THE PRICE OF BUTTER

Waikato Times, Volume 93, Issue 14491, 14 October 1920, Page 5

THE PRICE OF BUTTER

REPORT OF THE COMMITTEE. 2s 3d PER LB RETAIL SUGGESTED. GOVERNMENT SUBSIDY £OOO.OOO. (By Telegraph.—Special to Times.) WELLINGTON, Wednesday. The committee appointed to consider the i-ricr of butter made its report to the Rouse of Uopresentatives this afternoon. The chief rccommoncliition was that the retail price oi butler sliould be 2s 3d per pound, an arrangement tha-t would involve Hie pavmrnt of a subsidy of about £i;O0 000 a vcar from Hie public Rinds i„ „r.lor Rial the producers might receive the full market value. Tho Committee's Report. The del.ate on the report of the committee was interrupted by tlie J-«'0 adjournment, and will be continued on another dav. The chairman of Hie committee Mr .1. A. Nasi. , Palmerston, read the following recommendation:— . . ••in view of the fact that no restriction has been placed on the price of wool and other products of the Dominion the committee was or opinion that the dairy farmers are entitled to the full benefit of the market prices for butter. It recommends that a sufficient quantity of butler be taken from the whole of the Dominion's supply, and be requisitioned for supply to the population at 2s f.d per pound f.o.b, this being the amount of the Imperial Government's offer. "Having carefully considered the price to be charged Hi nsumer Iho committee recommends that Ihe retail price lie fixed up to March .'! I at 2s .'!d per II) for cash, and'2s 5d hooked. The eslimated <•'•>! of fixing the price on this basis is £OOO.OOO. The rommiti locs not recommend an export tax on butter. "Having considered Ihe question of lh,, introduction of margarlno, Ihe committee resolved In make no recommendation (hereon." Position of Dairy Farmers. Mr Nash added that the evidence loki'ii by the committee had been printed, and would be circulated, lie thiiilghl he could say confidently thai the investigation made by Ihe committee had shown clearly that the increased price of butter did nol improve the position of .the dairy fanners from a producing point of view since the cost of production had more than doubled since the war. Mr A. S. Malcolm (Clutha) : Does the committee say where this £600,000 is to come from? Mr Nash replied that he would leave the Minister for Finance to answer that question. He proceeded to refer to the increased cost of production, and to the relatively small returns received by the dairy fanners on the line of the evidence taken by the committee, and reported at the time in the newspapers. He stated that the average earnings of the dairy farmers had been sd an hour in 1'.»1 i, ami amounted only to Is an hour to-day. Everything thai the farmer bought had Increased in price. He quoted the cases of some farmers who showed a loss

on their operations at the present prices. A suggestion had been mad'' that the cities should have their own dairy farms for the production of the milk required by their people. He believed that the matter was being considered by the Wellington City Council, and it, should be a means of i, during the cost of milk. Son f the witnesses, added Mr Nash, had suggested the imposition of an export tax. Such a tax on butter would involve a similar tax on el se and other milk products, and lie hoped that nothing of the kind would ever be done in New Zealand. The findings of the committee had not 1 u unanimous. The retail sale of biitb-r in New Zealand at 2s 3d per lb would involve the finding of a sum of £OOO.OOO by the Minister for Finance. Mr Massey: Poor Minister for Finance! Suggestion Regarding Margarine. Mr Nash stated that the Prime Minister had been unwilling at first to undertake the arrangement of so large a subsidy, but he bad a happy method of finding a way of doing the thing. The bulk of the money would have to come from the Consolidated Fund. The chairman added that personally he would have liked to see the price lixed at not more than 2s per pound, bul In view of the statement of the Minister for Finance on the point the. committee could not go further. New Zealand was getting cheaper butter than any other country, The retailer's margin of pro tits would he a matter for arrangement. Tin l introduction of margarine under state ci.mtrol Jiad been suggested to 11i... committee. Margarine, with I •"> per cent of butter added, was ijuite suitable foi king purposes. People would not know the difference between such margarine and butter. The committee had been unanimous In reporting against margarine. lie stated that there were still some 1',1,000 boxes of free butter made last season in the cold stores. The Department was giving this matter attention, and bad issued instructions that this butter was to be sold at the prices ruling for last season's butter. The Leader of the Opposition Mr T. M. Wilford Jlutt, said that the heavy demand on the Consolidated fund was inevitable in view of the situation that bad arisen, but he suggested that the position would have been much better if the Government bad looked ahead, and levied a special tax on profits made by die sale of dairying lands. The large profits thai had 1. n taken rrom the land bad put up prices, and so iniposeil a burden on the whole community. The increased price of land bad put up the price, of produce. Financing the Subsidy. Mr Massey said he regarded Hie payment of a subsidy as absolutely inevitable. The demands on the Consolidated Fund bad been enormous, and had so increased the burden they had to bear that he bad to admit that the chances of reduced taxation were becoming smaller by degrees, and beautifully less. He would have lo ask Ihe House before the end of Ihe session to sanction sj ial steps to raise money for the proposed subsidy. lie did not wish to breathe alarm by suggesting what, was going to increase taxation. What he had in view was taxation lh.it collld Ilo| be passed on, and thai would not be fell by Ihe great body of Ihe public. Kver> peiin.v per 111 paid as subsidy on holier meant that Ihe Governmenl had to lind i: luo.iioo. Several members indicated then' opinion that the proposed price was still 100 high, bul the House irenerally

apparently favoured Ihe committee's report which is sure tu be adopted when the deled.' is concluded, II is undersl I that Mr Masses intends In And the extra money required for Ihe increased butter subsidy by an amendmenl "f the slump duties. The extra burden in I his case will fall mainl.v on the Heath Duties.