BUTTER AND PRICES.

New Zealand Herald, Volume LXIV, Issue 19633, 11 May 1927, Page 9

BUTTER AND PRICES.

CONTROL BOARD'S POLICY* FAILURE OF FIXATION SYSTEM. "A VERY RASH EXPERIMENT." [from orn ovrs corbespondext. ] LONDON, April 9. Tho operations of tho New Zealand Dairy Produce Export Control Board were reviewed at tho annual meeting of Joseph Nathan and Company, Ltd., by Mr. A. Sandercock. He opened his remarks by reviewing the position which aroso last month as the result of the price-fixing policy of the board. " We, fur our part, in conjunction with many other importers," said Mr. Sandercock, "have never ceased to advise the Control Board that their policy was fundamentally wrong, inasmuch as that by their policy they had entirely eliminated the human element in trading. Neither the housewife who goes to her shop, nor the merchant who comes to th» market likes to be faced with the proposition—- ' Here is an article at a certain priccj and there is a certain quantity of this article; you may take it or leave it.' If it were the only article of its kind in the world this attitude might be effective; but we all know that the New Zealand supply was far from being the only butter and cheese coming into this country; in fact, it is only something m the neighbourhood of 20 per cent., and therefore this attitude toward tho trade was foredoomed to disaster.

" When the Control Board said, in spite of our advice, that they were going on with it, Tooloy Street had no other course open but to fall into lino and carry out the rules and regulations and submit to tho restrictions which the Control Board thought fit to impose. We, for our part, have loyally carried out these instructions and done our utmost for the producer under theso difficult conditions. Tho effects, howevor, were not long in snaking themselves felt. We soon found that all other kinds of butter and cheese were soiling, in place of New Zealand produce. Canadian cheese was selling, but not New Zealand cheese. Big butter buyers were filling their requirements from Australia and Argentina during tho past winter. The demand for New Zealand produce fell almost to tho irreducible minimum. You can realise how quickly that brought about a very serious position." Acute Hostility of Buyers. Mr. Sandercock went on to say: "Wo found ourselves, by tho beginning of January, faced with tho possibility of a very largo accumulation of Now Zealand produce in this country and with* no buyers. With the board continuing to maintain a fixed price for their produce above sales level tho position became serious, and more serious every day it was allowed to continue, from tho point of view of the producer, whose livelihood depends on tho price which his produce realises. It was obvious that all tho Stock which was piled up had ultimately to bo sold at some price, and when a large accumulated stock had to be put on the market the price had to come down. "This position was pointed out to the Control Board, and in tho finality at the beginning of March the seriousness of tho position became apparent to them, and they were forced, in tho interests of everybody concerned, to do away with these restrictions of price. The immediate effect, of course, was to bring tho price of their produce—which they had held for a fixed price—immediately down to a level where buyers would bo again interested. Not only have they hud to do that, but they had to overcome the very ftcuto hostility of those buyers who Had been for years past trading in New Zealand produce, and had, m fact, owing to these restrictions, boyeott«M it.' Looking back it seems obvious that if vou eliminate the human element in trading your produce is going to bp boycotted iii favour of produce not so restricted, and that is what occurred. At the present moment wo are in tho throes of a very difficult and dangerous position, because we have missed two of the best selling months for New Zealand produce, namely, January and February, and we are faced with ifie position of having to. liquidate very large stocks before the Northern Hemisphere production comes upon us with tho fresh made supplies which will carry us over our summer requirements. Loss to the Producers. "As a direct result of this ill-advised attempt to revolutionise entirely the methods of marketing New Zealand produce it has been estimated that tlie amount the. dairy producers in New Zealand will receive this year, us compared with last vear, will be at least übout £3.000,000 less, and a £3.000,000 deficiency on a turnover of £20,000.000 is an acutely serious thing for each and every producer, especially when it in borne in mind that the producer as * rule is a small man find not a wealthy capitalist. The. loss to him i# a B»rioua one, and the result must also reflect, not only ort the producer, but on tbo general trading conditions in New Zealand. Ido not want you to think wo ara going to be involved in any heavy loss through the policy which hss been pursued by the Control Board, The entire losj, as the entire responsibility, rests on the shoulders of the producer#. It is only by indirect effects that we shall feel the backwash of this very rash experiment "