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Wednesday, 18 August 1920

Mr GREENE (RICHMOND, NEW SOUTH WALES) (Minister for Trade and Customs) . - I move -

That this Bill be now read a second time.

I wish to explain very briefly the circumstances which have led up to what is known as the Butter Agreement. The policy of the Government is to 'get rid of all extraneous forms of control of various products and resume normal conditions, but we find ourselves unable to do so in regard to butter for reasons which I hope to make quite clear. On the 9th January, the Government despatched to the British Government the following cablegram : -

My Government would greatly appreciate information as to whether His Majesty's Government propose 'to continue butter control for any period after expiration of existing contract with Australia. If decided continue butter control, would you kindly give some indication as to probable time such control would continue.

We sent a reminder at a later date, and on 29th January received the following reply: -

With reference to your telegram, 9th January, regret impossible to say at present whether His Majesty's Government will wish continue contract purchase Australian butter or cheese after expiration of present contracts at end of August next. Food Controller, however, inquires what prices producers would be prepared accept for next season's exportable surpluses in the event of His Majesty's Government deciding continue control these commodities beyond that date. Please telegraph reply with least possible delay.

The Government replied on 4th February, pointing out that it would take some time to fully consult the producers and asking the Imperial Government to let us have a reply as soon as possible as. to whether they were in a position to tell us the form, the Pool would take, or whether they proposed to continue the Pool. In the meantime steps were taken to call together the dairy producers from all parts of the Commonwealth. A very representative gathering, which was elected by the proprietary as well as the co-operative section of the industry, finally met in Melbourne. I do not know whether the honorable member for Indi (Mr. Robert Cook) remembers that conference, but I think I may safely say that there must have been present from all parts of Australia some seventy or eighty gentlemen. Before the conference met, we despatched the following cablegram to the British Government: -

Referring my telegrams 7th January, 4th and 12th February, re butter, a conference has been called for 9th March. Delegates attending from all parts Australia. Would be glad advice relative question" further control of butter by British Government, the nature of such control, and its probable duration; also whether, in event of producers decidingto sell, British Government prepared to enter into negotiations. A reply before9th March would be greatly appreciated.

A cablegram was received about that date from the British Government, in which it was said -

Not possible at present . to reply, definitely regarding further contract, as question continuation of control here not yet definitely settled.

Honorable members will see that we endeavoured to obtain from the British Government this information. It was recognised at this end that, if the British Government decided to continue the control, and to still remain the sole importers of foreign butters, it would be necessary for us in some way or other to enter into negotiations with them for the sale of our surplus.

The conference was held. I was in the chair, and made it perfectly plain to the representatives of the producers - both proprietary and co-operative - present that the decision arrived at, whatever it was, must be their decision. I pointed out that it was not a question of the Government deciding to. sell this produce. I put them in possession of all the information that I have given the House to-day. I read the cablegrams, and told them I could not say at that moment what the British Government intended to do, but that the Government would endeavour loyally to carry out their decision, whatever it might be. I said at this conference -

I am here to tell you, as the representative of the Government, that the decision which is to be made to-day is to be your decision. ... I want to make it quite clear that it is you, gentlemen, who have got to come to a decision, and, whatever may be my own personal view on this matter, whatever may be the views of the Government on the matter, we will loyally carry out the decision that you come to.

Mr Riley - That is to say, the butter producers were to fix the price of butter, and the Government would carry out their determination?

Mr GREENE (RICHMOND, NEW SOUTH WALES) (Minister for Trade and Customs) - The conference had nothing to do with the fixing of prices. The question before it was whether or not the sale of our surplus should be made to Great Britain.

Mr Fenton - That surplus would be determined after local requirements had been satisfied.

Mr GREENE (RICHMOND, NEW SOUTH WALES) (Minister for Trade and Customs) - It was simply a question of meeting the local requirements and exporting the surplus. I wish to make it quite clear that we left it entirely in the hands of the conference to say whether they would sell to the British Government or not. I said -

Now, as to the terms of the contract, that is a matter which entirely rests with yourselves.

We did not lay down any conditions. We said that it rested with the conference to do that. I went on to say -

You have got to remember that, if Great Britain continues the control, she may also continue the control of refrigerated tonnage.

I need not quote further from my ' remarks on that occasion. I desire to give the House the terms of the resolutions which were passed at the Conference - resolutions arrived at by men dealing with their own produce. The resolutions were -

1.   That this conference of representatives of the dairying industry of the Commonwealth favours a return to pre-war conditions of marketing butter and cheese when the present contract with the Imperial Government terminates in August next, and that therebefreedom from price fixation and all other Government restrictions. 2. (a) That this Inter-State conference be urged to request the Minister to inform the Imperial Government that the producers desire a free market.

(b)   That in the event of the Imperial Government deciding to retain control of the importation and sale of dairy produce in Great Britain after the completion of the present contract, the Commonwealth Dairy Produce Pool Committee be empowered to negotiate with and sell to the Imperial Government next season's surplus butter and cheese.

Honorable members will note that they asked in the first place that the Government press for a free market, and that, secondly, they resolved that in the event of Great Britain refusing a free market the Commonwealth Dairy Produce Pool Committee be empowered to negotiate and sell.

3.   That when the Commonwealth Dairy Produce Pool Committee ascertain what the nature or extent of -the control to be exercised by the British Government is, they open up negotiations, acting in concert with our representatives, if any, which may be appointed in London, with the object of attaining the highest possible price for the surplus butter, and cheese of the Commonwealth.

4.   That it be a recommendation to the Commonwealth Dairy Produce Pool Committee that two representatives bc appointed to proceed to London at the earliest possible date.

Then followed some other resolutions which have no direct bearing upon this matter. It was decided further -

7.   That it be a recommendation to the Government in the event of our effecting a sale to the Imperial Government that the existing Committee -

That is to say, the Commonwealth Dairy

Produce Pool Committee - be re-appointed for a further term of twelve months.

8.   That in the event of a sale being ellected the Federal Government be asked to include in the functions of the Committee, powers which will enable it to continue to see that each factory placed its proper quota on the local market in order to fully supply the requirements of the Commonwealth.

These are the resolutions which this representative body passed. Subsequent to the meeting of the Conference the following cablegram, dated 23rd March. 1920, was sent by us to the Secretary of State for the Colonies -

Adverting to my telegrams, 5th March, and previous dates, representative Inter-State conference of dairymen has considered question of sale to the British Government of surplus butter find cheese for further period of twelve months, and desires me to urge their wish for a free market. If, however, His Majesty's Government decides necessary to continue control dairy products, will be much obliged for earliest possible information as to nature of control proposed to bc exercised, and particularly if it would involve purchase by British Government of foreign butter as heretofore. In that event producers willing to negotiate.

We received ito reply to that telegram, and as time was going -on the Commonwealth Dairy Produce Pool Committee, acting on the instructions which it had received from the Conference, decided to appoint two delegates to proceed to London for the purpose of interviewing the British Government. These delegates were to press first of all for a free market, and, if they could not obtain a free market, to enter into negotiations for the sale of the surplus butter and cheese of the Commonwealth.

Mr Austin Chapman - Did not the Government ask for a reply to that cablegram? It is rather extraordinary that a further reminder was not sent.

Mr GREENE (RICHMOND, NEW SOUTH WALES) (Minister for Trade and Customs) - I do not see a copy of any such reply among my notes. I asked to be supplied with copies of all cablegrams, and I cannot for the moment remember whether a reply was or was not received. The important fact is that these delegates went to London. Whilst they were on the water the British Government announced that they had decided to decontrol cheese and to still continue the control of butter.

Mr Ryan - Did they .give the date on which the decontrol of cheese would come into operation?

Mr GREENE (RICHMOND, NEW SOUTH WALES) (Minister for Trade and Customs) - I can obtain that information for the honorable member. As a matter of fact, cheese is not controlled in Britain to-day, but butter continues to be controlled there. As the season was drawing to a close, and as these negotiations generally take some time, it was considered, advisable, whilst we were awaiting a reply, that two delegates should go to London, and they were accordingly despatched on their mission. Mr. Hugh Sinclair, who represented Moreton in this House for many years, was on'e of those appointed by the Dairy Produce Pool Committee, , and Mr. Osborne, of the Western District Cooperative Association, was the other. We gave them letters in which we informed the British Government that 'they had been empowered by this representative Conference of dairymen to enter into negotiations with- the Home Government for the sale of their produce, and we also told them that, as far as practicable, in the event of a contract being entered into, the Australian Government would support their action.

Mr Riley - Then they are really delegates from the Government.

Mr GREENE (RICHMOND, NEW SOUTH WALES) (Minister for Trade and Customs) - I have been endeavouring to make it quite clear that they are not Government delegates in the ordinary acceptation of the term. They were authorized by the producers to negotiate on their behalf.

Mr Gibson - And their expenses are being paid by the producers.

Mr GREENE (RICHMOND, NEW SOUTH WALES) (Minister for Trade and Customs) - Yes.

Mr Riley - But the Government gave them credentials.

Mr GREENE (RICHMOND, NEW SOUTH WALES) (Minister for Trade and Customs) - We gave them the ordinary credentials which, in the circumstances, they were entitled to receive. I have here copies of all the cables which passed between the representatives -in England and the Commonwealth Dairy Produce Pool Committee on whose behalf they were acting. The Commonwealth Dairy Produce Pool Committee was acting on behalf of the producers. I shall not read the whole of these messages since they are lengthy, but shall make a few extracts from them. The following message was received from the delegates -

Accompanied by High Commissioner, interterviewed Minister. Bequest for free market refused.

That is to say, they backed up the request we originally made to the Imperial Government on their behalf for a free market, and the Imperial Government refused it. The cable concluded -

Government having decided retain control till 31st March.

That is the 31st March, 1921, and that answers the question put to me a little while ago by the honorable member for Hume (Mr." Parker Moloney). On the 23rd June, 1920, this cable was received - .

After lengthy negotiations with Controller and Committee we obtained definite offer 240s. f.o.b. Delivered cool stores Australia until end March ninety grade one shilling point .up and down other details not arranged same conditions as before.

That is to say, the price of 90 points butter was to be 240s., with ls. up or down, as the case might be, as the butter graded under or over the 90 points, on the same conditions as to payments as in the previous contract, with 3s. additional for unsalted. The Dairy Produce Pool Committee replied as follows: -

Accept 240s. basis 90 points f.o.b. Delivery Australian stores end of March prefer ls. 6d. on every 2s. per lb. up or down. Assume 3s. unsalted, and same conditions as before Committee leave details your hands confirm.

The "delegates replied as follows : -

Butter contract arranged £12 f.o.b. Australia cool stores until end March contract conditions same as before except storage average six weeks reserve our right to ship not exceeding 50 tons per month to South. Africa.

That, I think, pretty well covers all that I need say as to the negotiations which took place. It will be noted that the British Government refused to decontrol butter. The London market is far and away the most important market for our surplus dairy products. In view of the fact that the British Government was still controlling refrigerated tonnage, it would have been a fatal mistake on our part not to have entered into some definite contract. I know, as a matter of fact, that Britain has bought in the bulk - in very much the same way, though not necessarily dealing in a direct manner with the producers - very large quantities, and I believe the price we are receiving on this occasion is on full parity with any other butter she is buying.

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