PRICE OF BUTTER

Dominion, Volume 14, Issue 201, 20 May 1921, Page 8

PRICE OF BUTTER

CORRESPONDENCE AND COMMENT

IMPERIAL STOCKS IN NEW ZEALAND

Correspondence regarding tbe price of blitter has recently passed between Mr. G. Mitchell, M.P., and the -Minister of Agriculture. (Hon. W. Nosworfliy). On May 9 Mr. Mitchell wrote Mr. Noswortliy the following letter: —

“The Minister of Agriculture, "Wellington,

"Dear Sir.—>i reference to the present arrangement between your Department on behalf of the Government and tho producers, whereby the retail price of butter is 2s. 3d. per lb. to Hie consumer, and tho Government subsidy to tho pro ducor is 2d. per l'b., which means that the people are paying 2s. sd. per lb.. 2s. 3d. to tho retailer, and 2d. by way of taxation.

"I would be glad if you will let me know if this arrangement is for any definite period, and, if so, how long? If there is no date fixed, is it the intention of your Department to reveiw the price,, and when? Also, considering the iincinploymenf and general financial condition of tho country, is it intended to continue the subsidy? "Ar tho London wholesale parity, tor tho huge stocks of butter belonging to the Imperial Government now in stores in the Dominion, is. equal to about Is. 5Jd. per lb. here, will the Government arrange with tlio Imperial Government to release some of this butter nt the London parity for local consumption? "I' would be pleased to receive your answer at the earliest possible date, as the matter is of national concern.— Yours faithfully) ••/Signed) G. MITCHELL.” Tbe Minister replied to Mr. Mitchell as under: . "Dear Sir,—l am in receipt ot your letter of May 9, and in reply have to state that the present arrangement with tho producers manufacturing butter for tho local market terminates on August 31 next. "I am aware that within the l.<tt tew days a very heavy fall has taken place in'the United Kingdom in the price of butter, partly to be accounted for by the summer make of butter oming forwr.id, but greatly accentuated by the unfortunate labour troubles. "The Imperial Government has never offered to sell their remaining stocks in Now Zealand for local consumption, aid as the contract with the Imperial Government was for the export of tho surplus New Zealand butter, it would not be possible to take back any butter sold to the British Government without offering to returne the actual prico paid for the same. If there happened to lie an actual shortage of butter for local'consumption, the New Zealand Government would not hesitate to take this course. "The - actual price received by butter producers for their winter make is 2s. lid. per lb., ex factory door, and the facts regarding whole season cost of production, as placed before tho Parliamentary Committee, plainly show that this price is in many eases .below the cost even of summer make, and much below tho cost of producing and manufacturing Hutter during the winter months.— Yours faithfully, "(Signed) W. NOSWORTHY, "Minister of Agriculture.’’

Upon the Ministerial reply quoted above, Mr. Mitchell offers, among other comments, the following: “The most serious statement made by the Minister is that the present price of 2s. lid. per lb. is much below the cost of winter production and in many cases below summer make. Does the Minister believe that? If so, he is the only ono who does. This is a most serious matter because even tho present Home prico of Is. 7ld. to Is. Bld per lb., or about Is sd. here, is not likely to be maintained. If tho Minister’s statement is true, bankruptcy is facing most of our dairy industry. It is reassuring, however, to remember that tho industry flourished up io 1919, and the price never exceeded Is. 7d. per lb. I only wish I could assure tho producers Is. 7d. per lb. in the future. I believe they would bo satisfied, and I 'hope, tor the country's sako and their own, they reccivc it. “There is little doubt that the present Imperial stocks in New Zealand could be bought for Is. Gd. per lb. and probably less if tho Minister desired to give people tho advantage of this cheapei butter. The British Government would gladly quit it here or anywhere else at a parity with bhe price they arc offering in London. They made, a bad bargain, and would gladly free themselves of it. The Minister’s statement to the contrary is opposed to common sense. To-day we are paving 7d. to Bd. per lb. more for our butter than tho London parity, and at least 7d. per lb. more, than the. Imperial authorities would sell the butter here to tho Chinese, Americans, or any other people who could pay for it. "The approximate monthly consumption of butter in the Dominion is 4,083,3331 b.. which at 7d. per lb. is *8119,096, so this unjust arrangement of the Minister will have extracted approximately *8595,480 out of the general populace in the five months.of its operation, and passed it on to the most prosperous section of the community. The dairy producers have had seven splendid years, but last year was a super-record ono as tho returns show. In 1919-20 tho amount received for exportable butter and cheese was *88.705,000. In J 9‘ > 0-21 the amount received for these products was £16,033,000, showing a total extra profit last year over the previous good year of £7,328,000. “This does not lake info account the extra profit on condensed milk, glaxo, etc. and butter and cheese consumed in the’Dominion. The actual increase in return io the dairy producers oyer any previous year must be in the neighbourhood of nine million pounds. Yet<m spite of this enormous prosperity tho Minister arranges to ’ take another £595 480 out of tho pockets of our own peopie, and hand it over to this prosperous section of the community. "The position to-day is that we are paying approximately £119.000 a month more for tho butter consumed in the Dominion that the London parity or what the Italians or Chinese would buy it for. We are paying some £34.000 a month from the Fund to subsidise those who had an increased income of npproxinmtbly £9,0D0,C00 last yonr. Surely this lon-sided and unsound policy is bad alike for the country and the people, and the great body of reason-able-minded dairy producers will bo the first to acknowledge it. But the selfish few ordained it. and the people submit.”