QUOTA THREAT.

Star (Christchurch), Volume LXVI, Issue 20485, 11 December 1934, Page 7

QUOTA THREAT.

Dominion’s Primary Industries. MARKETING PROBLEMS MR FORBES URGES NEED FOR ORGANISATION. (Special to the “Star.”) INVERCARGILL. This Day. “ There is probably considerable lack | of appreciation among farmers and the public generally of the seriousness of the situation regarding the marketing of our exports and the purposes of the recent Act passed by Parliament, the Agriculture Emergency Bill,” said the Prime Minister (Mr Forbes), speaking at the Royal Show luncheon to-day. “ Probably you are all aware that at the instigation of the British Government, important discussions are at present taking place in London in connection with the regulation of the marketing of all meat products in Great Britain and the quantities to be admitted from foreign and Dominion sources. “ Perhaps the general situation is best put by the following extract from the leading article of the ‘ Manchester Guardian ’ of October 27: ‘ The problem that will immediately engross the attention of Parliament is meat, including bacon. The milk industry, rejoicing in its various subsidies, will have perforce to be quiet, at least until fresh arrangements have been made with the representatives of the Dominions who have been guaranteed a free entry for their milk and cheese until next sum- “ * Mr Elliot's declared programme, as outlined in a White Paper of July, is to impose a levy of a penny a pound on all imported meat with a preference 'said to be a halfpenny) for the Dominions. Beyond that, there are to be all-round quotas euphemistteally called a regulated market. Unhappily for Mr Elliot, Mr Runciman's AngloArgentine agreement of 1933 precluded a quota in which the Dominions did not bear an equal share and laid a complete taboo on a levy until 1936. Mr Elliot has so far failed to persuade Argentina to accept a voluntary levy and the Dominions are naturally reluctant to swallow a quota. “ ‘ Meanwhile,, a subsidy of £300,000 (advanced by the Exchequer) is being distributed among meat producers with somewhat unfortunate results, as more farmers than usual rushed their halffattened stock on to the market in the fear that the subsidy would run out. Others, who were not intended to obtain the subsidy, appear to have benefited. The consequence has been that the run on the subsidy, combined -with normal seasonal factors, has sent down the wholesale price of beef heavily and the farmers got no more for their meat with the subsidy than they got without it. “ 4 What will happen when the cattle fund is finished in March? Presumably, according to Mr Elliot’s plan, the quota and levy should be at work by then and raise the price of British beef sufficiently not only to satisfy the farmer but to enable him to repay the advance.’ Regulation of Imports. “ One can well imagine how, in these circumstances, the British Government is being pressed by the Home farmers to effect some regulation of imported meats from all sources, and this is the question which is at present under discussion in London.” continued Mr Forbes. “ Let me quote from the ‘Scottish Farmer’ of Juy 14, 1934: ‘‘ 4 The position with regard to cattle was not so satisfactory, but Mr Elliot promised that the Government would not leave the meat producers in their present plight, and he added, amid cheers, that the Government is now engaged in active negotiations to deal with the position. A statement on the meat question is to be made before the House rises. “ An extract from the * Scottish Farmer’ of September 29, 1934. reads: * The Milk Committee of the National Farmers’ Union of Scotland submitted an important resolution on milk marketing to the meeting of the Central Executive Committee in Glasgow last week, and the central executive decided to send it immediately to its branches for consideration and report. It is a broad resolution referring to the dairy industry of Britain as a whole, not merely to certain sections or certain localities. It calls upon the Government to declare at once its longterm policy regarding the dairy industry in fulfilment of its pledge to control dairy imports in the interests of the Home producers.’ “ Already arrangements have had to be entered into for the period ending March next, and so far as New Zealand is concerned these affect not only the total supplied but also the sub-items, frozen and chilled beef and pork,” said Mr Forbes. 44 We may assume, therefore, that quota arrangements are already in existence, but difficult as these are, our main anxiety is for the long-term arrangements after March next, w’hen the beef subsidy to British farmers comes to an end. We are told that this subsidy was given to enable time for the completion of negotiations for a longer-term period, and it has for some time been apparent to the Government that the result must be such as to make it necessary that the organisation for these regulations of exports from New Zealand must be strengthened to meet the position. “ This is the purpose of the Agriculture Emergency Act. It was these difficult conditions of marketing w’hich the Governmenet had to anticipate, and it was obvious that a situation might arise where we might have different sections of the New Zealand agricultural industry competing with one another. Directly we have a quota on one major product, production is affected in others and marketing interfered with. Dairy Commission’s Report. “ The Dairy Commission has given a carefully considered report, based on a thorough sifting of all the evidence given to them in a confidential way from witnesses of all interests, and I think we may assume that they came to a strong measure of belief that some action of the sort indicated in the Bill was necessary at this time. Consequently, the Government’s task was not only to give effect to such recommendations of the Dairy Commission as it deemed would meet the situation in that industry, but the Government had to take a wider view and create

an organisation which could make a more intensive study of the general marketing position and advise the boards and the Government so that a comprehensive policy of advantage to the whole country could be pursued. 44 I would emphasise here that this difficult marketing situation and the organisation necessary to deal with :t is not of New Zealand’s direct creation, but is rather forced on us by the nationalistic policies in Europe and the slump, which has not only reduced the spending power of our customers and thus reduced prices, but has also resulted in extraordinary measures of tariffs, quotas, etc., which hamper the free marketing of our produce. 44 We have the markets in Germany, France, Switzerland and Belgium severely restricted by quotas which came into full force at about the same time as Britain adopted a protectionist policy, but we now have Britain proceeding from tariff protection to quotas. 44 Truly, it is an economic war, and in war it is a good maxim that the best defensive is a vigorous offensive. We have to fight for a position in the world’s markets for our goods and we have to organise accordingly. “ The Agricultural Commission proposed by the Act is one step in this defensive offensive, leaving the individual details of marketing of each product to the particular produce board concerned. 44 Dealing with a similar situation in Britain. Mr Walter Elliot stated on September 9, ‘ agriculture and industry may yet need more organisation than they have needed in the past. Let that organisation be by the chaps that know.’ “ But for the purpose of co-ordina-tion, and as I have stated above, to form a focus of all information on the subject which would be of value to the Government and to the boards, the Agricultural Commission is to be set up. , “ Its functions may be said to be fourfold: (1) Exploitation of new markets. that is shipping, advertising, forwarding of samples and trade representatives on behalf of all industries: (2) in existing markets, its function will be to co-ordinate with the boards in such common problems as shipping and insurance contracts, etc. (3) The commission will act as technical adviser to the Government on such matters as quotas, trade agreements and questions of restriction of trade by other countries and will arrange for the ‘ follow up of trade agreements. (4) Arising out of the foregoing, there will be the question of assisting in the organisation of primary production in New Zealand to prevent one industry suffering from the effects of restriction in another. “ This is a very important long-range question which some people call planning or national organisation of industry and one needing the best brains and forethought which we can give from all the sources at our disposal. When Wool Prices Fell. “ You will remember how, when wool prices fell a few years ago, with meat prices also low, a large number of farmers switched over to dairying. In this was a factor having some influence on the over-production position of last year. “ I would particularly emphasise the question of co-ordinated action in new markets, whether as a normal development or as a result of trade treaties, and in this work the Minister of Industries and Commerce will be able to devote more of his attention to collaborating with the Commission in trade commissioner services and the like. The evolutionary nature of the Executive Commission of Agriculture should be kept in mind. “ Organisation of primary industry through control boards, the personnel of which is comprised mainly of sheep farmers, dairy farmers, fruitgrowers and poultrymen, as the case may be, has now been proceeding for some time in New Zealand. “ This movement has emerged from a period when infant primary industries were guided by Government departments. Almost wholly the dairy industry, for instance, in its infancy relied very much on the Department of Agriculture for guidance in all matters from the farm to the disposal of the produce in overseas markets. To-day, the farming industry is beginning to become more and more self-reliant. The status and independence of various sections have been strengthened by the experiences of the operation of the various boards. “ There are many besides the Government who appreciate the fact that the present board system to be entirely successful requires what might be termed a ‘ coping stone ’ to complete the arch of the organisation. “ Events of the past few years, when, owing to the depression, marketing has become progressively more difficult, have thrown much greater responsibility upon the existing boards. These events have tried out the organisation, which was for the most part built up in days of prosperity, when the sailing of the ship of industry was easy. “ Defects have appeared and the various boards have been forced mole and more to discuss and consider problems of common interest. Such consultations have been irregular and dictated for the most part by the need to meet emergencies which have arisen. In such circumstances, no real policy could be developed or implemented which would be in the interest of the farming community as a whole. The problems which arise are large and difficult. They require continuous attention, careful -watching and much consideration. The whole question of the balanced development of our rural industries is involved. “ The New Zealand exporter and trader has to deal with a world of nations operating in the straitjackets lof tariffs, quotas, currency manipulai tions and a whole array of trade obstructions. Such restrictions have brought Governments into the trade arena to an extent greater than ever before. Forced Into Arena. “It is no longer a case of individual traders freely dealing with each other in different countries. The actions of such are now entrammellrd by the restrictions of Governments. It is neces sary to meet such organisation, and the New Zealand G overnment has unfortunately been forced accordingl) 7into the trade arena, too. “ Bearing in mind that the duty of the Government is wider than that of individual sections of producers, it is seeking through the Executive Commission of Agriculture to have available in any negotiations the considered advice of those in direct touch with all phases of agriculture, so that balanced national development will be assured and at the same time a united front be presented for trade negotiations. “If the position is forced upon us, then it is encumbent upon the Government to arrange or the best organisation possible to deal with the situ-

ation. I feel that the Executive Commission of Agriculture could fulfil this function. I agree that the real problem is the choice of the Commission’s personnel, but I can give the assurance that every effort will be made to find the most suitable men, and political considerations will have no weight compared with national interests. “ Readers of the newspapers will have noticed that in Australia a similar body is proposed so that farmers may speak with one voice. Similarly, in other countries, the need for gathering together and impartially evaluating the mass of divergent facts, positions, opinions and interests of different sections of farming makes it imperative for tjie Government and the farming industry alike to have some 1 means of unifying their ideals and aims. Just as different banks require a clearing house for their cheques and notes so do the various groups of farmers require a clearing house of a different sort to deal with their multitude of problems and interests.

44 If we are not successful in our strenuous endeavours to avoid serious qtiota restrictions, it is going to be a difficult question to find profitable additional uses for our land. It would indeed be unfortunate if we were to sit back and lie down under the present threats of quotas and if we allow the position to damp our efforts towards more economic and more diversified production.

“ It was partly on this account that the proposed measures for wool improvement last season were made. We must maintain a spirit of enterprise and initiative and flexibility in the matter of production, so as quickly to adapt ourselves, through research if necessary, to changing conditions and possibilities of marketing. Want of Flexibility.

“ Apart from possibilities in wool, we might consider chilled beef, canned beef, flax, etc. Taking the situation as a whole, it is this want of flexibility in industry all over the world which has contributed largely to the depression and unemployment. “ Once we can solve the question of looking ahead a little more and becoming more flexible in our industries, we shall be freer of these periodic bouts of depression and all questions of rise in the standard of living and conditions of labour will'solve themselves.”