Meat stabilisation scheme for farmers announced

Press, Volume CXV, Issue 33963, 2 October 1975, Page 1

Meat stabilisation scheme for farmers announced

The establishment of a permanent price stabilisation, or smoothing, scheme for meat aimed at cushioning farmers’ incomes against fluctuations in export prices was announced by the Prime Minister (Mr Rowling) during an address to students at Lincoln College yesterday.

He said that the scheme would not constitute a “hand-out” to farmers, but would be “self-balancing” over time.

. that Sir Alan Danks had . been appointed chairman of a prices committee, comprising an equal number of Meat Board and Government ■ representatives. The committee would have as its main task the fixing of min1 imum prices for all classes I of meat each season. > It would also determine , the point above the min- > imum price at which levies I should be deducted for payment into the stabilisation : account, and the amount of the levies. I ‘The increased minimum r prices for beef, already an- ; nounced by the Meat Board : for the season which starts : today, will now be int corporated into this scheme . and, as necessary, be finan- , ced from the stabilisation I account. : “I expect that minimum ' prices for lamb, and mutton, will be set by the prices’ i committee at its meeting on Thursday next week. I Mr Rowling said that, to-

The price-setting committee established under the scheme will meet next Thursday to set the minimum prices for lamb and mutton., “In times of depressed prices, farmers’ prices will be boosted by payments from a stabilisation account, and in times of high prices their returns will be reduced by payments into the stabilisation account,” said the Prime Minister. The Goverment provided s3sm for the account earlier this year, and Mr Rowling said that should it move into deficit, Reserve Bank credit would be drawn on at an interest rate of I per cent. "This scheme will replace, on a continuing basis, the ad hoc arrangements that have been operating since early this year to supplement producers’ returns from lamb and beef.” The Prime Minister said

gether with the higher minimum prices already announced for wool this season, these new arrangmenets for meat prices would enable the farmer to face the future with increased confidence. “With the new dairy stabilisation arrangements, the smoothing of prices for our three main farming commodities represents a major step forward towards greater income certainty for farmers. N.Z. to benefit “The country as a whole als> stands to benefit from this greater stability in farm incomes,” the Prime Minister said. He said that the Government had reached agreement with the Meat Board on the scheme, “I am very pleased with the way the Meat Board and the industry have faced up to the need to reduce the effects on farmers’ incomes of fluctuating export prices, and have brought forward proposals which the Government has been able to accept with only minor modifications,” the Minister of Agriculture, Mr Moyle, said after the Prime Minister’s announcement. Some of the administrative details of the scheme had still to be worked out, he said, “but the essential point is that we have the means of ensuring against a repetition of the experience of the last two years, with the boom meat prices of 1973 being followed by a precipitate fall to the disastrously low levels of 1974 and 1975.”

Mr Moyle said that in normal circumstances the minimum prices would be set within a band 10 per cent above, and below, a moving three-year average of market prices, including a forecast of the market price for the coming season. In exceptional circumstances the committee could, after consultation with the Minister, fix minimum prices more than 10 per cent above or below the three-year average. If actual market prices fell below the level necessary to

sustain the minimum price to the producer, supplementary payments would be made from the stabilisation account established at the Reserve Bank earlier this year. He said that the Meat Board could assure that the producer received not less than the minimum price by direct intervention — by buying or offering to buy at the minimum price. The levies to be deducted from producers’ returns at times of high prices would be assessed in relation to trigger < prices established each season some 20 per cent to 30 per cent above the relevant minimum price. Producer prices would be free to fluctuate within the band between the minimum and trigger prices. “The setting of trigger prices to enable the assessment of levies will have to await the passing of legislation during the next Parliamentary session,” said Mr Moyle. “However, 1 would regard it as extremely unlikely that circumstances will arise that would justify the imposition of levies on sheep farmers this season.” Additional aid Mr Moyle said the stabilisation schemes for meat, wool, and dairy, products were not seen by the Government as necessarily providing adequate levels of farm incomes in all circumstances. To the extent that they failed to do so, additional assistance would be required, and the form and level of such assistance would need to be kept under review to ensure that a satisfactory rate of productive investment in agriculture was maintained. “Nevertheless,” Mr Moyle said, “I believe that the guaranteed minimum price structure now established for the whole pastoral farming industry will go a long way towards providing farmers with a wider basis on which to plan and invest with confidence. “At the same time, more stable meat prices and farm incomes will assist in maintaining greater economic stability in the country as a whole.”