GUARANTEED PRICES

Press, Volume LXXXII, Issue 24988, 24 September 1946, Page 6

GUARANTEED PRICES

NEGOTIATIONS STILL IN PROGRESS

REPORTED CLAIMS OF DAIRY INDUSTRY (From Our Parliamentary Reporter.) WELLINGTON, Sept. 23. No conclusion has been reached yet in negotiations on guaranteed prices for butter and cheese. The Stabilisation Commission appears to have stated its views, and the issue is now apparently being decided between the Government and the dairy industry. An increase of something more than Id per lb of butter-fat is expected. It is understood that it was originally suggested that a cost allowance of 2d per lb of butter-fat should be paid this year, in addition to the guaranteed prices, plus cost allowances granted in recent years. The argument advanced in support of this contention was that in the negotiations with Britain, resulting in a large increase in returns for New Zealand produce, an important factor was the increase in the costs of production. The dairy industry argues* that if increased costs of production was the reason why Britain was willing to pay more for butter and cheese, the New Zealand farmer should get a higher return to cover that increase in costs. On the other hand there is no doubt that Britain was willing to pay higher prices partly because they were still below the level of world parity, and the prices that Britain would have to pay from other sources of supply undoubtedly entered into the calculations. According to reliable information in Wellington, the Stabilisation Commission is unwilling to agree to an extra costs allowance of more than about Id per lb butter-fat. The dairy industry was willing to accept about I Jd. This difference of id has apparently been referred to the Government for its decision. Political considerations must be taken into account by the Government. On the one hand dairy farmers

are seeking to obtain as much as possible of the higher prices obtained for their produce, and they are still a factor in halt a dozen seats which the Government hopes to retain at the next election. On the other hand the industrial Labour movement is bitterly opposed to farmers getting higher returns if workers are to remain on the same rates of pay, and unionists are trying to get some advantage from these negotiations. Obviously, stabilisation is facing a severe test, possibly the most severe test since it was introduced almost four years ago. In the njeantime reticence is being observed by all parties to the negotiations. “What about the guaranteed prices,” the Prime Minister (the Rt. Hon. P. Fraser) was asked this evening by reporters. “Guaranteed prices? That sounds like an echo of the past in the future,” the Prime Minister countered, with a smile. “Whatever decision is reached on the payment of guaranteed prices, the balance of realisations will not be retained by the Government. In accordance with the agreement made in 1943 any balance above the guaranteed prices is to be paid into the dairy industry stabilisation account, and this is to be used for the benefit of the industry by agreement between the industry and the Government.”