SURPLUS BUTTER

Taranaki Daily News, 30 March 1933, Page 16

SURPLUS BUTTER

SIMPLE, SOUND PLAN AVOIDING EXPORT RESTRICTION. SOUTHERN SUGGESTION. Dunedin, March 28. The problem of surplus butter exports likely to accumulate as a result of a restriction of shipments to the United Kingdom is one 'of first importance to the dairying industry not alone in New Zealand but also in Australia. With respect to the British market it is estimated that there will be a total of 20,000 tons of butter which will 'not be capable of absorption, and the question is how the difficulty of its disposition can be surrounded without interruption of production and of the closing down of factories for periods during the year. An interesting, and, on the face of it, remarkably simple and sound plan for dealing with the situation, was outlined to a reporter to-day, and it is understood that the Dairy Produce Board has already been asked to consider the proposal. The idea is to change over to the manufacture of “dry butter” in preference to the present standard article which is allowed a water content of 16 per cent. It has been estimated that a reduction of only. 3 per cent, in the legal water content of butter would reduce the actual output' in New Zealand by approximately 4000 tons without necessitating any decrease in the production of the raw material. A similar course adopted in Australia would result in a reduction of 6000 tons in the output of butter, and if the proposal were extended to cover other Empire butterproducing countries as well as foreign imports into Great Britain, a total reduction of close on 18,000 tons would be achieved as an offset to the 20,000 decrease which is needed to stabilise the market at the present time.

In brief, “dry butter,” with a reduced water content, would contain more fat, and as a result prove a more acceptable article in every way. It would freeze better, and there would be a definite improvement hi “spreadability,” that characteristic which lias assumed particular importance on the London market lately. ■ Its manufacture would demand a 3 per cent, increase in raw material, so that the production of butterfat could remain constant, leaving a 3 per cent, reduction in the quantity of butter. The proposal would of course apply equally to butter for the local market.

Unless something of the kind is done thousands of tons of butter will have to be withheld from export, and since there can be no local demand for it it must become valueless. Expert opinion has yet to comment on the idea, but in the meantime the proposal has the- confidence and support of a considerable section of the industry.

MARKING TIME AUSTRALIAN BOARD’S DECISION. AWAITING NEW ZEALAND VIEW.

The Commonwealth Government on March 21 decided to defer action in regard to the proposed restrictions on the export of butter to the United Kingdom.

This decision was arrived at so as to enable the Australian Dairy Produce Export Control ' Board to confer with the New Zealand Dairy Board. In the House of Representatives that night the Attorney-General (Mr. Latham) said that if the board recommended that no restriction should be imposed, the Government would have no hesitation in adopting that recommendatiop. Members of the Dairy Produce Export Control Board again visited Canberra on March 21, and spent the day in conference with Ministers. The proposal under consideration was that Australia should agree to the importation of Australian butter into the United Kingdom being reduced by 6 per cent, on condition that foreign importations are reduced by 12 per cent The imposition of a compulsory export levy of a halfpenny a lb to be paid by all Australian producers was suggested. This export levy would enable .the surplus Australian butter, estimated at 6000 tens in the present year, to be purchased from the producers and disposed of on the local market. ' These proposals had been agreed, to tentatively by the executive of the Control Board, but were the subject of further consideration at last week’s conference.

The resolution agreed to by the board was as follows:—“That the Australian Dairy Produce Export Control Board resolves that the Commonwealth Government be requested to defer final determination on the question of the restriction of the export of butter until the board has had an opportunity of discussing the matter with the representatives of the New Zealand Dairy Board, who will visit Australia within the 1 next few weeks.”

In his statement to the House, Mr. Latham said the question of restricting butter exports to the United Kingdom had been raised, not by Great Britain, but by the New Zealand Government. The British Government had merely asked. New Zealand and Australia to meet its representatives to discuss the position. The Ottawa Agreement ' provided for free entry of butter from the Dominions for three years. The British Government did not ask that that provision be amended, 1 and the Dominions could, if they ’ wished, maintain the Ottawa position, and have no restriction. If there were no restriction it was quite certain that • negotiations now pending for- trade agreements between the United Kingdom and Denmark and other countries would be greatly facilitated. The question must be considered in Australia simply from the point of view of the interests of the local industry’. The question under consideration, continued Mr. Latham, related to a Dominion’ restriction with a, foreign restriction of double the percentage of any Dominion restriction that might be adopted, together with the . maintenance of the 15/- preference to Dominion butter. The Government had sought the advice of the Dairy Produce Export Control Board, and it was reasonable to draw the conclusion that the board possessed the confidence of the industry. If the board recommended that no restrictions be imposed, the Government would have no hesitation in adopting that recommendation. “There is no question of the Commonwealth Government dictating to the industry, and there is no foundation for Statement designed to promote the impression that one Government or the other is attempting such dictation,” added Mr. Latham.