BONUS PAYMENT EXPLANATION

Press, Volume XCVIII, Issue 29068, 3 December 1959, Page 18

BONUS PAYMENT EXPLANATION

“Not Increase In Basic Schedule”

(New Zealand Press Association) WELLINGTON, Dec. 2.

“Because a bonus is warranted by present market prospects in the United Kingdom, we have this week offered to pay a bonus of 2s for lambs under 361 b,” said Mr P. J. Borthwick, dijector of Thomas Borthwick and Sons '(Australasia), Ltd., in a statement today. “There are good economic reasons for an alteration in the price structure at the present time, as it is important that the flow of supply to the United Kingdom market should be kept up to the demand during the early part of the season,” he said. “The United Kingdom market is firm with an upward tendency which, together with the necessity for early killings and shipments, warrants an increase in the price structure for all lambs under 361 b., “After consideration of the effect of an ordinary increase on the floor price, we were forced to the conclusion that this would be unreasonable as the price over 361 b would be reduced by the Meat Export Prices Committee and the farmers with heavy lambs would be unfairly treated as they would get a reduction in their price.

“It should be stressed that we have not increased the basic schedule this week, we have merely said we will pay 2s for lambs under 361 b. There are plenty of precedents for premium payments.

“Unless an incentive is provided, farmers will continue to hold back their lambs as at present. The payment of a premium by a special bonus will ensure that farmers receive the full benefit of it.

“It may be suggested that the special bonus will undermine the deficiency payment system and therefore in the long run be against farmers’ interests. This is not so. This is a special bonus to meet special conditions. An increase in the schedule, followed by a decrease in the deficiency payment,' would not encourage farmers to send their lambs to the killing works at this time. “The bonus is the only way to achieve this end.”