coffee growers of Brazil, who manufactured! thousands of tons of their commodity and then made a bonfire with it. It is better not to produce at all, and the only solution I see to the quota problem is- the curtailment of production, even if. this involves the compulsory slaughter of the low-grade cows in our dairy herds. It is an extremely unpleasant alternative, and I hope it will never be necessarv.”