BUTTER PRICE.

Taranaki Daily News, 14 October 1920, Page 5

BUTTER PRICE.

THE COMMITTEE'S REPORT? 0/3 CASH; 2/5 BOOKED, a Subsidy op & 000,000. PREMIER SUPPORTS PROPOSAL. By Telegraph,—-Presa Association. Wellington, Last Night. In the Houae of Representatives this afternoon, Mr. J. A. Nash (tlie chairman) brought down the report of the Butter Committee aa follows:

''The Butter Prices Inquiry Committoe,' to which was referred the ■ 'ation of the present and future prices of butter in the Dominion, has the honor to report:

(1) That in view' of the fact that.no restriction has been placed oa the prices of wool and other prodijicti of the Dominion, it is of opinion that tho dairy farmers are intitled to the full benefit of jths market price of butter, and iecommends that a sufficient quantity of biicl'er (to be taken from the whole Dominion) should be requisitioned for the requirements of the population at two shillings and sixpence pel' poiind f.0.b., this being, the amount of the Imperial Government's offer. (2) Having carefully considered the price to be charged to the consumer, recommends that the retail price be fixed to the 31 et day of March, 1921, at two shillings and threepence (2/3) per lb for cash, and two shillings "and ftvepence (2/5) booked. Note: The estimated cost of fixing the price basis will be £600,000 (six hundred thousand pounds). (3) That it does not recommend an export tax on butter. (4) And having considered the question of the introduction of margarine, resolved to make no recommendation thereon.

' DECISION NOT UNANIMOUS. Mr. Nash then moved that the report lie on the table. Ho said that in all 21 witnesses wore examined by the committee, and on this evidence the report of the committee was based. He would like to point out that the increased price did not benefit the farmer, because the cost of production had so increased as .to balance the enhanced price. These increases in the cost of production he proceeded to enumerate as disclosed in the evidence already published. The finding of the committee was not unanimous, some of the members being absent when the decision was arrived at.

To enable the price to be fixed s»t 2/3, would require a subsidy of £<>oo,000, the bulk of which came from the Consolidated Fund. With the subsidy now being paid to keep the price of bread down, this would bring the charge on the Consolidated Fund up io about £1,000,000.

The committee went fully into iiie question of the introduction of margarine, and came to the conclusion that it was undesirable that this should be done.

Mr. T. M. Wilford (Leader of the Opposition) contended 1 that primarily the high cost_of butter was the high coat of land, an<l the high cost of land might be due to the high cost of products. He wanted to know whether the price recommended by the committee was the committee's' own decision, or was it a suggestion of the Government. The need of the State thus to interfere was caused by the failure of the Government to take substantial contribution from those who sold out their butter land at high war prices. This neglect was due entirely to the fact that the Government was bankrunt in constructive statesmanship, A Bill ought to have been brought down setting a part of this increased value of land aside to stabilise the price of hutter, becausa it was economically unsound to do so through a raid on the Consolidated Fund. The price fixed bv the committee was too high; it should not be more than 2s. He recognised that butter must be brought down to a price people could pay, but the need to do so was due entirely to a want of foresight on the part of the Government.

CAUSE OF HIC4H PRICE. Mr. Massey said the price of land had nothing to do with the high price of butter. What did regulate the price of butter was the exceptional demand for; it in Britain. The Government ha<j probably done more than any other Government would to keep down the price of food stuffs for the people, nnd that statement could not bo contradicted. As proof of the foresight on the part of the Government he gave official figures to show that the Government saved the people £263,454 by keeping back sufficient winter butter for the people. Personally he did not like having to interfere with prices, but it had to be done in the interests of the great masses of the people. -Mr. Massey ~in.id he had not been able to attend the committee much himself, hut be received a report of it, and he was bound to say the evidence gave a most interesting insight into the life of the dairy farmer, whom, lie believed, was the worst paid worker in the country. He reiterated that low values did not influence the price of butter. The market value was the thing that governed it, and any attempt to interfere with that principle must result In trouble. If that was done he ventured to predict that in half-a-dozen years the production of butter would •fall off, and instead of our exporting butter Ave would be importing it. He depnteated the suggestion that an export tax should be imposed, He reminded the House that many returned soldiers were recently put. on the land, and became dairy farmers. Would any member of the House be prepared to say a returned soldier should not get the market price for his butter? If he had to meet a demand for £(100,• ODO he would not be able to reduce taxation as he hoped. He had consulted the Treasury, and lie was of opinion that the money could be found in a way that would not hurt the people at large. The arrangement would last till March 31, but he doubted if it would be possible to drop the subsidy suddenly. At that, rate, it might have to be carried on for some time longer, but not indefinitely, as ho cowld not wis th#

taxation, of which we were at present carrying a y«y heavy burdenj LABOR'S VIEW. The price paid for milk was regulated to (l great extent by the price lor butter, yet no one seemed Jo complain at the price of that commodity. The fact was that milk required to make ft pound of butter wag costing in Wellington 3s 6d, and fi so, how could they expect the price of butter to be less than that proposed? He intended to instruct the Agricultural Department to give effect to the report of the committee, but it would take almost two days more to make.arrangements, but no time would be lost unnecessarily. Mr. J. McCombs (Lyttelton) said that as the only representative of the official Labor Party on the committee, he had moved, when the committee was deliberating, that the retail price of butter cash over the counter Bhould be Is 9d per lb, or booked and delivered Is lOd per lb, and that an equalisation fund should be created by a levy of a 5 per cent addition to land and income tax, and an increase in stamp and death duties, calculated to produce the equivalent of 5 per cent on the total. In support of this proposal, Mr. McCombs quoted tables Showing what this would mean to the various classes of taxpayers.. Thus a man with land valued at £2600 would be called on to pay 16s 4d, and a man with land valued at £IO,OOO would pay £4 Ofl 2d, which, he said, wag not an excessive demand on such a man. A man with an income of £3OO would pay nothing, and a man with an income of £IOOO would be liable for than £3 10s Bd, 'UNHEALTHY BOOM."

When the committee came to deliberate on the evidence, the question of the cost of production was not considered. The evidence taken by the committee on the question of' the cost of production was quite inconclusive. Actual balance-sheets furnished by the butter producers were submitted showing the cost of the production of lmt-ter-fat ranging from Is Id to 3s 3d per pound of butter-fat. The wide divergence in cost was almost entirely due to the differences in the prices that had been paid for laud. Those who have acquired their titles recently, including returned soldiers, are, ijn a number of casejty vutinjs. pf. very Jijsavy interest thaiges, One witness, , who gave the cost Oi the production of but-ter-fat ci 2s SVStd, stated that lie was making a loss K>f- £74 14s 9d per ia.iinum, One cost oi tliis farm six 'years ago was £64 per acre, and the seller madf( a profit of £6OO to £7OO - 1 Witness stated that the seller had made a profit in selling the land, but ■ made a loss on the working of the farm Yet this witness, who stated that heSicould not'' make the farm pay at £4jf pet acre, and also stated that the priVioui owner had not made it pay, confidentially affirmed that his land was worth £l4O per acre for speculation. Similar evidence was supplied by ether witnesses, who said they were making a loss on the working of their farms, yet they could sell out at conriderably enhanced prices. The unhealthy condition thus revealed, resulting from land booming, should cause the Government grave concern, and remedial measures should be devised. At a time when the demand is for production and more production, qualified primary producers are being induced to sell out and live in idleness on the proceeds of land sales. The working farmer, in some instances where land has changed hands a number of times, has to carry a burden of interest sufficient to maintain in idleness two or three other families. It is men who "farm" farmers that are the real cause of the hardships which some of the. working farmers and their families undoubtedly suffer.

WORKERS' BURDEN. Some of the share-milkers also Lav® a very hard time. At one period the latter used to receive half of these products. Then it was reduced to --. r >ths, and now it is generally l-3rd. Two-thirds go to the non-producing landlord, where this working fanner receives only a few pence per hour for his labor. The reason is to be found in inflated land values, and a form of landlordism which has grown up in this country under which the working farmer" receives only one-tlurd of the products which he produces. The working farmer who received half of the value of the product when butter was at Is 4d was better off than the farmer who receives one-tliird of the product with butter-fat at 2s. The producer receives 8d in both cases, but the farmer of the farnier doubles his return, and receives Is 4d, where formerly he received only Bd. Herein lies the explanation that tho present working farmer is having a hard time of it, and it is necessary that he, as the producer, should be protected, if the interests of the consumer are also to be protected. He also will benefit as consumer as well as producer. At this point the debate was interrupted by the 5.30 p.m. adjournment.

In the course of a brief statement in the evening', Mr. Massey saSfl he wished to make it clear that the butter subsidy of £(>00,000 mentioned in the House earlier in the day was for twelve months and not for the period of the contract, which was onlv six months.

BURDEN OF THE SUBSIDY, XO REDUCTION OF TAXES. (By Wire. —Parliamentary Reporter.) Wellington, Last Niglit. During the debate, Mr. llassey saiil lie regarded the payment of a subsidy as absolutely inevitable. The Consolidated Fund had been enormous and an increasing burden to bear, and he had to admit that the chances of reduced taxation were becoming Bmall by degrees and beautifully lese. lie would have to ask the House before the end of the session to sanction special steps to raise money for the proposed subsidy. He did not wish to create alarm by suggesting that lie was going to increase taxation: the. taxation he had iu view was taxation that could not be passed on, and that would not be felt by the great body of the public. Every penny per pound paid as subsidy 011 butter meant that the Government had to find .£IOO,OOO. During the debate that followed several members indicated their opinion that the proposed price was still too high, but the House generally apparently favored the committee's report, whicli is sure to he adopted when the debate is concluded. It is understood that Mr. Massey intends .to find the extra money required 1 for the increased butter subsidy by an amendment of stamp duties. The ex--1 tra burden in this case will fall mainly Im ' • K

DAIRY FARMERS' J^TCNGS, LOSS SHOWN IN SOME CASES • STILL SOME "OLD" SUTTER, (By Wire.—Parliamentary KmortefJi Wellington, LMtHighfc The debate on the report of tie etamittee was interrupted by the S.tO An, adjournment, and will be COatiilUediPß another day. L in the course of his statement I* is the House, Mr. Nash proceeded to ire- '■ fer to the increased, cost of psoductlm, and to the relativity small set retUjhM received by the dfliry fatnUerg. J pi " stated that the Average eartihgg if Me dairy farmers had men 8d an hourfln 1914, and amounted"only to Is an hjftur , to-day. Everything that the lun/nt bought had increased In price. 'He quoted the cases of some fanners who showed a loss on their opsrationg At present prices.

A suggestion had been made that tfee cities should hay* their own data farms for the production of the ttlk required by their people,He believed that matter was being considered- \fj the Wellington City Council It ehoHld be a means of reducing the oost oi milk.

Some of the witnesses, added Mr. Sash, had suggested the lmpaltitm fif an export tax. Sucli a tax an butter would involve a similar tax on cheats and other milk products, and Jhe hop*d that nothing of the kind would ever be done in New Zealand. The chairman added that personally he would have liked to gte the prise. fixed at not more than 2e p#r pout* but in view of the statements of the Minister for Finance on the point, the committee could not go ally further New Zealand was getting cheaper wxt* ter than any other country. The N- ' toilers* margih of profit would be a matter for avraagement. ... The introduction of margarine with 16 per ceikt of butter added was quite suitable for cooking purposes, and people would nit know the difference between such margarine and butter.

Dr. Thicker: "We would know >in ' ;he health of fhit'.people" Mr. Nash: "That may be; I give you ihat ip." ; ;■ j

The committee, he said, had been ani mous in reporting against ttntgfcrine. He stated, in conclusion, that there were still some 19,000 boxes of free buttfer made last season In the cold stores. The Department was giY« ing this matter • attention, and Bad issued instructions that this butter Was to be sold at the prices rulipg for hat season's cutter. -*