Mr Coates Returns

Manawatu Times, Volume 60, Issue 194, 19 August 1935, Page 7

Mr Coates Returns

Comprehensive Review of Meat Negotiations

More Bacon ; Less Pork

Per Press Association

WELLINGTON, Last Night

Right lion. J. Ct. Coates looking - tit and avcll returned to Wellington by the Maunganui to-night. The vessel arrived in port at about 5.30. The official party, led by the Acting-Prime Minister, Sir Alfred Ransom, and including members of Mr. Coates’ family, met the vessel off Point Halswcll in the Janie Scddon. A fresh wind was blowing, but all the members of the party negotiated the climb up the ship’s side successfully, and Mr. Coates met them at the head of the gangway. In an interview on the way to the wharf, Mr. Coates referred to the meat negotiations, stating: “The main purpose of my going to London was to discuss an immediate and a longer term policy in connection with Great Britain’s agricultural imports and especially in connection wth meat. In the period of weeks (months as between the United Kingdom and Australia) when the discussions proceeded many proposals and counter-proposals and amendments were considered. To these it is not possible to refer, for they were necessarily confidential, but the end achieved is what can be reported. Mutton and lamb, New Zealand’s principal meat export, were to have been subject to a levy and exemption from any levy has been attained.

Dependence on Primary Produce ‘‘One docs not need to reiterate the plain fact of New Zealand’s dependence for her whole economic welfare on the export of farm produce uor the fact of our reliance almost wholly on the United Kingdom market. A single comparison can be given in percentages of the country’s total export values that are represented by (a) beef and (b) mutton and lamb: — Percentage of total export values for New Zealand: —(a), beef 2.4 per cent; (b), mutton and lamb, 19. S per cent. for Australia:—Beef, 1.4 per cent; mutton, 1.9 per cent.

and suggestions will shortly reach New Zealand as to methods of economic feeding which we hope will he helpful.

Briefly, the position prior to 1995 and since Ottawa was that mutton and lamb were satisfactory. They were under an cllcetivo supply regulation with foreign supplies to the United Kingdom held at a figure 55 per cent, below the Ottawa year (July 1931 to June 1952) and with quarterly allocations. To the southern Dominions it was less satisfactory that wo were working on a hand-to-mouth basis not knowing far enough in advance what our own and our main competitors’ allocations would be. and it was most desirable that we should have a longer term supply plan under which we could work. A Greater Menace "But the situation held a greater menace than the unsatisfactory shortness of the term for which the mutton and lamb allocations were being made known. For a number of reasons (not all of them connected with meat) the United Kingdom was showing signs of abandoning the policy of quantitative regulation. Instead a policy of levies on imports of farm produce was being more and more favoured. In other words a tax on foreign and also, though at a lower rate, a tax on Dominion produce was to be imposed- This was to provide a fund from which to subsidise farmers in the United Kingdom. Such in substance was the basis of the White Paper on meat of March 1935. The effect of the United Kingdom’s proposals would have been to place a burden on New Zealand producers of £530,000 per annum.

Our Main Purpose ‘‘To preserve and to extend in time the system of supply regulation on the basis already ctsablishcd for mutton and lamb, to avoid a levy on our produce aud 1o get Australia's otherwise uncertain mutton and lamb supplies controlled within a known figure: these were our main purpose.

‘‘ln beef also wo should hope to get away from the hand-to-mouth quarterly quantities and as far as possible to secure the right to switch over from frozen to chilled instead of being allowed only small experimental shipments of chilled beef.

Pork and Bacon “Pork, including baconers for curing in the United Kingdom, was a product to which we attached very special importance and it received long and close discussion with the United Kingdom Ministers and officials. For the present and for the near future the outlook is on the whole quite satisfactory. It is truo the bacon position in the United Kingdom has been causing some concern there from the viewpoint that prices have been unduly high by comparison with the low level ruling before action was taken following upon the United Kingdom Bacon Commission inquiry. Even now, however, prices arc not as high as 1929. The United Kingdom Government have indicated that they favour allowing an increase of bacon imports so that the cut imposed on Danish imports will not be so severe as it has been. One purpose they have in mind is that prices would be somewhat reduced.’'

The prospect therefore is that for all bacon and baconer pigs prices in the United Kingdom may be slightly less than they have recently been. It is true also that, for porkers from New Zealand and other countries the United Kingdom market is and will continue to be regulated, but in the volume that can be taken from New Zealand baconers will not at present be reduced f>elow what we estimate we will be able to supply to the end of 1936. “From this it will be seen that the problem that may engage the attention of farmers is that of turning their attention to producing more baconers and less porkers and solving the problem of converting the surplus porkers into baconers. As one aspect of this wc have been making inquiry into the recent developments in iiit.-Igedi&g

"Looking further ahead, and much as wo might wish it otherwise, the policy of facing a regulated market or in its place a tariff in all pork products and baconers as well as porkers cannot be ignored. (Supplies can expand very rapidly and while expansion from New Zealand can be expected it has been made clear that on present indications the rate of expansion shown may lead to negotiations of quantities and may severely disturb the market.

"We are entitled to emphasise, and have emphasised, that foreign bacon supplies to-day account for a large proportion of imports, and on this score we can, I believe, look for a satisfactory increase to ourselves, but the limits of the United Kingdom market in absorbing increases at, reasonable prices must always be kept in mind.

Mutton and Lamb. "Mutton and iamb are New Zealand ’s principal meat export, and it is most gratifying to have attained: (1) —Exemption of these from any levy. Almost certainly the whole burden of a levy would fall on overseas producers. At -Id per lb. This would have meant for New Zealand a burden of £S30,000; for Australia £3S0,000; for Argentine £215,000 at the same rate or £430,000 at the double rate of Id per lb. (-)-—A satisfactory plan of supply regulation. Up to the beginning of 1937 we know whero we stand for IS months, and, no less important, we know where other supply countries, Empire and foreign, stand. For six months to the end of 1935 the mutton and lamb allocations to Australia and New Zealand are 950,000 cwts. and 1,578,000 owls, respectively. For the year 1936 the agreed quantities are: Australia 1,750,000 cwts. and New Zealand 3,900,000 cwts. Either country if short on its 1935 second half-year may add the deficiency up to 50,000 cwts. to its 1956 total. New Zealand’s figures are satisfactory. The-year’s total is equal to our peak year (.1932) or above that peak if we count the extra 50,000 cwts that we may send. The total is 350,00 G cwts. (or 400,000 cwts. on the larger figure) above our 1934 total.”

Beef. Coming to beef Mr. Catees said: “The information that may bo published regarding beef is limited to the fact that the quantities have been agreed upon to the end of 1935. These are adequate for us. Wc are in a fair way towards getting right to absolute freedom in changing over from frozen to chilled. For the rest as a result of prolonged negotiation and subject only to points of detail, New Zealand has reached an agreement with the United Kingdom covering a long-term policy. It remains lo be seen how far the other Governments that have been parties to the discussions will also find the draft agreements acceptable, and it is this incompleteness in the negotiations that ma.ko disclosures in detail by us impossible.

Pork "To date,” said Mr Coates, "New Zealand has been granted satisfactory quantities for porkers aud baconers, and this position remains. For the half-year July-Deccmbcr, 1935, wc have arranged for quantities for porkers of l-lO.oOOcwts. For baconer pigs our estimate of probable shipments has been accepted without reduction.

Dairy Produce "In November, 1935, the United Kingdom Government are free in terms of the Ottawa agreements either (1) t o impose a duty on Empire dairy produce, or (2) to introduce a quantitative regulation. (For three years since 1932 neither of these could be done without our agreeing to waive our Ottawa rights.) In the iirst case the margin of 15s per cwt. (15 per cent, ou cheese) must be maintained during the period of the Ottawa agreements in our favour. It happens that the agreements with Denmark and other European countries, the ‘black pacts’ which are current, until the end of 1936, prevent the United Kingdom from increasing the duty on their butter above 15s per cwt. Hence ours must remain free till then in the absence of an agreement by foreign countries to waive the 15s maximum. The intentions of the United Kingdom Government, which on present showing will involve a levy on all produce, Empire included, rather than a supply regulation, have been indicated to us generally, and a letter from the Dominions Secretary makes a formal rei-ord of the matter. Our request has been itet befALeisfl iiaporianJi a : . BiatkeiJs

decided upoir it should be the subject of consultation to which we are a party. The United Kingdom Ministers, the Prime Minister and the Dominions Secretary, on July 17, 1935, and the Minister of Agriculture on July IS, 1935, ngreed to this.

Apples and Pears .‘‘Australia and New Zealand through their producers' boards agreed on respective aggregate supplies of fresh fruit to be exported to the United Kingdom. As a sequel to this it remained to ensure that tho market would not be spoiled and the Austra-iiau-New Zealand agreement undone in its effects by an unlimited flood of foreign imports. That this should be attended to was the substance of our 1935 requests to the British Government.”

A fair crowd had assembled at the entrance to the Taranaki street wharf and Mr Coates received a cheer when he left the vessel.