STABILISATION SCHEME

Taranaki Daily News, 24 January 1934, Page 9

STABILISATION SCHEME

DAIRY INDUSTRY CONTROL COMMONWEALTH LEGISLATION. REPLACEMENT OF PATERSON PLAN. MOVE FOR EARLY OPERATION. Efforts are being made to expedite the steps necessary for the issue of a proclamation by the Governor-General to bring into operation proposals for the stabilisation of the Australian dairying industry. From the Commonwealth point of view the legislative authority for the stabilisation scheme is contained in the Dairy Produce Act which was passed by the Federal Parliament during the latter part of'last year. The proclamation bringing it into effect will be issued within the next few weeks. The Dairy Produce Act provides for the regulation of the transfer of butter and cheese from one State to another, and is on similar lines to the Dried Fruits Act of 1928, states the Sydney Morning Herald. Its chief object is to ensure to all producers of butter and cheese a fair share, and not more than a fair share, of the advantages aiid disadvantages of selling within Australia and overseas. New South Wales, Victoria and Queensland which, in the aggregate, produce approximately 90 and 80 per cent, of the total output of butter and cheese respectively in Australia, have enacted legislation under which a board will be established in each of those States to regulate the intrastate marketing, of butter and cheese. It is doubtful whether South Australia, Western Australia- and Tasmania will introduce similar legislation. The Commonwealth Government indicated, however, that it would be prepared to give effect, by proclamation, to Commonwealth legislation provided that the poll among producers taken by the States which pass intra Stat legislation indicates .that in those States where an affirmative vote is cast the aggregate projduction of butter and cheese is not less than 60 per cent, of the total Australian output. . ’ NECESSITY FOR LEGISLATION;' ! Five years ago Australia exported 45,000 tons of butter overseas. During the year ended June 30 last the total reached 101,000 tons, of which . 93,000 tons was sent to the United Kingdom. The value to Australia of that export trade last year was £9,270,000. This substantial increase of-exported butter was due partly to the expansion of the areas devoted to dairying, especially in Queensland, and partly to improvement in farm technique, to pasture improvement, fodder conservation and other factors. Apart from a valuable market for about 6000 tons in the East, the United Kingdom constitutes almost the only outlet for Australia’s exportable •surplus, and year by year greatly increased quantities of butter have been sent to that market. Australia has not been alone in increasing her dairying production. While Australia in the last five years has increased her exportable surplus by 56,000 tons, New Zealand has increased hers by 40,000 tons . Her only worth-while outlet •is also the United Kingdom. Thus, from Australia and New Zealand alone Great Britain receives nearly 100,000 tons of butter a year more than the quantity of five years ago. In addition, increasing quantities of Danish butter have been placed on the. British market, mainly because of the restrictions imposed on imports from Denmark in other Continental countries. In j;hese circumstances a fall in prices in the United Kingdom was inevitable. THE PATERSON PLAN. For some years the Paterson plan has been in operation. This was designed, to assist in ensuring a more remunerative price for butter. Under the plan a levy is paid on all butter manufactured, and from the fund created a bounty is paid on all butter exported. The existence of a bounty on exported butter brings about an automatic increase in the Australian price, and the dairying industry has profited considerably from this enhanced price. In view of the voluntary nature of the Paterson plan the industry has' found difficulty in sustaining the scheme. During recent months, according to the Minister of Commerce (Mr. F. H. Stewart), there has been an increasing tendency on the part of factories to break away from the scheme, and • the industry claims that another section of the butter producers—the persons who make butter on farms—is not making any contribution to the stabilisation of the industry. These farmers, with the breakaway factories, it is claimed, are reaping the full advantages and benefits Of the plan. With the large amount of butter exported the plan is rapidly losing its effectiveness. COMMONWEALTH’S PART. After conferring with the State Governments the Commonwealth Government agreed that it would pass enabling legislation in the event of the adoption by the State of measures for marketing butter. One of the principal provisions in each of the State measures empowers the respective State Ministers, in conjunction with boards which are to be appointed, to determine the quantities of butter and cheese which may be sold on the home market. The States are not empowered to regulate the interstate transfer of goods, without which it' would not be possible to ensure that the balance of butter and cheese over and above that determined for home consumption would be exported overseas. To meet this position it was essential that there should be Commonwealth legislation which would prohibit interstate trade in butter and cheese except under license. A license will be granted only on condition that the licensee will comply with the export quotas fixed by the Minister for Commerce. In this way it is hoped to ensure that each producer will take his fair share of the less remunerative export market. One important aspect of the new stabilisation scheme is the necessity for ensuring that the consumer is protected against any unreasonable increase in the Australian price above the additional cost at present brought about by the operation of the Paterson plan. This possibility will be controlled by means of the power vested already in the Minister for Commerce with regard to the fixing of export quotas. Thus, if it were represented to the Minister for Commerce that the Australian price was too high, he might conceivably reduce the export quota—and, in consequence, increase the amount available for the Australian market—and thus force a reduction in price. When the Commonwealth legislation, and the complementery State legislation, become fully operative the Paterson plan will be no longer necessary. The new arrangements will enable a price to be fixed on the home market independently of London prices.