VEGETABLE PRICES

Dominion, Volume 35, Issue 50, 22 November 1941, Page 11

VEGETABLE PRICES

Survey Of Marketing Methods

SUGGESTIONS BEFORE TRIBUNAL

Conclusion Of Inquiry

Following the survey of commercial market gardening in New Zealand, given at Thursday’s session, analysing the causes of the shortage in supplies, the Price Tribunal which is inquiring into vegetable prices yesterday heard a survey on the marketing of vegetables given by Mr. D. K. Pritchard, instructor in vegetable culture, Department of Agriculture. In this several recommendations were made as to means of assuring growers an adequate return and at the same time lowering prices to the consumer. Mr. Pritchard drew the attention of the tribunal to the fact that in 1912 a Royal Commission had inquired into the cost of living when exactly the same causes as had been mentioned in the present inquiry had been advanced. Evidence presented by Mr. Pritchard and by Mr. G. R. Holmes, a senior officer of the Fields Division, who dealt principally with the marketing of onions, concluded the hearing, which had occupied six days. The chairman thanked the organizations which had been represented for the care taken in compiling their evidence. He said 50 to 60 written statements- had been received from various parts of New Zealand, and these would be considered by the tribunal, who would send their report to the Minister of Supply. The chairman mentioned that the Press reports had been valuable from the public point of view, and very useful to him as day-to-day summaries.

Mr. Justice Hunter presided, associated with him being Messrs. H. L. Wise and L. Munro.

Any discussion on marketing of vegetables with a view to economy in sale and distribution must be on tbe basis of the locations and convenience of existing market structures and the present marketing methods, said Mr. Pritchard. He considered that the markets in Wellington, Christchurch, and Dunedin were located in inconvenient positions. New sites for produce markets in these three centres were essential, following which improvements for unloading produce and the reloading of it by retailers could be considered.

Mr. Pritchard summarized the marketing of vegetables as including harvesting, grading, containers, packing, transportation and selling (auction, retail and co-operative), and gave a detailed explanation of each point. Referring to grading, he suggested the adoption of the national mark scheme existing in Britain and adopted in South Africa. Transport Problems. Transportation was a definite factor in tbe cost of vegetables to the consumer, said Mr. Pritchard, and also had an. effect on supplies. As an illustration, he said that for 50 cases of cabbages, and 50 eases of lettuces, auctioned at 3/6 a ease, the gross proceeds were £l7/10/-. The marketing cost to the Hutt grower was £2/13/4, and to a grower at Otaki £6/15/-, the net return being £l4/16/8 and £lO/15/- respectively. This emphasized that transport and marketing charges could, when prices were low, absorb up to 50 per cent, of the gross price realized at auction.

Referring to methods for increasing vegetable production, Mr, Pritchard suggested that cropping on dairyfarms might be adopted with advantage to the farmer and consumer. He also urged the placing of trained and experienced returned soldiers on areas suitable for mixed farming, and -the inauguration of an extensive scheme of education in home gardening for vegetable production. Distribution Methods.

Dealing with distribution, Mr. Pritchard said that if receiving and delivery charges were abolished, rate of commission reduced, and transportation methods overhauled without impairing the efficiency of the service rendered, the saving in costs to the grower would be considerable,, but there was no guarantee that prices to the consumer would be reduced. To effect a lowering of prices of vegetables to tbe consumer, Mr. Pritchard said it seemed that the present number of auctioneering firms must be reduced, and that those permitted to remain in the business must organize the disposal of vegetable produce on a co-operative basis. ' ' In reply to Mr. Wise witness said ne could not see where the 200 acres lost

to market gardening in the Hutt Valley could be replaced. “There are six or seven golf links in the Hutt. Valley. There has been no mention of taking them over for vegetable production or for housing,” said Mr. Pritchard.. Mr. Justice Hunter said witness would doubtless appreciate the value of such golf links to people in a cramped-up city like Wellington from the point of view of healthy exercise. Mr. Pritchard: That may be so, but the housing of the community must be given preference to golf. His Honour: I think I can agree with that. Imported Manpower. The importation of manpower from the Cook Islands as a means of easing the shortage of labour was suggested by Mr. W. T. Goodman, assistant director, horticultural division of the Department of Agriculture. He mentioned that the Rarotongan population, , situated on an area hardly as big as Kapiti Island, was now 5000, and was more than the island could support. The people could easily adapt themselves. To Mr. Wise, witness said he visualized much improved transportation for perishable goods in the future. He did not agree with a statement made at the inquiry that it would be ridiculous to bring vegetables to Wellington from Canterbury. In reply to Mr. B. V. Cooksley, president of the Dominion Council of Commercial Growers, witness agreed that growers had been seeking registration for more than 10 years.

A GROWER’S MARKET

Reasons For Increase In Onion Prices SHORTAGE OF OTHER VEGETABLES

A statement that the onion market at present was definitely one for growers and that prices had hardened because ot the shortage of other vegetables was made before the Price Tribunal yesterday, when its inquiry into vegetable prices was in the concluding stages. Some indication was given of now the committee dealing with the marketing ot onions .operated, and it was said that there was little room for tbe speculative element, because growers held a far greater proportion of tbe stocks than did merchants. ~ t . Evidence was given iby Mr. tr. ix. Holmes, a senior officer of the fields Division, and secretary of the vuion Marketing Advisory Committee, that this organization was established in and had done a great deal to stabilize the onion market and expand the export ot onions. Harvesting usually began at Pukekohe in December, but it was not till February that merchantable or keeping onions were harvested. They were able to say, with reasonable accuracy, at any period of the year, what onions were held by growers and merchants, both of whom were registered, lhe acreage of onions had expanded and the yield per acre had been improved to such an extent that in 1939 New Zealand growers had been able to export to Sydney. However, in 1946 and. 1941 New Zealand had merely been self-supporting in onions. Mr. Justice Hunter: Is the. price to the consumer raised by speculation, holding over, or cornering of the market. Witness: Not at present, and if it were done, it would be as much 'by the growers, who have access to the information, as by the merchants. The present conditions are abnormal, because of the shortage of other vegetables. Reason For Present Shortage. Is there a shortage of onions at present? —Yes, there has been for the past six weeks. ■ ■,. , What is the reason? Has there been a bad crop?—The crop at Marshlands, the only South Island growing area, lias been light, despite a higher acreage, because of the continued summer drought. There have been average crops at Pukekohe and Makerua (in the Manawatu), but in the latter place they have been badly affected by mildew. The demand for onions in recent weeks has been increased by the scarcity of other vegetables. Military camps and restaurants must have them. The retail price in Wellington js sd. a lb., but the standard price is 51b. for 1/-. Mr. Justice Hunter: So they have gone up 100 per cent. I Mr. Holmes said that had shipping been available, onions would have been brought from Canada to cover the present period. Onions landed from Canada would cost 26/- a cwt., and their selling price ex store would be 30/- to 31/-. The onion business was very satisfactory to growers at present, and while tlie war lasted the market. would be on their side. Areas really suitable for onion growing in New Zealand were restricted, but some places where they might be grown had not yet been developed. The Government had agreed in 1937 to establish a minimum price of £4 a ton. This was later raised to £6 a ton. A return of £7 or £8 a ton at harvest time was satisfactory to the producer in covering costs. Mr. L. Munro: Then anything above that the consumer pays. Mr. Hojmes said that in 1939 some 5000 tons of onions were exported to Sydney, but in 1940 and 1941, had shipping been available, that amount would have been imported to New Zealand from California or Canada. Onions which brought £7 to £8 at harvest realized £l4 or £l5 in the spring months, because of the loss through deterioration. Mr. Munro suggested that it might be possible to fix a maximum price to give a reasonable return to producers and a reasonable price to consumers. It seemed unfair to have a minimum and not a maximum.

Mr. Holmes said there was no evidence over the past four years that there had been any speculation to increase prices. The advisory committee had the power to fix prices, but had not exercised it. Difference In Prices. Mr. Justice Hunter commented that it was admitted that £8 a ton at harvest gave a fair return to growers. That was about Id. a lb., but onions were selliug in tbe shops at sd. a lb. What was the reason? Mr. Holmes said that conditions were abnormal and there bad been no importa tious. Mr. H. L. Wise inquired if, having regard to the wholesale price, growers were receiving the benefit of sales at sd. a lb. Mr. Holmes said the growers were getting a small margin at present, and definitely receiving the benefit of the high prices, as they held 80 per cent, of the onions, and the merchants had only 20 per cent, as floating stocks. Some 791 tons had been exported to Sydney this year because of the risk of deterioration, but that would hardly affect the retail price. Only graded onions, were permitted to be sent from one district to another, and the price in Wellington only exceeded that at Christchurch by the cost of freight. The committee received returns of stocks and it it found evidence of market cornering, it could hx a maximum price. Onion growers were the only vegetable producers registered. Replying to Mr. Munro, Mr. Holmes said there was no reason why prices iu 19-11 should be higher than those in 1939. which were satisfactory to the growers, except for the reason of demand. In 1939 onions were imported from the end of September from California and Japan. , , Mr. R. G. Ffitch, officer in charge ot the produce section of the Internal Marketing Department, said that only four weeks ago a licence to export had been sought because of fears of a surplus, but the market had taken a sudden turn with the dearness of vegetables, the public finding onions at 4d a lb. (the price then ruling) cheaper than cabbages at 1/6 each. Prices charged by merchants and shops were no more than had been normal at this period of the season tor the past ten years. Mr. Munro said that onions were an essential commodify, and in his. opinion there should be some measure ot control for prices between the growers and tnc consumers.