Farm-price worry

Press, 26 March 1981, Page 13

Farm-price worry

PA Wellington • The increases in Govern-ment-guaranteed minimum prices for farm products could distort land values and harm dairying, according to the chairman of the Dairy Board, Mr Ken Mehrtens. The board was concerned that the guaranteed minimum price for iamb next season had been increased much more than the price for dairy products, he said. The price for lamb appeared to be out of kilter with the market, meaning that sheepfarmers would get a free hand-out from the taxpayer. The higher price for the sheepfarmer could also distort land values to the detriment of dairying. The dairy industry was prepared to compete for land on equal terms with anybody else but the recent increases in the supplementary mini-

mum prices meant that the competition was not equal. - The minimum price for lamb had been increased by more than 30 per cent to 145 c a kilogram, while the price for dairy products had been lifted only about 15 per cent to 265 c a kilo of milkfat. “We feel that we can probably sustain that increase in the'market but we are not so sure about lamb,” said Mr Mehrtens. “If it is to be a handout then there should be equal handouts for everyone.” Mr Mehrtens said that dairy farmers faced the same sort of increases in costs as others so the rises in their minimum prices should be the same as for other sectors. Three of the five annual ward conferences held by the industry had passed resolu-

tions supporting the board's concern over the distorting effect of the increases in the minimum prices. He would tell the Minister of Agriculture, Mr Maclntyre of the industry’s concern. The Government announced the increases in the minimum prices for next season earlier this month after a warning by the Agriculture Review Committee of a serious cost-price squeeze particularly affecting sheep and beef’farmers. The increases in the minimum prices for meat have been criticised by meat exporters as having little relation to market returns. The minimum price for wool has yet to be announced, although the Government has said that it will not be less than 250 c a kilogram.