CHEAP BUTTER

Dominion, Volume 12, Issue 202, 21 May 1919, Page 8

CHEAP BUTTER

j WHO SHOULD PAY? ]■■ "' f the Equalisation scheme OF THE PRODUCERS i,*'■'•'"'''' '-'"' ''■'■ ; ; Never at any timo have the butter | ''producers- of. -New Zealand been satisfied i '~. with- what is • known 'as the equalisation j [scheme.' This arrangement was made as t S.ipart-of tho-plan for keeping tho local -imarket-supplied with butter. More than Uwo years ago Mr. Massey declared that .'.he would allow no butter to be exported from this country unless he was assured -that the local retail price should hot be allowed to exceed Is, Si. retail, equivalent to*l<Oi6d. per lb. in bulk at tho facj tbry.■"•Jhenbuttor producers had to get I - Itheir .exportable surplus out of the cqunj itfy'on to.-the market, and they'-arranged i i-with' the-'lniperial Supplies Department I >'that-.;the profits realised on the sale of !'' .butter,on.-,the London market should be [" used;to,make up to the suppliers' of. tho p. local market for what they had lost in I- .supplying the New .Zealand market and "accepting'a'lower price than was obtain- !; able for butter exported. A deputation }•' representing the Dominion Butter Comi mittee,, which represents the butter pro- '-.<■ dricers' in' dealings with tho Government, and representing also butter producers ! from one end of New' Zealand to the other, waited on Sir Tames Allen (Act- - Ing-Prime Minister) snd the Hon. W. t D. Si' Mac Donald (President of the v ßoard |. of Trade) yesterday to,ask that the cost | ;,of; ; supplying cheap butter to the local I market should bo borne not by the dairy- ;. farmers, but by the general community : through'.the Consolidated Fund. The Hon. D. H. Guthrie, in Charge of the Imperial-Supplies. Department, being out of town, was unable to be present. - Mr. S.'.G: Smith, M.P., introducing the said that as a representative l' of a. dairying district, Iho request of the ! demitation had his .full support, i'■"-. Mr. W. H. Field. M.P., said that he I .also,knew, the troubles of the dairy-far-j 'liier, and that ho too supported the're- ) • tjuest' of the deputation. j .;•■'' The Grievance. ':- Mr. Arthur' Morton, chairman of the f Butter Committee, said that, the" depu- | i-tatibn',.-was!, fully representative of the j, butter producers all over the country, and i they had come .to make complaint about {'the grievance suffered .-'by 'them in reI gard to tho price of butter for the local !'.market. -It-was. within the knowledge ! -~of. .the Ministers that the New Zealand 1 .; exportable surplus of butter had been f ;ebld to the Imperial Government for two I 'years at 188s. per cwt., f.0.b., equivalent } to Is. 73d.. per lb. The _ local price of j; butter''fed'for some time previously j .vbeen-fixed' at Is. 5d.. per lb., and the dir-i'-.ference. -between the price .realised by ! ;sale,.for the local market, and.that real- | -lls'ed' by those who sold for export, wa3 i, made up out of.an equalisation fund, est Tablished, out of the funds' derived from [the sale to tho Imperial Government, i: ?s6'that : all producers should receive' exj 'actly ( the same .price for their butter, i ;-The -purpose of the Government in fixing !,;the.price, for the local market was to i leisure-that-.the consumer should not

! : have to pay an unduly high price for ! this article'of fowl It wan clear from . the report' bf the Board of Trade, on this I' ■'ilriattttf*thtit'- r at no time was there any I 'exploitation of the community by the i. butter people. The price charged had ■ -never-teen..more than the fair market | '/value* of the commodity. It wis the coni .tention of the butter producers that they i .bad done nothing to deserve the penalty i now'imposed on them—of providing anj '-other section! of the community with '. "cheap food—and that the cost of provid- ; ing one. section of i the people with cheap ;. butter should be borne not by dairy L-. formers' alone, but by the' whole comi% munity, by-making the jSaymsnt out of | . the'.Consolidated Fund. ■ ■. .. :—,,>. ,u ■j^:.g ur( j e j ) oft the p o j ri f"«.-.. -'... ■'.''■' 1 " He said that butter farmers wero the I poorest of all dairy farmers. Many of ! them were in the back-blooks districts, 1 working very hard, and making very litj tie. It had been pointed out, on a prei vious occasion that a very large propor- ! tion of the dairying community were • receiving a very small income. It seemed ! vpry 1 irojust that these people should ' ihave to find cheap .butter for all tho ! rest of the community. If they were askl , ; «T fa-'Arid:'it "only lor the. poorer wage- ; '■-'ittrMs-.there 'would not be so much' reai 'son'for'complaint, but they were finding [ :l'"nol H only for- the poor,. but • for the i 'rich and tWwell-to-do. The suggestion I "w'a's* ttiarrtlib money, required to keep i'tlve ; price of butter down should \ "be''' obtained by taxing the rich, t. and ' that ' then the money, could '.■ Tie' paid out of the Consolidated '■ •T'und:-' In support of this appeal he : pointed out' that the cost of all farming ■ ."operation's' had increased\ enormously in ; 'war' time'; ,and ,in addition the dairy i farmer had to bear tho high cost of living in respect of his family in the same ; way as'Knd'the wage-earner in the cities. : As a precedent for the action the Government was,being asked to take,, he • incntionedthat a.subsidy was being paid • "to' flourmillers out of the Consolidated Fund, in order to keep down the price

of'.'ffouf to the consumer. Mr. IV Mac Donald (Hikurangi) said i that in' Til's' district were men receiving : very small incomes. They were very ; poor men. and they were being asked to j provide cheap food for the wealthy. ! They did not quarrel with the Govern- : incut for its desire to keep down the L cost of liyipgrhut the cost.of the operaI -. tion should come out of the general i' funds-of--the-.State. The'average earn-' \ iiigs of farmers in-the North I Auckland idistrict were' less than ,£2OO j' gross, and many were earning less than\ • -.filOO-.gross.'•■ The provision for -.the I ,'■equalisation,..fund represented a tax of t ner cow,:which was a very heavy tax ! oil''the small farmer.' j Mr. W. Anderson (Ashburton) was the. ; other speaker. He declared that the ; butter producers were the only producers i who were, hot getting' a free market. He '.'■ urged, that, the dairy tjumers were a i class- of ■•people to' whom the country I owed-a -great deal, and Hint they should j not be penalised in this way.

| '■ -Whose Proposal? i . ■ Sir James Allen said that he agreed !'■ with nil that had been said about'the j importance of the dairy farmer to the I country."'"'The request made was that i' the co'st'of the equalisation fund should be borne by the Consolidated Fund, and ; Jiot by tho industry itself. If he reool- !'■ lected' aright, the proposal for tho equal- '; * isation fund had corao in tho first in- ; stance from' the industry. .Mr/Morton said that, the equalisation ' scheme had been forced upon thein. <■' The Prime Minister had 6aid that he ;''■ would never allow tho'price of butter to * fib beyond. Is. sd. for the local market j ; 'or- Is., Bd. to the consumer.. This had | mnde'the'cqimlisation scherao necessary. ! Sir James Allen said that he did rot | think Mr.. Morton had answered the | statement that the equalisation scheme ; came from the industry. A scheme had i been tried on two occasions. On the. j first occasion tho industry protested, and !. the scheme was withdrawn. Afterwards ! tho butter producers adopted the idea. I After that they must not blame tho Gov. ! ernment for tho.burden oh their slioul- ! der3. The Government could not bo accused of imposing this particular burden j on the dairy farmer; It was now sugi geeted that the time had come when j the burdon should bo placed on the Con- ' solidatcd Fund. That matter would havo I tobe considered by Cabinet, 1 and ho could I riot give the answer of Cabinet, nor I xpUld he give his own opinion, although i it .was quite clear, because it might bo ! suggested that ho was trying to influence | the decision of Cabinet, i Duty .of the Government. ' , He wished to make it clear that it was j essential for the Government in war timo, ! as it was now, in his opinion; during tho ' timo of reconstruction, to control tlie cost i of living as far as it was able' to do it., i It was true that in keoping down the cost i- of commodities in common use they might 1 have- assisted .tho wealthy as well as_tlie ■ poor, but ,ho,could not see how that ; could be avoided. It might be.that tho - wealthy had benefited, but the step had i been - taken to benefit the poor. It was not :' his understanding of the position that the ; butter, producers, as had been stated, !' were the only producers not getting a 1 tree market.

The Agreement Made. The Hon. W. D. S. Mac Donald said that he had not expected to moot this deputation again. Ho had thought that the whole matter was settled. So far us he was concerned on this occasion ho was in' tho happy position that tho business was not his job. Tho whole business had been carried on between tho Imperial Supplies Department' and the Butter Committee, and ho had thought that the agreement made had onded tho matter. Ho thought tho question had now arrived at a stage at which it never would have arrived if the original equalisation 6cheme lad been left alone. Then the burden would have been spread over the whole dairying industry, and tho burden /would have been a small one. Now the • whole burden had to I'fc borne by the butter people. The Butler Committee had made an undertaking with Mr. Guthrie, the Minister of Imperial Supplies, to see that tho local market was supplied at the price of is. sd. per lb., when the _ two-years' purchase agreement was beiug negotiated. It was on this condition that tho two-years sale was made, and there was compete agreement between the' Butter Committer and the Imperial Supplies. Department. Now it was asked that an amount equal to 6s. 6d. per cwt. on butter produced should be paid out of (he Consolidated Fund. That question would have to be dealt with in Cabinet. A large. number of the butter people thought that they had been unfairly dealt with, when (lie truth was that butter was the only product in the country which, after iho local market had been supplied, was sold in Britain in a free market, at the highest price available in Britain. A voice: We don't get it.:, Mr. Mac-Donald said that the producers might not get the same price for butter as was charged retail in Britain for but.ter sold by the ounce. . ■ _ A voice; The price of butter, n Britain was 23Gs. a hundredweight. We did not get 'that. ," Mr. Mac Donald said that a- lot cf charges had to bo borne bv the produce before it could realise that price; A voice: Not at all. We could land )t at Home for a very small amount.

Other Prices Fixed. Mr. Mac Donald said that the prces of beef, mutton and lamb were all fixed. Representatives of the meat industry had 6ai4 that they should„he getting about Is. 6d. a pound for their meat, but Iho price had stood the same since 191 G. Tho wool clip had been sold at a fixed price, and there was no question that the price for the wool would have been higher if there had been an open market. .'But the sale of these products to the Imperial Government might not prove to bo a bad bargain. Already the Imperial Government was cancelling contracts witn neutral countries. They were not prepared to take tho products at the 1 prices. If we could hold our present prices until 1920 we should do well necause after that there might be a very great difference. Me'ition.had been made about what the Government was doing in regard to wheat. .There was a great deal of, difference between tho case of wheat and of butter, because we had to import wheat. The millers had to pay Sd. a bushel more for wheat than they paid last year, and' last year' they had been allowed pricei which allowed them only a small profit. It was necessary to import four or five million bushels of wheat from Australia, and as it could not be imported for less than 6s. Gd, a bushel, it was not fair to expect our own growers to sell for less than this, price: He wished to say regarding the butter people, and about other people, that 95 per cent, of the people,in the country had played the game in the war period. No Government could have carried oh without their' help Ho would be pleased to give this matter consideration when it was before - Cabinet, but the butter people must not be under tho impiession that they had been singled out. He thought it was unfortunate that the first equalisation scheme had been done away with. If it had been retained, and extended to cover glaxo, cheese, and all other' milk products as well as butter— Voices: Hears Hear! Other voices: And wool and meat? Mr.. Mac Donald said that if the scheme had been extended to cover all milk products there would not now be such a heavy burden on the butter producers.

Mr. Morton explained again that the butter • producers had never adopted tho equalisation scheme except under compulsion. 'It had been forced upon them by the declared policy of the'Prinie Minister that the local price of butter must not be advanced above Is. sd. wholesale.