THE BUTTER PROBLEM.

Taranaki Daily News, 1 February 1918, Page 2

THE BUTTER PROBLEM.

EXPORT TRADE. SUGGESTED PROFIT POOLING. Mr. H, E. Pacey, managing director of the N.Z. Dairy Association, Ltd., in a'statement on-the butter position to an Auckland Star representative last week, said h* was due to leave for Wellington thifs week to attend a conference which would further deal with the matter and that meanwhile he did not feel at liberty to say much on the subject. Briefly the position is that the exportable 'butter has been sold to the Oovernmentat 1575, with an undertaking that 50 per cent, of the net proceeds from the sale of such butter in the Old Country will be returned to the producers. The 157s is equal to slightly more than Is 4%d per pound f.o.'b., or on the average Is 4»/ 2 d at the factory door. The price of butter upon the local market Is, as the result of Government influence, limited to Is 6d per lb wholesale, which, after allowing for the wholesale distribution charges, is equal to about Is 5d at the factory door or Jd more than the minimum "return from tho wholesale trade. As tlic Government is influencing the p'riee on the local market; and I has acquired the export surplus;'it is manifestly desirable, said -Mr. Pacey, that tie returns should be equal.- To this end the'traders on the local market have urged that they should participate in the profits from the export trade, which nrofits they expect Will."be: considerable,' arid that, failing such, participation, competition for supplies .of but-ter-fat may force them to abandon the local market, with a view to exporting on terms which they believe ■ will be more advantageous. The position is particularly acute in the Wellington district. There some companies are understood to have already seriously considered; the question of withdrawing from' the local trade. The reply of the exporting companies is that at present the local trade enjoys an advantage of Jd per lb, and that any increase in -Vice for exporting factories is problematical, and may be negligible, and that under the circumstances the local factories should be allowed to participate in the advantage which the local traders enjoy. Mr. Pacey said he believed the war out would be that the present local advantage should be pooled, and the pool should be augnientrl by the profits from the export trade, and that export and local trade should alike narticipatc in the advantages nf the pool. This would be fair, and' he believed it would be acceptable, providing the machinery for such arrangement can be improvised This would be' the nrincipal business of the conference, shortly to he held at Wellington.