THE PRICE OF BUTTER

Hokitika Guardian, 14 May 1921, Page 3

THE PRICE OF BUTTER

(Lyttelton Times)

•Consumers of butter in New Zealand are entitled to a substantial and immediate reduction in the price. We say this on the authority of the producers, confirmed by the Government, and there is no escape from the justice of the claim. Last October the whole subject was threshed out. Exhaustive evidence was taken by a Select Committee of the House of Representatives and an important rdport was submitted to Parliament. While various aspects of the subject were brought under discussion,, including a lot of arithmetic on the cost of production (most of it unconvincing, by the way) the ultimate issue was narrowed down to this—that for butter sold for local consumption the producer is entitled to export parity. This had been the solid claim of representatives of the industry, pressed home with all the force at their command, and it was accepted by the Government and enforced upon the consumers. All arguments as to the cost of production, and all consideration as to whether values were high or low, or whether the dairy farmer secured a good or a. moderate or an indifferent return, were thus ruled out of court. Mr Massey entirely endorsed the world’s market basis insisted upon by the producers, though ho tried to conceal .the full consequences by paying part of the people’s butter hill, to the ektent of sixpence a pound, out of the Consolidated Fund. This so-called “subsidy” policy we have always condemned—and we have the support of the Hon W. Nosworthy, Minister of Agriculture—as being economically and morally or as Mr Nosworthy put it, mere make-believe. However, the consequence to the public- of establishing export-value ns the basis of the price for local consumption was that this commodity from October to March cost the people of the Dominion, despite the fact that there is an enormous surplus of production, the high price of 2s 9d a pound—2s 3d to the grocer and sixpence to the Treasury through taxation. The export value was then 2s (id, while threepence was added for retailers’ profit. That was the effect of the rule laid down by the Government, at the behest of the producers, that whatever other considerations might he brought forward they could he regarded as of no more importance than mere abstract discussion, the governing principle being that butter is worth in New Zealand what it will fetch for export and the consumer must pay accordingly. New Zealand butter to-day is very hard to sell in London at 192 s per cwt. The local parity is probably about 12s per cwt below that figure, on a conservative estimate of Height and other charges. This brings (lie “export parity” to' not, more than 180 s, compared with 28()s from October to March, when the local retail price was fixed al 2s fid a pound oil the ground that it must he governed hv export parity and by nothing else. The retail price of New Zealand butter in New Zealand, on the only principle allowed by the Government and the producers last October, should he about Is lOd a pound, whereas it is 2s sd—2s 3d to the grocer and twopence to the taxpayer. It should not take the Board of Trade more than half an hour’s thought to realise the logic and justice of our contention, and there should consequently, as we say, be a sharp reduction is the local price of butter.