Milk subsidy might be cut or dropped

Press, Volume CXIV, Issue 33464, 20 February 1974, Page 14

Milk subsidy might be cut or dropped

f.X’eir Zealand Press Association/ PALMERSTON NORTH. February 19.

The possibility of a reduction in the milk subsidy, or its removal, was raised today by the Minister of Agriculture (Mr Moyle).

New Zealand paid 4c a pint for milk, one of the yowest prices in the world, he said at the opening of the Palmerston North milk treatment station. "But in fact we pay a high price for our bottle of milk — 4c delivered at the front gate, and s42m in subsidy this year.” Mr Moyle said “The Government must, and the country should, question the continuation of a subsidy of this magnitude. "If adjustments were made

to family benefits, and for people on fixed incomes, to compensate for an increase in the price of milk, would the public accept that some lor all of this S42m could be better spent in other directions?” Mr Moyle said the town milk industry was dominated 'by its need to produce liquid milk in winter. But with continuing technical development and “ a bit more effort” it should be possible to produce a reconstituted milk mixed with the reduced supplies of raw milk i winter to provide a wholly acceptable alternative to the present supply.

The Minister said he expected within a fortnight the first report of an interdepartmental committee set up to consider the wider questions affecting both the town milk and manufacturing industries. The committee was investigating the relationship between the two industries with particular reference to the following questions: Was the present quota system for town milk still

appropriate? Should the formula linking the town milk price to

the factory payout be revised? Were there some areas where it would be more economical to transport town milk from other regions rather than produce it locally? Would integration of collection and some integration of processing pro-

vide economies? Was there any place for recombined milk within

the New Zealand system?

Mr Moyle said that town milk and factory supply had worked as separate and independent sections of the dairy industry since 1943 — “a separation that I think is open to serious question.” “I think it is ridiculous that the export industry has so i little direct involvement with ithe local market,” he said, !“and the local milk industry has no interest in exports. “The local market should (be the testing ground for new products, new packaging and new presentation.”