GUARANTEED PRICE FOR DAIRY PRODUCTS

Dominion, Volume 29, Issue 224, 18 June 1936, Page 10

GUARANTEED PRICE FOR DAIRY PRODUCTS

•‘Fraction Above Most Generous Maximum” MINISTER ELABORATES SCHEME If Land Values Are Affected MR. NASH HINTS AT POSSIBLE ACTION (By Telegraph—Special Reporter' ) Hastings, June 17. A statement that the guaranteed pride for dairy products would be fixed at a fraction above the most generous maximum price based on the average for the past eight to ten years was made by the Minister of Marketing. Hon. W. Nash, in addressing the National Dairy Conference, which opened at Hastings to-day. The objective of the Government, said Mr. Nash, was to remove the fear of price falls and the ecstasy of price rises.

Mr. Nash arrived at Hastings from Wellington by car early this afternoon and was the guest at a luncheon tendered to him by the Hastings Borough Council. He was accompanied by Mr. G. A. Duncan, acting-Director of Marketing, and his private secretary. Dr. W. B. Suteh. Later the conference was officially opened by Mr. Nash, who was welcomed by the Mayor of Hastings, Mr. G. A. Maddison. The mayor referred to the prosperous appearance of the farmers who constituted the audience, and said he would only ascribe it to the fact that they were all hopeful of a good guaranteed price. Reference was made by Mr. Nash to his addres/ at the National Dairy Conference at Palmerston North last year, when he outlined the Labour Party’s guaranteed price scheme. The general election, he said, bad brought it into being. The Government was pledged to do what he told that conference he thought should be done.

"In the past,” Mr. Nash continued, "all the regulations of the Dairy Board have not spread out to an even point the price which the farmer can legitimately obtain for work he does. The price that we propose to pay will be something more than the price received during the past 12 months; it will be something more than the average for the previous 12 months or even for the 12 months prior to that.” The main principles of the Primary Products Marketing Act were explained by Mr. Nash, who said that the whole basis of tlie legislation was that there should be one man responsible for the marketing machine. The Department of Marketing would ultimately control the marketing of all primary products when an imperative need was established for marketing from the Dominion as a unit. The same procedure as Hint now set up for the dairy industry would be followed in respect of other commodities. It was not proposed to bring any more products within the marketing machine this year, although fruit exporters had already expressed a desire to be given the benefit of marketing legislation: that was a question which would be further considered with representatives of the industry concerned. Tribute to Mr. Duncan. A high tribute to Mr. Duncan was paid by Mr. Nash. He said that after the passing of the Act he had iold the Government that he knew of m> man better equipped for the position than Mr. Dunean. He had not met him until he became a Minister of l he Crown, but he knew that Mr. Duncan had the confidence of the dairy industry. Similarly he had asked ihe other members of the Executive Commission of Agriculture, Sir Brands Frazer and Mr. D. Jones, to take over the task of organising the new marketing machine. He was confident that no man in New Zealand understood the moat industry better than Mr. Jones.

“Then we come to the question of finding the money,” Mr. Nash continued. "I had a discussion with the Governor of the Reserve Bank, Mr. Leslie Lefeaux, and told him that wo would require money to finance dairy marketing. We had determined the maximum amount likely to be required through the expert committee which was set up in the first place to examine the scheme, and we have now arranged with the Reserve Bank for that, money to be advanced.” Discussing the question of overseas marketing, Mr. Nash said the Government was prepared to co-operate fully with the hest interests in the distributing trade in Great Britain. It was hoped before long to arrange a reciprocal trade agreement with Great Britain. That was part of the whole plan, and the guarantee, could be based on the understanding that the whole of the money obtained from exports would be available for the purchase of imports. That was a principle which would probably be in general operation within the next ten years. New Zealand had already received from the British Government an invitation to discuss arrangements regarding reciprocal trade. He did not know whether the British Government would be prepared to discuss a bilateral agreement, but he thought it would. New’ Zealand could take all her cotton goods from Britain willingly and profitably on the basis of reciprocal trade and not bother about importing those goods from Japan. It. was not the Government's desire to set nations against one another, hut if. could not. be responsible for lifting the standard of living of the peoples in Eastern countries, f’n the other baud it had to be recognised that if. was impossible to keep Eastern countries down permanently to a low standard of living. Procedure Explained. Mr. Nash also explained the proeedue by which the Government will lake over dairy products for export. Dairy factories, he said, would deliver their goods to grading stations. After they had been graded and placed on board ship schedules would be made out. Twelve schedules would give the export for each ship, separate schedules being mad- out for each of the trading banks for hotli butter and cheese. For example. in one shipment the Bank of New Zealand might be the agent of ."II different factories. The names of thosp factories with details of export would appear on ;• Bank of New Zealand schedule, and the branch of I he

Department of Marketing al Ibo particular port of export would advise the bank of the sum to be placed to the credit of factories at the guaranteed price. Next morning the money would be available at the bank lor the dairy factories, and the bank would then obtain a cheque from the Marketing Department in return. "Is that better Ilian the old procedure?” Mr. Nash asked. •‘.I do not think there is anyone who would answer anything but 'yes’ immediately the question was put to him. The Minister reaffirmed that, in the event of high overseas prices ami a possible surplus in the dairy industry account, at the Reserve Bank that surplus would be used exclusively for the benefit of the industry. It would not be touched until the industry had been consulted as to how it was to be used. In detailing the questions to be taken into consideration in fixing the price for dairy products after the first year of operation. Mr. Nash said it was Hie aim of the Government to treat everyone fairly. If there was something not set out in the Act and that ought to be legitimately taken into account in determining the price to the. farmer, that factor would be considered.

Referring to the present rising price level for butter on the London market, Mr. Nash said the position showed the necessity for watching the market with the utmost care. Actually there had been a fall of 1 per cent, in blitter imports into Great Britain, but that had resulted in an increase of IS per cent, in prices. Another point of importance was that the retail price had been more or less stabilised at about I/- a pound. If once the price went much above 1/- the demand for the product immediately decreased. The incomes of the majority of the British people were comparatively so low that too high a price would naturally result in a drift from butter to margarine. Effect of Laud Values. "We have discussed the possibility of making the guaranteed price known,” said Mr. Na,sh, “but have decided for various reasons that the time is not quite opportune. “However, when the price J s known to the farmer the value of Ids land will be determiner]. If the old iwocedure follows, and it will “not if I can avoid it. every rise of a penny in the price will bo added to the land. If a farmer who sells his land gels more for it than lie ought to gel, 1 would take every penny off him I could.

''We want to sec no charge on the land other than that charge which can be sustained by the price which we are prepared to pay. Our objective is to help to the maximum every dairyfarmer in the Dominion to be paid for the work he has done. Wc want to make it possible for him to pay his son, who may work with him, and we want to remove the necessity for bis wife to go out and work in the fields." Questions Answered. At the conclusion of his address, which lasted for just, on an hour, Mr. Nash intimated that, he would be wil!-< ing to answer questions. Mr. N. Campbell (Awahurii asked whether it was intended to pay differential prices for butter based on quality. "I have discussed the position with Mr. Duncan,” the Minister said, “ami although I cannot lay down any definite principles, there is an idea of extending the existing three grades to five. There will probably be two grades of finest and two of superfine.” Mr. J. Kyle (Kairanga) asked whether the Minister had considered the method of paying out for cheesemaking on a butter-fat basis. The scheme already announced, whereby there will be a preferential payment of lid. a pound butterfat, for cheese, was explained by Mr. Nash, who added that investigations were being carried out at Massey Agricultural College regarding the new method. If it could be proved to be wortii while it might be adopted, but meanwhile the old. system would be retained. In reply to a question by Mr. IV. Darrell (Tatna), Mr. Nash said he could not give the date on which the guaranteed price would be finally announced. However, he did not think he would have to wait until the scheme became operative on August 1. Financial Accommodation, Mr. L. J. Fairbrother (Dalefield; raised the point of financial accommodation for producers and factories during the first three months of the season. "Just for the moment we are financing marketing,” Mr. Nash replied. "Some day we might finance the industry as well. We shall not ask the industry to pay interest on money that comes from the Reserve Bank to pay the guaranteed price. The trading banks do all the financing up to f.o.b, and as they have the necessary machinery it is only reasonable that they should continue to do so." In answer to further questions Mr. Nash said the work of the Executive Commission of Agriculture regarding overlapping between factories would be continued. The Government wished to take all necessary steps to eliminate waste between farmer and consumer. The question of local price had not yet been finalised. Several alternative proposals were before the Government, and a final decision would have to be reached before Hie end of Hie month.

“If there is an overdraft in the dairy industry account, will it be a charge on the dairy industry or on the Consolidated Fund?” asked Mr. 11. W. Neal (I’iopio).

“The dairy industry lias nothing to do with the dairy industry account,'' Mr. Nash replied. “If there is a shortage in the account the iesponsibilit.v is with the Government.”

“There has been some uncertainty as to rising costs.” said Mr. F. E. Cullen (Maungaturoto). "In fixing the guaranteed price has the Government taken into consideration a possible rise in the cost of production?'' Mr. Nash said the que-iion of costs dill not. come within the average of eight to ton years, bin on Ihe ground I hat increased "ages for one thing would moan added ro-ts. the Gon-rn incnt. had taken that fm-lm- into considerntion and had gone a traction lie.von.l the most gencrmi- possible inlerprelaliuii of i|> promi-e lor a guaran food price. The possible elTeci of high wage- for I’ublic Works employee- on i he aiailabilily of farm labour "a- raised l»,v .■mother delegate. Mr. Nash said an agreement had been reached between the Government ami representatives of the farmers regarding wages and conditions for farm labourers. However, if there were mon available who would not. go to work i n farms when if was offering the Government, would not pay them sustenance.

After the Minister had retired the solicitor Io the National Dairy Association, .Mr. IV. 11. <'unningh.-ini (Wellington). dealt with the marketing legislation from the viewpoint of the seller. He also reviewed Hie trend of dairying legislation from the time the first, measure affce|ing< lh< ; industry was passed in 1898.