THE PROS AND CONS OF QUOTAS.

Taranaki Daily News, 7 September 1935, Page 6

THE PROS AND CONS OF QUOTAS.

In the correspondence columns this morning Mr. W. P. Kenah returns to his advocacy of quotas on dairy produce entering Britain, and takes the Daily News to task for preferring tariffs to quotas. In the first place it must of course be admitted that it is Britain, not New Zealand, that has the final word in this matter, but that does not affect the argument. Is Mr. Kenah not hoist on his own petard when he says failure to recognise the necessity for quotas is a short-sighted viewpoint? There is no question that the present rising prices of butter on the English market are due chiefly to comparative shortage of supplies, and the probability is that when heavy supplies begin to arrive from New Zealand and Australia the prices will drop. Applying the principle of supply and demand and assuming, as Mr. Kenah does, although with questionable authority, that the demand is more or less constant, it is obvious that an all round restriction of supplies would keep up prices. As the Daily News said before, restriction may thus be justifiable as a temporary expedient. But the cases of Denmark and New Zealand are entirely different. Denmark has almost reached the limit of her producing capacity, and would welcome a quota based on present supplies; New Zealand’s production is only in its infancy. Taking the long view, is this Dominion to display in front of its existing and innumerable potential dairy producers the “House Full” sign, and say “Shut up Shop! It is no use your attempting to improve your farms or bring into profit your lands at present lying idle?” Nor is this the only factor. Mr. Kenah says that Denmark, Australia and New Zealand at present supply more than two-thirds of the butter consumed in England, and that a quota arrangement between these countries would be beneficial. What of Russia and the other Baltic States, with their huge potentialities for butter production, just waiting for the opportunity to exploit the British market? Again taking the long view, is it not better that New Zealand should continue to develop the great primary industry for which she is so peculiarly fitted, suffer from low prices in the interim rather than prejudice that expansion, and trust to low prices and indefatigable search for new customers to so increase demand that ultimately there will be sustained demand for her goods at profitable prices? Finally, is not Mr. Kenah’s reference to the unemployed only a part truth? Space does not permit a debate on why the Dominion has so many unemployed, but there are many other factors beside increased production to account for the diminished receipts from the sale of our butter, cheese and meat. Not the exigencies of to-day but those of to-morrow—they are the ones that must be considered if the progress and welfare of New Zealand are not to be seriously imperilled.