DAIRY PRODUCTS MARKETING.

Hawke's Bay Herald-Tribune, Volume 81, Issue 50, 22 November 1937, Page 6

DAIRY PRODUCTS MARKETING.

The first annual report of the Primary Products Marketing Department, suhmitt'ed to Parliament at the week-end, contains a great deal of information that will be of distinct interest to those" engaged in the dairying industry, the only one to be as yet brought under the operation of the Aet. A very large part of it, however, dealing with guaranteed prices, their adequacy and the methods by whieh they have been arrived at can he thoroughly understood only by those who are familiar with the practieal working of tlie industry and its intcmal organisation. In this respect, therefore, the report must be left to be dealt with by the dairymen's rcpresentative bodies and their expert advisers. So far as criticism from these quarters has yet gone it would appear that the farmers are far from being satisfied with the way in which the Minister claims that election pledges have been fulfilled. But -that is a qnestion for them and him to fight out, with ultimate results that will probably not be fully appreeiated until next election-tim'e eomes round. In the meantime what the general body of taxpayers see. definitely enough is that on the first year's operation of the guarantee system, as worked by the present Government, there is an estimated deficit of something over half a million for them to carry as an addition to their present heavy load. Certainly, for the time being, Mr. Nash is treating this deficit in an offhand way, almost as if it did not exist, and so far making no provision for wiping it off the slate. It is thns left hanging between heavan and earth, bnt that' it" will everitually fall on the shoulders of the taxpayers there can be no donbt. What the amonnt will be for the cnrrent production year, with its substantially increased guarantee prices, 'cannot, of course, be foretold, depending as it must altogether on the open market prices realised on the exports, prices that we already see beginning to reeede rapidly. To all this* the taxpayers, by way of supporting an essential industry, wotild probably he prepared quietly to snbmit, if only the declared pnrpose of satisfving the dairymen showed any indication of being fulfilled. But as yet that is most assuredly not the case. It may he woTth while noting, too, that the estimated deficit — likcly- to he somewhat reduced as a result of the high prices ruling at Home during the last few weeks — is arrived .at as thc result only of debiting the Government 's overdraft aecount at the Reserve Bank with an entirely fictitious rate of interest, seemingly 1^ per cent. per annum, thongh Mr. Nash. with his customary reticenee, does not in his report tell us this straight out. How essentially artificial this rate is can be understood when we recall that the Government is paying 3£, or at the very best 3, per cent. on tens of million borrowed in qther quarters for other State pnrposes, sueh as .publie works and so on. To this extent, then, the dairy aqcount would seem to be something of a delusion, unless the Minister has some explanation to offer snch as he has not yet vouchsafed in any definite ior intelligiblc fo'rm.

Turning to the more general tenor of the report, its rcaders cannot bnt be struck with the fact that the Minister finds liiinself viruallv compelled to admit that his marketing plans are merely a quite iogieal and natural development of those which had been gradually evolved by the Dairy-Prodnce Gontrol Board. Its organisation has been taken over as it stood, and Mr. Nash finds it in him to acknowledge that when he took it up it was in an entirely satisfactory position and working well. The only modifieations he seems to liave found necessary were consequent xipon the Government being the sole seller, a position towards which the Board itself was working. It may thus very well be donbted whether, so far as concerns realisation of the exports on overseas markets, the conntry has reaped from the change of eontrol anything like the advantages claimed for it. In this conneetion Mr Nash makes a big point of the fact that for the year 1936 as a whole Ihe average price of New Zealand butter on the London market as compared with that for 1935 advanced by a nrach bigger percentage tlian did that for the Danish product. Obviously the inference expected to he dravvn from this is that prices for New Zealand butter have benefitted greatly from governmental eontrol of its marketing. It does not, however, seem to have occurred to him as a fair thing to emphasise also the fiirther fact that for the same periods — as shown in one of the tables appended to the report — the price of Australian butter had made a slightly bigger percentage advance than that for New Zealand, and this without any concurrent advantage of government eontrol. This ministerial trick of stressing facts that seem to redound to the Government 's credit while suppressing those which go tq diseount it is, of course, not by any means peceuliar to Mr. Nash among his colleagues.