BUTTER PRICES.

Auckland Star, Volume LXVII, Issue 21, 25 January 1936, Page 12

BUTTER PRICES.

: MARKETING PLANS. ; CABINET MEETING MONDAY. DISCUSSIONS NEARING END. . (By Telegraph.—Parliamentary Reporter.) . | TVELLIXGTOX, this day. . j The successful conclusion of the dis- ! ctissions with the Dairy Board was forecast hv the Prime Minister, the Hon. M. J. Savage, in a special interview. Mr. Savage also discussed freely the GovernJ ment's guaranteed prices plan and exchange developments. I He stated that there would be a Cabinet meeting on Monday to complete the Government's side of the proposals | relating to the Dairy Board's plans for ! organising marketing overseas and the internal marketing of 'butter. "And there is no difference of opinion," declared the Prime Minister. "Internal marketing, as well as external market- | ing, will involve guaranteed prices, and j external marketing involves the proper j organisation of the British end of, it." I Reminded of the Government's request I that the Dairy Board should suspend j Mr. Agar's visit to England till the conj elusion of the negotiations, Mr. Savage ! was asked if this plan was likely to , proceed and whether the Government | would also desire its own representative , to watch the position in England. |- "It has been suggested," replied Mr. Savage, "that the Government might have a representative associated with the Dairy Board member, but that has to be finalised on Monday. After the Cabinet meeting wo shall be able to say definitely whether Mr. Agar is going or not, and what will be done at the London end, which cannot be left to look after iteelf." Butterfat Price. The Prime Minister was ready to discuss freely guaranteed prices. When asked if the Government had come to any conclusion as to what price would be guaranteed in terms of butterfat minimum payment, lie replied that no exact figure "Had been named, adding, "A guaranteed price only means that you have to pay an economic price for the work. You have to have some basis for it, and the Government has to fix that basis and supply the money. The machinery of Dairy Board will be used for the pay-out. Our job is to carry on the policy that the people voted for, and I have no doubt about our being able to carry it out, for no insuperable difficulties have arisen in perfecting details. The utmost good will exists between the Dairy Board and the Government, and if we cannot work successfully together I shall be greatly disappointed."

"Have you settled tlie price on a butterfat basis?'' ill*. Savage was asked. "The actual basis will be considered by the Government and the board," he answered.. '.'lt will be an economic price for the man doirif* the job, and before the matter is finalised a question involved will be readjustment of overhead charges on the same basis as the guarantee of the price. All over this country 1 have stated that the basis of the guaranteed price will be the average of about eight to ten years, and in addition to that mortgage liabilities will have to be placed on the same basis. This will not only save the mortgagor, but 'also mortgagee.

I.3?" The valuation will be what the- average "'man can do working nnder average conditions. You ask what are average conditions? We say the average prices ruling for eight or ten years. Lending should always be on that basis. Production cannot be on any other basis. Our job is to avoid inflation while at the same time paying the farmer for the service he gives." Lowering Exchange. "The farmer cannot have the advantage of the high exchange as well as guaranteed prices," suggested the interviewer. Mr., Savage agreed, remarking, "Oiir objective is n lower rate exchange, but we don't want people to get excited becau6c ) .the rate of exchange will be handled carefully. "Some British newspaper editor says I have a lot to learn about foreign exchanges. I don't claim to be the last word on the subject, but I think I understand foreign exchange as well as that editor, and I know speculators are always waiting for a rake-off if they can prot any indication at all of what the Government proposes to do. The Government's job is to see that they do not get any rake-off. When the rate is reduced it is going to be done with the least possible disturbance of finance and industry. That is our job, and we understand it just as well as that British editor."