DAIRY PRODUCE MARKETING

Press, Volume LXXXII, Issue 24882, 23 May 1946, Page 4

DAIRY PRODUCE MARKETING

PLAN PREPARED BY INDUSTRY

ALTERNATIVE TO THE GUARANTEED PRICE

(P.A.) AUCKLAND, May 22. Details of a new plan of overseas marketing which has been drawn up by the dairy industry were given by Mr A. J. Sinclair, secretary-manager of the Te Awamutu Dairy Company, Ltd., in addressing the senior and junior Chambers of Commerce in Auckland. The industry had never been satisfied, he said, with the present arrangement whereby the Government compulsorily took possession of the farmers’ produce and dictated the price to be paid, and the new scheme was put forward as an alternative to the guaranteed price. “In formulating its new plan, the industry has set down as a fundamental principle that the marketing of its produce should be removed entirely from political control, and vested once more in the New Zealand Dairy Board, reconstituted to cope with the increased responsibilities,” said Mr Sinclair. Determination of the price to be paid to the dairy farmer should be no longer under the sole control of any political party in office, but should be decided by an independent tribunal, consisting of three Government representatives, three from the industry, and a Supreme Court Judge as chairman. This tribunal would consider movements in the labour reward of those rendering equal service, and would set out the cost structure covering farmers’ working and maintenance costs, return on capital invested, and labour reward, which would form a basis for fixing a guaranteed minimum price. “While New Zealand continues to operate under conditions other than free exchange, free marketing, and free imports, # the industry in self protection must have a guaranteed price adequately related to costs. As this Srice must be guaranteed by the State, ie industry readily concedes that additional Government representation would be necessary on the Dairy Board, but it insists that the board have a majority of producer members, under the chairmanship of a producer member.

Minimum and Maximum Prices “The plan provides for a minimum price, below which the farmer must not be paid, irrespective of realisations, and a maximum which must not be exceeded should the market take an upward trend.

“It is suggested that the formula unanimously recommended by the 1938 price investigation committee should be the basis, and that the minimum price should be Id a pound of butter-fat less than the figure set in that report, plus increases granted to the industry since. This would result in a minimum price, slightly less than the farmer receives to-day. “The industry proposes that the maximum price should not be more than 2d a pound above the minimum. All realisations up to that figure should be paid into the dairy industry equalisation account, and distributed to suppliers through dairy companies at the end of the season. Any oalance over the maximum price would be withheld, and credited to the State equalisation account, to be available as an offset to debits incurred by the State in maintaining the minimum price. “While the United Kingdom Government continues the present system of bulk purchase, negotiations may be required between the two Governments, but the industry should be given a partnership in the negotiations. In the event of the British Government abandoning its scheme of bulk purchase, and dairy produce marketing reverting to its former channels, the industry has a plan for establishing marketing associations throughout the Dominion, vested with statutory powers. Two Vital Problems

“We do not anticipate that the prices paid during the war will continue for any long period. Stability in the industry can be achieved only by increased production. The resilient spirit of the farmer is as strong to-day as it was in the depression, and the labour shortage promises to be less acute; but the country must solve for him two vital problems over which he has no control. ‘Give me fertiliser,’ the farmer Is saying, ‘and I shall send food to the starving millions in Europe in increasing quantities that will make the coupon-saving scheme look foolish.*

“The second problem is that labour is being attracted from farms by high wages and the 40-hour week. Few men who own farms take serious exception to working 50 or 60 hours a week they have tangible evidence that they are steadily improving their position in life, but if they cannot get a price that will enable them to pay reasonably competitive wages to farm employees they are prepared to conceae the point made by Mr Fraser when ne spoke a little disparagingly of the pro*pects for youth in primary industries “When the Arbitration Court recently curtailed hours from 44 to 40, wij® no reduction in wages, the farmer garded this as equivalent to an increase of 10 per cent. He is a** 1 "!; why his labour reward factor. wNcn stands in the guaranteed price formula at 11.44 pence a pound, should not dw similarly increased, because wages are automatically increased ny 5s weekly for every increase of t° pound in the guaranteed price.