NEW ZEALAND’S CHANCE OF EXPORTING BUTTER.

Matamata Record, Volume VIII, Issue 640, 18 June 1925, Page 7

NEW ZEALAND’S CHANCE OF EXPORTING BUTTER.

Australian dairy producers are becoming convinced by degrees that at last they have discovered the art of making something out of nothing. The Paterson scheme of stabilising butter prices no doubt represents to many the long looked for philosopher’s stone, and it will be decidedly interesting to watch events. Shortly put, the scheme is as follows: Australia at present uses approximately two-thirds of its total dairy production for home consumption, the other third being exported. It is the price fixing for the home consumption which leads to continuous troubles and price cutting amongst the various States, although the elementary basis is more or less the London parity of prices. “Increase the value of the one-third of butter and cheese exported and you increase the value of your two-thirds local consumption,” says Mr Paterson. This is, of course, obvious to every producer, but is easier said than done. However, this is where Mr Paterson’s generous scheme comes in. He is advocating that the Commonwealth dairy companies should levy themselves with Id per lb of but- j ter and Id per lb on cheese they manu- | facture. This will be collected into a consolidated fund and be paid pro rata to factories who exported part of their

produce. As only one-third of the total manufacture is exported, a levy of Id per lb on manufactured butter would, of course, represent 3d per lb on the exported portion, and would therefore automatically raise .the value of exported butter by 3d per lb. The, same would also apply to cheese. ,On thp other hand, the price of home consum-

ed produce would increase correspondingly.' :/ .-/—'A' ■j ■ The scheme, although not entirely new, is certainly original, and on the face of it looks, feasible enough. In ■practice, however, it might work out entirely different, Has it occurred to the advocates of the scheme that an increased price of 3d per lb over London parity would certainly constitute a great temptation for New Zealand producers to supply the Australian Ideal market? And what would happen if Australian factories, tempted by,the hmintv. were to export two-tliirds

OU. .UUUIIUy, WCIC LU CApui l, instead of one-third of their total produce. The local prices would no doubt soar even higher and the chances for New Zealand would be all the greater. "Mr Paterson, M.H.R., speaking at ,

xvxr jrctLtsi bun, iu.jLx.j-u, | Colac the other day, compared the pos- ; sibilities of a Commonwealth pool with his own scheme. He said that one of | the difficulties in the way of a gutter ■ pool tvas getting the six States into ; line; Hairing done that they were faced with, the, inter-state' difficulty, .which M State could deal with. There would be a tendency to send butter over a border to undercut. With that position obtaining it would not be long before ey were back oh export parity, and he advised them to grasp it with both hands. The old proposal'was to get a price for local sales in excess of ex-, port. That, meant a! two price system that would necessitate an elaborate piece Of machinery fQr .equalisation purposes. That helped to prevent the scheme being signed up by all factories. Another difficulty was the risk of produce being sent from one State to another. The proposal he advocated overcame both difficulties at one stroke and made use of economic laws instead of . fighting them. His-proposal was that if they taxed themselves at one penny on butter and one halfpenny on cheese it would provide an

export bounty on the third of the production that was exported. The butter for local consumption would immediately rise to export price, and on that two-thirds there would be 3d. a lb net gain. Some said that this was n6t enough, but the project had no limits. If they levied 2d a lb they would increase the price by 6d. The danger, however, would be that it might have tge effect of bringing butter from outside. However, they could safely raise the price by 3d, and ■ the would'be overcome by ah arrangement between the Australian and New Zealand boards. The reason that 3d hdd been decided on for a beginning was that it was a-safe proposal. was no inter-State difficulty, because there was no danger of one/State exporting. to another at less than the general price, because producers had' only to send abroad to get 3d above export value. ' The dairyman was going to get as large a net increase under this system as he could under any system, that could be devised.