"FACE POSITION"

New Zealand Herald, Volume LXXI, Issue 21793, 7 May 1934, Page 10

"FACE POSITION"

ME. BPiUCE'S ADVICE MANY MUTUAL PROBLEMS REGULATION INEVITABLE NEGOTIATIONS WITH BRITAIN "T have enjoyed the privilege of a private discussion with your Prime Minister and his colleagues," said tho lit. Hon. S. M. Bruce, after the conference. "It is not for mo to give details, but where the London market for primary products is concerned Australia and New Zealand are facing common difficulties. Our interests in many ways aro very mutual."

Both Australia and Now Zealand would have to face tho situation that had arisen in England, Mr. Bruce continued, and ho inferred that some measure of restriction of dairy exports to Great Britain was, in his view, inevitable. Great Britain was thinking not so much in terms of tho expansion of overseas markets for her manufactures, but sho was thinking definitely in terms of fostering her own agriculture and giving her own farmers first consideration in their home market.

Mr. Bruce mado tho point that Great Britain at present absorbed 85 per cent of tho total dairy product exports of tho world. Other importing countries of tho past had now erected high tariff barriers, and applied stringent quota restrictions to increase their own production, and buttei; which had previously found its way to Germany and other countries was now being placed on tho British market. It was a question whether, in that market, saturation point had not now been reached. Changed Trade Situation "Free trade was a very excellent thing for Britain whcyi she was tho workshop of the world," Mr. Bruce said, "but tlioso days aro finished. Other countries aro manufacturing their own goods instead of importing from Britain, and Britain finds that she must adjust her general trading policy accordingly. Both Australia and New Zealand depend largely on the British market for their primary products; in many respects tho British market is to them the world market, it is obvious that we aro vitajly interested in tho continued economic welfare of Great Britain."

Tho prico question was ono of considerable importance, Mr. Bruco continued. Tho market rates for butter were already so low that they had destroyed tiio market for first-grade margarine. The manufacture of this product was substantially in hands of one largo firm which, when it had found production unprofitable, had been in a position to accept that fact and practically cease production and cut losses. Difficulties of Farmers The position of the dairy farmers of Australia and New Zealand had been much more difficult. They had not been able to ccaso production overnight when they found that tho market rates had fallen below their costs of production. Certainly efforts had been made to reduce costs, but the logical result of tho pressure of low prices was that a string of small dairy farmers, who did not have the solidity of a largo manufacturing concern, would bo slowly squeezed out of existence. Apart from the restriction of exports, there was one other possible avenuo open to Australian and New Zealand producers. That was to accept low prices and to continue storming the market until even tho lowest grades of margarino had boon wiped out, necessitating the marketing of butter at about 4d a pound. "Co-operation with Great Britain presents tho logical solution of our difficulties," Mr. Bruco said. "Wo need not fear the consequences. In some quarters in Australia, I know, there is an impression that Great Britain is out to 'squeeze' the primary producers of the Dominions and I gather that similar views arc supported to a certain extent in New Zealand. That is foolish. It must be remembered that tho expansion of British agriculture caimot go beyond .certain well-defined limits. Great Britain has a comparatively small area and a dense population. Tho country cannot be turned into one large, intensely cultivated farm." Negotiation and Regulation Regulation had to come. That point was strongly made by Mr. Bruce. It was not a question of it being forced on tho Dominions by Great Britain; if was a question of the Dominions having to adopt the principle in their own interests. Decisions on that principle could be followed by negotiations with Great Britain on the basis that, with the British farmer having his interest in his home market assured, the Dominions would receive preferential treatment over foreign producers. Naturally, margarine would have to come into the question; a manufactured substitute had a distinct bearing 011 the market for butter.

In Mr. Bruec'a view there was no likelihood of the calling of an early Imperial Conference to make fresh Imperial arrangements for the marketing in Great Britain of primary products. As far as ho was concerned, he thought negotiations could be carried on through the High Commissioners for tho Dominions in London. Ho realised too, that the dairy industry was probably of greater importance to New Zealand than it was to Australia, but suggested, one gathered, that once the basic principle of regulation had been adopted, the various Dominions should be free to carry out their own negotiations and make their own mutual arrangements with the British Government.

Meat Involved Meat exports provided another point in which both Australia and New Zealand were vitally interested. Mr. Bruce added. The present agreement for meat would terminate at the end of June and definite regulation of the meat imports into the United Kingdom could be brought into force from July 1. It would be possible to cut down the whole imports of lamb and mutton. Summed up, Mr. Brucc's views were that the position would have to bo faced without delay. The British market was overcrowded and the Dominions apparently would be well advised to accept some form of' restriction and seo to it that their fair share of a reorganised British market was secured. Mr. Bruce concluded by saying it had been a great pleasure to him to meet the New Zealand Ministers. There had been no question of acrimonious debate. A conversation in which mutual difficulties and problems were set forth could not fail to bo useful and enlightening.