THE New Zealand Herald AND DAILY SOUTHERN CROSS WEDNESDAY, AUGUST 21, 1935 BRITISH FARM POLICY

New Zealand Herald, Volume LXXII, Issue 22193, 21 August 1935, Page 10

THE New Zealand Herald AND DAILY SOUTHERN CROSS WEDNESDAY, AUGUST 21, 1935 BRITISH FARM POLICY

More than ordinary importance attaches to the decision of British milk producers, registered in a vote of six to one, in favour of retaining the marketing scheme. The result will undoubtedly strengthen and confirm the British Government in pursuing the line of agricultural policy which had begun to emerge out of experience gained in protective experiments with various food products. The affirmative vote is also the first substantial meed of encouragement vouchsafed to Mr. Walter Elliot. He had to expect a good deal of criticism from consumers and distributors, but the unkindest cut of all was the bitterness with which he was assailed by the farmers themselves, whom he was trying to help. To judge by the milk producers' ballot, the critics have been more vociferous than numerous. Either that, or else the farmers preferred to put up with administrative imperfections, rather than go back to individual marketing, and again find themselves at the mercy of the distributors and the victims of price-cutting. Competition would be more fierce than ever before, because during the short life of the scheme the number of registered milch cows has increased by 250,000 and total production by 40,000,000 gallons a month. In spite of advertising and the extension of the free distribution of milk in schools, the surplus over liquid requirements continues to grow, thus depressing the price obtained by Jarmers. That accounts for the wide expression of dissatisfaction, but also for the overwhelming vote to retain the scheme. The recent rapid, if artificial, growth of the industry would be cut down without it. Another inducement was the hope, encouraged by recent Ministerial statements, that a subsidy for milk producers would shortly be found out of the proceeds of a levy on imported dairy produce.

New Zealand farmers should note that this policy of levy-subsidy is rapidly being extended by the British Government. It had its genesis in the Wheat Act, but the desire of the British Government, as plainly stated in the White Paper, is to extend it to meat and now to dairy produce. The system is to apply to bacon from January 1, subject to the consent of foreign countries. And the intention is, as attested by several official statements, to apply the levy to Dominion products, although at a lower rate than to imports from foreign _ countries. In short, so soon as Britain can free her hands of the tangle of existing trade agreements, Ottawa and foreign, she intends to substitute the levy-subsidy system on an Empire preferential basis. The new scheme is sometimes described as an agricultural protective tariff, the proceeds from which are to be earmarked to subsidise British farmers. Thai is merely another way of putting it. The effect is to confer on British farmers a double protection —first the shelter afforded by the tariff and then the subsidies coming from the same source. As the levy goes on, it is intended to take some of the restrictions off imports. Mr. Baldwin is not enamoured of quotas and, if he can substitute levies, Mr. Elliot will be content with les3 restriction, although he still considers some measure of regulation necessary to prevent gluts and the collapse of prices. So foreign bacon producers have been offered enlarged British quotas if they will consent to a "limited charge" or levy on imports. British public opinion demands, and the Government seems to be persuaded, that agriculture should not be indemnified by creating scarcity and so inevitably depressing the living standards of the mass of the people. Hence Mr. Elliot and his Parliamentary Secretary, Lord De la Warr, have recently been extolling the virtues of increased consumption and devising schemes in certain directions to bring it about. They also recognise that the new objective cannot be realised if prices are forced too high. Part of their effort, therefore, is to improve marketing so that the farmer may receive a higher percentage of the retail price of his product, and the middleman less. But they also stipulate—and this is important to New Zealand—that the levies or earmarked tariff on imports should not be fixed so high as to affect prices and consumer demand. To judge by the White Paper, and more recent official statements, this policy is to be applied generally as opportunity offers. There is no support for the idea put forward by some politicians in New Zealand that the Dominion could obtain a special exemption for herself, and retain the old free and unrestricted market, by making an offer of free trade to Britain. The British Government's attitude does not even admit of a reciprocal trade agreement, such as is suggested by Mr. Goodfellow this morning. Britain is determined to protect agriculture,

as she is protecting her other industries. She is no longer willing to sacrifice her farmers to gain advantages for her industrialists. Even as a pure matter of business, she is not prepared to consider such a baigain. And there are other motives. Britain remembers the food shortage of 1917-18, and, for defence reasons, wants to be more self-sufficient in future. Again, she is not convinced that she did well almost a hundied years ago, when she sacrificed the life of the countryside in order to create 1 the Black Country, depopulated villages in favour of ugly industrial cities, and reduced her best stock, the countrymen, to gain a C.3 factory population. Th is consideration may be found stronger than any material motive. At any rate, Britain is at present resolved to preserve and promote agriculture, and that resolution will not be shaken or qualified by the offer of a small increase in the New Zealand market for British goods.