Wheatgrowers given new price system

Press, 10 April 1980, Page 2

Wheatgrowers given new price system

■ Two important announcements affecting wheatgrowers were made in Wellington yesterday, the first setting a minimum price fori toe 1981 harvest, and the! second outlining a new pricing structure for future! wheat production. ■ 1 - Wheatgrowers will receive! a" minimum of $167 a tonne: for the 1981 crops. This price might be increased xyhen calculations under the pricing system are made in December. ; The new system, announced by the Minister of Trade and Industry (Mr Adams-Schneider), has been arrived at after consultation with representatives of the wheatgrowers.

~ It was the most important decision made in the history of New Zealand wheat-grow-ing, said the Under-Secre-tary of Agriculture (Mr Talbot), who said he raised the initial concept last year. * The chairman of the wheatgrowers’ sub-section of Federated Farmers (Mr A. L. Mulholland) described it as a radical departure from procedures of the last 20 or 3.0 years. ■ Mr Adams-Schneider said that starting with the 1981 harvest the price paid to growers would be a threeyear moving average of the f.'o.b. price for Australian standard white wheat. The calculation would take in the last two seasons and the price for the coming season, which would be estimated in December each year. • The scheme also provides for a minimum price and in any season it will be 90 per cent of the price paid to growers in the previous season.

' As a transitional measure, Mr Adams-Schneider said, it bad been decided to assist growers by. announcing a minimum, price for the 1981 harvest. It would be $167 per tonne, but if when the new formula was used in December to calculate the actual price for next season’s crop a higher ' price than $167 resulted, the higher price would be paid to growers for . wheat from next year’s harvest. . In futures growers would not know the actual price to be paid until shortly before each season’s harvest started. -

< The Wheat Board would decide the- premiums and discounts for particular varieties of wheat, starting with next year’s harvest. Mr Talbot said that the new pricing structure was the culmination of intensive discussions between the Government, industry representatives, and officials after his challenge to the industry la’st August “to get the industry back where it belongs with the producers . . . and

to link the price to the international market.” Wheatgrowers' representatives who had been involved with the new proposals were Ito be congratulated on the decisive way that they had [accepted the challenge, enabling the new procedures Ito be available in the coming season. The growers’ representatives deserved total support in this matter. Mr Mulholland said that for some time the growers’ sub-section had been in consultation with the Government and the officials’ committee which advised Government on wheat matters and had reached general agreement on the new pricing scheme, but they had been at variance as to the minimum price fixed for the next harvest. “We maintained that a price in excess of $l7O a tonne was necessary to give growers the confidence to move back into wheat growing. It is, therefore, disappointing that the Government has not seen fit to follow our advice,” Mr Mulholland said. “However, in view of overseas wheat price movements the figure of $167 could well be academic. Our information is that growers may well obtain prices in excess of $l7O when the averaging is done to establish the final price in December. It is interesting to note that had the new scheme been in force for the 1979-80 harvest growers would have received 8153 a tonne instead of $140.” Growers had also hoped that the minimum price would be set at 95 per cent of the previous season’s price. If in three or four years time it was found that growers were seriously disadvantaged by the scheme, thev still had the right to go back to Government and start again, Mr Mulholland said. , , But a study made by the Economics Division of the Ministry of Agriculture has shown that in only three of the harvests since 1970 would growers ,have received less than the prices fixed by. the Government had the new pricing system been ■working over that period. _ln some years the new pricing system would have given growers a much bigger return than they obtained. - ' The chairman of the Dominion agriculture section of Federated Farmers (Mr N. Q. Wright) said he believed that the new pricing structure would put the wheatgrowing industry on an equal footing with other farm export sectors in that prices would be related to the world market. Wheat iwas the cornerstone of the whole arable industry and at last the Government had recognised this. Mr Mulholland said that in the coming week he and his vice-chairman (Mr A. J. Blair) and also Mr R. Lough, of Lincoln College, would attend a series of meetings throughout the grain-grow-ing areas to explain and discuss the new pricing scheme, as well as other matters.'