DAIRY PRODUCE CONTROL

New Zealand Times, Volume LIII, Issue 12483, 26 June 1926, Page 5

DAIRY PRODUCE CONTROL

FROM DAY TO DAY MR GROUNDS ON PRICE-FIXING WHAT DO WORDS MEAN? This season the Dairy Board hns endeavoured to regulate shipments from New Zealand, but failed so badlv that the Home market was glutted during January. Factories found their own solution to the problem by storing their surplus butter in London, and have fed the market steadily ever since at from 170 sto 175 s per cwt. The market hns not fluctuated one penny per pound for over six months. How could the Dairy Board hope to obtain any better stability than factories are at present obtaining for themselves? According to Mr Goodfellow’s statement, in December the board could have done better still and kept the market at 180 s per cwt. At that time this statement was backed up bv various official statements by Mr Grounds, who stated that the board would fix the price level from day to day. Now Mr Grounds tries to*tell us that .there will be no such thing as price fixing, and that it is wrong in principle to hold butter in London for a better market. If such a policy of meeting the market had been pursued by the Dairy Board during thp present reason values would have declined to 150 s per cat, and the very speculation which the factories are so anxious to avoid would then have taken place. To improve on the present season’s results would mean that the board would have to fix prices and storo largo our.ntities of butter in London from time to time. It would be excellent for the New Zealand producer if the board could do eo. but as it would mean higher retail prices, would the (British consumers stand for such a policy? Certainly not. In other words tho hoard’s marketing scheme has not the • slightest chance of achieving better financial returns for the nroduoers. • which is just the point we have been trvjng to make all along. Tho following i* from Mr Grounds. December llth. “Dominion”: _“Butter prices have receded to 172 s to 176 s per cwt. To endeavour to maintain prices at a fictitious level wftuld be unwise and impracticable, but indiscriminate forcing of produce upon the market immediatelv upon arrival will precipitate a further considerable decline in prices. The board have not .undertaken marketing supervision in this sense during the present season, but present? experiences once more emphasise the imperative necessity for such a course if the best results are to be achieved.** The foregoing is delightfully vague, but obviously means that the Control Board would 9ay how much butter was to be marketed and at what price, and their policy would surely be to receive the highest price that was obtainable from the consumers, and at the same time move the butter into consumption “What is this but price fixing and extracting the last penny that the consumers will pay ? Such a scheme would be excellent for the producers if the Dairy Board could get away with it. but no doubt the consumers would have something to say. "FIXING THE PRICE*’ On December 7th the following P.A. message was circulated from •Hamilton by Mr Goodfellow, pointing out that the butter market would decline seriously in January owing to heavy arrivals at Home from New Zealand : “These very low prices could, and would no doubt be obviated by New Zealand factories cabling to their London agents fixing a minimum selling price. In this way it might be possible to prevent the market going below 180 s, but without a central authority acting on their behalf the factories* action would be spasmodic and to a large extent ineffective. Mr Goodfellow said this was another glaring instance of tho necessity for absolute control. Until the board had absolute control it would be impossible to do anything worth while by simply tinkering with the market.” In other words, if the Dairy Board had absolute control during the last six months it would have, according to Mr Goodfellow, prevented the market from declining below 1809 per cwt from January onwards. How could it have done so except by fixing market values and extracting higher prices from the consumers? “Taranaki Herald,” January 29. Mr Grounds at the Hawera meeting said:—“The policy of the board aims at the whole of its distributors being in touch with the central office reporting from day to day how the market was going, and in that way the London Office, as a clearing house for information between the distributors, would be better able to guage the market in competition with other countries.*’ “Dominion,’* February 26. Mr Grounds issued an official statement outlining the board’s policy in which the following appears“ The •hoard’s London agency will decide, in conjunction with the distributors, their price level from day to day, which price must, as an ordinary business necessity, be kept at the sales point to enable business to be done.” "What is this but price fixing and extracting from consumers the last penny they will pay, and at tho same time enable tho butter to be moved into consumption ? “Southland Times,” March I. *‘At tho Gore meeting Mr Grounds wa* asked how the board would make provision for the final payment on produce held up in London. He replied that it would be an unwise suggestion to hold any produce. Any waiting for prices to firm would »avoi;r of speculation, and was absolutely wrong in principle. By that method the board would create the very disabilities it was set up to prevent.” “Southland Times,” March Ist.—Mr Grounds, speaking at Invercargill, said: “The board’s policy was to maintain a steady market le\el and keep prices about the same.” Grounds’ Meeting at Itangicra.— iThristohureh “Press,” March 4th. —Mr Grounds said: “Tho hoard recognised the necessity of saying the last word i*s to whether the produce should be put on the market or not.”