DAIRY QUOTA OPPOSED

New Zealand Herald, Volume LXX, Issue 21503, 29 May 1933, Page 5

DAIRY QUOTA OPPOSED

OPINION OF MR, W. GROUNDS RISE IN PRICES UNLIKELY EFFECT ON NORTH AUCKLAND " It is a choice between the devil of low prices and the deep sea of the quota—how deep no man knows —and it is better to have the devil we know," said Mr. W. Grounds, chairman of the Northern Dairy Conference, in an address at a sitting of the conference at Kaitaia. Mr. Grounds opposed the imposition of a dairy quota, declaring that North Auckland would be more seriously affected than any other part of New Zealand. After showing the increase in production in North Auckland since the 1930-31 season, Mr. Grounds said this increase would proba'bly continue and restrictions would aflcct the North more than the higher-developed parts of the Dominion.

A recent resume of the position by the IU. Hon. J. G. Coates was not as unbiassed as it was supposed to be and did not put the full facts of the case before the public, while it had been given at a most inopportune time, just after the return of the Dairy Board delegation from Australia, where 'the quota question had been discussed. When the Dominion representatives visited Australia, they found there was a growing feeling that a quota could have been accepted, but after conferring with the New Zealand delegation the Australian representatives viewed the matter from the point of view of principle and agreed to resist any restriction.

New Markets Question The theory on which Mr. Coates' finding was based, that the removal of a proportion of the output of a commodity would tend to harden the price to the extent that the increase would recompense the producer for the smaller output, would not work in practice. There was no justification for the belief that restrictions would improve the price. If there was to be any restriction of New Zealand exports, that volume would have to be definitely withdrawn from the market. The suggestion had been made that supply should be limited to the volume of 1931 production, which would mean that about onesixth of next season's butter production would be valueless. In regard to new markets, Canada and the United States were definitely closed to Dominion butter, while in the East the earning power of the people would have to be raised before they would be in a position to purchase. Meeting the Loss If the quota was introduced, was the industry or the country as a whole to carry tho loss, asked Mr. Grounds. If the quota was tb be treated as a temporary measure, the industry was justified in asking that the Government should carry the loss, as it was doing in tho case of the wheatgrowers and in the indemnity to the banks through the raising of the exchange rate. If it was to be treated as a pern'anent policy, then the national policy of the past 50 years, of closer development, with greater production, would have to be changed. If the industry was to carry the loss, the Government should cease the policy of closer settlement, resulting in greater production. Under the Ottawa agreement, which had two years to run, Great Britain had given New Zealand butter free entry for three years, concluded Mr. Grounds. By the' time the agreement had expired he thought the position would right itself, as there were factors operating on the English market which would make a quota unnecessary. Another point was that as soon as the wheat and wool markets improved, farmers who were formerly producing these commodities and had turned to dairy farming would return to the type of production in which they were previously engaged. " We are still trying to palch up an economic structure which was made for a world of scarcity," added Mr. Grounds. "We have not made that policy conform to the present age. We must plan our economic and distributing policy on the world of plenty in which we live, and until we shape a new policy we will hot emerge from oar difficulties."