SALE OF PRIMARY PRODUCE

Dominion, Volume 38, Issue 278, 23 August 1945, Page 6

SALE OF PRIMARY PRODUCE

Further Long-Period Contract CONDEMNED BY DAIRYMAN Dominion Special Service. HAMILTON, August 22. It would be a risky business and could not be too strongly condemned, specially when the value ,of sterling was in the melting-pot. said Mr. W. Goodfellow, managing director of rhe New Co-operative Dairy Company, Limited, today, in telling shareholders his opinion of an extended long-period contract for the sale of New Zealand's produce to the United Kingdom. Mr. Goodfellow said that the colossal British war debt of £25,066,090,600 justified the expectation that there would be considerable further inflation iu the United Kingdom. New Zealand's secondary industries no doubt wanted but why ask the farmer to pay for it? This kind of thing was only another reason why the dairy industry should regain ownership and control of its own business. ' The primary industries were of infinitely greater importance to New Zealand than all the new industries.

The United States milk powder surplus was causing concern, and no further factories were warranted in New Zealand at present, despite, immediate prospects of payable prices for the next year or so. Dairy produce exports from Europe to England were coming forward. In the next few months Denmark would export to England and Europe 37,000 tons of butter, 7000 tons of cheese, 25,000 tons of bacon, and 5000 tons of eggs. This country had suffered little war damage and would soon regain its pre-war export position. No other Continental supplies would be available this season. Russia had taken over the Baltic and there was no prospect of supplies from the other pre-war exporters, Sweden, Finland, Poland and Holland. The last-named was in a bad way. Seventy per cent, of the dairy herds had gone, and vast areas of land would have to be reclaimed before exports of dairy produce on a pre-war scale could be resumed.

It appeared probable that without difficulty Canada and New Zealand would provide all the cheese required by the United Kingdom for the next few years. Butter, however, would be short for several years and would be imported mainly from New Zealand, Denmark, Australia, and the Argentine. It was just possible that Europe, including Germany, might export some butter to England next year, using margarine for home consumption, with the butter producing credits for the purchase of much-needed clothing and manufactured goods, Threat of Margarine.

In his opinion, sales of margarine were likely to expand all over Europe, and it would take a big effort by the butter-ex-porting countries to regain their pre-war markets. Meantime butter was 1/8 per "lb. retail in Great Britain and margarine ninepence. The weekly butter consumption Per head before the war was 7.630 z., and in 1944 2.340 z.. while margarine consumption was 2.770 z. before the war and 5.260 z. in 1944. Dealing with the United Kingdom’s post-war food policy, Mr. Goodfellow said the new Government was pledged to establish food import boards for each commodity, or, alternatively, it. might decide to maintain a reorganized Ministry of Food. While food was short, New Zealand had nothing to fear, but once supplies became normal quotas on meats might be expected to assist the Home farmer. Cheese might also be regulated for the same purpose. The National Farmers’ Union in England had long advocated quotas, with a tariff on both Empire and foreign produce, such tariff funds to be used to subsidize the Home farmer. The new Government boards might lead to a realization of this objective. Much would depend on the import policy of the supply countries. The United Kingdom’s agricultural policy aimed to produce more milk, meats and vegetables, less grains, little or no butter, some cheese and evaporated and dried milk from town supply surpluses. Other Markets. Dealing with alternative markets, Mr. Goodfellow said all his company’s normal business had been lost during the war. Immediate steps were being taken to promote and regain dairy produce export business. India, now a creditor nation, offered good prospects. Later, China, with the help of American and British capital, would be worth attention. He was hopeful that before long New Zealand dairy produce would again be shipped to Honolulu. Panama and the West Indies group. These were small markets, but in the aggregate a useful alternative. When America wanted food urgently for the Allies she put up the prices and let the farmers do the rest. The result was that from 1940 to 1944 dairy cows increased by 3,000,000, food went up 23 per cent., farm population down 16 per cent., farm labour down 5 per cent., fertilizers up 45 per cent., tractors up 25 per cent., output per man up 28 per cent., net farm income up 170 per cent., wages up 150 per cent., kind values up 36 per cent, and mortgages down 14 per cent. Twelve million tons of fertilizers were used in the United States last year, resulting in an enormous output with less labour. The effort would later cause considerable internal difficulties, and perhaps repercussions abroad when production had to be reduced to local requirements. It was unlikely that Now Zealand would be unable to sell all her exportable products so long as she would accept manufactured goods in payment. The present policy was unfair to Great Britain, our only substantial customer. It was contrary to the Ottawa and subsequent agreement and the spirit of the Atlantic Charter. Inevitably, within a few years when food supplies again became plentiful, it would bring repercussions which would be felt severely by the whole community. For any Government of a great food-producing country like New Zealand to prejudice the present and future real wealth of the country for political expediency was a serious state of affairs.