DAIRY PRODUCE PAYMENT

New Zealand Herald, Volume LXXVI, Issue 23269, 11 February 1939, Page 12

DAIRY PRODUCE PAYMENT

Sonic dairy companies arc again being forced to incur heavy charges for storage, interest and insurance on produce awaiting shipment. This difficulty cropped up toward the end of the first season under the guaranteed price and appeared then, as now, to affect some companies more than others. The crux of the matter is that the Government does not pay for butter or cheese until it placed on board ship. Those companies whose output is quickly despatched are, of course, not affected, but others whose output has to be held in store for some time awaiting a space allocation have to foot heavy bills. Suppliers hav« to be paid monthly, involving overdraft interest, and storage charges have to be met. If these delays were purely fortuitous and borne by all companies in fairly equal measure, there would be less cause for complaint. The suspicion exists, however, that the Government causes the factories to hold produce at their expense in order to suit its own marketing arrangements. It is certainly sound policy and good business to spread consignments so as to avoid the accumulation of excessive stocks in Britain, but that should be done at the charge of the State consignor, not of the factories. It is the Government's interest. The injustice and inequality of the present system could be removed if produce were paid for at the grading stage, instead of upon shipment. The change could be made within the terms of the Primary Products Marketing Act, which provides for f.o.b. payment, but also empowers the Minister to take over produce "at any specified time prior to shipment" upon giving due notice. Certainly the Government would thus incur extra expense, but allowance could be made in future when fixing the guarantee.