Meat Board wants to spread income

Press, 29 March 1979, Page 2

Meat Board wants to spread income

Wellington reporter

The Meat Board had an operating deficit of 53.02 M in 1978, and it views with p some urgency the need to : spread its income from ’export levies over meat from the local market as well.

Its export levy income fell from 55.08 M in 1977 to 54.78 M in 1978, because of the reduced tonnage of meat shipped in 1978. Income from other sources rose slightly to 862,720. Against this reduced income of 84.84 M, board expenditure rose by $900,000 to 87.86 M. Direct exp.nditure on promotion increased by 13.5 per cent to 83.98 M, most of which was spent in Britain, Europe, and Japan. The net operating deficit of 83.02 M has been recovered from the meat industry reserve account, with the approval of the Minister of Agriculture (Mr Maclntyre). The most acceptable

proposal to finance the board’s operations had been to extend the present export levy to apply to all meat, said the chairman of the board’s finance committee (Mr F. M. B. Kight). There had been clear evidence of farmer support for this earlier, and progress had been made to the stage of the Government’s drafting legislation before reconsidering its position in September, 1977, and advising that the legislation had been “deferred indefinitely.” In spite of frequent representations by the board since then, no substantive progress had been made by the Government towards the reintroduction of the proposal, he said. The board believed that the Government was reluctant to approve the extension of the levy to local market meat because it feared this would push up the price of meat to the consumer.

“This is not a valid argument,” Mr Kight said. The reason why a levy on local meat would not be passed on to consumers was the one that distinguished farmers from most other sellers of goods and services in the economy — that farmers were forced to be “price-takers” when selling their products, and so buyers made allowance for any costs they were likely to .incur in deciding what they were prepared to pay. Depending upon the method of collection employed, it was estimated that the extension of the levy to apply to all meat would bring in a further S2M to $3.5M, which would still not be sufficient to cover the board’s current operating deficit.

Mr Kight said that the board was reluctant to consider other possible measures to improve its levy income until this matter had been resolved.