QUOTA DEMAND

Taranaki Daily News, 26 January 1934, Page 11

QUOTA DEMAND

BRITISH FARMERS’ VIEW “ONLY WAY TO (RAISE PRICES” ADDRESS BY MR. T. BAXTER OPINIONS OF NEW ZEALAND The full text of Mr. Thomas Baxter’s report on his visit to New Zealand in connection with the proposal for a quota on Dominion dairy produce has been made available throught the courtesy of the secretary of the Royal Empire Society. You will understand my subject better if I begin by explaining something of the milk marketing scheme now in operation in this country before touching upon the subject of New Zealand, said Mr. Baxter in his address at a Royal Empire Society luncheon. The Agricultural Marketing Act of 1931 enables a body substantially representative of producers to promote schemes for controlling and regulating the marketing of agricultural products. When this Act became law it was received with mixed feelings by the National Farmers’ Union. Some farmers objected to any scheme of control, and would have nothing to do with it; others could see no good in controlling our own supplies so long as they were subjected to the uncontrolled dumping of supplies from overseas, and others were so pessimistic of the future that they were willing to try any remedy rather than continue the existing chaotic scheme of things. It was not until the National Government came into power ana Sir John Gilmour promised to give control to overseas supplies, that the National Farmers’ Union decided to support and promote the milk marketing scheme, set up by the Government. Then came the Ottawa Conference, with the object of increasing trade within the Empire, and the National Farmers’ Union sent two representatives, including myself, to watch the interests of the home agricultural producers. Our intentions were to get in touch with brother farmers in the Dominions, to discuss matters with a united front, and to ask nothing for the moment in return but this one acknowledgment, that the home producer is entitled to the first place in his own home market for all that he produces; that the Dominions are entitled to the second place; and the foreigner to the third. That acknowledgment was freely given, and the result was favourable to the Dominions.

A duty on butter and cheese from foreign sources was increased, and the Dominions were guaranteed a market in this country free for three years. Unfortunately there then occurred in this country a most extraordinary collapse of butter and cheese prices, and these'have remained at a ruinous'level ever since. The milk marketing scheme came into operation on October 6 last. The arrangement provides for milk to be used for local consumption and for the surplus to be sold for manufacture into some form of dairy produce. The whole of the moneys received are to be pooled and each producer receives a proportion •of the pooled amount. Now I come to where New Zealand enters the picture. Our present Minister, Major Elliot, when he came into office, was anxious to carry out the promises given by Sir John Gilmour to protect home agriculture from unlimited overseas supplies. He came to the conclusion that the best way to do this was by some form of proposal which would enable him to regulate the quantity coming on to the market. I only need to give one instance of what I think will be sufficient t- show you the necessity for this. For some two or three months last summer my wife, who always uses New Zealand butter, was able to have it delivered at her house for 8d per pound. Whenever I wanted a pound of grease to put in my car wheels, I had to fetch it from the garage and pay Is a pound. I did not have to play that shilling because grease was scarce, but because there was some common sense used in the marketing of grease, which is more than could be said of the marketing of dairy produce. FIRST MENTION OF THE QUOTA. The next thing we knew was that our Minister was in touch with the Trade Commissioners of New Zealand and Australia over this question of agreeing on a quota which they could stand out of for a period of two years, which is the period continuing under the Ottawa Agreement. Next the Prime Ministers themselves came over to the Economic Conference here, and when the conference ended he called them together and raised the question of .butter. I understand that the upshot of that question of a quota on butter was settled by Mr. Bruce, representing Australia, saying they would have nothing to do with that. I remember “a time very well, seven or eight years ago, when Mr. Bruce was the chief guest at one of our annual dinners of the National Farmers* Union, and he raised round after round of applause by declaring that the home producer was entitled to the first place in his own market, in which he. produced; that the Dominions were entitled to the second place, and the foreigners the third. It does appear to me that these sentiments are quickly forgotten when their own interests are concerned. The Minister then turned his attention to cheese and said, “What about cheese? If the butter market has to rip we cannot let that rip, too. We must have some decent price opening for the surplus milk in this country.” There again New Zealand was more affected than any other Dominion. He told them that what we wanted them to do was to divert some of their milk from cheese to butter, and to restrict the quantity of cheese they were sending over. They could put it into butter and take their chance with others in i the butter market.

I suppose they had news that something of this kind was coming off prior to Mr. Forbes’ meeting. Our Minister, with, I think I am right in saying, Mr. Coates, had issued a memorandum in New Zealand drawing up what he believed to be the position of New land under the proposed quota, and he > weighed what he believed to be the |

advantages .to New Zealand with the disadvantages, but he came down, in favour of the quota proposal, and when that memorandum received publicity in- New Zealand, the producers took it very badly and, I believe, Mr. Coates ,;had a bad time. Therefore, when Mr. Forbes was pressed by our Minister here he naturally was a little anxious on the question of agreeing to any such proposal, and asked if he could see somebody representing the National Farmers’ Union interested in this milk marketing scheme, so that he could get a greater insight into the milk marketing, and realise what the effect of the scheme would be.

I had to go to see him, and the upshot of that discussion was that Mr. Forbes issued an invitation to the National Farmers’ Union to send a representative out to New Zealand to state the ■ case of the home producer 1 here to the home producer in New Zealand, so that there might be a bet- ■ ter understanding of what it means if ■ there should be a refusal on the part of New Zealand to comply "with the request of the Old Country. That Dominion is anxious not to refuse a request made by its best customer. They ' realise .that England is their best customer—in fact, almost their only customer—and naturally the Prime Minister did not want to turn it down if he could find a way out. That was the object of my visit; I was deputed by the National Farmers’ Union to go out there and see those interested in the subject and state the case for the home producer to their farmers, and to show that a refusal to comply with the request for the regulation of dairy produce to our markets for the purpose of lifting the price level of those commodities would prejudice the success of the milk marketing scheme. MR. BAXTER IN NEW ZEALAND. I went to New Zealand. My visit was a very short one. I was anxious to get back because I had been appointed the head of the Milk Marketing Board, and therefore I only spent 11 days in New Zealand. I had a wonderfully hospitable reception there. New Zealand will always almost kill the visitor from the Old Country with kindness; the New Zealander may not accede to all that is asked of him, but he will certainly treat the visitor very, well while he is in the country. I had a wonderful time. I had to meet a body termed the Dairy Produce Board. This is a kind of council of dairy societies. These men are engaged in the manufacture of milk into butter, cheese, or some form of dairy produce, and their duties are to find a market for it and to market the goods. There I was up against a difiiculty s I realised that they came between the farmer and myself to a great extent, and for the following reason: In this country the interest of. the farmer is represented by. the National Farmers’ Union, . and I. hope it always will be. We are adopting a similar kind of thing to what exists in New Zealand, but I . shall regret it if ever the day comes when- we taken over the whole policy of the National Farmers’ Union of dealing with pigs or products. I think it would be a great mistake, and that the \ policy should always be directed by the. producers themselves i and not through the heads of societies marketing the goods. That is one. thing about which I have ' a quarrel with New Zealand. The men

I met looked at the business more from the factory than the farm side. It is tons that matter to them rather than prices. I do not say that they, are not interested in prices, but they are chiefly interested in getting the largest number of tons through the factory. In New Zealand they do not buy the milk, whereas all milk in this country is purchased either by those who distribute or manufacture. It is entirely different in New Zealand. Very little, if any, milk is purchased by these dairy societies. They induce members to let them have their milk, - and they manufacture, pack, transport, and market to this country, and from the proceeds all factory and other charges are deducted, and the farmer is given what is left. Therefore it is tons that matter to them, the tons going through the factory, rather than the price. SEEING THE DIFFICULTIES. I could see at once that I would have great difficulty in inducing this Dairy Produce Board to agree to a curtailment by quota. They treated me very fairly; asked me to go up country and see their system of manufacture and factories, so that I could realise what they were up against, because they claimed that they. had difficulties also. I accepted the invitation, and for a week those men took me over the district and showed me a good deal of the dairy districts of New Zealand. It was agreed that I should do this before we really came down to the discussion, of my mission. I was introduced to various groups of men in the different towns visited. Frequently the Mayor and ' entertained me at a luncheon, and I had to say something about my mission. During these discussions they put many arguments up to me, giving their reasons why they

should not be asked to accede to the request for a quota. The farmers had a strong belief that it was a question of monetary policy or -tariffs, and. a feeling that if the New Zealand Government would give free entry to all our manufactures into their country, and did not interfere with the 4 currency question, this matter of the quota would not have arisen.

I was able to assure them that I had the authority of the Ministry of Agriculture to say that this question of tariffs and monetary policy had nothing whatever to do with the quota; if they agreed to remove every tariff imposed against manufacturers from this country, the question of quota would remain the same.

, When this was explained,’ it was not , long before they dropped that argu- , ment. They then said that in this coun- . try a great quantity of stuff was im- ■ ported from foreign countries, and that , they felt they ought to be allowed to ’ fight ~it out with the foreign countries. ■ I told them that if it were possible we , would be willing to leave it to them, but that while they were fighting it out with the foreigner, someone would have to go out, and the first to fall would be the home producer. They told me that they had a million and a half cows, but I reminded them that we had three and a half million; they had not realised that our home dairying industry amounted to much, but. when this was explained they . could see why we were not prepared to let that fall. COSTS OF PRODUCTION COMPARED. I think we can say that with the restrictions we have here, the statutory charges, the length of time cattle have to be housed in the winter, costs of feeding stuffs which we are compelled to use, our costs are double what the New Zealand costs are. I think I was successful in showing them why - they could not be left to fight it out with the foreigner. They thought that as long as any goods were coming in from foreign countries, the restriction should be placed on the foreigner, and not on the Dominions, and I had to point out that there was a very good reason for not doing so. It would be no good cutting off 10,000 tons of butter from Denmark if Australia, New Zealand, and the other Dominions were left free immediately to jump in and supply that 10,000 tons. All we should have been successful in doing would have been to invite retaliation from Denmark, and we would have got nowhere. In my opinion it was no use for our country to attempt to apply restriction without every country concerned in sending supplies to this country were within that control.. I told the New Zealanders that what. they . could do, . and were entitled to do, was to fight for as good a place within -hat control as they could' get. They had all got to come into it; a. commodity could not be controlled, and it was no good controlling a country or group of countries and, leaving another country or group of countries uncontrolled. Therefore, if there is to be control, it must include all countries within that control. I explained that although they had preference over the foreigner, there was also a willingness shown to give preference in. any quota proposal; . there should only be a cut of, say, one box of butter to the foreigners’ two. If they could get a cut of one box of butter to the .foreigners’ three or four, I wished them good luck. We did not mind where the cut came from, but we would prefer it being imposed against the foreigner, and' we were willing to bring any weight that we could to bear .upon the matter to enable them to get as good conditions as possible. With regard to prosperity, New Zealand could never hope for prosperity 1 without prosperity at Home. Unfortunately their population was so small

—about the size of Birmingham or Glasgow—that there was not an outlet for the manufactured goods for which we had to find a inarket. I could not help telling them that, in my opinion we could not afford to lose any foreign trade whatever if it could possibly be avoided, and the more foreign trade we lost, the less would be the prosperity of this country. I explained that they were as much concerned- with a prosperous country here as we were. Those were the chief arguments that I had to meet. I think I satisfied them that none of them were really practicable or could be adopted. NO POWER TO NEGOTIATE. I was not in a position to negotiate; all I could do was to state the case for the Home producer—which I do not propose to go into here. The difficulties of maintaining a full price would be almost impossible if one had to accept a very low price for the milk which we have to put into butter and cheese. They gave me an undertaking that they would immediately get into touch with the New Zealand Government, but I could not help but feel that these men were not going to assent to their Government Agreeing to a quota. It was the Government’s pigeon to agree to a quota or refuse it; the Government was anxious to get the assent of the Dairy Produce Board, but my feeling was that the Government was not going to be relieved of the baby by the Dairy Produce Board; it would have to agree to or refuse the quota knowing that the blame would be on the Government if it proved to be unsatisfactory to the New Zealand producers in the end.

I am prepared to admit that New Zealand is a country which will have to depend in the future on producing some form of pastoral product. The country is, I believe, confined to the production of pastoral products, and, therefore, her difficulty is a real one. If she is going to submit to a quota, development is going to stop, and the producers will be seriously prejudiced, but I do not think there is any need to fear that. The cut does not need to be big so long as all countries exporting to this country come in, and all have a cut made on them. In meeting their payments on tire national debt, it is not the number of tons they send out, but the amount in the aggregate received for those tons, that matters. I feel quite certain that until a regulation of the supply of dairy produce and other things on this market is adopted, there is no hope of any permanent rise in the price of those things. There may be a temporary rise, such as occurred when I was in New Zealand, which was one of my difficulties. When I left England one of their dairy products realised 70s per hundredweight, and when I arrived in the country it was 110 s, and it kept that level during my visit I said that it was a

temporary rise only, due to the fact that we had had a serious drought in England, on the Continent, and in Australia, and I am not sure that New Zealand had not had something to do with assisting that rise. Prices are coming down, and I believe until some steps are taken to stop this insane throwing on our market of vast volumes of stuff by countries, each doing the best they can for themselves, there will be no rise in prices. The New Zealand producer wants a rise in prices of butter and cheese as badly as we want it here. I dp not know how it is going to take place without something on the lines suggested by our Minister.

I would like to conclude by saying that in my opinion Dominion farmers must co-operate with the home-produc-ing farmers. As long as there is the slightest spirit of antagonism our success will be prejudiced by uncontrolled action of Dominion or foreign farmers. Therefore I hope that in the near future we shall have some better sort of co-

operation brought about between Dominion farmers and ourselves, and I hope that, we shall see a greater prosperity to British industry in general, including agriculture, in which we shall all have pleasure in participating.