MEAT SUPPLY AGREEMENT

Northern Advocate, 19 August 1935, Page 6

MEAT SUPPLY AGREEMENT

Mr Coates Details Negotiations STATEMENT ON LONDON TRIP. A SATISFACTORY OUTLOOK. [Special to “Northern Advocate.”] ■ WELLINGTON, This Day. On his return by the Maunganui xast evening from Britain, the Minister of Finance, the Rt. Hon. J. G. Coates, made an important statement in connection with the meat agreement arrived at with the British Government. In a long interview regarding the meat negotiations, Mr Coates said: — “The main purpose of my going to London was to discuss the immediate and longer.-term policy in connection with Britain’s agricultural imports, and, especially, in connection • with meat. In the period of weeks —months between the United Kingdom and Australia —when the discussions proceeded, many proposals, counter-pro-posals, 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 obtained. Since Ottawa. “One does not need to reiterate the plain fact of New Zealand s dependence for her whole economic welfare on the export of farm produce, nor the fact of our reliance almost wholly on the United Kingdom market/ A' simple comparison can be given in the percentages of the country’s total export values that are represented by (a) beef, and (b) mutton and lamb: — N.Z. ’ Australia. Beef .. .. ... 2.4% 1.4% , Mutton & lamb 19.8% 1.9% “Briefly, the position prior to 1935, and since the Ottawa Conference, was that mutton and lamb were satisfactory. They are under effective supply regulations, with foreign supplies to the United Kingdom held at a figure 35 per cent, below the Ottawa year (July, 1931, to June, 1932), and with quarterly allocations to the southern Dominions. It was less satisfactory that we 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. Greater Menace. " “But the situation held a greater menace than the unsatisfactory shortness of the term for which 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 quantative regulations; 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 sum from which to subsidise the farmers in the United Kingdom. Such, in , substance, was the basis of the White Paper on meat, issued in March, 1935 The effect of the United Kingdom’s proposals would have been to place a burden on New Zealand producers of £830,000 per annum. “To preserve and to extend in time the system of supply regulation, on the basis already established for mutton and lamb; to avoid a levy on our produce; and to get Australia’s otherwise uncertain market and lamb sup- • plies -controlled within a known figure—these were our main purpose.

Beef Trade,

“In beef, also, we 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, including baconers for curing in the United Kingdom, was a product to which we attached very special im- . portance, 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 true that 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 Commission’s inquiry. Even now, however, prices are not as high as in 1929. The United Kingdom Government has indicated that it favours 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 it has in mind is that prices will be somewhat reduced. Prices Might Be Less. ‘ • “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 overseas coun- ' the United Kingdom market is, and will continue, to be regulated, taut, in volume that can be taken from New Zealand, baconers will not, at present, be reduced below what we estimate we will be able to supply to the end of 1936. “From this it will be seen that a problem that may engage the attention of the farmers is that of turning their attention to producing more baconers and less porkers, and solving the problem of converting surplus porkers into baconers. As one aspect of this, we have been making inquiries into recent developments in pig breeding, and suggestions will shortly reach New Zealand as to methods of economic feeding, which, we hope, will be helpful. Pork Product Market. “Looking further ahead, and much as we might wish it otherwise, the policy of facing a regulated market, or. in its place, a tariff in all pork products, 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 ex-

pansion 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 today 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 muot always be kept in mind. “So far, New Zealand has been granted satisfactory quantities for porkers and baconers, and this position remains for the half-year JulyDecember, 1935. We arranged for quantities of porkers of 140,300 cwt., and, for baconer pigs, our estimate of probable, shipment has been accepted without reduction. No Mutton or Lamb Levy. “Mutton and lamb are New Zealand’s principal meat expbrt, and it is .most gratifying to have attained the exemption of these from any levy. Almost certainly the whole burden of the levy would fall on the overseas producers. At |d per lb. this would have meant for New Zealand & burden of £830,000, for Australia £380,000, and for the Argentine £215,000, at the same rate, or £430,000, at the double rate of Id per lb. It is gratifying, also, to have obtained a satisfactory plan of supply regulation up to the beginning of 1937. We. know where we stand for 18 months, and, no less important, we know where other supply countries, Empire and foreign, stand. For the six months to the end of 1935 the mutton and lamb allocations to Australia and New Zealand are 950.000 cwt. and 1,578,000 cwt.. respectively; for the year 1936, the agreed quantities are:—Australia, 1,750,000 Cwt, and New Zealand, 3,900,000 cwt. Either country, if short on its 1935 second half year, may add the deficiency, up

to 50,000 cwt., to its 1936 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 cwt. that we may send. The total is 350,000 cwt. (or 400,000 cwt. on the larger figure) above’our 1934 total.” Beef Question. Referring to beef Mr Coates said: — “Information that may be published regarding beef is limited to the fact that quantities have been agreed upon to the end of 1935, and these are adequate for us. We are in a fair way toward getting the right to absolute freedom in changing over from frozen to chilled. For the rest, as the 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 to be seen how faxother Governments that have been parties to the discussions will also find the draft agreements acceptable, and it is this incompleteness in the negotiations that makes disclosures in detail by us impossible.”