How Is The Deficiency Payment Worked Out?

Press, Volume C, Issue 29709, 30 December 1961, Page 7

How Is The Deficiency Payment Worked Out?

JpARMERS who are at present receiving deficiency payments on lambs, hoggets and wethers killed for export are naturally interested in how the payment is fixed in any particular week. “The Press” recently sought information through the Meat Board about the general principles used in reaching the deficiency payment and at the same time submitted a suggested method by which it might be calculated. The secretary of the Meat Export Prices Committee, Mr L. Vogtherr, had no comment to make. The suggestion was that the Meat Export Prices Committee could start off in its calculations in any week using the minimum price of 15d a lb for the bare meat at f.o.b. of the North Island prime Down cross 29 to 361 b lambs. To this it would add from its various sources of information a skin value for wool and pelt and from this it would subtract a figure for charges, again calling on its sources of information, to allow for killing and freezing charges, buying and administration charges, interest and the meat pool levy. This would give a schedule based on a 15d price for bare meat at f.oJa. as required under the deficiency payments scheme. This figure could then be compared with the operators’ schedule for the particular week and the difference must be the deficiency payment. In more simple form this

could be expressed this way in a hypothetical case: Minimum price for lamb 15d Plus skin value per lb 4d 19d Less consol, charges 5d Minimum price schedule 14d Schedule price 13d Deficiency Payment Id The same result could be reached by taking the operators’ schedule of 13d in the case cited, adding the charges and subtracting the skin value to give the bare meat content of the schedule of 14d—which is Id less than the minimum price.