"PERNICIOUS"

Evening Post, Volume CXV, Issue 72, 27 March 1933, Page 8

"PERNICIOUS"

THE QUOTA SYSTEM

MR. GOODFELLOWS VIEW

■ "1 have done my best to induce the New Zealand Dairy Board not to agree to any restriction on the imports of our butter into the United Kingdom, because I believe it will be better to fight the matter out, even if prices do go a little lower," said Mr. W. Goodfellow, advisory director of the New Zealand Co-operative Dairy Company, Ltd., when addressing the Auckland Chamber of Commerce at luncheon.

Mr. Goodfellow referred to the* restrictions proposal as "a pernicious system," and one likely to play into the hands of th,e foreigners. It had been suggested that foreign butter should be restricted to two tons for every one ton restriction placed on -Empire butter.

Denmark, Holland, ana the' Baltic States were all highly developed as far as their dairying industry was concerned, and it was questionable whether they could produce much more. In the face of the duty of 15s a cwt, or about ljd a pound, they were consuming more of their own butter, and would have substantially less to sell to Britain. By agreeing to the restrictions, therefore, the i Northern European countries were probably only accepting a position which would come about automatically in a few years. Mr. Goodfellow said Denmark had alternative markets. If the British market were restricted, the Danes would get a higher price for the produce they sold in the United Kingdom, because of the restriction on Empire countries, and would still have the rest of Europe in which to dispose of its surplus, even if lower prices had to be accepted •in those countries. Therefore, the restrictions would probably hurt the Dominions more than the foreigners, who might not suffer at all. NO HELP FOE HOME PRODUCER.

Examining the position of the British dairy producer, the speaker said 80 per cent, of the cows in the United Kingdom were milked for town supply, which would not bo affected by butter and cheese prices, because the British Government was adopting a scheme for rationalising or nationalising the milk supply, fixing the cost of distribution to give the Home producer a fair price. As far as the" remaining 20 per cent.

was concerned, that figure was largely represented by by-products of the town supply business. As far as he could see, then, tho restriction system would not help the Home, producer, but it would help the Continental farmer.

"New Zealand will get into a very difficult position if it agrees to Testrict its output," said Mr. Goodfellow. "Increased production is the only way out of our difficulties. I hope and believe the Dairy Board will not agree to tho proposal, and that city opinion will support that view."

"We arc continually being told there are many other markets awaiting development, especially in the Orient," said Mr. Goodfellow, who briefly reviewed the prospects, which, in some cases, had been tested by representatives of hia own organisation. He said for several years representatives were sent xo the East, but today New Zealand sent only 1411 tons of butter to all outside markets compared with 106,000 tons, sent to the United Kingdom.

Australia could undersell New Zealand in Java, partly because it had no transhipment charges to meet. A small shipment of butter was sent each month from Auckland to eastern countries, but the amount was infinitesimal. The Chinese did not eat butter much, and the purchasing power there would have to be raised considerably before a larger market' would be developed. QUOTAS AND DUTIES. "I claim there are no alternative markets where we can sell COOO or 7000 tons of butter," said Mr. Goodfellow. South .Africa was an exporter of butter; they were large butter producers in South America, and in any ease the Argentine could supply those countries which had to import; a little trade in butter was done with Honolulu and Panama; it was quite clear Canada did not want our butter, even without a 'duty,-and in any case there- would be no market there until wheat prices rose and fanners in the eastern provinces turned from cows to wheat; while Australia, which imposed a duty of sixpence a pound, was exporting almost as much butter as New Zealand.

Further, nearly every country in Europe had introduced the quota system, either because they had not the money to pay for imported produce, as in Germany, or because they wished to protect their own farmers, .as in France.