Dairy Board seeks increased S.M.P.s

Press, 24 January 1984, Page 21

Dairy Board seeks increased S.M.P.s

PA Wellington The Dairy Board has asked the Government for an increase in the supplementary minimum prices for dairy farmers. • The Dairy Board’s chairman, Mr Jim Graham, said the board held preliminary talks with the Minister of Agriculture, Mr Maclntyre, and Ministry of Agriculture officials, on the principle of an increase in S.M.P.s.

“Basically, the board feels the situation needs to be reviewed,” said Mr Graham.

“S.M.P.s will prevail for a further two years and we believe they should be examined again. After all, for the last two years the Government has kept S.M.P.s at the same level.”

The board believes that the level is inadequate be-

cause it is based on a return of 340 c a kilogram of milkfat, with a supplementary price of 325 c a kilogram. “A price of 340 c a kilogram means that farmers' income will be about $12,700, and even less if the S.M.P. is 325 c a kilogram,” Mr Graham said.

“Compare that with the average gross income last year of $19,600, when farmers were earning 360 c a kilogram. Even if this year the price was 360 c a kilogram, the income would still only be about $15,000. “In effect, dairy farmers are getting a lower S.M.P. than sheep and wool farmers, which is unfair.” Dairy farmers have not been paid S.M.P.s since 1978, because export returns have been at a higher level

than that of the S.M.P. The last three seasons have been kind to dairy farmers, with a lift in export returns corresponding to a rise in incomes.

Average gross farm income was estimated to rise 16 per cent during the 198283 seasons, and net farm income to rise about 21 per cent.

But the pay-out for the 1983-84 seasons is likely to be considerably lower than the last season’s, a direct reflection of the decrease in export price.

The board went into the season with higher stock levels than usual, and this disadvantage was compounded by the drop in prices.