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Wednesday, 18 August 1920

Mr CHARLTON (Hunter) .- The Bill before us is very small, but it is very important, and one that concerns not only the butter producers in the Commonwealth, but Australia as a whole. The measure provides for an agreement between the British Government and the Australian Butter Pool, and under its provisions, no butter will be exported after the agreement comes into operation without the approval of the Butter Pool. Every one admits that our surplus products should be disposed of in the most favorable markets, in order that our producers may obtain the best prices, and incidentally assist the Commonwealth. It is well known that we produce a considerable surplus of butter. I have before me a statement made in the Victorian Journal of Agriculture by Mr. R Crowe in regard to this matter, in which he says that during the past season seven-eighths of our production was consumed locally: and, therefore, the quantity available for export, and coming under Commonwealth control, represents only one-eighth of the production. Knibbs' figures in regard to production show that, in the period from 1909 to 1913, ' the butter produced in Australia represented 945,014,305 lbs., valued at £47,742,910. The quantity consumed in Australia during that period was 557,408,071 lbs., valued at £28,160,720, leaving a surplus for the five years of 387,606,234 lbs. If we take the figures for the years 1914-15 to 1918-19 - a further period of four years - it will be found that the quantity of butter produced in Australia was 896,413,192 libs., valued at £58,733,739. Of that quantity we consumed in Australia 643,015,392 lbs., valued at £42,130,904, leaving 253,397,700 lbs. as a surplus. It will be seen from these figures that we produce a large surplus, and that it is necessary that provision should be made to market it under the most favorable circumstances. The question then arises as to whether the arrangement embodied in the Bill will do what it is intended; I am very doubtful. The Minister for Trade and Customs (Mr. Greene) stated that a conference of butter producers was held recently, at which the question of the fixation of prices was discussed, and at which the representatives were of the opinion that the butter producers should have the freest possible market in disposing of the surplus quantity. That was practically agreed to, and delegates were sent to Great Britain to enter into an arrangement with the British Government. We are now being asked to sanction an agreement providing for the sale of butter at- 240s. per cwt. f.o.b., which works out at approximately 2s. 1.6d. per lb. During recent years I have a vivid recollection of different Boards fixing the prices of certain commodities produced in this country. In connexion with wool, a committee was appointed to deal with that product, and we have ascertained recently that some have made a tremendous profit as a result of the price at which the wool was sold when that profit should have gone to the Australian producer.

Mr Gregory - Exactly the same thing occurred in regard to a previous sale of butter.

Mr CHARLTON - Yes; and in connexion with wheat we find the same thing prevailing. Boards have fixed the price of wheat, and after it has been exported it has been sold at practically double the price at which it was sold by the producer, thus enabling others to reap the benefit from fixed prices. In view of these instances, which have occurred quite recently, it seems strange at this juncture, when there is a scarcity of commodities in other parts of the world, that we should be asked to sanction an agreement which may be the means of depriving the producer of that profit to which he is justly entitled. The future price of butter will depend largely upon the conditions abroad. In Europe today the situation is bad enough; and in view of what is transpiring, always allowing for the intervention of bad seasons, it is more than likely that butter will be at a very high price for a considerable time to come. If we enter into the agreement contained in the Bill, and fix a price of 2s.1d. per lb., it is quite probable that within a very short time the retail price of butter will be in the vicinity of 3s. or 3s. 6d. per lb.

Mr Mackay - It is the producers who have made this sale to the British Government.

Mr CHARLTON - Yes, and I am at a loss to understand why.

Mr Richard Foster - Does the honorable member suggest they do not know their own business?

Mr CHARLTON - I am not saying that, tut merely expressing an opinion. In view of what has happened here, there is a good deal to be said in support nf my contention. We have made mistakes, and it is possible that we are du the verge of committing another. At the conference of butter producers, to which I have referred, the representatives asked to have the fullest freedom in regard to marketing. What will be the position if butter is fixed- at 2s. Id. per lb., and there is a better market in, say, South Africa?

Mr GREENE (RICHMOND, NEW SOUTH WALES) (Minister for Trade and Customs) - I omitted to say that, under the terms of the contract, the producers will have the opportunity of meeting the normal trade of the Commonwealth, and in other centres, including 500 tons, I believe, for South Africa.

Mr CHARLTON - The Minister for Trade and Customs now says that he omitted to place certain facts before the House, and that certain, latitude is to be allowed. If the producers are to have freedom, they should not be tied at ail, and should be allowed to take the fullest advantage of any market abroad. It may be said that the price arranged is a good price, because it is practically the same as they would be receiving in Australia. To-day the producer is obtaining 2s. per lb., or perhaps a little less, and the price embodied in the agreement is slightly higher. But we know that in the event of a drought intervening, and during the winter months, the supply would be reduced, with the result that prices would rise. Before we export any surplus, we should make sure that our own. people obtain the commodity at a reasonable price--

Mr Lister - What of coal ?

Mr CHARLTON - That is exactly what we are doing to-day, as our coal is being sold at such a reasonable price that we can send it to the Baltic and elsewhere at a cheaper price than British coal can be supplied.

Mr Mackay - Does the honorable member advocate an embargo?

Mr CHARLTON - I have never said one word about an embargo on Hie export of butter. In connexion -with all our products, we should allow the people of the Commonwealth to obtain them at a fair and reasonable price; but by that I do not suggest that we should rob the producer; he should receive a fair price for the work he performs.

Mr RICHARD FOSTER (WAKEFIELD, SOUTH AUSTRALIA) - ls not the world's parity a fair price?

Mr CHARLTON - We do not know what the world's parity may be next . week. We may enter into an agreement to sell butter at 2s. Id. per lb., but in a month's time it may be worth 2s. 6d.

Mr Richard Foster - The experts take all such possibilities into consideration.

Mr CHARLTON - I am quite aware of that. In connexion with our wheat and wool, the experts thought that the price decided upon was a reasonable one; but we ascertained later that it was about one-half of the proper price, and that others derived the benefit.

Mr Richard Foster - But we are now getting back to normal conditions.

Mr CHARLTON - Then, if such is the case, why do not we give the producer freedom to market? Why is there any necessity for passing legislation of this character ?

Mr Richard Foster - The producers, through their representatives, have asked for it.

Mr CHARLTON - I am merely expressing my opinion, and I represent as many dairy farmers as any honorable member in this House. I have to answer to them.

Dr EARLE PAGE (COWPER, NEW SOUTH WALES) - The British Government does not give a free market.

Mr CHARLTON - Exactly. I asked the Minister for Trade and Customs whether there was anything to permit the British Government to interfere in regard to sales, and he replied in the negative-

Mr GREENE (RICHMOND, NEW SOUTH WALES) (Minister for Trade and Customs) - I did not think I had said that.

Mr CHARLTON - I asked if there was any power in existence which compelled us to sell the butter to the British Government-

Mr GREENE (RICHMOND, NEW SOUTH WALES) (Minister for Trade and Customs) - No-; I said the British Government could commandeer the butter at a fixed price.

Mr CHARLTON - I do not think the British Government would commandeer any commodity without giving a price equivalent to that which could be obtained elsewhere. Therefore, it is- all the more necessary that this should be an open question.

Mr GREENE (RICHMOND, NEW SOUTH WALES) (Minister for Trade and Customs) - They are the sole importers of butter to England to-day.

Mr CHARLTON - I admit that; but that fact does not give them power to compel us to sell butter to them.

Dr EARLE PAGE (COWPER, NEW SOUTH WALES) - Where could we sell it?

Mr CHARLTON - Wherever we can. If the markets in Great Britain were to advance 6d. per lb. within the next two or three months, and we had freedom to sell at London parity, our producers would get 3d. or 4d. per lb. more. We cannot tell what may happen.

Mr Hill - Our market is limited. The people who would buy and pay high prices have neither cash nor credit.

Mr CHARLTON - That is my argument. We should broaden this transaction, and have the utmost freedom in the sale of our produce. We are no longer at war; we want to get back to normal conditions. The producers at their conference said that they wanted a free market; now we are legislating to compel them to sell at a fixed price, whereas within the next two or three months butter may be worth 3s. per lb., and somebody other than the producer will be getting the increase. There is not much prospect of butter being cheaper in Europe than it is to-day; the tendency is rather for the price to increase. Therefore, I do not see why we should be legislating to restrict the market for the butter producers. They ought to have the widest possible field, and get the best price offering.

Mr Mackay - Does not this Bill merely indorse the agreement made by the representatives of the producers?

Mr CHARLTON - I have admitted that the representatives of the producers have agreed to this arrangement, and that the Government are introducing this Bill merely to give effect to it; but I do not think it is in the best interests of the producers, and if the price of. butter abroad does rise, and middlemen are making a profit at the expense of our producers, I desire to be able to turn up my speech in Hansard, and show to my constituents that I made my protest against this arrangement.

Mr Richard Foster - Suppose the price of butter falls.

Mr CHARLTON - We must take the risk, but the tendency is for the price to increase. European countries are not recovering from the war as rapidly as Australia is doing; their conditions are still very much disturbed. In view of what has happened in connexion with the sale of our primary products during the last two or three years, the producer would be better off if he were not hampered by legislation of this kind.

Dr EARLE PAGE (COWPER, NEW SOUTH WALES) - Who will handle the butter if the Pool does not?

Mr CHARLTON - I do not argue that the Pool should not handle it; but the Pool should have access to the open market, so that it can sell the commodity for whatever price is offering.

Dr EARLE PAGE (COWPER, NEW SOUTH WALES) - The controllers of the Pool asked for this Bill.

Mr CHARLTON - I have admitted that; but it does not follow that I must agree with the proposal. Is it not possible for the representatives of the producers to make a mistake?

Mr Richard Foster - Surely the honorable member will not set up his opinion against, the combined opinions of the representatives of the producers?

Mr CHARLTON - In view of what has happened during the last two or three years, I think it would be better for the producers to have the free market for which they asked at the conference.

Dr EARLE PAGE (COWPER, NEW SOUTH WALES) - Butter was controlled by the Government then; now it is controlled by the producers' own organization.

Mr CHARLTON - Do not forget that the same Pool is still in existence.

Mr Atkinson - What would be the position if this Bill were not agreed to?

Mr CHARLTON - The producers would have an open market, and. could dispose of their produce in any part of the world.

Mr Gibson - And what would happen to the sales made to the Imperial Government?

Mr CHARLTON - If such sales have been made the producers are in honour bound to complete them, even without legislation of this kind.

Dr EARLE PAGE (COWPER, NEW SOUTH WALES) - Where will the butter be obtained if the agreement is not ratified ?

Mr CHARLTON - There will be the surplus over and above local consumption, and only that surplus should be exported.

Dr EARLE PAGE (COWPER, NEW SOUTH WALES) - But how will the Pool get possession of the surplus?

Mr CHARLTON - The producers will send their commodity through the ordinary channels until it reaches the Pool. There need be no trouble on that score.

Mr GREENE (RICHMOND, NEW SOUTH WALES) (Minister for Trade and Customs) - The trouble will be that there will be no legal body to deal with the butter unless we give the Pool some power and control.

Mr CHARLTON - We can always find a purchaser for an article that is in demand. Without this agreement we should have an open market, and the utmost freedom to dispose of our product wherever it was required. The mere fact that the representatives of the producers have entered into an agreement is not in itself a reason why we should accept this legislation. If they have a mind to carry out the agreement and dispose of the butter at the price agreed upon that is their affair, and if later it is found that they could have obtained a better price for their commodity they will have to answer to the producer. '

Whilst 1 favour the export of our surplus butter, we ought to be able to supply our own people at a reasonable price.

Mr Hill - What does the honorable member call a reasonable price?

Mr CHARLTON - I am not in a position to answer offhand, except to say that we should give the producer an adequate return for the labour employed in producing the butter, and something extra to put by for a rainy day.

Mr Hill - Would the honorable member be surprised to learn that, during the last three months, it has cost 4s. per lb. and upwards' to produce butter in the dairying districts of Victoria?

Mr CHARLTON - I do not dispute that, because I know the conditions that have obtained during the past few months, but we must take the seasons by and large right through the year. The honorable member for Echuca (Mr. Hill) will admit that, about a month hence, we shall be producing much more butter. As a rule the price of butter does fall lower about this time of year than it is to-day, but I do not think it will ever fall to the pre-war price, because the cost of everything has risen, and the dairy farmer is entitled to ah advance just as much as is anybody else.

Dr EARLE PAGE (COWPER, NEW SOUTH WALES) - How shall we get a reasonable price, if the world's parity should be lower than the honorable member has estimated ?

Mr CHARLTON - We shall have to do the best we can with the exportable surplus. The law of supply and demand operates with butter as with anything else, but the Australian people should be able to get their butter at a price fair to both the producer and consumer.

Mr Stewart - It would be most difficult to fix a fair price. How would the honorable member arrive at it?

Mr CHARLTON - I admit the difficulty, but the price will be arrived at by the supply available and the demand for it. Nobody can expect the price of butter to fall to the pre-war level, in view of the fact that there has been an advance in the price of everything else. The price must be sufficient to put the producer in the same position as he occupied prior to the war.

Mr Gibson - Would the honorable member regulate the fair price by Act of Parliament ?

Mr CHARLTON - I do not think that that would be possible. The price is largely determined by the seasons. Reverting to the exportable surplus, I hope that the Government will see that an artificial scarcity in the local market is not created for the purpose of keeping up the price. We know that in the past large quantities of beef, mutton, butter, and other commodities were kept in cold storage until the prices rose very high. There is no justification for storing the butter for export and compelling the local consumers to pay high prices. Provision ought to be made for the requirements of Australia to be met before any large quantity of butter is placed in the cold stores. This measure leaves the control with the Pool and the Minister. I am of opinion that the Butter Pool, and every other Pool, should include a representative of the public. Somebody ought to be appointed to the position to watch the interests of the general public, and see that everything is done fairly and above board. I believe the producers desire everything to be done fairly and squarely ; and I understand that their representatives in this House advocate that.

Mr Mackay - Does not the honorable member think that the producers are as honest as are the workers ?

Mr CHARLTON - Three-fourths of my constituents are farmers, and I have always admitted that they are a fine body of men. I have not a word to say against them; I am merely contending that the interests of the public ought to be con- served in connexion with all these bodies for the control of commodities. It would be an advantage to the producer if the middleman could be eliminated altogether. The producers would not suffer through the appointment of somebody to represent the general public on the Pool; that representative would merely see that things were done fairly.

Mr GREENE (RICHMOND, NEW SOUTH WALES) (Minister for Trade and Customs) - Does not the honorable member think that the Minister is capable of representing the public and seeing that a fair deal is given all round ?

Mr CHARLTON - Ministers generally have more work in attending to their Departments than they can properly perform; they have not the time to attend to all the ramifications of these Pools. The Committee of a Pool will decide certain things, and make a recommendation to the Minister. The Minister will look at the recommendation and sign it. He cannot be in close touch with everything that happens in connexion with these various bodies; he must accept the word of the controlling Committee. What I desire is a man sitting on. the Committee as the representative of the public interest to see that even-handed justice is given all round.

Mr Gibson - Are the public represented on the Wages Boards?

Mr CHARLTON - Although there is no representative of the public on a Wages Board, the Chairman is supposed to hold the scales truly and fairly, and on the evidenoe adduced decide what is best in the public interest. The Pools are on quite a different footing. I have no objection to a Pool looking after the interests of the producer, but I do object to an agreement being made by Act of Parliament which will probably rob the dairyman in the near future of some profit to which he will be entitled, and which will go into the pockets of some intermediaries.

Mr Stewart - The inference to be drawn from the honorable member's statement is that he knows better what is suitable for the primary producers than they themselves know.

Mr CHARLTON - I do not infer anything of the kind. Honorable members are at liberty to form opinions of their own on these matters, but I regard it as my duty to place my personal views on this question on record. In doing so I wish to assist those whom the honorable member for Wimmera (Mr. Stewart) represents here. I am as much in sympathy with dairymen as is any other member of this Chamber. I do not approve of the agreement, because I think it would have been better if our butter producers had been left an open market. We cannot estimate the millions of money lost to the producers of this country during the war by the fixation of the prices of commodities, which we know have at times brought double the prices that were fixed.

Mr Stewart - Those prices were not fixed in this manner.-

Mr CHARLTON - They were fixed through Boards appointed by the Government.

Mr Stewart - They were fixed by the Government, and the producers concerned had no say in the matter.

Mr CHARLTON - The honorable member will agree with me that the reason why the butter producers have entered into this contract is because they think that a good price is being obtained , and one that will compare more than favorably with the prices obtained in the past. I say that throughout Europe prices will probably never come down to what they were before the war.


Mr CHARLTON - I say unhesitatingly that since the war the workers have learned their strength in every country. In proof of that, we are in a better position in Australia to compete in many industries with people abroad than we were at any time before the war. The increase in wages in other countries must have its influence on the prices of commodities in those countries.

Mr Gregory - Prices generally are not likely 'to come down.

Mr CHARLTON - In the building of ships we are able in Australia to-day to compete with any other country in the world. Before the war we could not think of doing so.- The difference between wages paid abroad and wages paid in Australia before the war was so great that inmany industries it was impossible for us to compete without the assistance of a high Tariff. I believe that at the present moment the Australian producers of butter would be in a better position than they will be under the agreement if they had a free market for all the butter they can export from this country.

Mr Gregory - What should they do with the butter which they sell in Australia ?

Mr CHARLTON - I speak of the butter which they can export after supplying local requirements.

Mr Gregory - What about the price of butter supplied for local requirements ?

Mr CHARLTON - I have made (my position on that point perfectly clear. I believe that our people should be able to secure commodities that are produced in Australia at a reasonable price.

Mr Gregory - And the honorable member would fix the price?

Mr CHARLTON - I would fix it at a price which would give a reasonable return to the producer. I have always recognised the producers as representing the backbone of the country. I know the disabilities under which they labour, and I desire that they should ' be given an adequate return for all that they produce. . I feel that this legislation is quite unnecessary, and that it would be far better in the interests of the butter producers if they were left free to secure the full value of their product wherever it is sold outside of Australia.

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