SUBSIDY ON BUTTER

Press, Volume CI, Issue 29932, 20 September 1962, Page 15

SUBSIDY ON BUTTER

Explanation Of

System

(5 Z. Press Association) AUCKLAND, September 19. He had been told by a number of people that they believed the farmer paid the 8d a lb subsidy on the retail price of 2s paid for butter on the local market, said the M.nister of Agriculture (Mr 'lalboys) at Pukekohe today. That is not correct,” he s.nd. ’True, the farmers con- • ibute to the subsidy as taxpayers because the subsidy is paid by the taxpayers.” The Minister said that in 1957-58. when the basic price if butterfat was 36jd per lb. the Government consumer subsidy was £4.7 million. Today. at a basic price of 32d per lb butterfat the subsidy was £3 6 million. Referring to the Dairy Industry Account, the Minister said that it was at present overdrawn by about £2O million. The overdraft fluctuated seasonally. "The interest rate on the overdraft is 1 per cent.,” he said. ‘‘The industry has enjoyed this facility for many years. It is apparent that the granting of low-cost finance <-n this scale is of real benefit to the industry. "The dairy farmers benefit under this procedure in that they receive the basic price almost immediately on delivery into store at a charge to time of realisation of only 1 per cent. per annum. "Where the system of 1 per cent, advances on stock held not operating, the dairy farmer would Either have to wait a considerable time for his money or, alternatively, borrow at current rates against his unsold produce in the same way as other producers.”