BUTTER-FAT LEVY

New Zealand Times, Volume XLIV, Issue 10285, 21 May 1919, Page 6

BUTTER-FAT LEVY

DAIRYMEN'S PROTEST

DEPUTATION URGES CHARGE ONCONSOLIDATED FUND.

4 large and representative deputation, comprising members of the Dominion Butter Committee and butter-producers from the Far North of Auckland to the Bluff, waited upon Sir James Allen one! tho Hon. W. D. S. MacDonald (Minister for Wiculturo and Acting-President of tho Board of Trade) yesterday afternoon to lay before thorn their gi-levancea with regard to the incidence of the buttar-tat equalisation levy. Mr S G Smith, M.P. for faranaki. Mr W.'n.'Ffcld, M.P. for Otaki who accompanied the deputation stated that tho mat tor was of the utmost importance to the dairying industry and the object of the deputation had their most hearty sympathy. Mr R. McCallum. M.P. tm VVairau, was also present m support or the deputation. CASE FOR THE FARMERS. Air A Morton said that the deputation desired to put before the Mmistsrs present and before Cabinet the-grievance that tho dairy farmers and the butter manufacturing companies laboured under in regard to tho price of butter in the local market. All tho exportable butter of the Dominion for a period Oi t\ui vears had been sold to the Imperial Government at 181 s per cwt, or Is 7 t d per lb, and at the time that that arrangement was mado t.h» local wholesale price of butter at the factory door's was fixed at Is 5d a lb. This left a difference of 3Jd. between tho export prico and the local wholesale price, and an equalisation fund had bsen established to secure that tho suppliers of the local market should receive. Die same price for their butter as the exporters. The purpose of that, they presumed, was that the local price of butter should not go to too high a range. He wished to point nut, however, that in making their recommendations two or three years ago, the Board of Trade stated that, so far ,as the local market was concerned, there had not been at my time any exploitation by those connected with the dairying industry. They had simply endeavoured to get what they lelievcd to be a fair market price for their butter. The fixed price, he contended, inflicted an injustice on those supplying the local morltets, many of them backblocks 'dairy farmers, the poorest in the Dominion, living upon very poor land, separating their own cream, carrying it, often on horseback, long distances to the butter factories, and having no returns except from their butter-fat. The deputation to Mr Massey two years ago lad pointed out that a very large number of the dairy-farmers received very small renumeration indeed for their toil, and it seemed verv unjust that these people, who wero the backbone of the country, should have to find cheap butter for the wholo of the rest of the community. If they had only to find cheap .butter for the poorer classes there would not be so much reason for complaint. But they wero finding it for all alike, for the Acting-Prime Minister himself, and for tho highest salaried men in the Dominion. Under such conditions, he urged, the loss in supplying the local market with cheap biitttr "for all should be borne not by one section, but by the whole community. , He. had had the honour of putting their case before the parliamentary Industries Committee, and it was suggested that the proper course would be to tax the wealthier portion of the community to find the money, making the levy a charge, not against the butterexporters, but against the Consolidated Revenue. The cost of production, he pointed out, had tremendously increased during the war period. The cost of labour had gone up at least 50 per cent.; the cost of manures had gone up in some cases 100 per cent.; fencing material SOO per cent; and grass seed 200 to 300 per cent. The dairv farmers had also had to bear ,'the increased cost of living so far as their families were concerned, £nd wero doubly penalised, as at the same time they were not allowed a free market for their produce, but had to supply cheap butter for the rest of the community. The previous deputation had been told that there was no legal iuthority to levy the equalisation charge en the Consolidated Revenue. But the position seemed to have altered, inasmuch ;>s the Board of Trade had now made Hie suggestion that the flourmillers should he compensated out of the Consolidated Revenue for any loss due to their having to pay a fixed prico to the wheat growers and sell their flour at a fixed price. If that was right for the flourmillers, it ijhould he right also for the dairyla inters. Tho faimers had troublo enough anyhow to make both ends meet and tho Consolidated Revenue, he? maintained, should bear the whole of the cost.

Mr F. Macdonald, Hiknrangi, strongly supported this contention. In his district, ho stated, 400 email dairy farmers supplied only 309 tons of butter-fat a year to tho butter factory, and they felt the equalisation fund, which had been going on for three years, very severely. Thoy were poor men, very few receiving moro than X2OO gross a year, and a great many only .£100; and thev did not think it right (hat they should be asked to provide cheap biittclr for very iinulch wealthier men.

Mr Anderson, Ashburton, argued that in the prices for taxed necessaries the dairy fanners indirectly paid nart of tho taxation of tho producers of those necessaries, who had free markets, besides paying their own share of war taxation: and thoy had also to pay the equalisation levy, amounting to about £1 per cow, though they were ,tho only producers not getting a free mnrket. The producers of cheese, wool, and meat were getting the extreme value for what they produced, and he" held that as a class thoy were better able to assist the small dairyman in this matter than ha was to assist himself. ACTING-PREMIER'S REPLY.

Sir James Allen, in reply, endorsed a great deal of what had been said, especially in u-egard to tho position of the dairy 'farmer and his importance to the community generally. He realised that tho dairy farmer was to a largo extent tho backbone of the country, and everything the country and tho Government could do for him ought to be done. Tho deputation asked that tho equalisation charge should he borne by the consolidated fund and "not hv the industry itself; but if he recollected aright the propositi that tho charge should be put upon tho industry carno from themselves. Mr Morton: It was forced upon us. Tho Prime Minister had repeatedly statod that he would never allow the price of butter in New Zealand to go beyond Js 5d a lb wholesale, and Is 8d to the consumer; so that the position was forced upon n». Sir James Allen thought that that was no answer to his statement that the proposition had come from themselves. Tho carrying out of the equalisation had .Varied on two occasions, ho added. On tho first occasion there was a good deal of protest; but on tho second occasion, ho understood, they all agreed to it but three factories, and they came into line later. GOVERNMENT NOT TO BLAME.

So they must not blame the Government. It was their own proposal. He could not give them tho nnswer of (he Government as to putting the equalisation charge on the Consolidated Fund. That matter would have to be submitted, and would be submitted, to Cabinet for consideration. Nor did he wish to give

them his personal opinion, though he had clearly made up his mind, because that mighc lead them to think that he would influence Cabinet in the direction, t'npy knew as well as he did that it was essential that the Government during tho war, and he thought also during the process of reconstruction, should control the cost of living as far as possible; and so it became the duty of the Government to do what they could to restrict the prices of 'commodities in common use. It might be that in doing so they assisted those who were well a bio to pay, but he did not: see how a line could bo drawn. He admitted that there might be some logic behind the objection that the wealthy were being benefited to some extent, but it was being done so that the poor might benefit too. He did not agree with the speaker from Ashburton that all prouucprs hod a tree market except the butter 'producers. Mr Morton: •Locally." he said. Sir James Allen : I cannot sav more about ir. Mr MacDonald and Mr Guthrie are the Ministers more concerned in the butter industry, and 'they will both be present when the matter is submitted to Cabinet. Mr MacDonald is here, and can speak for himself. THOUGHT WHOLE MATTER SETTLED.

Mr MacDonald naid thai, ha had not expected to see such a deputation again. He thought the whole matter had been settled. ilo was now in tile happy pasi. lion that it did not happen to bo his iob. Tho whoio business had been carried on between the Imperial Supply Department and tho Dominion Butter Committee; unci thev had come to a certain agreement ■ which Ministers all thought was an end to the wholo job so far as anv difference of opinion as to the equalisation fund was concerned. He thought that, tho butter question had arrived at a stass> that it would never lsavo arrived at_ if tho Butter Committee had left the original equalisation scheme alone, which spread the charge over the whole butterfat industry, and «cst them nil u small fraction only. But they had objected, and now the whole burden was concentrated or. butter. It was at the request of the committee that it was done; and, in order to facilitate the negotiations with the Imperial Government for the sale of the 1918-1910 and 1919-20 butter. Mr Mascev was informed in July last that tlie Butter Committee undertook to see that the local market was adequately supplied at Is 5d a pound in bulk at tho factorv door. That was an absolute agreement between the Dominion Butter Committee and the Imperial Supplies Department; but now they asked that the equalisation charge, estimated at 6s 6d a cwt, should be paid out of the Consolidated Fund. As Sir James Allen had said, the matter would be submitted to Cabinet. . But, so that tho dairy farmers of New Zealand should not think that thev had been hardly dealt with, he would point out that butter was the only commodity that, after supplying the local markets, was sold at the highest price obtainable in the British Empire. Voices: We don't got it. Air Morton : It is Hold at 256 s wholesale in Loudon and we get 181 s.

Mr MacDonald: Of course, you don;t get it fit the price they sell it per ounce t 0 'the very poor. The price you refer to is f.0.b.. without freight, commission, handling charges, etc. In March, .1815, the whole of the exportable beef, mutton and" lamb was sold at a certain price. There was a slight increase in the price in 1916; but tho people' engaged in tho moat industry held meetings saying that they should get Is a pound. Again, the whole of the woo) clip was sold in 1916-17. 1317-18, 1918-19, and 1919-20. at a fixed .price, though no doubt it could have bsen sold much higher in ' the open market. America had contracts for 300,000 bales from •Australasia, of which 100,000 were to come from New Zealand, but had only taken 35,000 from here and was now cancelling all contracts, although people were saying that they should get higher prices. Wool, mutton, beef, lamb, scheelite, and flax all had a restricted market. POSITION OP FDOUR-MILLBR, As to the flour .miller, he had to pay 8d a bushel more than the year before, and the year ueiore it had been worked down to bedrock 60 that some said tney only made la a ton on flour. But now oags. freight, and everything had gone up, and tho price had' been hxed with uia,thematical calculation to put them on tho same basis as last year. The Government had t.<i import wheat from Australia at 6s Sd a bushel, so they could not ask tho New Zealand wheat, grower* to produce at less than (is 6d. His feeling would be to open up the markets, eo thai; tue>- could get tho highest possible price; but the Government had the cost of living to consider, and was in a ve,rv difficult position. He recognised that the dairy farmors and other producers had played the ganio and done their bc&t to help tho Government. No Government could have carried on without their help. The matter would be considered bv Cabinet. He held that it was unfortunate that tho first eaualisation scheme had been done away with. That was why the butter people were so hard hit to-day. (Hear, hear.) To do tho fair thing the charge should havo been levied on all butterfat, glaxo. dried milk, cheese, otc. (Hear, hear.) A voice: And wool and meat. Mr MacDonald. Yes, and wool and meat. (Hear, .hear.) Air Morton said that when the. meeting of delegates passed the resolution referred to in regard to the local price of butter., thev did/so knowing that the Prima Minister had repeatedly stated that the price of butter locally must not be allow>d to eo bevond Is 8d n pound retail. He held that tho local price of butter was a matter 'for the Board of Trade, not for the Imperial Supplies Department. The latter was only dealing with tho pnualisi'ran fund because they handled the money.

Mr MacDonnld replied that the question of fixirfg" the pricft of butter had not came before tho Board of Trade for tho past two years. It was done by, tho Imperial Supplies Department. Mr Morton : It was done to give Mr Massov a free hand, knowinsr that tho prices here were fixed, to negotiate in regard to the price from tho Imperial Government.