PRICE OF BUTTER

Dominion, Volume 10, Issue 2902, 14 October 1916, Page 10

PRICE OF BUTTER

GOVERNMENT FIXES RATE

BOARD OF TRADE'S SCHEME

TO BE ENFORCED

Zl'ho maximum wholesale price of butter for consumption within New Zealand is fixed at Is. 4d. per pound by an order under the Regulation of Trade and Commerce Act, 1914, issued in a Gazette. Extraordinary .last night. Tho retail price, under this arrangement, will not exceed ls.;7d. per pound. The same Gazette contains a regulation requiring firms or : companies engaged in the . manufacture 1 of. butter or cheese to : pay to the Board of Trade a levy at the rate of three farthings per pound of butter-fat used, the money to be used to compensate sellers of butter for -any loss incurred. in disposing of their product for local consumption instead .of for export. The Maximum Price. "The maximum wholesale price of biitter a s sold b*>- the manufacturer aud delivered in boxes at tho factory on ihe usual trado as established at the date 'of this Order-m-Council," says the regulation, "shall be 119s. 4d. per hundredweight. "In the case of butter sold by the manufacturer otherwise than for delivery at tho factory in boxes on the usual, trado terms aforesaid, the maximum wholesale, price thereof shall be a price equivalent, as regards the seller, to the maximum price above mentioned.

"In the'case ot butter sold otherwise than by the,manufacturer, and whether wholesale or retail, the maximum price thereof shall be the maximum prico mentioned above, with such increase only as is in accordance with the established custom of the trade as existing at the date of this Order-in-Coun-cil with respect to the relation between the price of butter so sold and tho wholesale price of butter at the 1 factory.

"Nothing in this Order-in-Council shall apply to butter destined by the purchaser for exportation, and not for consumption or use in New Zealand."

The effect _of these rules is to limit the retail price within New Zealand to Is. 7d. por pound, but ft may be possible in some cases for retailers to sell below that level. • :

A Compensation Fund. The, regulations regarding the levy upon butter-fat provide that no butter or cheese shall be exported from New Zealand unless it has been manufactured at a factory in respect of which an export license has been issued. Export ifcenses will be issued by a Government officer, and their issue will bo conditional upon tho holders undertak: ,ing to pay to the Crown a charge of three-l'arthings per pound of butter-fat "on all butter-fat consumed by tho license holder in the manufacture of butter or cheese at any factory or factories during tho continuancc of his license, and also on all butter-fat which has boon already consumed by tno license holder in the manufacture of butter and cheese at any factory or factories" since August 31, 1916. The amount of- tho chargo may bo varied by the Board of Trade. The money so.collccted will be used to cover tho cost of administering' the scheme and to compensate license-hold-ers "for any loss incurred by them in disposing of butter o£ their own manufacture for home consumption instead of for export, during any period in rcsjjccfc of which the charge on buttcr-fat hds been paid by them. The decision of the Board o Trade'with regard to tho expenditure of the money will lie final.-.. \ The-regulation does not apply to whey butter, or to", milled, or to farmers' dairy butter or cheese. THE PRODUCER'S SIDE OF THE QUESTION IS THE ; BOARD OP TRADE'S PROPOSAL JUST? THE POSITION ANALYSED. (To the Editor.) Sir,—Tho question ■ that is now engaging public attention, the-retail price of butter, and the proposed scheme to regulato local values by the National .Government, is one of importance to tho Dominion as a whole. Much has been written and spoken in connection with the subject that will hardly repay either serious investigation or an attempt to refute. The publication of the Board of Trade's report on tlio matter and the favourable comments thereon form a basis of criticism and an oppor r timity to put forward tho producer's standpoint. It is acknowledged at oneo that the idea of reduced retail prices for food commodities appeals generally to the purchaser of any particular class or section of the community without their attempting to look fully into the question from any point, of' vi<iw but their own. For this reason, it is difficult to combat popular clamour and prejudice." Before the reform, indicating .the unfainioss of tho remedy proposed, it is advisablo to inquire what is the value, of the Board of Trade's finding "that an increaso of 3d. per lb. in tho retail price as compared with October,. 1915,. is more, than sufficient in tho board's, opinion to cover any extra cost of production that lias accrued since.". The. board ' does not indicate what is meant by "cost of production," but as the issue is one between producer and consumer, presumably it means what additional burden has the producer to meet in manufacturing a marketable and commercial article. Now tho difference between Is. od. and an increase to Is. 7d. is barely 12 per cent., Surely that is not a serious matter.' How does.it stand .with tho producer who owns the factory and has to'pay increased values for factory requisites? During the war— - r (1) "Wages have increased from 20 per

cent, to 25 per cent. (2) Butter boxes increased from 10 p.c. to 15 p.c. (3) Cheese crates increased from 10 p.c. to 15 p.c. (•I) Salt increased 80 p.c. (5) Parchment paper increased 125 p.c. (6) Cheese rennet increased 733 l-3rd p.c. • (7) Cheese colour increased 100 p.c. (8) Glassware increased from 100 p.c. to 300 p.c. (9) Iron and 6tecl goods used in factory increased from 50 p.c. to 75 p.c. (10) Hailago rates increased 10 p.c. (12) Cartage increased from 12J p.c. to

15 p.c. Outside manufacturing expenses, London freight lias'increased 50 per cent., inward freight on goods l'roni 50 per cent, to 700 per.cent, on some oiasses, and tlio cost pf marketing butter has advanced from the prc-wnr rate of 13s. per cwt. to 205.. 6d. In view of these figures and facts, which can be verified, is the advance, to-day of 2d. a pro rata increase? The statement, therefore, made, to say the least, is somewhat inaccurate. -

Take, the farmer's position individually. Stock lias iiiorensed in value. This i 3 fillip admitted. On paper he is a richer mail to-day apparently, but this paper valuo will in time vanish. At. present he has to make good the annual loss in the herd of 10 per cent, at a high figure. He cannot always replace such by breeding for this simple reason that he cannot afford, on a small property, to retain his young stock till tho.y reach maturity! ,Evory article bought for farm purposes has advanced in value enormously: Now Lis it a logical attitudo to adopt to urge [ the agriculturalist, the pasloralist, and

tho dairyman to produce all lie can from his holding for tho purpose of increasing national wealth, and then insist by holding a bludgeon over his doomed head, on his selling what lie produces at the instigation of tho State. Is it equity for tho State to say he shall dispose of his produce at '20 per cent, less than he can get in tho world's markets within tho Empire of which wo form a part? It is patent to anyone' who will consider tho position seriously for ten minutes that it is neither logical nor sane. It is an act of folly. .-

Tho export of dairy producc last year was -worth six millions to the Dominion. To-day, we, as a Dominion, are richer, by the energy and industry of those who produced so magnificent a. result. Wherein, then, lies tho sense of our losing £2-5,000 this year by Joca'l -sales, especially as the general'rate of wages has been raised throughout the Dominion to meet the: additional cost of living. After all/: the cost is infinitesimal in connection with the butter. The average quantity of butter consumed in Now Zealand is Boz. per head per' week; on 2dl per lb. this means Id. each. This is an awful tax oil a- family of seven, 7d. a week! A trifle more. than the cost of a glass of ale; probably 500 per cent, less than a ticket 111 'a sweep, and Id. more than the ticket that- gives admittance to the picture theatre. Now, turn to tho proposal itself. It is so marvellous that one is surprised that persons in authority would'father it. It is, in fact, that every pound ot butter-fat manufactured into butter or cheese in the Dominion shall bo taxed at the rate of }d. per lb. for each penny every pound of butter the factory supplies to the local market under tho price realised if tho goods had been gold in London. To-day the disparity between tho London and_ local values is at least 2d. per lb. This difference may continue; if it does, note the absurdity of it. Here is a. concrete instance. A; factory that does a large local trade, if this disparity continues throughout the season (which, of course, it should, if the Board of Trade's argument is sound) vi.ll lose £3000. TJiat- would be tile difference between the London value and the local sales; but here.is the foolishness of the policy,:'if. the tax is levied 1 on the basis of id.-.per their whole produce made'j'-.they ..will have to pay £5000. That};Siiy i.s ; a fact. Imagine a. business:-concern "paying away £5000 to get ;a "bonus of £3000. Is it not pertinent to ■' tho..point at issue to ask if any .member ..:of tlie_ Board of Trade .found'-.himself", in this position what wo.uld he do? -..Why, cut out the local trade and cultivate the London business; if not. and. it.'.is said with no disrespect to the gentlemen-.-on the Board of' Trade, he would be unworthy of the high position lie now holds. ' -Now for another. illustration of the injustice of this crude proposal. .One of tlie cardinal axioms of taxation is that tho tax levied maintains inviolate the principle of "tile equality of sacrifice:" It is- well knofl-n that in the best dairying districts of the Dominion suitable land 'lias changed owners at a vory high figure, from _£50 per aero upwards. -In hiany instances bo'ught probably with ; barely sufficient capital for stability, or even to remove the present owner from-a sphere where he has constant worry to make ends meet. The advisability of such a policy is not pertinent to this subject, except that the proposed tax will hit such severely;. It does not discriminate between the affluent and the struggling. Actual facts aro given of the above contention, the name:;, of course, are fictitious Mr. Andrews bought a fifty-acre farm four years ago at £55 per acre in one of New Zealand's best dairying 'districts. He milks thirty cows, and is doing fairly well. The adjoining farm of fifty acres belongs to Mr. Jones, who was fortunate to purchase yeajjs ago at £5 per acre. His dairy consists of fifteen cows, and the land; is . equal in quality ;lnd value to irfr/ , 'i\n3rcW.'",'iintr''''pr6Babl.r lie 'is worth, .with ;I,n\itl.. stook, aiid investments, f['o.3ll £10,000 to $12,000. "i'liov both supply the same factory. Now, if tlie suggested tax -is enforced, Andrews will, at the end of the season, get £20 less than he would otherwise receive had there been no such tax, because the factory will have to pay it, and will have less cash to distribute, but Jones will got only £10 less. Now, in the one ease wo have a young man, striving hard, working well —early and late —and not without a. good deal of drudgery, endeavouring to improve his position and pay his way. On the other hand you have a man in comparative affluence, only penalised to half the extent of the other. This is not equality of sacrifice. There are thousands of men to-day in the industry, hard-working and industrious, making New Zealand what she is, in a similar position to Mr. Andrews. Is this proposed tax justice or injustice? Is it reasonable or unreasonable? Is it. a form of taxation that conforms to the proper'incidence of taxation? Is it worthy of the. nation or the men who have given it birth? The fioiiit is submitted with all diffidence that if the Government-desired to regulate price/; in this crisis of the nation's history, they , are beginning too late. Tho nroner time was-when the war began. To have requisitionad all foodstuffs at a reasonable and fair valuation, such as meat, dairy produce, potatoes, grain, etc.,. for tho Empire's need, and encourage every man engaged in pastoral or agricultural pursuits to., produce every ounce,-.every pound, every bushel from his land, mid:nqfc-.to step in .when -a certain class of-the community, -have made arrangements for Uic disposal of their season's output,- and thus diecourage those who have shown their loyalty by sacrifice, by gifts, by . takingup 'additional'heavy .taxation .willingly, without now pin-pricking, and for what purpose?—l am, ..etc., JOSEPH G. HARKNKSS. October 13. FARMERS' UNION PROTEST. By Telegraph—Press Association. " Auckland, October 13. Tho Provincial Executive of the Farmers' Union passed a strongly-worded resolution protesting most emphatically against continued interference by tho Government With prices, such as is proposed with reference to the supply of butter for local consumption. The rcsofution states: "We call attention to the fact that tho farmer's cost of production has enormously increased, and that a comparison of present with former prices is most misleading. "We polltend that tlie cost of living has been alfectcd by the general rise in . tho prices t>f commodities, and we fail to see any reason why. butter should bp singled out for special treatment."