BUTTER PRODUCTION INCREASE

Wanganui Chronicle, Volume 77, Issue 35, 10 February 1934, Page 8

BUTTER PRODUCTION INCREASE

jYJR- WILL APPLETON, on his return from Europe, affirms that he is still of the opinion that New Zealand did the right thing in moving its exchange from 10 to 25 per cent. He considers that what business men in New Zealand overlook is that “New- Zealand was simply forced to adopt the 25 per cent, exchange by reason of the action of Australia, which country, because of the stimulus to primary production, had made -serious inroads into the New Zealand market for butter and othergoods. ” The Australian exchange moved up to 130 in January, 1931, but the exports of butter from Australia to the United Kingdom had been increasing for years prior to that date. The stimulus to butter exports had been achieved before that by the application cf tn export-bonus scheme, known as the,Patterson Plan. Favourable seasonal conditions in 1932 gave milk production in Australia a fillip, but even then the butter exports did not reach the quantities exported from New Zealand in that year, namely; Exports from Australia in 1932, 1.899,000 cwt.: from New Zealand, 2,190,000 *cwt. The trouble with milk is that it is increasing faster than consumption. The advance in New Zealand exchange brought about an advance in the Danish kroner, which vis-a-vis nullified the New Zealand move. Canada followed soon afterwards. Actually these excl z~.ge stimulants are not so potent as the high exchange advocates would claim, but the difficulty lies in the fact that the representatives of the British farmers are using the argument that exchange rigging stimulates exports to the United Kingdom, and on that ground are demanding the application of a quota to New Zealand and Australian butters. The last condition will, therefore, be worse than the first.