These timeless but never republished joke-filled articles on white mice and egg marketing boards work well together, so here they are:
1. E. A. H. Middleton, “A white mice marketing board,” The Sydney Morning Herald, January 26, 1972, p. 6, as a letter to the editor.
2. Alan Wood’s “Aspect” column, [untitled], The Sydney Morning Herald, August 2, 1972, p. 6.
3. Ken Baxter, “The white mouse marketing board,” address to an informal occasion organised by the National Rural Press Club, during the National Agricultural Outlook Conference, February 1, 1979. Thanks to the legendary Ken Baxter for providing us with this speech.
4. Bert Kelly, “Unscrambling the egg,” The Bulletin, August 9, 1983, p. 110.
5. Bert Kelly, “The goose that laid the golden egg,” August 16, 1983, p. 118.
6. Bert Kelly, “Intervention is egg-headedness,” July 31, 1984, p. 134.
7. Bert Kelly, “Egging on the substitutes,” August 7, 1984, p. 144.
SIR, — I am a very small farmer in respect of some of the commodities I produce — lemons, cucumbers, beetroot, gherkins — and, as a sideline, my children breed for sale white mice. As a consequence of the deteriorating economic conditions the prices for all these products have fallen and I am holding larger stocks than usual — particularly of white mice.
The purpose of this letter is to seek the support of 99 producers of each of these products I have listed to sign a petition to be lodged with the Government. The consequence will be that the Government might declare these products to be a product under the Marketing of Primary Products Act, and a poll of producers of each product could then be held to determine whether a marketing board should be formed to acquire, hold stocks of, and market, these products, together with arranging the entire distribution process.
It is particularly desirable that the poll be held and that there be a simple majority vote in favour. It then permits the producers of these, or any other primary products for that matter, to have a producer-dominated board to set the prices which the housewives and other consumers shall pay. It eliminates also any competition in the market, except for products coming into New South Wales under Section 92, and means that prices can be raised to the consumer so as to ensure that the producers’ costs of production are completely covered.
Producers of barley, oats and coarse grain have voted already to establish marketing boards and these boards have been, or are being, established; and 100 or so livestock producers have filed a petition with the Minister for Agriculture seeking the establishment of a marketing board for meat.
If these people can have a board established and push the prices up to the consumer, why shouldn’t the producer of every other primary product exercise his or her rights under the Act to have a board formed and have the Government, the taxpayer and the consumer take over the risks of production and the marketing process for them?
I hope there will be a spontaneous response from producers.
E. A. H. MIDDLETON
Earlier this year the Herald published an intriguing proposal from Mr E. A. H. Middleton, of Binalong, a small town near Yass.
In Binalong in 1865 the troopers shot Flash Johnny Gilbert. Presumably there is no need to recount the tale for according to Banjo Patterson:
The smallest child on the Watershed
Can tell you how Gilbert died.
The only other development of interest in Binalong of which I am aware is that there was a re-enactment of the shooting in 1965, the most interesting feature being the promise of beer at 1865 prices.
The sign outside the special bar informed the large crowd that there would be NO BEER UNTIL AFTER SHOOTING, but beery voices in animated conversation could be heard from within.
When Flash Johnny was finally disposed of for the second time the bar opened, dispensed a dozen or two middies and sheepishly closed again, leaving everyone to troop off, swearing, to the pub.
All of which has nothing to do with Mr Middleton’s letter, which was, in fact, about white mice. Mr Middleton was seeking the support of 99 like-minded producers to establish a white mice marketing board.
Deteriorating economic conditions had left Mr Middleton with uncomfortably large stocks of mice, and he proposed that the Government be petitioned to declare them a product under the Marketing of Primary Products Act.
A poll could then be held and a producer-dominated marketing board set up to determine the price consumers (cats? pythons?) should pay.
As Mr Middleton pointed out, the producers of barley, oats and coarse grain had, or were getting, marketing boards. Mr Middleton asked:
If these people can have a board established and push the prices up to the consumer, why shouldn’t the producer of every other primary product exercise his rights under the Act to have a board formed and have the Government, the taxpayer and the consumer take over the risks of production and the marketing process for them?
What Mr Middleton was effectively drawing attention to was the inevitable reaction of primary producers to competition: they seek protection or subsidies.
Which leads up to the meat industry, and synthetic meat.
In England, Europe, Japan and the United States large amounts of money are being spent by the multi-national corporations on developing synthetic meat as a source of protein for animals and humans.
Synthetic meat is already being manufactured from soya bean and has been imported into Australia, to the horror of — among others — the city of Albury, which protested to its federal member about a public display being held in the city, to extoll the virtues of synthetic meat, in April this year.
In a Federal parliamentary debate, which one can only assume was inspired by the meat industry, it put its solution in terms of a parliamentary motion on “The urgent need for the Government to take immediate steps as a matter of public importance to plan for the protection of the Australian meat industry against the probable future influx of synthetic or imitation meats on the Australian market or Australia’s overseas markets following recently announced developments overseas.”
The developments overseas certainly should be of interest to meat producers.
In our principal market, the United States, synthetic meats have already gained a foothold in the area of most interest to Australia — manufactured meat (sausages, hamburgers, hot dogs and so on).
Soya bean protein substances can increase the volume of the usual hamburger mix by 25 to 30 per cent without affecting palatability.
And their addition reduces the price of the end product (on the basis of this study) from around 65c a pound to 53c a pound.
Synthetic meat has another great advantage over the natural product for these manufacturers: supply can be guaranteed and the only price fluctuations are likely to be downwards.
According to that “pot-stirrer” Mr Ralph Nader, the American hot dog now contains less meat than it did at the height of the Depression of the 1930s (although Nader’s complaint is against fat and other additives rather than synthetic meat).
According to US Department of Agriculture projections, synthetic meat will account for 15 to 20 percent of the US manufactured meat products market by 1980.
Similar projects have been made for the British and Japanese markets — two other important importers of our beef. The interest of these areas in developing a high protein meat substitute is obvious enough, since none of the countries mentioned can conceivably produce enough beef to meet their requirements.
This suggests to them rising prices and variable supply. Obviously these developments are going to make in-roads into our beef markets, but they are not likely to be serious for some time in the developed countries unless a far more sophisticated meat can be developed.
Where the real market and the real need lies is in the underdeveloped countries starved of protein. The “Green Revolution” is providing their carbohydrates; the synthetic meat revolution must supply their protein requirements. Australia has a fair share of these countries on its doorstep.
The most stupid and short-sighted approach we could take would be the old, narrow, protectionist stance expressed in the parliamentary motion.
The most sensible suggestion of the debate on the issue came from the Country Party member for the Northern Territory, Mr Sam Calder. He said:
We should be doing research on how to use our products in this regard, because there is no earthly reason why we should be just confronted with this problem on an overseas market …
I do not see why we cannot develop these products and put them on to overseas markets ourselves. These products would be suitable in India, South-East Asia and other areas whose people have low protein diets and cannot afford to buy our meat anyhow.
This is what we should be doing.
It most certainly is, and provided we have the initiative to grasp opportunity there is no reason why we could not be as significant a producer of synthetic meat as we are of natural beef.
According to Dr D. G. MacLennan, of Sydney University’s Department of Chemical Engineering, Australia is well placed to be a world leader in the field.
Dr MacLennan should know. He has recently returned after a period with ICI in Britain, where he worked successfully on the development of a process for using methanol from North Sea gas as a protein source to produce synthetic food for non-ruminant animals (pigs, poultry).
Dr MacLennan is now interested in developing processes for producing synthetic meat for human consumption from abundant Australian raw materials.
He believes that, ultimately, the synthetic meat industry will be as big as plastics, which means that Australia has a chance of getting in on the ground floor in a major international industry.
It is up to us whether we take it or follow our old policy of sitting behind protectionist bulwarks and watching the world go by.
Ken Baxter, “The white mouse marketing board,” address to an informal occasion organised by the National Rural Press Club, during the National Agricultural Outlook Conference, February 1, 1979. Thanks to the legendary Ken Baxter.
Note from Ken Baxter in 2015:
This speech would not have been in the Outlook Conference records because it was an after dinner speech (the dinner was sponsored by P&O on behalf of the Overseas Shipping Representatives Association — another bunch of rent seekers but we were pleased to drink their liquor!). Dr Hylda Rolfe of the then Industries Assistance Commission and Bert Kelly were the other speakers. It was then open to Q&A which turned out to be just as hilarious. It was a great shame that it was not tape recorded.
There are some characters referred to in the speech who are either deceased, senile or have changed their names. They are as follows:
— Barry Cassell, former Executive Director of the Queensland Cattlemen’s Union. An agrarian populist with a similar appearance and demeanour to Hon Barnaby Joyce. He went everywhere with his Akubra and RM Williams boots! Was a devotee of the poem, “We will all be ruined said Hanrahan!”
— Mr. John Black was the then Secretary of the Graziers’ Association of NSW. It largely represented the NSW Southern and Northern Tablelands larger wool and cattle producers and the Western Division of NSW.
— Mr. Davidlor was a play on the name of Michael Davidson who was the President of the Graziers’ Association of NSW but as well as being a large woolgrower had substantial wheat growing properties between Young and Temora. His brother James was the President of the Royal Agricultural Society of NSW.
— “Hephalump” was Jim Heffernan, then President of the Victorian Farmers Union. He was a mixed wool, wheat and fat lambs farmer in the Victorian wheat belt and was a “good” agrarian socialist.
M’Lords bewildered, M’Lords arrogant, M’Lords ignorant, my humble public servants and the few sons of the earth that may have actually gained admission.
I, and after I have finished, no doubt many others, will wonder why I was invited to attend, let alone address this allegedly delightful interlude to round off or round out what has been a wholly speculative, astrological day.
One reason I suspect is:
Everyone says that I’m such a disagreeable man,
I know everybody’s income tax and what everybody earns,
and I carefully compare it with their income tax returns.
You’ll always find me ready with a crushing repartee,
I’ve an irritating chuckle, I’ve a celebrated sneer,
I’ve an entertaining snigger, I’ve got a fascinating leer.
With those characteristics and a sound solicitor it appears the choice might have been mildly rational.
As a diversion from matters agricultural I thought I might deliver a learned dissertation about the reasons why the historical principles of the Shorter Oxford English Dictionary are infinitely superior to Cassell’s English Dictionary.
I understand that Mr. Cassell is unable to attend the conference as he fell off a horse. I am trying to establish if it was a mythical horse, a Trojan horse or just that he was riding in the Cameron Highlands and was pushed. Regrettably I cannot yet say where wreaths are to be sent.
That subject seemed deadly dull so I rather thought I might talk about my white mice — one of my numerous diversions.
As a death duty avoidance scheme has not burdened me, and blighted me with a loss-making grazing property with 4,000 sheep, 1,000 Hereford cattle and 500 tonnes of cash sitting in a big pile beside a header, I have been forced to move into agriculture in a small way.
Since I moved to Canberra I found that the C.S.I.R.O. and numerous scientific institutions have an all consuming demand for well-bred white mice.
As these little animals find procreation fun and do it frequently and well, it seemed like an untapped bonanza which could be carried on in less than .005 of an hectare.
The weather took its toll and occasionally predators such as children, cats and eagles, to say nothing of the tax man, were a nuisance.
I found that the price of the mice fluctuated with the demand and supply but in real terms the net return crept up. This sort of enterprise appealed to me a bit because, having been blooded in the now physically, but not spiritually, dead Graziers’ Association, it seemed to me to be what free enterprise was all about. If I profited or failed it was a reflection of my management skills and pretty much on my own head.
One day in the mail I received a very impressive piece of paper headed “White Mice Association of NSW”. In contrast to the old Graziers’ Association the Secretary was a Mr. Black — I thought he might have at least changed his name by deed poll when he joined our Association.
After telling me that the Association had a large membership, many of whom subsequently proved to have either died or be unfinancial, and what great feats had been achieved for members it then referred to the desperate, devastating effects the sale of white mice on the black market were having and how it was desirable that we should form a marketing board and introduce “orderly marketing” into the Australian white mouse market.
I was told that a poll had been held under the Marketing of Primary Products Act and NSW had a white mouse marketing board and subsequently a Mr. Davidlor had been elected by the growers as Chairman. He had been nominated by the NSW Branch of the Association.
Remembering George Bernard Shaw’s advice that — “Democracy substitutes election by the incompetent many for appointment by the corrupt few”, I was wary if not downright suspicious about what was going on and when a meeting was called of all interested white mouse growers I decided to attend — as a Mouseketeer. After all, my interests were at stake.
Before going I talked to my mousebuyer and my mousebroker, both of whom helped me with my local and overseas sales. In fact I had applied for an export award, and I might add an export grant, having sold 200,000 mice to China — on credit terms and for future delivery naturally.
My advisers told me that I should be careful because if the price of my mice rose and the Minister for Science, Senator Webster, continued to provide more words than money for scientific research, brown or spotty mice might be substituted for my pure whites or they could use rats and if really pushed could go out in the parks late at night and round up all the potential and actual feral rats.
I was given a series of graphs which told me all sorts of things about the marketing of mice. Armed with this information I went off to the meeting.
The meeting was held, appropriately, in Brisbane. Delegates would be able to claim it as an overseas trip. It was opened by the Premier who seemed to have an incredible knowledge of the cat and mouse game. To liven things up the first discussion was about the trade unions. The Australia Mouse Pee Union — known as the A.M.P. had a particularly stroppey secretary called Mickey. He was frequently pulling out his members and making things difficult for we Mouseketeers.
In addition the problems of that blight of the Federal industrial scene, the Moore v. Doyle case reared its head because we could never solve the perpetual demarcation disputes between the Australian Mousetrapper Union and the Australian Mousehunters Union — numerous wildcat strikes were a blight especially to our overseas sales of live mice.
All this union bashing seemed to be a good way to start off the meeting. However, sitting next to me was this rather loud-mouthed Victorian, a Winnie the Pooh type character who was always falling into traps, named Hephalump. He kept nudging me and shouting loudly in my ear — “We’ll never solve all these disputes while Davidlor’s the President. He just wants a knighthood and he thinks this is about the best way of getting it”.
The talk about unions did not seem to be getting us very far. No one had any solution and it seemed most of the Mouseketeers present were really envious of what the A.M.P. had been obtaining for its members.
So we left the unions problem to talk about mice marketing. I had kept silent during the discussions on unions; but, as I was one of the largest white mice producers, I did not want the pipsqueaks in the industry determining my future.
I asked the Secretary how many members there were throughout Australia? — about 12,000 I was told. How many producers were there? — about 40,000.
Well on that basis it seemed improper to try to tell all the other producers what they should have to do with their product. So I suggested that to match the measures which were being proposed for unions, there be compulsory unionism, court controlled ballots and on matters of significant policy a referendum.
These suggestions really put the cat amongst the pigeons — we could not allow them amongst the mice.
I shall not canvass all the arguments, but amongst a great deal of waffle about the cost of the referendum, the rank and file, not understanding the issues of the prospect of dividing the white mice industry, the real issue seemed to be a realisation that if a referendum was held the Executive might lose and the prospect of a national white mouse marketing scheme would disappear down the gurgle hole of history.
One or two chaps at the meeting were close to the National Country Party which was split over the marketing issue. They relayed a message that the Government would prefer a referendum as that would save the Government having to make the decision. So being politically impartial it was decided that we should hold a referendum and not embarrass the Government of the day.
The meeting then moved on to a proposal that the Australian Mouseketeer’s Association should join the new National Farmers’ Federation. Initially, the major discussion centred around whether we should apply for entry under the livestock section or the multi-commodity council.
After that little wrangle the meeting degenerated into something akin to a Confucian proverb contest. We started off with the usual “Unity is strength”; “single reeds bend to the wind” and so on and how politicians could not afford to knock back the submissions of an organisation if there was only one of them.
Well that really set me off. I was quite prepared to pay twice my annual Australian Journalists’ Association subscription of $104.00 if we could see something tangible for it. The debate so far suggested that we might be financing a minor literary society whose leaders would either be given a rottenborough or a knighthood or, if they performed well — both!
At that stage I recalled the words from the Mikado:
As some day it may happen that a victim must be found
I’ve got a little list — I’ve got a little list,
of industry offenders who might well be underground
And who never would be missed — who never would be missed.
The victims and the list were expanding rapidly.
As a student of law I could not resist the temptation. What is all this nonsense. Have you read the Federal Constitution? Unless you have all suddenly become supporters of Mr. Whitlam and a unitary government in Australia there are six States’ Governments — all of whom have considerable powers even over the Commonwealth.
Have we also taken to the view that a majority view of a minority of persons from the industry necessarily represents the views of the industry. Will not politicians find a way out if the decision does not suit them? Hasn’t the meeting spent a great deal of time extolling the virtues of competition and yet we wish to exclude it in our organisation.
My pompous Victorian friend on the other side to Mr. Hephalump had been asleep during most of my remarks but while I was parrying a question he said to me:
You’re right you know. Why imagine if we all got into bed together. The next thing, buggers like Hephalump will expect is that not only should I invite them to lunch at the Melbourne Club, but I should nominate them for membership.
In spite of rational, social objections such as these, the prospects of unity won the day. My Victorian friend resigned forthwith and stomped out of the meeting muttering about starting another organisation.
Being a thoughtful fellow I just sat back in my seat with the words of Horace in Ars Poetica ringing in my ears:
Porturient Montes, nascetur ridiculus mus
Mountains will be in labour, and the birth will be an absurd little mouse!
There was a moral somewhere!
Bert Kelly, “Unscrambling the egg,” The Bulletin, August 9, 1983, p. 110.
In September, 1964, I asked the then Minister for Primary Industry, Charles Adermann:
Is the Minister aware that most of the eggs produced in South Australia are produced from flocks containing less than 50 birds? If a levy of so much per hen is to be imposed, does this mean that each flock will have to be counted by an inspector? If so, how will they manage in my case, as my fowls live either in the header or in trees?
The House laughed heartily and I thought that Menzies would fall off his Prime Ministerial chair. This was the time when the hen levy was being conceived, the idea being that a levy of a certain amount should be imposed on each laying hen in all commercial flocks to raise money need to equalise the low export price for eggs to something nearer the much higher local price. The levy is still there ($1.95 a hen) and it is administered by the Council of Egg Marketing Authorities (CEMA).
Before the CEMA scheme, egg producers, when they had satisfied the local demand for eggs, could either sell them in the low export market or sell them across State borders under the shelter of section 92 of the constitution. The price obtained under this latter method was much higher than the export price, so there was brisk interstate trade, with truckloads of eggs crossing each other at State borders and so bringing chaos to egg markets all round Australia.
Then in each State there is an Egg Market Board (EMB) whose task it is to arrange for the grading and marketing of all eggs produced from commercial flocks in each State and to set standards and prices. The EMBs are producer-dominated. Because the export price is so low, the EMBs try to limit production to the local demand. However, they have set the egg price so high that producers are encouraged to produce more eggs than the local market can absorb, so the EMBs limit the egg supply by allotting each egg producer a quota to supply a set number of eggs. These quotas were given out without charge when the scheme was conceived but they are now worth a lot of money. For instance, I have been informed that an egg quota in South Australia is now worth about $15 a bird. In August, 1982, this State had nine producers with an average flock of 29,414 hens so the quota for each of these nine farmers would be worth, at $15 a bird, $41,210 — income tax free, too. It seems that producing eggs must be a good deal more profitable than the producer members of the EMBs let on.
One of the reasons given for the present system was to prevent the egg industry falling into the hands of big companies.
What has been the effect of the EMBs keeping the egg price so high and making the egg quotas so valuable? AFCO, the consumer group, says that in 1981 the egg price in the US was 73 Australian cents a dozen, the Canadian price was 85.6 cents while the Australian price was about 135 cents. This is a surprising difference as the three countries produce all their own wheat, the main ingredient in poultry feed.
The Victorian Government appointed a committee to inquire into egg marketing in Victoria and its report, dated April, 1981, really pulls the rug out from under the Victorian EMB. It says:
Although it is not possible to determine a precise level of evasion and illegal practice, it would be reasonable to suggest that as much as 25 percent of all eggs in Victoria are sold outside of board control and without payment of relevant board dues. In its efforts to combat evasion, the board has, over the years, devised a series of complex, costly and only partially effective controls over various parts of the marketing system. The board has also established its own grading, manufacturing and distribution operations, primarily for the most inappropriate reason: to reduce evasion. As these board operations are not subject to the constraints of the market place, it is impossible to ensure that they are efficiently run.
Then the McArthur committee really bites on the bullet. It says:
In the light of the board’s continued reluctance to try to control production through price, the committee considers that the power to set prices should no longer rest with the board but should be left to normal market forces.
I don’t suppose anything has happened about this recommendation.
I understand that the Bureau of Agricultural Economics will be publishing shortly a report on egg marketing so I should be able to paint soon an Australian-wide picture. And I hear that Ken Baxter, who serviced the Rae committee and who knows a lot about how such bodies are run, is now the chief executive officer of the NSW EMB. I think there will be a lot of egg scrambling done shortly.
Bert Kelly, “The goose that laid the golden egg,”
The Bulletin, August 16, 1983, p. 118.
I finished last week’s article by saying that I had heard that the Bureau of Agricultural Economics (BAE) were about to publish a report on egg marketing and then I would be able to paint an Australian-wide picture instead of just groping round the South Australian scene. The report has now arrived and I am relieved to find that I have not blotted my copybook.
I was right about the effect of the egg marketing scheme on hen quotas. The report says:
It is estimated that egg prices at retail level may have been around 40c a dozen lower under an unregulated market arrangement. In particular, these higher prices are, in part, reflected in the value of quotas which, in 1982-83, traded at around $15-$20 a hen.
So, clearly the high price for eggs fixed by the producer-dominated egg marketing boards (EMBs) has encouraged the production of more eggs than the Australian market can absorb and, as the export market is so poor, the supply of eggs has to be limited by issuing licences or quotas to particular people while denying them to others. These quotas, which are obtained at almost no cost, then become valuable pieces of paper with a value that is quickly translated into about $15 or $20 a hen. These are known as hen quotas.
Then the report examines who pays the increased price for eggs and who gets the benefit. It says:
Current marketing arrangements have substantial consequences for the distribution of income between consumers and producers as groups and between individual producers. It is estimated that the extent of the consumer transfer in favour of egg producers was of the order of $70 million, or around 40c a dozen eggs consumed in 1981-82. The extent of this transfer falls more heavily on lower income groups who spend a greater proportion of their incomes on basic food items.
In terms of this transfer between producers with different sized flocks, it is estimated that, in 1981-82, 90 farms with over 20,000 birds, accounting for about 4 percent of the number of commercial units but 17 percent of the income transfer, which is equivalent to about nearly $300,000 per farm. By contrast, about 1200 farms, or about half the total, received in aggregate about 3 percent of the consumer transfer, or about $1640 per farm.
I am reminded of an English friend who farmed a big English farm very well indeed. We used to compare our farming figures and I was always startled by the large sum that he had in his subsidy column. When I quizzed him on how long he could expect the government to continue this generous treatment, he replied: “Bert, as long as there are a lot of poor struggling farmers around me, I shall be all right!”
Let us assume that these 90 big producers are getting this $300,000 average benefit from the increased price they get for their eggs. If their flocks average about 42,000 hens, which seems to be the position, the average value of their hen quotas at $15 a hen would be about $630,000. If I owned one of these large flocks, I would regard the present system with deep affection and would do what I could to stop people messing around with my fowl feather bed.
It is clear that the present system must be altered. Hen quotas are valuable because the EMBs have fixed the price of eggs too high. The trouble is that, once the value of a hen quota gets built into a chook farm, people who have paid big money for their farms think it would be unfair if the government lowered the value of their quotas.
Eccles says that hen quotas have the same effect as taxi plate licences where the number of taxis are limited by government regulation, so making them more valuable. Doing this makes taxi plates in Canberra worth about $56,000 and hen quotas about $15. When Eccles is travelling in a Canberra taxi to or from his ivory tower, he spends most of his time mournfully estimating how much of his taxi fare goes towards the operating costs of his taxi and how much goes to paying the interest on this $56,000. This distresses him so much that often he pays off the taxi and walks.
Mrs Eccles tells me that Eccles always used to eat two boiled eggs for breakfast but since reading the BAE report, he only eats one and he sniffs at that one suspiciously.
I tried to get Fred interested in the egg marketing problem but he wasn’t interested. I know that he has some hens but I don’t know how many. And I am certain that he would not tell me how he sells his surplus eggs. I have an uneasy feeling that he might be supplying some of the 25 percent of eggs which the McArthur report said were being sold outside the marketing system. You should try asking him about this.
Bert Kelly, “Intervention is egg-headedness,”
The Bulletin, July 31, 1984, p. 134.
A year ago I wrote two articles about the egg marketing feather bed and since then things have been getting worse. This became apparent with the TV coverage of the raid and arrest by inspectors of the New South Wales Egg Marketing Corporation of poultry farmers who had the temerity to produce and sell their eggs outside the statutory egg marketing system. The supreme irony is that the managing director of the corporation is Ken Baxter who has for years been tipping buckets of scorn on the indolence and inefficiencies of statutory marketing authorities. Those of us who had the good fortune to hear Baxter’s hilarious description of his white mice marketing board at an Outlook conference will always think of him and it with gratitude. But now he is driving the reprehensible NSW egg marketing machine and he has my sympathy. If he cannot clean up that mess, then no one can.
Before we look closely at the mess the industry is in, we should ask why it is thought to be necessary for governments to get involved in the industry at all? Poultry farmers claim that, because there is almost no demand for export eggs, it is essential for egg production to be tailored to meet the local demand with very little over to be sold cheaply overseas. This is the same claim now being made by dairy farmers who also have a weak export market. The production of eggs is limited by governments giving selected poultry farmers the right to keep a certain quota of hens which should produce enough eggs to supply the local market with almost none over. Dairy farmers hope to do this also but they intend to call their quotas “entitlements”, “quotas” having unpleasant connotations since the NSW chook farmer arrests hit the TV fan.
However, this does not answer the question: Why do governments have to get embroiled in egg regulation? There is also a weak export market for pig meat but big farmers manage very well without government intervention and they have disadvantages that poultry farmers escape. For instance, most pigs are killed in export abattoirs and so farmers have to pay high inspection fees even though their pigs are not exported. And pig meat has to compete in the rough, cruel world in fierce competition with red and chicken meat. Indeed, a pig producer told me the other day that he felt like a man in a swamp up to his arse in alligators! Pig farmers may sometimes look with longing at some statutory marketing feather bed but they quickly put this temptation behind them.
There is almost no export market for vegetables either but, by some magical marketing mechanism, cities seem to be supplied with fresh vegetables every day without the government’s guiding hand. Indeed, the very thought of the government switching demand from carrots to cauliflowers makes my thin blood run cold.
Another reason why government intervention is said to be necessary is to ensure that eggs are supplied at stable prices and that there are always enough eggs to go round. But there is nothing sacred about stable egg prices; meat and vegetable prices go up and down as supply and demand for them fluctuates. What is wrong with that? Why not let Mavis decide whether she wants expensive eggs in the winter or more eggs in the spring when they are cheaper? It is her money she is spending, not the government’s. Even though she gets uptight about my striped trousers, she is not stupid.
Poultry farmers say that, if the government is not regulating the supply of eggs, a fate worse than death may result and we might not have enough eggs to go round. The same fear is often expressed after droughts when people say there may not be enough sheep or cattle for restocking. But we always find that, when stock prices rise, animals seem almost to materialise out of the woodwork. And, with our ability rapidly and cheaply to send eggs in refrigerated transport across Australia, there is no chance of running out of eggs and everyone knows this.
There is, indeed, no logical reason why egg production should be controlled by anything other than market forces — as is done with pigs and vegetables. The only people who want eggs regulated are the poultry farmers who are comfortably ensconced on their feather beds. But ask the poultry farmers who were raided and arrested in NSW what they think of government control of egg marketing or ask the poor old consumers. But, of course, no one has worried about them for years — not even Labor governments supposed to be looking after little people.
We have examined the reasons why a few people want the egg industry regulated; next week we will look at the mess we have made of it.
Bert Kelly, “Egging on the substitutes,”
The Bulletin, August 7, 1984, p. 144.
Last week we discussed why it was thought to be necessary to regulate the egg industry; this week we will examine the fruits of that regulation.
One result is that it has made eggs dearer except in NSW, where prices have been coming down recently. A year ago the Bureau of Agricultural Economics said:
It is estimated that eggs prices at retail level may have been about 40 cents a dozen lower under an unregulated market arrangement. In particular, these higher prices are, in part, reflected in the value of hen quotas which, in 1982-83, traded at around $15-$20 a hen.
So that is one result of regulation. The bureau estimates that the artificially high prices of eggs is costing consumers about $70 million a year. Of course, no one worries about that, consumers being regarded as fair game in Australia. But it worries exporters such as Fred and me because Eccles has taught us that a consumer subsidy works in the same way as a tariff subsidy; both get built into the cost of living, then into wages and then they are passed back along the line until they come to rest on the bent backs of exporters who are at the end of the line. So Fred and I worry about consumer subsidies, as we do about tariff subsidies.
One result of keeping the price of eggs high is that this encourages substitutes. If the dairy farmers get their way and succeed in keeping the price of milk products high, they will hold the gate open for artificial products such as soymilk to come in. They did this with butter prices years ago, giving margarine an arm-chair ride.
It is true that artificial eggs do not appear to be just around the corner, though it is hard to be sure about this with such queer goings-on with human eggs. But substitutes for eggs can come in other forms. I used to eat two eggs for breakfast every morning but Mavis weaned me on to bran, the same stuff as horses eat. I resented this at first, but now I am addicted to it. Indeed, the other morning I caught myself giving a little whinny when I heard Mavis chittering the breakfast dishes. The chook people will keep the door open for substitutes is they keep the price of eggs artificially high.
It cannot be claimed that we regulate the egg industry to take care of the poor little poverty-stricken fowl farmer because most of the subsidy money goes to the people who need it least.
I quote again from the bureau report:
It is estimated that, in 1981-82, 90 farms with over 20,000 birds, accounting for about 4 percent of the number of commercial units but 37 percent of production, received 37 percent of the income transfer, which is equivalent to nearly $300,000 per farm. By contrast, about 1200 farms or about half the total, received about 3 percent of the consumer transfer, or about $1640 per farm.
You can understand the big egg producers’ fanatical attachment to orderly marketing if it is as profitable as that.
Another result of regulation is that it encourages each state to have its own egg marketing system. Stern hopes are taken by states to prevent eggs coming in from other states, even if eggs there are cheaper. I can never understand how this is legal when Section 92 of the Constitution insists that trade between states must be free.
States once used health regulations to keep out interstate eggs. This perhaps could be justified when transport was slow but now, with fast and refrigerated road transport, it is foolish to pretend that these health regulations are necessary. We transport meat across Australia in refrigerated trucks. Recently I saw in Queensland beef being loaded for Perth. What is wrong with doing this with eggs?
Some people appear indifferent to the Constitution being breached in this way but I think it is a serious matter. Before federation, there used to be Customs posts at all state borders. It was one of the great achievements of the founding fathers to get rid of these. But if we stop eggs and milk being produced where this can be done most cheaply just to satisfy state loyalties or prejudices, why not do the same with cars, textiles or footwear? And what kind of a nation do you think would result?
Fred has been having a pretty rough time on his farm lately and he is thinking of buying a large refrigerated truck for his boy Bill so that he can carry packaged milk from northern Victoria to Sydney and then back-load with eggs to Melbourne. He thinks that this will be better than farming.
This is the kind of opening that governments create when they muck around with markets.
However, once you get on the back of a hen quota tiger — or any other kind of quota tiger — it is hard to get off without being eaten.
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