Study in Economic Imperialism

Northland Age, Volume 3, Issue 14, 5 January 1934, Page 3

Study in Economic Imperialism

Scotch Farmer and Dominion Dairy Products The following is taken from an article in an Edinburgh Journal, “The Free Man,” and gives a sidelight on the Butter Quota Proposals from the Scotch farmers’ point of view : There has been a lengthy correspondence in the “Scotsman” under the above heading. The war began with a question to the Dominions Secretary by a Liberal M.P., who wanted to know (1) If Australian butter exporters got a Government

bounty, and (2) the comparative prices of the same brand of butter in Melbourne and in London. The answer to the second part of the question was that the relative prices were 123/ in Melbourne and 78/ to 80/ per cwt. in London, as . good an example of dumping as one could wish. The answer to the first part was that while Australian butter exporters received no State bounty, there was a voluntary levy by- the producers of 3d per pound to “compensate” the exporters.

An excitable gentleman, styling himself the Director of Australian Trade Publicity in London, wrote to the pre’ss complaining of unfair aspersions on the Australian butter producers and exporters, and explaining that if the Australian butter producer sells that butter in Australia he gives a percentage of his receipts to a pool fund, out of which he and

others selling abroad are partly compensated for the low prices in the highly competitive British market. From which two points clearly emerge : first, that this levy is just as clearly a subsidy, from the competitive point of view, as any Government subsidy, and, secondly, that the price obtained in the British market is so low that the exporter can make no profit out of it unless he is compensated at the expense, of course, of the Australian consumer. It seemed impossible to get into this Antipodean’s head that the net effect of the policy is to beggar the Australian farmer and surcharge the Australian consumer all for the benefit of financial interests ten thousand miles away ; he is all for Australia piling up a huge external debt, which she shall pay by underselling the British farmer in his own market. So much for the economic implications, but the Director did not base his appeal so much on economic arguments as on sentimental ones. He did his utmost to obscure the fact that Australia has been increasing her butter exports to this country by 12 percent at the very time when Mr. Elliott was considering a cut of 50,000 tons in butter imports, and he appealed to us to look at the wicked foreigner, kick him out, and support

our kith and kin struggling to make a living in the back blocks of Australia. Now the facts, as stated by the Empire Marketing Board, are that 52 percent of all butter imports come from the Dominions, and Australia contributes 22 percent of these imports. The Director called attention to the increase in Danish imports from 125,698 tons to 131,739 tons, or 4.5 percent, in the year ending 30th June ; in the same period Australian butter imports increased from 84,332 tons to 93,339 tons, or 12 percent., or nearly three-quarters of the Danish import. The supreme indictment—and that from which the Director invariably ran away—is that foreign countires, and notably Denmark, being asked to accept restrictions on their exports, accepted without squealing, but the Dominions refuse to accept any restrictions, and, under the beneficent Ottawa agreements, no restrictions can be enforced without violating these agreements, and the Dominions are taking full advantage of that fact. A further point, and probably the worst indictment from the point of view of the Scots farmer, is that while the Danes and other foreigners got into the market by their own efforts, the Dominions have only done so, first with the assistance of the Empire Marketing Board, and latterly by the assistance of a duty of 15/ a cwt. on foreign butter, the effect of which has been to undersell the Scots farmer in Scotland and drive Scots butter off the market. And to make all perfect, the Empire Marketing Board was paid for entirely by the British taxpayer, and when it was threatened with decease, the Dominions refused to contribute a cent to save it. So there is the whole lovely story. The principle of the great Imperial agreement at Ottawa was that the home producer should have first call on his own market, but the Dominions ignore the implication when it is the British home market. And the Australian producer sends butter several thousand miles at a loss, for

which the Australian consumer pays, involuntarily assisted Ifj the British producer and competitor wt.*n he paid taxes for the upkeep of the Was ever a more gorgeous example of crazy economic thinking or lack of thinking, and of the consumer-tax-payer being bluffed in two separate countries —all for the behoof of financiers who produce nothing at all. When are the customers and producers going to throw these parasites into the ditch and behave like free men with rational minds? A fallacy which appeared again and again in the correspondence was the suggestion that Scots farmers cannot supply all the dairy products needed in Scotland. It appears on the face cf it to be nonsense. If Denmark, wi:h half the area of ocotland, and very much poorer soil, can do this 'thing, why on ear ill should Scotland be unable to do it ? Happily the lie direct has been given by the Chairman of the Galloway Creamery Co., at the annual meeting, w here he said : “The production of milk in this country is quite ample for ail our needs, and yet dumping flourishes,” and that the creamery could quite easily have produced more milk if it could have got a price for it. And he gave the reason in no uncertain terms : “They were at the mercy of Colonial and foreign dumpers of their superfluous products, and the powers-that-be complacently encouraged this, for the simple reason that the majority of our legislators were men interested in coal, steel, etc., and had no time for agriculture.” The rest of the correspondence was devoted to harrowing tales of the low prices bankrupting Australian farmers—a mischief which no one outside of Australia can mend, and laborious arguments about the balance of trade and the value of lending and borrowing as a function—those who upheld it seemed all to be arguing from the lender’s point of view, which rather discounted the value of their assertions. It is up to the Scots farmer to organise some publicity for his case ; it suffers by default as against the speeches of politicians and Dominion publicity exponents, as also the insistent talk inspired by financial interests that debts must be paid, no matter what happens to the producer in Australia or Scotland.