GUARANTEED PRICE FOR NEXT YEAR

Press, Volume XCVII, Issue 28559, 12 April 1958, Page 12

GUARANTEED PRICE FOR NEXT YEAR

Dairy Companies Fear “Excessive” Cut (New Zealand Press Association) NEW PLYMOUTH, April 11. . A clegrr indication that dairy company directors are apprehensive that the present low prices for butter and cheese may lead: to a move to reduce the guaranteed price for the 1958-59 season by more than the 5 per cent, fluctuation fixed in existing legislation was the only clear thing which emerged from a confused discussion at the close of today’s annual Taranaki ward conference of the Dairy Board at Stratford. The ; conference ended the discussion by unanimously approving a resolution that, in its negotiations with the Government over next season’s guaranteed price, the Dairy Board seek “justice for the farmer under the existing legislation.”

The originator of the discussion, the chairman of the Okato-Puniho Co-operative Dairy Company (Mr L. D. Hickford) claimed that this meant the same thing as the original motion which he had proposed. He had been asked to withdraw that resolution by the chairman of the Dairy Board (Mr A. Linton), and the Taranaki ward member (Mr J. S. Hickey), who said they feared that unless it was passed unanimously there would be unfavourable repercussions when the negotiations began. “Unless it is passed unanimously, we’re shot in making these negotiations,” Mr Hickey declared. The chairman of the T. L. Joll Co-operative Dairy Company (Mr W. E. Scott), appealing to Mr Hickford and his seconder, the chairman of the Bell Block Cooperative Dairy Company (Mr L. J. Rundle) to “withdraw and not divide the conference on th?s,” suggested his resolution, which was eventually carried, as a compromise.

Mr Hickford’s motion called on the Dairy Board to ensure adherence to the existing legislation providing that there should, in the case of q. deficit in the Dairy Account, be no more than a 5 per cent, drop in the guaranteed price in any one year. He condemned what he called “unbased statements” that had been made of the extent of suggested drops in next season’s price. “Loose Talk” “What hasn’t been stated is that the taxpayer might not have to pay out,” Mr Hickford said. There was “loose talk” of what would happen when the pool reserves were exhausted. “But they haven’t been depleted yet—even if they’re getting near tp it.”

The Dairy Products Marketing Commission Amendment Act, 1956, provided for three courses if, and when, reserves were exhaused. They were: An increased overdraft from the Reserve Bank, the mortgaging of the assets of the commission, or a call upon the Consolidated Fund.

“We have always agreed that we should take some of the smack, and that we can’t have the full amount of our costs on a falling market; but so far our agreement has been a one-sided one,” said Mr Hickford, “because the reserves are not exhausted.” Mr Hickford estimated that lump sum payments for produce during the 1939-45 war, which were never distributed to the farmers, amounted to £3O million. There were other funds which had come into the country and from which the farmer had not benefited.

“The money won’t stay in our hands. It will be distributed, and the community will benefit by its circulation,” he added. Tasman’s Loss “The Dairy Board must fight this for all they are worth,’’ said Mr Rundle. If inflation was argued, what of Tasman Pulp and Paper which had lost £3 million in two years of operations? he asked. The wages were still being increased by the Arbitration Court. Some awards provided increases of as much as 6s a week. Agreeing, the chairman of the Mangorei Co-operative Dairy Company (Mr A. Hall) said transport drivers had recently had an increase, and this affected the dairy industry. “Now is the testing time for the 40-hour week,’’ he declared. “All we want is a living wage.” The first note of dissension came from the chairman of the Manutahi Co-operative Dairy Company (Mr A. B. Muggeridge). “What happens if we get one or two more bad years?” he asked. The industry . could find itself with a mortgage of up to £5O million in a few years if it borrowed from the Reserve Bank. “When will that be recoverable?” he asked. “We can stand by the legislation this year but the longterm aim surely must be to reduce costs.” Effects of Borrowing “Are we to borrow money to keep costs up?” the chairman of the Kaponga Co-operative Dairy Company (Mt J. P. Gibson) asked. The chairman of the Moa Cooperative Dairy Company (Mr K. W. Jackson) was definitely opposed to an advance from the Government. “J don’t see any sense in borrowing money to pay income tax on it and to keep costs up,” he said. “You’re skating on thin ice,” Mr Hickey told Mr Hickford, who insisted that all he wanted to do was to strengthen the hands of the Dairy Board in negotiations. Before the next season’s price was fixed, legislation could be passed altering the present act, said Mr Scott when Mr Hickey told him that the present provision was that next season’s price had to be announced “within 30 days after August 1” of each year. Later, Mr Linton asked the press not to publish any of the discussion at all. This was vetoed from all parts of the hall, and the discussion ended with Mr Hickey putting Mr Scott’s compromise motion, which was carried unanimously.