RESTRICTION ON DAIRY EXPORTS

Hawera Star, Volume LIII, 28 September 1933, Page 6

RESTRICTION ON DAIRY EXPORTS

CASE PRESENTED FOR BRITISH FARMERS 1 ' MR BAXTER OUTLINES QUOTA PROPOSALS FORCEFUL ADDRESS GIVEN AT HAWERA

The British farmers’ ease for the necessity of quantitative restrictions on the exports of primary produce from the Domionions to the Home markets, particularly cheese, was outlined by Mr T. Baxter, the representative of the National farmers’ Unio’n of England and Wales, in an address in the Carlton tearooms, Hawera, last night, to some seventy representatives of the dairy industry in South Taranaki. Mr Baxtei stated that regulation of the market was inevitable, and that the British Government was definitely committed to quotas. The proposed quota, however, was by no means as drastic as the New Zealand producers generally supposed, and in all probability they would be asked to restrict their exports by a tenth of last year’s total. He pointed out that, as the Ottawa agreements would not expire for another two years, the Dominions could not be forced to accept quotas in the meantime. It was hoped that an arrangement could be reached whereby the Home and New Zealand producers would be mutually served, and he emphasised that his visit was actuated by a genuine desire to achieve that object. He hoped to convince the Dominion producers that their refusal to accept quotas would severely prejudice the marketing scheme in England, and that the regulation of the market would be to their advantage in the long run. Mr E. J. Betts, president of the South Taranaki provincial executive, presided over the meeting, which was arranged by the Farmers’ Union and the Taranaki Federation of Dairy Factories.

In extending a welcome to Mr Baxter, Mr Betts expressed pleasure that Mr Baxter had been able to visit the district. The very representative nature of the gathering reflected the importance attached to the subject of Air Baxter's visit, and to his remarks, and what he had to say would be followed with the closest interest.

Mr. AV. J. Poison, M.P., president of the New Zealand Farmers’ Union, also extended a welcome to Mr Baxter. The occasion, he isaid, was a momentous one in the history of dairying in the Dominion and it was pleasing to see him here to discuss mutual problems. Mr. Baxter was a man highly respected for his great work in the dairying industry in Great Britain and he was the representative of that industry and also chairman of the Milk Control Board. The object of his visit was too well known to need elaboration and in Mr Baxter the British farmers had an : outstanding advocate.

The question of a quota was a vital one to New Zealand farmers and to the Dominion, whose prosperity depended upon that of the industry, proceeded Mr Poison. In recent years there had been enormous increases in supplies l and as the had developed so had the country. Now came a time when it was asked by the farmere of Great Britain that New Zealand should restrict her export of primary produce—at least of cheese. The British farmers certainly had a case to present, but there was also the case for the New Zealand farmer.

Although the increase in New Zealand primary produce had been rapid and enormous, it had by no means reached its limit and it would continue. All knew what had been accomplished in Denmark any ol the mutual advantages, that New Zealand had and New Zealand’s potential output could readily he recognised. The Dominion with ten times the acreage, infinitely better soil and climatic advantages, had to continue to develop. The position to-day was that we had embarrassed our farmer friends in Great Britain, our supply to the market having become so tremendous that, temporarily at all events, we had glutted the market. He did not think it justifiable to isay that New Zealand alone was responsible for the embarrassment of the British farmers. The depression, which had reduced the spending power of the world, was the real factor, and a recovery in world prices was the only permanent solution of the difficulty. Mr. Poison said he realised very fully the predicament, of the British. 1 armors. Mr Baxtei- had presented tneir case in a straightforward manner and had been frank in what he had to tm-j. it was most refreshing to meet a man who spoke his mind clearly and, one who was unafraid. Mr. Baxter took the attitude that the British farmer wa* entitled to his own market first, that the Dominions must come second, and the foreigner third. He said that no consideration of any kind could interfere with that view; that the British Government was committed to a policy of import restrictions because the industry at Home could not continue without a price increase, and that restriction seemed the only way of attaining it. Mr Poison thought that argument could be combated, but it was a very forceful argument. No doubt it would be very fully discussed before Mr Baxter left the Dominion, and probably there were alternatives. Mr Baxter said that it was a stark necessity that the British farmer should receive the relief he now asked for. The speaker believed that relief was most necessary, but the remedy suggested—one which would cripple this Dominion and essential industry—was one that New Zealand would have to explore very much further before submitting to. it. Mr Baxter was definite that we had to submit to quotas;

■hjo said that once established! they would be permanent. If restrictions had to be made the speaker’s opinion, and that of every New Zealand farmer, was that they should be on the foreigner and not on the Dominions. (Hear hears.) NEW ZEALAND’S CLAIMS'. New Zealand was- as much a part of Britain as a county of England, and we had claims, not solely based on sentiment, that could not be ignored. Per head of population New Zealand purchased more British goods' than any other country in the world; we had made sacrifices to maintain the prestige of the Empire and particular sacrifice for Great Britain. We were entitled to consideration over foreigners, and appealed to Britain not to sacrifice the Dominions in anything that might be done in connection with quotas- unless it could be shown that such action would help-the Empire as a whole. The question had to be looked upon from an Imperial point of view and not from any insular angle. There were remedies to the situation and one suggestion he advanced was differential prices for New Zealand and British

cheese, with a minimum price for the British farmer. It would mean that in New Zealand payment would he on a butterfat basis and mat an average price would be paid to the producer. The proposal would mean control,_ but it was apparently a case of submit to control or something worse. Summed up the proposal would necessitate a form of milk pool and a pay-out on the aggregate return for butter and cheese on an all round butterfat basis, irrespective of whether butter or cheese was manufactured from it-

There was no doubt that Mr Baxter had the cards in the presentation of his argument, because the British Government was behind him, added Mr Poison. However, he wanted to Know what the British farmer was to get out of the proposed scheme so that there would be a comparison between the price the British farmer would receive and what the New Zealand farmer . would receive . The question was whether a temporary advantage to the British farmer would not he a strong disadvantage to the Empire farmers. Fortunately, the agreement reached at the Ottawa Conference would last another two years and New Zealand was fortunate to thus have the opportunity of going fully into the question and ascertain whether restrictions could not be put on foreigners. In the last few days there had been almost a pyschology of fear among many farmers as the result of Mr Baxter’s published statements on the quota but there was no necessity for hasty action in the matter and a hasty decision might he deeply regretted. Mr Poison ielt sure that he expressed the sentiments _of all present in saying that New Zealanders were loyal citizens of the Empire. If sacrifices had to be made in the interests of the Empire New Zealand would be prepared to make them, but first of all she reouired to know the facts! and all of them.

Mr. T. A. Winks, chairman of the Taranaki Federation of Dairy Factories. also welcomed Mr Baxter. In outlining the position of the New Zealand farmers he said that the Dominion was in ignorance as far as conditions at the other end of the world were concerned, but he did know that a quota would be a very serious matter to the Dominion. He could not understand the insistence of the British farmer in demanding that a quota he placed on cheese._ leaving the exports of butter to continue as at present. Mr. Baxter: New Zealand refused to agree to a quota on butter; that is the position. AS EASY TO MAKE BUTTER,.

To his mind, said Mr. Winks, it would be just as easy for the British farmers to manufacture their surplus milk into butter as into cheese. As far as the quota generally was concerned, he agreed with ill-. Poison that tile foreigner could be hit harder and the Dominions left alone. Denmark was New Zealand’s greatest rival, and the Danes were consuming I 70,000 tons of margarine and 14,00'u tons of butter annually. A restriction oil foreigners would help to adjust that position. He was satisfied that the Dominions could come to a common agreement and that a solution of the problem could be found as the result of clear thinking and a none too hasty decision. After hearing New Zealand’s side of the story he was certain that Mr. Baxter would agree that with the quota disaster would follow, and that a restriction of the Dominion’s dairying industry would be nothing less than a calamity. There was room foi j the Dominions and Britain in the market if restrictions were placed on the foreigner, and the attitude of New Zealand was that the Dominions had more claim than the foreigner. If a quota were imposed what was to become of 1 the surplus production? he asked. Pro- | duetion could not be curtailed, and the I alternative would seem to be trade j treaties with foreign countries who would take our produce, BRITISH FARMERS’ VIEWS.

Mr. Baxter briefly traversed the steps leading up to the suggestion put forward by the British Minister of Agriculture for the regulation of butter and cheese supplies from overseas and the adoption of the proposal by the British farmers. There would be no quota compulsion so long as the Ottawa agreement extended, and therefore for another two years New Zealand could take any action it liked in refusing limitations. The question of butter exports had to be put aside because of the refusal of New Zealand to agree to a limitation, and that was wliv cheese was concentrated ripon in quota proposals If all countries continued to “bung” in butter on the market that was their lookout and one that did not concern the British farmer very much. Butter-making at Home was merely an adjunct to cattle rearing. It had first been desired to regulate both the butter and chee'se supply, but the Minister of Agriculture held the view, and so did the Home producers, that if the butter question had

to he put on one side because New Zealand and Australia refused to accept limitations of supply, the country could not afford to let the cheese market go as well. Mr. Baxter explained that he was not a Government official and had no connection with the Government. He was a farmer pure and simple and an advocate of the farmers, and he desired to put their case as frankly as he could. In the first place, be said, the success of the New Zealand farmers depended on the prosperity enjoyed in the Old Country. If times were hard and money was short good prices for produce could not he expected. The (Did Country was passing through very difficult times, perhaps more so than was generally understood in New Zealand. There were 3,000,000 unemployed; many industries were carried on at a loss and many at no pront, all hoping for better times. It was realised that the only way to restore prosperity was to raise the wholesale price of primary products, and that was the crux of the present suggestion. He would defy anyone to say that any producer in New Zealand had been gettincr a profit on his butter and cheese this* summer, and the British tanner had been in a similar, but worse, position for a much longer tune. It the producers could not raise the price* of their goods was it not time the Government of the country stepped in. he asked. That was the position in Britain to-day; the Government was taking a hand. A country could not hope to prosper if its producers were being ruined, and it was just as essential for the producers at Homo to get a reasonable margin as it was necessary for the producers m New Zealand The adverse trade balance m England had long reached a most serious position, and there was the situation when £500,000,000 was being spent on foodstuffs and only £300,000 - 000 worth of manufactured goods sold. That position could not go on, am that was why the Old Country had t< take some steps. BRITISH MARKETING ACT. There was a great deal of land m England not producing anything like capacity, and big areas had fallen out of production through low prices. Jbe time had come when England could no longer neglect her land and had to make the greatest use of it. The government, after many years of neglect, had decided to stand by the farmer and rive him some measure of prosperity. ° The Labour Party, curiously enough, had started the measure proposed by the introduction in 1931 of the Agncultural Marketing Act, designed to assist the farmers m the marketing of their produce. This Act provided that the producers could regulate the pioduction and marketing of any commodity. At first the farmers received the measure with mixed feelings. One section claimed that it was no use it overseas supplies were not regulated The National Farmers’ Union voted against the Act, and for six or eight months no action was taken. Then came the crisis, with the countiy on the verge of destruction. The budget was millions short and the trade balance was all astray. The Labour Government would not face up to the position and the National Government came into being. The new Minister of Agriculture had then announced that he was prepared to adopt a- quantitative control of foodstuffs. . With this announcement the National Farmers Union took a different view of the Act and decided to endeavour to make some use of it. From then commissions were set up to arrange the maiketing of various commodities . I fie experience with the hops, marketing scheme had been very satisfactory to the producers, who had been able to sell their whole production at quite good prices through a central s>ellm board that fixed the price and regulated the market. A similar scheme had been devised for the marketing of bacon pigs to encourage pig production by guaranteeing prices to the producers based on the cost of production. The carers were able to pay these prices through an undertaking by the government that for every increase in the pigs raised by the farmers there would be a corresponding decrease in her to be imported. The difference between the number of pigs produced and consumed would be■ allocated among the exporting countries. THE MILK SCHEME. The milk -scheme was on somewhat similar lines, isaid Mr Baxter. The object of the .scheme was to .sell the whole production of milk m England and Wales through a central producers’ board. A-s much as possible would be sold for consumption m liquid form and the rest sold to manufacturers of dairy products. Each. Producer would be paid on the pool of the average prices, whatever price his milk mrihtT have brought. The annual production of milk was 1420 million gallons. Of this amount 946 million gaJ lons was .sold in liquid form, 210 million gallons went into butter making, and 137 million gallons went in cheese making Very .little factory butter was i made, “most of it being manufactured I on the farms and the skim milk fed to stock Cheesemaking was generally carried out by bigger farmers on their oremises, and it was a high quality product which brought a very much !j hi "her price than factory cheese. It was estimated that 45 million gallons was kept for cream, 24 million gallons j used in condensed milk making, and 11 million gallons in milk powder proi j dilution. ; What was feared in the success ol .(the milk scheme was that if cheese 5 prices remained as iow as . they were . to-day eheesemakers would quit its manufacture and throw the quantity ' of milk used into the pool for distn- - bution. Sucli an action would-result i in a great national loss. If the farm 1 cheesemaker gave up manufacture the f milk would still have to he made into - cheese in factories, as it was not found » possible to- distribute more for con- ; sumption, in liquid form. In the milk > scheme a price was agreed with the distributors for milk for liquid consumption, what could, not be sold by that means had to be sold for manufacturing purposes, and the principal . outlet would be in cheese manufacture. L Recollecting that- the producer was : paid on the average price realised for r his milk, irrespective of for what purII pose it was sold, it would be seen that 2 a low price for cheese would result in

a return most unsatisfactory to a producer. Costs of production in England were high, mainly because the cows -had to bo artificially fed for seven months of the year, and during that time they were housed. RECENT RUSE IN PRICES; “What I am trying to convey is that something has to be done to -raise prices,” .said Mr Baxter. “Prices have gone -up recently, but there is no permanency. The recent rise was due to the drought at Home and on the Continent, and at present all milk in England is finding ~a liquid market. I am quite convinced that in the next two or three months the Old Country will be back to normal production;, and that the market will then again be glutted.”

“HARDLY PLAYING GAME.”

Everyone had to admit that when a supply exceeded the demand there would be chaos in that particular market. That was the position to-dav. For a time the market wa-s full and there “Seemed no way of improving the position until the saturation taking place was- stopped. New Zealand had been sending ever increasing supplies of butter and cheese, and the increases m recent years had been phenomenal. A comparison of the principal butter exports was as follows: Australia, 1928, S73,ooocwt; 1981, 1,558,'000cwt; 1932, 1,829,00Qcwt, for the first six months of 1933 there was a further big increase. New Zealand: 1928, 1,222,000 c wt; 1931, 1,926,000 cwt; 1932, 2,190,000 cwt. The increase for six months of 1933 was also heavy in comparison with the same period of 1932. Irish Free State: 1928, 559,000 cwt; 1932, 316,000 cwt. Denmark: 1928 2,016,000 cw t; 1931, 2,466,000 cwt; 1932’ 2,584,00Qcwt. The cheese exports were : New Zealand: 1928, 1,554,000 cwt; 1931, 1,733,OOOcwt; 1932, 1,853,000 cwt. For six months of 1933 a greater proportion of increase was shown in comparison with the 1932 period. Canada: 1925, 920,OOOcwt; 1931, 707,000 cwt; 1932, 747,OOOcwt.

Mr Baxter said that the increases spoke for themselves. He could not see how the New Zealand producers could expect to go on increasing their production and expect Great Britain to absorb it. “Mr Poison has stated the case for the New Zealand producer extraordinarily fairly,” said Mr Baxter. “I am not here to" tell you who the reduction should be on. That is a matter for the British Goverment, which will do what it thinks best in the nation’s interests. I say that all countries must, be controlled. It is no earthly use applying the cut on one country, because that would not have the desired effect. lam sure the British Government will not he so foolish as to restrict one country and not the rest. That would lead to retaliation. What the Home farmer is going to get is a domestic matter and has nothing to do with the New Zealand producer. I could not tell you the price if I was anxious and willing to' do so. Mr Poison: The price is essentially our business.

Mr Baxter: I repeat that it is a domestic matter. Mr Poison .says, that there is plenty of time before the New Zealand producers need take action in the matter. In that respect he is wrong. Something has to be done immediately to -assist cheese prices. You could, of course, go on for two years, but to your own detriment. If something was to .be done it has to be done between now and Christmas. , Replying to Mr. .13 Joll, Mr. Baxter said that if the quota was applied it would be applied to all countries. Cheese mainly affected New Zealand because the Dominion was the largest exporter. NOT SERIOUS LIMITATION. “I don’t think the limitation of tonnage will be a very serious one. I am inclined to think it will be much smaller than you expect-it to be. Possibly you will be asked to keep back a tenth of what you sent last year. 1 am not in a position to -say that auth-j oritativcly; it is a matter for negotiation. I also want to make it clear that, I do not say ‘once a. quota, always a! quota.’ What I do say is that if the market is once regulated it will always be regulated.” Mr. J. S. Tosland thought that a way out of the quota was more trade within the Empire, which should obviate such a demand. He referred to the loyalty of Now Zealanders during the war and suggested that they were more entitled to consideration on the Home market than the foreigners who I had given no asssitance during that crisis. He believed that unless the consumers had a surfeit of supplies, and there was no evidence of that, the quota was not justified. “I am authorised by the British Government to state that the questions of trade, tariffs and eurency deflation will have no bearing on the quota,” said Mr. Baxter “The question of bow much trade you do with us has nothing to do with it.” Mr. Joll: I think it a terrible thing that New Zealand should suffer when the quota will make practically no difference to Denmark, which takes only £5,000,000 worth of British goods per annum.

Mr. Baxter: Britain’s trade with Denmark is considerably more than that. Until just recently Great Britain had no right to demand a return trade, but with the altered fiscal policy there is now a different aspect. Britain can now adopt the attitude that if you don’t trade with us we will not trade with you. The position can’t be judged from the past. If Denmark doesn’t do trade with us we have the right to refuse to accept her goods. Mr. Muggeridge claimed that New Zealand was as much a part of the Empire and Britain as any county in England. If in the matter of quotas the Dominions were to be treated on the same basis as the foreigners it was not unreasonable to suggest that pos-

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sibly a step would have been made towards the disintegration of the Empire. He did not think, however, that the Old Country was prepared to thrust the Dominions from the bosom of the Empire. He hoped that some scheme could be evolved to obviate the quota, and that the Dairy Board would be able to rise to the occasion and assise in a solution.

“It is hardly playing the game to suggest that Great Britain is treating the Dominion on the same basis as the foreigners,” said Mr. Baxter. When the Government decided to 'change its fiscal policy it put on a 10 per cent, revenue tax on nearly all imports, including butter and cheese from foreign sources, hut- not on the Dominions, who were, and are, free. Then there were the benefits of the iQttaua agreements. The British farmers joined forces with the New Zealand farmers representatives and pressed to get an increased duty on foreign goods, lhe position to-day was that the Dominions have a 15s per cwt. benefit on butter and 15 per cent on cheese. The British Government is prepared to put double the quota on the foreigners, and I think that can b© taken a;§ definite. The intention of the British Government is to help all producers, and the endeavour is to raise the prices to all farmers equally. “'Why was cheese picked out. - asked Mr Tosland. $ “Chese is the main item because our surplus milk at Home will have to he manufactured into cheese,” replied All Baxter. , „ , ~ “Is it to be presumed that the higher production goes at Home the higher the quota will be?” asked Ail J. SL Hickey. . “I don’t think there is much chance of the Home milk production rising,” said Air Baxter. The amount required for liquid consumption is a fairly constant one, and the surplus in manufactured) form is sold for a less price. The more produced, therefore, the lower the price will be. Mr AVinks asked if the Labour Party was in agreement with the proposed restrictions. . Mr Baxter replied that such uas the case. The proposal had the blessing of the entire House, and, in fact, the Labour Party .said it was time something was done. HOAIE FARMERS’ PRICES.

Replying to Air Poison, Air Baxter said he could not say how much the Home farmers were to get for their milk. He reiterated that what the price would he was purely a domestic matter. , , , Mr Poison contended that it was most certainly the Dominions’ business. They were being asked to forego something gained at Ottawa and to substitute a quota. It was essentially the concern of the Dominions, because something was being given away. It was only right to know if the price was to be a reasonable one. and if the Dominions were being asked to make a reasonable sacrifice. “Supposing I could say what the price will be, what would it be worth to" you unless you knew the costs of production at Home?” asked Air Baxter. “I fail to see hoiv you could compare costs in New Zealand with those at Home.” Mr Poison had just informed linn that as far as New Zealand was concerned the door was not definitely closed to a butter quota. The speaker had previously understood that there had been a definite refusal to accept a limitation. Air S. AI. Bruce, on behalf of Australia, had made an emphatic refusal. “AYhat will be the position if we refuse to accept a quota on cheese?” asked Air Aluggeridge. I “Great Britain can do nothing so 1 long as the Ottawa agreement is in (force,” answered Air Baxter. “If, say, i New Zealand is the means of deferring ■ the prosperity of the producers at * Home there will be a great deal of I resentment. AVhen the expiry of the I agreement came and you had no option in the matter you might not get such treatment as you receive to-day.” Air O. Johnstone asked what was the average cost of production in England. Air Baxter replied that the range wa:s so varied that it was impossible to give an accurate estimation. I In proposing a vote of thanks to the speaker. Air. J. S. AlcKay said it was -realised that m Mr Baxter the British producers had a very able re--1 presentative, and while one did not agree with all he had to say he had put up a. very forceful case. The motion was carried bv acclamation. “I would like to add,” said Air Baxter “that the British fanners have the most friendly feelings towards their brother farmers out here. They would be last to wish to injure the Dominion * producers. I ask you to fall m with the suggestion, in the firm belief that in the long run all will benefit.”

GUESTS AT INFORMAL DINNER. Prior to the evening meeting Mr and Mrs Baxter were the guests of the Farmers’ Union and Taranaki Dairy Federation at dinner at the White Hart Hotel. Mr E'. J. Betts, president of the South Taranaki Executive of the Farmers’ Union, presided and those present in addition to the nruests of honour were.; Mr T. A. Winks, chairman of the executive of the Taranaki Federation, the Mayor and Mayoress (Mr and 'Mrs J. E. Campbell), Mr W. J. Poison, M.P., Mrs E, J. Betts, Mrs C. Benton (pre-

sident of the South Taranaki Women s Division of the Farmers’ Union), Mr and Mrs A. K. Fyson, Mr and Mrs E. K. CanDeron, Profetsisor Ur Marsden, Messrs V. O. Veale, Fi. R. S. Dale (Chamber of Commerce), L. A. Ablett. J. Ardell (Department of Internal Affairs), P. C. Tjte (official organiser Fanners Union). Brief speecnes of welcome to Mr and Mrs Baxter were made by the chairman, the Mayor, • Mr Winks and Mr Dale, Mr Baxter responding. This morning Mr and Mrs Baxter and Mr Ardell, of the Department of Internal Affairs, were taken to luru-turu-mokai pa by the Mayor and Mr Baxter was also conducted by Mr E. K. Cameron on a visit to the Normanby Dairy Company and the farm of Mr J. Meuli. The visitors returned to Hawera for lunch and left later m the day for Wanganui.