NEW ZEALAND FOOD.

Auckland Star, Volume LXXI, Issue 156, 3 July 1940, Page 9

NEW ZEALAND FOOD.

NEGOTIATIONS REVIEWED. IMPORTANT COMPROMISES. (By Telegraph.— Parliamentary Reporter.) WELLINGTON, this day. Full details of arrangement for the sale of New Zealand food and other supplies to the United Kingdom Government during the war were tabled in the House of Representatives last night by the Minister of Finance, Mr. Nash.

The information generally has already foeen made public, but the report throws light on the protracted discussions preceding the agreements for the purchase of wool, meat, dairy products, tallow, sheepskins, hides, fruit, eggs and scheelite. ■ The New Zealand negotiators at an early stage raised the important point, when submitting the proposed prices for meat and dairy produce, that these be subject to revision if the United Kingdom index of export prices increases by 10 per cent during the period of the purchase agreement, which is for the duration of the war and one year afterwards.

The Prime Minister, Mr. Fraser, cabling the High Commissioner, Mr. Jordan, on this subject «tated, "Our negotiations are based on equitable exchange, but it is strongly pointed out here that the prices to be paid for essential imports from the United Kingdom and other Empire and neutral countries constitute the major factors in New Zealand costs. We would therefore be in a very disadvantageous position if we sold exports at the agreed prices, which we propose to do, and were then compelled to pay abnormally enhanced prices for all imports."

The United Kingdom tentatively put up the suggestion that New Zealand might arrange to purchase certain commodities in Britain at controlled prices, instancing iron, steel, fencing wire, woollen and other textiles. The question remained unsettled. At the time of his English visit, Mr. Fraser, then actingPrime Minister, met representatives of the British Government and suggested that prices for produce sold by New Zealand should be, subject to review of United Kingdom wholesale prices, increased by 10 per cent; another suggestion was that New Zealand be given the benefit of any price control rixed in regard to United Kingdom goods. Price Equilibrium. Mr. Fraser expressed the opinion that the agreements being negotiated with New Zealand should be dependent on the maintenance of price equilibrium, based on existing price levels. In the case of wool, he added, the agreement, which extended for a year after the conclusion I of war, provided for price review every | year in Slay.

Mr. Fraser also brought up another controversial point in the purchase discussions, namely, Britain's definition of the phrase "exportable surplus." It was clear that New Zealand'meant the whole quantity available for export, after meeting domestic requirements, but the United Kingdom adopted the definition, "the quantity which, having regard to available ships, could In fact be exported."

The New -Zealand Government had urged that such a conception meant that the United Kingdom was not purchasing, but only acquiring an option to purchase. A compromise was accepted whereby the United Kingdom gave a firm undertaking to purchase defined quantities of meat, butter and cheese, and that over and above these definite commitments they would, within the limits of their requirements, subject to shipping being available, use their best endeavours to lift any balances available for export.

This compromise wa« made acceptable, states the Finance Minister's report, by the fact that defined quantities covered approximately the estimated seasonal surpluses available for export. The wool agreement covered the whole quantity available for export without any qualification regarding shipment. Delays in shipment were visualised by the New Zealand negotiators, who secured the provision in the case of meat and dairy produce that the Ministry of Food will pay 50 per cent on account of the value of any produce which has to remain in cool store more than two months by reason of the Ministry's inability to adhere to its shipping programme. Question of Shipping. Mr. Fraser raised the shipping question at his London conference, U - British representatives stating that it would be serious for New Zealand if it had to be penalised owing to shipping delays, and the gravity of the position might be accentuated by reason of suitable storage accommodation bein<T limited. The Government had been try" ing to increase this before the "war. He realised that the agreements were part of the general co-operative effort, but urged that if owing to unforeseen circumstances it became impossible to implement a transaction either by reason of lack of shipping space, or to a really substantial increase in price of materials imported from the United Kingdom into New Zealand, then the terms of the agreement should be regarded as open for reconsideration. The Rt. Hon. W. S. Morrison, on behalf of the British Government, agreed that in such circumstances the arrangements would have to be regarded as open for discussion.