THE BUTTER-FAT LEVY.

Taranaki Daily News, 29 March 1917, Page 8

THE BUTTER-FAT LEVY.

REPRESENTATIVE MEETING AT HAWERA. - CONFLICTING BUTTER ANI' CHEESE INTERESTS. t A SERIES OF RESOLUTIONS. About sixty representatives of Tararala dairy factories attended a meeting held in the Foresters' Hall, Hawera, yesterday to discuss the 3d butter-fat levy and other matters of interest to dairymen in Taranaki.

On the motion of Messrs Forsyth and J. B. Murdoch. Mr W. 1). Powdrell was voted to the chair.

The chairman, in outlining the objects of the meeting:, stated that the butterfat levy had caused a stir throughout New Zealand, as had the 1J per cent, commission. This latter, however, did not apply so much to Taranaki, where they had consigned, but applied mostly to those iwlio had sold, and they might be allowed to fight their own* battle. He pointed out the (steps that the committee set up to work with the Board of Trade, had taken in connection with tin* levy. When they met the Minister o£. Agriculture put the question as to why the tax had been levied, pointing out that it was not !?vied to assist the butter industry, but to supply cheaper butter to a section. At that time butler was producing a lower price on the Home market, and cheese was called

upon to assist. Later, it was pointed out to the Board of Trade that the posr- . tions had been reversed, and that butter was producing a better price on the Home market than the cheese, and the Board of Trade promised to reconsider (lie matter. A little later, however, cheese was again on top. and nothing was done. A fortnight later, however, butter had again risen. At the time the Government commandeered the cheese for flJd some factories had sold from lOd to IOJd. The position now was that while they had sold their cheese for .Old the cheese market at Home would warrant the payment here of Is I id. The position, therefore, was that cheese factories, besides making a sacrifice of 3d per lb on the sale of the cheese, were also asked to pay a Jd per lb butterfat levy, while butter was allowed a free market. He thought there was no need for cheese factories to continue to pay that 3d levy. He showed that butter at 212s would allow factories to pay out Is IO.Jd after paying the levy. The figures being that 212s was equal to 1/8J net f.c.b.,'plus Id the value of skim milk, and less :]d for the butter-fat levy. With an extra 2d for casein this would be equal to 2s o}d. If tins was calculated at 224s it would mean an extra ljd, viz., 2s lid, including casein and Is Hid without. Cheese factories, on the other hand, with the fixed price of !)|d, would only be able to pay out Is fld, viz., 1/11J pins id for whey and ijd for whey butter, less 3d for cost of manufacture and .placing on ' board ship, and the butter-fat levy of . Jd. The cheese factories were, therefore, 1 asked to contribute Jd per lb butter-fat to assist the poor butter factories, who i are at present receiving 2d or 3d per lb more than the cheese factories. He also pointed out tiiat at the time the fd levy was made the difference at which the factory had to sell local butter (1/4) and the price ruling on the Home marI ket (1/7) was 3d, so that the levy was I practically a farthing for every 'penny difference. The price on the Home market was very much higher to-dav, and that would mean a veiv much higher

levy. There was a great diversity of opinion as to how to overcome the difficulty. Mr, Fisher, of Wairarapa, thought the matter should be left over until the end of the season, when the butter and cheese representatives should urge the Government to make the levy a charge on the Consolidated Fund (applause), The speaker pointed out that that was what they had endeavoured to do when the levy was first decided on, but the Government would not listen. He had no faith that they could get it made a charge on the Consolidated Fund, and less faith that they could get a refund from the butter people once it had been paid over. He thought that they should frame a strong resolution on the subject, and lie knew that the representatives of butter factories also disapproved of the tax. If they were unable to get it made a charge on the Consolidated Fund then he would suggest that the levy should be paid by the butter factories till they were down to the level of the cheese factories, then, if there was any difference, the butter and cheese factories could meet it equally. He concluded by stressing the point that the cheese market had been interfered I with, while butter had an unrestricted market-

Mr. H. Forsyth (Eltliam) felt strongly on the question of the levy, which he said was a class tax and unfair. It was not levied for patriotic purposes, but hit practically the poorest section of the farming community for the benefit of the people of the whole Dominion —rich and poor alike. If the Government desired to give the people cheap butter they should make up the difference out of the consolidated revenue, and, failing this, the butter people should bear the loss themselves. At the time the levy was made there was a prospect that cheese would pay out a much better price than butter. He pointed out that last year the cheese people made •a considerable sacrifice by selling one third of their output to the Government at 7.Jd,- when the consignment price averaged Old, and the butter factories never offered to give thorn any assistance, yet, at the commencement of this season, the butter factories were prepared to accept assistance from the cheese people and the cheese people were penalised to assist the butter people. Cheese suppliers were also penalised to a still greater extent by having to sell their cheese at much below market value. Canada wan to-day receiving full rates, which equalled Is 3i!d per lb f.0.b., in the Dominion, therefore, the cheese suppliers of the Dominion were making a sacrifice of 6}d per lb, or equivalent to 10? d per lb butter-fat. If they had received full value they could well afford to make the contribution, but seeing that they were already penalised, and that the butter suppliers were receiving a higher price, he thought the butter suppliers should stand on their own legs. Had the cheese suppliers not been patriotic, hut had looked at the business from a commercial aspect, they would have, turned to the manufacture of butter and casein,,when they would have made from iid to G.UI per lb additional, but they did not, because they, knew that cheese was necessary for the men at the front. It was, however, up to ,the cheese factories:

to present a united front and makq. a strong protest against the levy. Mr. K. Maxwell (Kafrui) regretted the

tone of the speeches in antagonising the interests of cheese and butter, and he appealed to the meeting not to adopt that view of the question, but, as a dairying community, to appeal against the injustice of a levy that was inflicted, not

for the benefit of the butter suppliers, but for another section of the community. It so happened that it had turned out for the benefit of the butter suppliers, but at the time it was levied butter wa* at a lower price than cheese. A grave injustice had been perpetrated on the dairying community, both suppliers of butter anil choose, While tlicy weie patriotic and did not object to the .cheese being commandeered for the use of the men at the front, the arbitrary action of the Government over the butter for the benefit of on. 1 section of the community was unwarranted.

Mr. Powdrell considered that it was a matter of opinion. The butter suppliers might be their best friends, but if a strong committee was set up to put the matter strongly before the Board of Trade and the Government, it could not do so without stressing the disparity of the difference between the price of butter and cheese. To leave this out would be to lose their strongest argument. Cheese suppliers could not sit down under an Order-in-Couneil which would allow them to be (axed when butler was producing 3d per lb more, and lie did not think butter suppliers would be so unjust as to expect them to sit down under an unjust levy that was becoming more and more oppressive. His proposal was that butter should pay the levy until the prices were equal, then the levy should be equally borne. The, committee, he said, had to educate the

meeting as to ideas, anil did not wish to antagonise butter and cheese. He hoped that the butter people would not look lightly 011 tne matter, though, perhaps, it did concern cheese more.

They had invited butter representatives to be present at the. meeting, and would be pleased to hear their views. Mr Maxwell considered they should

confine themselves to protesting againsl the unjust tax l , and urge that it be paic out of the consolidated revenue. Mr Marx (Mangatoki) said that ai

present they did not know where they were. There was only one course, and that was to fight the tax and try to obtain the restitution of the money already paid. He thought., however, that there was very little hope of this. There was also the possibility of a very large increase being added to the 3d butterfat levy. They should insist on the load being borne by butter and cheese in proportion to the price at the other end. Cheese at the outside not be called on to pay any more than now, but until the Inst of tho season's butter had been sold It would be impossible to say what would be an equitable division, The tax.was a faot. They had tried to get ovpr It both by appealing to the Board of Trade and the Sui'iome Court. Before any big disbursements are made the Board of Trade should be asked to hold the funds until the final payments on butter consigned for the season had been made, and the matter could then be adjusted according to the

price paid out by each, which could be worked out by qualified secretaries. That could not be said to he an unjust proposition, failing payment of the tax by the consolidated revenue.

Mr. Murdoch thought that a resolution passed by the meeting would considerably strengthen the hands of the committee that had been set up to meet the Board of Trade and the Minister of Agriculture. He thought the fact that the parity was now in favor of butter should cause the matter to be reconsidered. The levy he thought was made because the butter people, when approached on the subject of butter for local consumption, realised that last year they had made a loss of £130,000 through local sales, and they did not wish to lie faced with

the same this year. Parity was the main point of the discussion. Cheese was being paid while butter realised as high as 224/-, and the cheese suppliers were right to do what they could to get the levy reduced. They should r<ass strong resolutions objecting to any further levy at all.

Mr. J. C'onnett (Bell Block) thought that it was too late in the day to discuss a reduction of the levy. He favored getting a fair contribution from each in accordance' with the end of the season returns. '

Mr. W. J. Freeth (White Cliffs), said appeared as if there was no organisa-

tion among dairy farmers strong'enough to defeat the people in Wellington -who oat the butter and controlled the prict The industry evidently was not firm enough against the opposition that it jnet in Wellington. There was no doubt that the lovy was inequitable and unjust, and as S7 per cent, of the exports came off the land, it was only fair that the whole of the exports should pay the tax. Tho.v should make their voice heard in demanding a fair deal. It was not too late to get the system of taxation altered.

Tho chairman said they should endeavour to get the tax paid out of tho consolidated revenue, and ask the Board of Trade to hold over the disbursement until the end of the season.

Mr. Morton agreed that the tax was an iniquitous one, and was one that they should not be called upon to hear, but he did not agree that they had used their utmost endeavors to get the tax repealed. They had certainly done all they could up to the present time, but there still remained the appeal to Parliament, and ithey should endeavor t.o put a strong case before Parliament, so that members should see the injustice of the tav, and if they asked that- the difference should be made up out of the consolidated revenue, he was certain a number of members would be with them. Ho felt certain the tax would break down with its own weight. The Order-in-Council only made a ievy of 3d, which was wholly insufficient to meet the equalisation of payments. They could only effect an alteration by Order-in-Council, which could not be made retrospective. Parliament, he felt, would see the injustice and not fail to remedy it. fie expressed the hope that the committee appointed would have reliable figures to place before the Board of Trade relative to the values of butter and cheese, and he instanced one or two inaccuracies regarding the chairman's statement specially referring to whey butter being quoted at 3d''per lb butter-fat, which it was said to be worth five years ago, and was now probably worth double. The figures regarding the butter were also incorrect. He hoped that the figures would not be one-sided, and so give ris to a controversy. The chairman" pointed out that the figures as got- out by Messrs Forsyth, Marx and himself had been given to the Board of Trade. Mr. Morton at the time -aid they wore not correct, but had not produced the correct figures. ITe thought that it was placing Mr. Morton in "an unfair position to ask him to act on a committee to take a tax off cheese that should be borne fairly by butter. The figures could be° taken from leading factory balance sheets, and nothing "could be fairer.

■Mr. Morton pointed out the need for heing exceedingly careful regarding the figures, (Personally, ho had always endeavored to do what was fair to the industry. lie had fought the levy since it was. first proposed. It was unfair to saddle cheese with it, and he had done his best to have the cheese people rerelieved, as had everyone else. Mr. Marclmnt asked If Mr. Morton could give the figures from the butter point of view.

■Mr. Morton said that he did not have the figures with him, as he had no idea the question of butter -versus cheese would bB raised. Ho pointed out that 110 (■utter factory would average 212s through the season, and he favored waiting until the end of the season and ascertaining the difference between the pay-out.

Mr. Forsyth said that he realised the value of whey butter, but, when speakmg before the Board of Trade, gave the whey butter plus a certain figure as the cost of manufacture. He thought that the cheese people should form a strong committee to combat the levy, otherwise they would find some of the butter-men ready to "rope them in." Cheese must put up a fight on its own. He again remarked that as a commercial proposition they could have made butter, but they were patriotic and made the produce required in the trenches.

Mr. Okey, M.P. for Tarnnaki, also deprecated tho unfortunate butter and cheese controversy. Apc.rt from the mam question, if it was suggested that the butter people should pay the tax, it showed they agreed with the principle of the tax. . They should put forward the strongest opposition to it. It was not the act of Parliament, but of the National Cabinet, and he knew that a lar«e number of members of Parliament thought it an unfair tax. He suggested that every dairy factory supplier should sign a petition and present the same to 1 arliament, and such a strong petition would certainly have an effect. It was wrong to divide the butter and cheese interests, Franlcley Road Factory had already moved in the matter of a petition asking that & refund be made and that the levy be taken off. No one could say anything in favor of the levy All were agreeable that the public should have cheaper butter, as Jong* as tile taxpayer paid, but he did not see why the poorest farmer should work his Wife and family to pay for it. By a petition thoy would do more than they cou.d by sitting there and haggling whether butter should pay the tax,

_ Ml'. "Williams (Mere Mere) agreed. He intended suggesting that a great deputation of 1000 or 10,000 farmers should be sent to Wellington, but probnbly a petition signed by GO,OOO would ' wore effective. The majority of the members would not allow this injustice He pointed oiifc that tl>f> IPVyI PV y cost one Oi bis share » widow with a lamijy (pne of whom was paralysed)— |)s 'per week m the height of the season. It. was moreover wrong to set one section against another, If the fc a( j HnftW H s|io\il4 t)9 at the end or tjip s§ftspfi.

-Mfc Mwvgll moved- "That, falling

the agreement by the Minister to the requests of a deputation, a petition of dairy factory suppliers praying for redress he prepared and presented to Parliament." He considered this was the correct course, and all controversy regarding butter and cheese could then be dropped. This was seconded by Mr. Gatie, Jr., and, after some discussion, carried. Mr. Marx moved an amendment, that the meeting affirm its previous and continuous opposition to the levy, and that Parliament be asked to have this paid out of the Consolidated Fund, and iu the meantime the Board of Trade bo asked to hold over any disbursements until the end of the season. They had, ho said, come here for a specific purpose. They hoped great things from 'Parliament, and he hoped they would not be disappointed. He agreed that the relative prices ai the end of the season should be the basis of contribution.

Mr. -Mills pointed out that the latter part of the amendment could be taKen as a separate motion.

The chairman said that Mr. Okey had faith in Parliament redressing the matter. Mr. Okey was not present when they met the Board df Trade. Personally, the speaker thought that it was a waste df time, as the farmers' party did not number half the members in the House. Moreover, the Hons. Hemes, Allen, and Mac Donald, who were farmers, would not agree to the tax being paid out of the Consolidated Fund, so "hat was the use of asking Parliament to undo what Cabinet had done? r he committee fought them for five hours, but they would not stir one jot. Mr. Okey: The pywer rests in the people.

Mr. Powdrell: And the people are iu the towns.

llr. Pinglo (Stratford) aprreeil that it was unfortunate that butter against cheese had been talked. All should fight against tne unjust tax. Butter people did not fix the price of choose, and for years cheese had received the betlci price. Tf the cheese people placed their views before the Minister then the butter people would have to do likewise. They should go to Parliament united. Jsext year all might be making butter. The chairman said that as a cheese representative ho would use every argument possible.

■Mr. Dingle said that he was put on the committee for the good of the industry. Mr. J. B. Murdoch moved; "That this meeting of dairy factory representatives strongly protests against the unjust imposition o f_ the butter-fat levy 'imposed on the dairy farmers of New Zealand for the providing of cheap butter to the people of New Zealand, and strongly urges that if the Government give cheap butter to the people' that"the difference in price be borne by the Government out of the consolidated revenue:' 1-Ie thought that this resolution should be carried first to put the meeting in ordc-r.

This was seconded by Mr. Gane, Sr., and carried, without discussion. Some discussion then ensued as to the powers of the committee already set up and tho deputation proposed to be setup. It was pointed out that the advisory committee set up to meet the Board ot trade, comprising three cheese and three butter representatives, was still in existence, and would meet the Board of trade 011 Friday, when .probably the question to he discussed would be the increased levy. A deputation was necessary to send down to act with similar deputations from Auckland and the Wairarapa to place their views before the Minister of Agriculture later. •1i n A '? rx saiti tlie Boanl of Trade night think it necessary to raise the e\y to 2d, and they should endeavor to have the matter held over till the end ot the season, and so prevent the payment of hundreds of thousands. He then moved that the committee working with the Board of Trade convey this meetings wishes that while the meeting in no way agrees to the butter-fat levy it •" B Ti l ' d ° f Tra<le to rcfrnin fr ' om increasing the present /evy, and hold over distribution of levy funds till final returns for Home-shipped butter consignments have been received. This was seconded.

Some members objected to tin's reso- ! ' as i<; the Government not to mako a „ Increase, whereas they ob- ■' a, . a, . tn S et!ler to the levy. I■i r ' U '"S ,e asico(l if chccso paid out a nnnnll P T» MXt /« r ' WollW the cheese people act towards the butter people as W suggested that day, and'wa's a"! *>ured they would.

Jin Bh iV ie KoacU, aslced

The chairmani Wo are paid for our Prote f.0.b., and if we do'not p£ b 4 i r tll8 D P™ dme v°uM not go. J n-cnt "toTu' 0 '' UIOVOd an ame,l(l----,f „ That Ml> ssrs. 'Powdroll, M ur . mo ™ Tir ?f° rtf>n ' a " d Connett re - L; • la WWk( on the deputation to TmiZT Minis tw the Board of nf, i endeavor to ibtnin the repeal J tbo * 1 moneys pmd to date, and also the r<u INOYft] of tko lU fttmimjftsjon."

Mr. Maxwell seconded. The chairman said this would l)e taken as a separate resolution.

Mr. Marx's resolution was then put and carried by '23 to 20. Tne chairman then objected to the l 1 per cent, commission question being incorporated, as this only applied to factories that sold.

In reply to Mr. drover (Patua), the chairman stated that the North Island factories were not represented at the conference that fixed the commission. Ho was in Wellington at the time, but was not authorised to represent the factories.

Mr. Okey explained that he understood the agents proposed 2'/ 2 per cent, commission, while the factories offered 1 per cent., and the Minister, to whom it was referred, fixed it at 1y t per -cent. Mr. Powdrcll remarked that it paid the South Island people well to pay £4OOO commission and receive a of .£51),000, they having sold at from 8d to fid. but the North Island people, on the other hand, had' to .pay to cancel good contracts. Mr. Powdrell thought that it would Be far better to send representatives of factories that had sold their outputs, to place the position before the Minister.

Mr. Maxwell said the committee, if asked why they did not protest at the time, could say it had no authority, but now had special authority. Mr. Okey thought the commission suould have been paid by the-Imperial Government, as was done in the ease of wool. Some of the agents had decided not to accept the commission.

Mr. Binnifc (Okatoj thought that North Taranaki nhouUl be given equa 1 representation on the deputation with South Taranaki. His factory was not satisfied with the Soiith Taranaki people-had taken the bull by the horns. He also objected to Mr. Morton as a butter representative, being on the deputation, which should be confined to cheese people. The resolution was then carried. After the luncheon adjournment the meeting discussed the question of establishing a co-operative casein drvin" ami sugar-of-milk factory for South Inranaki, and a committee, comprisin" .Messrs. Morton, Connett, Poivdrell Forsyth, Murdoch, and Marx, was set up to obtain data.