THE BUTTER QUESTION.

Otago Daily Times, Issue 18320, 10 August 1921, Page 4

THE BUTTER QUESTION.

Once more the time is approaching when the question of the State control of butter must be reconsidered, and the conference which takes place to-day between representatives of the butter producers and the Government is of wido public interest. Incidentally it may be recalled that on the two immediately past occasions when the question of control came up for consideration the public was treated to two surprises. In October of last year, owing to a muddle in tho negotiations, butter was retailed to an indignant public at 2s lid per lb. After a period of uncertainty a final adjustment was made, but main in April of the present year a ■similar experience occurred. On All Fools’ Day the announcement was made that the price of butter was to be 2s 7d, and for a short time that price ruled, though the butter experts affirmed that the price could not stand. Ultimately the price was fixed at 2s 3d per lb to the public, the Government paying a subsidy of 3d per lb to the producers. It is estimated that tho subsidy costs tho Government £50,000 per month, and in view of the present condition of the national finances, together with the existence of a very marked opposition to Government control, the ques-

tion of future arrangements has become one of serious moment. Prior to his departure for Wellington yesterday the secretary of the South Island Dairy Association declared that the producers “were determined to have the Government lift the Order-in-Council prohibiting the export of butter.” If the producers succeed in their endeavour to eliminate Government control of exports at the end of this month, the local price of butter will bo governed by the world’s parity. This may involve an increase in the retail price of the article, but it may nevertheless mean a saving to the people in their butter bill. Only very simple people can be persuaded that they can get “cheap” commodities through the operation of a subsidy. In practice this system simply means at present that the consumer pays 2s 3d per lb directly for butter, and that for each pound purchased an additional 3d per lb is paid out of taxation. It is perfectly obvious that the £600,000 or so per annum which the Government pays in subsidy must come out of the pockets of the people, and the application of the system means therefore that the consumer takes 2s 3d out of one pocket and 3d out of the other for each pound of butter consumed. ' He is thou expected to believe that he is getting “cheap” butter. Moreover, under the subsidy system the price of butter is not merely 2s 6d per lb to the taxpayer. To this charge must be added administration expenses, and these are no small item. The Government must collect £600,000 more taxation than it would otherwise require, and it must employ a large staff to compile returns of the butter produced and sold. The companies must also prepare returns for the Government at a large cost, so that the subsidy expedient results in -considerable loss by waste labour. Viewed from every standpoint, the system is unsound and unnecessarily costly, and, rabove all, it is calculated to postpone the natural readjustment of values which is necessary to restore normal conditions of trading.