The Guaranteed Price

Press, Volume LXXIII, Issue 22104, 28 May 1937, Page 10

The Guaranteed Price

The statement of the Acting-Prime Minister at Hawera on the factors in the calculation of the guaranteed price for dairy produce in the 193738 season is so vague that it gives little to go on, but it should be accepted as a good omen by those dairy farmers who are supplying cheese factories, because apparently the Government has listened to their representations, and is prepared to allow them a larger premium than was allowed for this season. It cannot be expected, of course, that there will be any announcement of the new price earlier than the announcement was made last year—at the beginning of August—but the committee appears to have been busy already and to have been impressed with the need for fostering cheese production as far as possible. Without knowing more details than that it appears certain that the cheese premium will be increased, and that there are likely to be adjustments for all produce for over-run, it may be said that ja. determination to " stabilise the production of " cheese " is an object with some merit. The butter market in Great Britain has in recent years been subjected to an increasingly heavy bombardment of supplies, not only from Empire countries, but also from foreign sources, but the cheese supply continues to come mainly from New Zealand, with Canada a long way behind, and certain European countries again well behind Canada. There is the additional implication that secondary dairy products, pork and bacon, are taking an increasingly prominent place in New Zealand exports to the British market. It appears from the statement that butter producers will not be treated overgenerousjy in the matter of compensating them for additional costs of manufacture, though it is admitted freely that there has been a rise; but cheese producers are apparently to be allowed an extra return of the order of Jd on 2|d —a significant increase. This admitted increase in the cost, an increase which has been calculated on figures relating to only a part of a year in which costs have risen at an accelerated rate, is a tacit admission that costs as a whole have risen markedly. The statement says that butter costs have for this season been allowed at a rate that will probably be found sufficient for the coming season, but it is doubtful if butter producers will allow the comparison of their costs with those of cheese producers to pass unchallenged. The figures in the statement have been based, as mentioned, on only a small part of the season, four months for butter, and these costs are for factories alone. The authorities have yet to go into the costs of the producer, upon which, the whole system of guaranteed prices must in the end stand or fall. The scheme will probably this season cost the country about £2,000,000. Any increase in the basic price because of rising costs for the coming season, unless there is a corresponding increase in the average London price, must mean a greater burden to the country as a whole.