DAIRY QUOTA PROBLEM

Poverty Bay Herald, Volume LXI, Issue 18399, 17 May 1934, Page 2

DAIRY QUOTA PROBLEM

ATTITUDE IN AUSTRALIA EFFECTS OF RESTRICTION POSITION OF NEW ZEALAND Comment on the attitude adopted in Australia, on the question of dairy produce quotas was made, by Mr. H. K. Pacey, a director of Joseph Nathan and Company, on his return to Wellington by tho Makura from Sydney after _ a business trip. He emphasised the point that if Australia and New Zealand acted conjointly in the matter care should be taken to" see that the incidence of a restriction scheme was fair to both. Mr. Percy said the question of restriction was engaging the attention of the leaders of the industry in Australia, some of whom had adopted Mr. S. M. Bruce’s view that restriction would lie forced upon exporting countries in July of next year when tho Ottawa agreement expired, and that it would he better to open early negotiations with the Imperial Government rather than vva.it until, restriction became a reality. The milk marketing scheme in England, which was being used to subsidise all milk used for manufacturing purposes, was a factor which lent force to that view. AUSTRALIA’S FUTURE OUTPUT However, the Australian position was dissimilar from that of New Zealand in some respects. Australian producers had had a succession of good seasons and their output of dairy produce was thought to have passed the maximum for many years to come. Accordingly, restriction really meant a standstill policy at the worst, and it might mean that their output would not be up to tho expected quota under a restriction scheme. This was partly due to recognition that they had already enjoyed all the benefits they were entitled to expect from seasonal influences and partly to the fact that their output would be down by reason of producers transferring their activities from dairying to wool. Mr. Pacey remarked that if negotiations were undertaken by Australia and

New Zealand conjointly steps should be taken to see that the incidence of any restriction scheme was fair as applying to both countries. That was to say, that the policy of restriction should involve real restriction in both cases. Queensland’s position was more nearly akin to that of New Zealand its far as prospective increase in production was concerned, Mr. Paccy said. In that State the policy of restriction was not viewed as favorably as in some of.the southern States. PLIGHT OF PRODUCERS “The plight of the primary producers has been, of course, a very real concern over there, as it has been here,” Mr. Pacey continued. “They have not been quite as badly hit in Australia because they have had the Patterson scheme, which has helped out a little. It was a voluntary scheme, and as such it became very difficult to administer. Defections weakened it and the increase in their exports as compared with their local consumption caused the advantage from it to bo greatly reduced. The result is that the scheme has gone. On May 1 they started on a new scheme under which each factory is .given an export quota. “For the time being that quota will be 55 per cent., 45 per cent, being the margin for consumption within tho Commonwealth. Some companies will desire to export more and others less than their quota, and that condition will be met through an equalisation fund. Under the new scheme the wholesale price of butter throughout the country was increased to Is 3d a pound from about Is. That will moan that after they get over the first month or two, dul'ing which there will be a little adjustment, tho butter producer will get about livid a pound for his butter-fat, compared with our Bid, more or less. It means that the people of Australia by means of local consumption are making up the difference. “This scheme could not be applied with the same force to New Zealand, because our proportion of exports is approximately 84 per cent., as against Australia’s 55 per cent., but that is no reason why a New Zealand scheme should not be embarked upon as a means of assuring a reasonable price from this market. Occasionally butter is sold for New Zealahd consumption at rather less than export parity, and a margin over such parity might be reasonably increased without hardship to anyone.”