Federation Gives Details Of Dispute

Press, Volume XCVIII, Issue 28794, 15 January 1959, Page 10

Federation Gives Details Of Dispute

(New Zealand Press Association)

WELLINGTON, January 14. The present dissatisfaction among town milk producers, not only in Hawke’s Bay, but throughout the whole country, had arisen as a result of delay by the Government in deciding the town milk producer price for the 195859 milk year, which commenced on September 1, 1958, said the secretary of the New Zealand Town Milk Producers’ Federation (Mr V. S. Lynskey) today. Negotiations were commenced by the federation in April last year through the New Zealand Milk Board, which in turn made recommendations to the Government, he said. “The board’s recommendations were based largely on costs of production of town milk as revealed by a survey, conducted jointly by the board and the federation. The board is the statutory authority charged with the responsibility for administering the national milk scheme, and comprises a predominance of consumer representatives.” Government Proposals The Government had not accepted the recommendations of the board, said Mr Lynskey, and had proposed a range of prices incorporating the full drop in the negotiated dairy industry price. “On the usual method of translation of the town milk price this involves a cut of 2.55 d a gallon—a reduction of £361 per annum in the income of the average town milk producer,” he said. “The Government has gone further and imposed an additional cut of Id a gallon on first-grade milk, on which a reduction of about 3|d a gallon is suggested. “The federation has never been satisfied with the link with the dairy industry price, and has for many years pressed for relationship of the town milk producer price with the internal cost structure. Town milk farmers maintain that as their product is produced in New Zealand for domestic consumption they are entitled to recover in the price full costs of production, as is the case with every other local industry. “The range of prices proposed by the Government —27d a gallon for finest-grade milk, 25d for first-grade and 21d for second—if implemented would place a severe financial strain on the average working town milk producer. “In general, the town milk industry consists of a large number of producers with small dairy quotas. Twenty-two per cent, of the total number of supplies have daily guarantees of below 36 gallons a day, 34 per cent, below 45 gallons a day, 46 per cent, under 56 gallons a day, and 58 per cent, less than 66 gallons a day, involving a herd of 67 cows. “The average labour reward of those in the group under 36 gallons a day would be reduced to £4BO per annum. Farmers in the 36-45 gallons a day category would receive £677 per annum. Those in the 46-55 group would get £BB6 per annum, and the farmers in the 55-65 group would secure £lOBB per annum. “All of these rewards include the value of housing, assessed at about £135 per annum,” Mr Lynskey said. “The new range of prices is totally unacceptable to the federation, and a special general meeting of the membership held in Wellington on November 25 resolved that no member organisation should complete the annual agreement with the New Zealand Milk* Board till a price satisfactory to the executive committee was agreed on. “The Acting-Minister of Agriculture was at this meeting. “More representations were made to the Government, and in a letter dated December 18 the Prime Minister intimated he would consult with his colleagues as to what course should be followed. “No more official advice has been received from the Government and in the meantime town milk producers throughout the country are supplying milk each’ day without a proper agreement or a definite price schedule. Questions Asked “So far the federation has not received from the Government satisfactory answers to the following questions:—

“Why the Government proposes a greater reduction in the price for first-quality milk than the full drop in the dairy industry price calculated in the usual way. (The

price for first-quality milk in 1957- was 28.4167 d a gallon, while the price suggested for 1958- is 25d a gallon, i.e., a decrease of 3.416 d a gallon. A full drop in the cheese price, if reflected in the town milk producer price in the customary manner, would have been 2.55 d a gallon.) “Why the recommendations of the New Zealand milk board, the properly constituted and statutory organisation for making recommendations to the Government and comprising a predominance of consumer representatives, was set aside by the Government in deciding on the price for 1958-53. “Why the Government has in this instance departed from its fundamental policy that economic local industries are entitled to have their costs of production covered in the price of their goods. “Whether the Government Is prepared to accept the suggestion of the federation, as conveyed to the Prime Minister in a letter dated November 28, to submit the whole matter to arbitration for independent report, the findings of such arbitration to be binding on both sides. “Entitled to Fair Price” “Town milk producers in Hawke’s Bay appear to have become impatient at the delay in securing satisfactory answers to the industry’s representations. “The action being taken is not intended to inflict hardship on consumers in the area, but rather to direct attention to the fact that town milk producers, along with ali other local manufacturers, are entitled to a fair price for their produce.’’