THE QUOTA SYSTEM

Otago Daily Times, Issue 22066, 23 September 1933, Page 12

THE QUOTA SYSTEM

RESTRICTION OF EXPORTS EFFECT OF OTTAWA AGREEMENT STATEMENT BY MR MASTERS (Per United Press Association.) NEW PLYMOUTH, September 22. In view of the fact that you_ and the Prime Minister have covered fairly fully most questions affecting- the World Conference, trade, commerce, and education, have you anything to say with regard to the World Conference in its relation more directly to the question of a system of quotas generally being applied in different parts of the world? —That question was put to-night to Mr R. Masters, Minister of Industries and Commerce, when he returned to Stratford after his visit to Great Britain as one of New Zealand’s representatives to the conference. “The question of quotas was a very prominent one before the conference, and was dealt with by the delegates appointed to the Economic Committee,” Mr Masters said. “The conference was divided into two sections —monetary on the one side and economic on the other. While the Prime Minister represented the Dominion on the monetary side, I was the representative on the economic side and on the special committee set up to deal with the question of co-ordination of production and marketing. Ido not think there is anyone who deludes himself into believing that the World Conference wa« a success measured by definite agreements and tangible results. At the same time, however, there were many, elements ox value, and problems may be solved that will have a most important bearing upon the future of this Dominion. “The New Zealand delegation was particularly concerned with the discussions relating to the supply and marketing of farm products, I will refer to these particularly, with special reference to butter, though if the full story of the quota discussions were told it would cover a long list of commodities. France, for instance, raised the problems of co-ordina-tion of production and marketing, and mentioned wheat, wool, wine, coal, timber, copper, silver, and cotton. Other delegations brought forward proposals in regard to coffee, cocoa, all cereals live stock, sugar, tobacco, dates, tin and dairy produce. , , . . “ Before discussing any product in detail the conference endeavoured to reach an agreement concerning the principles that should govern the regulation of production. The United Kingdom Ministers, who were amongst the strongest supporters of the principle of quantitative regulation, drafted a set of rules, and these were adopted at the conference. Dairy products were not dealt with in the same detail as some other commodities. Regulations were submitted in keeping with the trend towards the regulation of supplies in favour of setting up an international dairy council. New Zealand took the view that this international control council would be premature. The closing stages of the conference were fast approaching when this was under discussion, and nothing binding was entered intoso far as dairy products are concerned, but in regard to all farm products the strength of the move towards quantitative control and the approach to unanimity amongst all the importing countries were features to be noted. . "More immediately significant than the trend of general discussions at the World Economic Conference is .the movement in the United Kingdom which at the present time looks towards quantitative regulation as desirable. The Agricultural Marketing Acts of 1931 and 1933 give Jo the farmers the right to organise and regulate the supply of products. A scheme may be drawn up to cover any product, and when it has been approved it binds all produce quantities, and prices may be fixed under the scheme. “ Of direct concern to all countries that supply ithe United Kingdom market is the power given by the 1933 Act for the regulation of the volume of imports. Schemes of control in the United Kingdom have been drawn up for pigs and bacon, milk and milk products, and potatoes. Furthermore, wheat is dealt with under a quota, and sugar beet and hops have control schemes. With regard to fish, action has been taken to regulate the quantity allowed on the market. Regarding fat stock a reorganisation commission (concerned .with beef, mutton, and lamb) is now sitting, and the Government has announced its intention of setting up a reorganisation commission regarding eggs and poultry. “ These references to legislation and to the control schemes that are under way are a good indication as to the extensive action being taken, and how wide the powers are for the quantitative regulation of supplies of farm produce in the markets of the United Kingdom. In dairy produce the powers of the United Kingdom' to regulate imports are subject for three years to the Ottawa agreement. For that period (counting from 1932) the United Kingdom Government has undertaken not to limit the volume of dairy produce imports from New Zealand and the other dominions. While there has been a strong inclination. in the United Kingdom towards regulating the volume of imports which are argued to be in over-supply there, has not been any suggestion of departing from the Ottawa agreement except by arrangement with the dominions.

“There has been a great deal of discussion in New Zealand in regard to the quota problem, and I should like to mention one or two points in connection therewith. First, as to the value of the Ottawa agreement—those who are most insistent on the value of a free market and are most severely critical of any suggestion for even examining the arguments in favour of the quota should acknowledge, from their point of view, the importance of the agreement concluded at Ottawa. Were it not for this agreement the free market would not be guaranteed. It would not be for us to choose whether there should be a quota, “ Secondly, in regard to the New Zealand Customs tariff and the quota, as clearly as could be the United Kingdom has stated that our New Zealand tariff has no bearing on the quota, and this is equally true in regard to the exchange rate. There were lengthy discussions and prolonged negotiations between the Dominion’s representatives and the United Kingdom Ministers. The question simply bristles with difficulties, one of the greatest of which is the impossibility of separating butter and cheese, and it is cheese that the United Kingdom farmers are particularly anxious to have brought within a comprehensive scheme of control. The farmers in the United Kingdom are taking this matter very seriously, as is indicated by the fact that the salaries of the general manager and some of the other chief executive officers of the milk control scheme are from £SOOO to £7500 a year. We recognise, and the producers of New Zealand will recognise, the importance of keeping the goodwill of the United Kingdom. The difficulties can be best overcome by discussion, and we took the view that this is a farmer’s problem in leaving the matter open and in not agreeing to the quota proposals. “ The New Zealand Ministers in London took notice of the principle stressed by the British Ministers and agreed to by the World Economic Conference—viz., any scheme (this affirmed) should in the first instance command a general measure of assent amongst exporting countries, and, within these countries, a substantial majority of the producers themselves. Whatever else was to be said for or against the quota, the New Zealand representatives in London had to take notice of the very strongly expressed opposition in the Dominion to the suggested quota on dairy produce. Accepting the view that it is a farmer’s problem, wo extended an invitation to the Nattional Farmers’ Union of Great Britain to send direct representatives to New Zealand. _ Hence, the visit of Mr Baxter, who arrived in New Zealand yesterday with the object of going fully into the problem of the entry of our dairy produce into the United Kingdom with representatives of our farming industry.”