MID IN FULL

Evening Post, Volume CXXII, Issue 31, 5 August 1936, Page 8

MID IN FULL

CONSTANT PRICES

NEXT YEAR'S FIGURES

"•These' prices, will remain ■constant throughout the season, and the differential price margins previously announced will apply in respect -of produce to which .higher or lower grading pointsare allotted,"' said the Minister in j making liis announcement.

' "It is iknown that there is a wide variation in the costs of .butter arid cheese making at the various dairy factories ithroughout the Dominion, so that, a fixed f.o.b. purchase price for all: butter <and cheese will yield a varying butterfat'price to suppliers, as the pay-out is-dependent on manufacturing' results and factory costs,, which in turn' are dependent on the circumstances, location, standard of efficiency, nature.; and quality of raw material, and extent of output of individual factories.

"The guaranteed price will be paid in full as soon as the produce is delivered to the overseas steamer. If the proceeds of the sale of this produce do not co\»:r the guaranteed price paid out, then the deficit is not the responsibility of the dairy farmer but of the Government. If, on the other, hand, the proceeds of sale in the first year are greater than the amount guaranteed, this surplus will be used for the benefit of the dairy farmer and the indus-

try after consultation with its representatives. AVERAGE OVER THE YEARS.

.'"The intention of the Government in regard^ to guaranteed prices to dairy farmers was expressed by' the Prime Minister in his statement that guaranteed prices should commence at an average of, say, the last eight or ten years' prices^' In reply to a question put to mo when I attended the National Dairy Association "conference at Hastings in June last I "said that the price was positively fixed on the butterfat basis of eight to ten year's, and the most generous interpretation, of that promise. * \.

'Trices have been fixed in fulfilment of those promises to ensure that dairy farmers supplying factories working under average, factory conditions- will receive the average butterfat return of the past eight to ten years. In addition, an allowance has been made for I increased costs in the industry.

"The basic f.o.b. purchase prices of cheese and whey butter have been fixed to yield, under average factory conditions, a margin of ljd per pound of butterfat processed into cheese above the average price of butterfat processed into butter. FUTURE FIXED PRICES. "For future years the cost of production, the standard of living of the farmer as compared with other sections of the community, and the stability of the industry will be taken into account in fixing the guaranteed price. The actual wording of the Act determining the procedure is as follows: — "4. In fixing prices under this section in. respect of dairy produce exported after the 31st day of July, 1937, regard* shall be had to the prices fixed under this section in respect of dairy produce exported befoicthat date, and to the following"additional considerations, namely:—

(a) The necessity in the public inteiest of maintaining the stability and efficiency of the dairy industry.

(b) The costs involved in the efficient production of dairy produce. (c) The general standard of living of persons engaged in the dairy industry in comparison with the general standard of living throughout New Zealand. (d) The estimated cost to the Department of marketing the dairy produce concerned, and also the cost of the general administration of this Act. : . (c) Any other matters deemed to be relevant. ' • •

"5. Due regard .having been paid to the several matters mentioned in subsection 4 hereof, the prices fixed in respect* of any dairy produce-exported after the 31st day of July, 1937, shall be such -ithat'any i efficient; producer eii•gaged;'inVthe dairy industry under usual conditions and in normal circumstances I should"be assured of a sufficient net return from his business to enable him to- maintain, himself arid his family in a reasonable state of comfort. COMMITTEE TO-ADVISE. , /'For the: purpose of giving effect; to these -principles .'the' Government has asked Messrs. J; Dunlop, representative of.- the Southern, Ward on the New Zealand Dairy Board; W. E. Hale, representative of the New Zealand Cooperative Dairy Company, Ltd., on the New Zealand Dairy Board; A. Morton, president of the National Dairy Association;- N. H, Moss, barrister arid solicitor, Stratford; B. Roberts, M.P., directbr. of Parkyale Co-operative Dairy-' Company, '. Ltd.; A. J. Sinclair, secre-tary-manager of the ,T.e. Awamutu Cooperative Dairy Company, Ltd.; = and D.O. Williams, Massey Agricultural College, Palmerston No^th, to confer, with the Executive Commission of .Agriculture and report to the Minister .of Marketing as to the price to be paid next year. _

~ -"The 'relation of farming costs to guaranteed prices is largely affected by interest and other land costs, and I proppse later to'set out the policy of the .Government for adjusting the mort- . gage liabilities of the farmer to the guaranteed price. , TO BEST ADVANTAGE. "The Government's Marketing Department will market the dairy produce to the best advantage, and the proceeds will be paid into the Dairy Industry Account at the Reserve Bank. In some years there may be a deficit in the account after the year's operations; in other years there may be a surplus to be offset against any deficit. I

** "New''Zealand dairy produce is mainly sold through importing houses in Tooley Street, London; most of which have regular connections .with the distributors of butter to the British consumer, and the Government has made arrangements to continue to use the efficient genuine distributor and to pay him, an adequate commission for the service : he performs.

"The more general question arises, however, of trade between the United Kingdom and New Zealand. New Zealand fully appreciates the right of and the; necessity for Great Britain to safeguard the interests of her own producers and: to increase .her output of farm produce. We, too, are faced with the same necessity, and farming plays a large part in New Zealand's economy. We fully recognise also the economic grounds .and ■ the' reasons of national security in time of war which British policy must take into account. But such a policy vitally affects the whole fabric: upon which bur trade with Britain is based and upon which our economy operates. Natural advantages make for an efficient arid economic agricultural industry. On the other hand, we could produce motorcars and other steel goods, but at a very much greater cost than Britain.

"If, however, our efficient agricultural industry is deprived'6l an overseas market and we cannot purchase overseas, the efficient manufacturing industry loses its market, and trade between the two countries suffers. Oh the other hand, the more we can sell abroad at an economic price the more we can buy. RECIPROCAL AGREEMENTS. ■ "Our■■.efforts will, therefore, be directed to making reciprocal trade agreements; New Zealand will have available the proceeds of the sale of a substantial volume of exports. These proceeds will be used in the first place to meet our debt commitments, and secondly for imports. There is no doubt that the-trade between the United Kingdom and. New' Zealand could be materially expanded; and it will be our ami, hot merely! to stabilise the existing trading relations, but to "expandtthem:: This; procedure' will, be mutually beneficial. ;y V ; ■ >-*VE§ciprbcal--'trade agreements with the United Kingdom and other countries! do riot conflict with the natural development of the Dominion and the right.of our, youth to creative work, development and right renders it .imperative that we should extend our manufacturing and other, industries.

"The Government realises the difficulties of-the task in establishing new industries, vbut sees no 'other immediate way of- extending the- production of commodities that could improve our living.standards., -~; ..:..' i ; MORTGAGE ADJUSTMENT.

I ("The, procedure, for the rehabilitation of the farmer by removing the burden of) over-mortgaged land has been drafted and will be introduced shortly after the debate, on this statement. Its main provisions will conserve to the mortgagee the values which are now sustained by his security, whilst allowing, the working "farmer to devote his time.to' production freed,from the menace of possible foreclosure or eviction. farmers : will in future, be assured of a/reasonable income ;for the .work they do on their farms; and, so far as the dairy: industry is •concerned, the guaranteed price, is inextricably, linked up with the adjustment of the, dairy farmer's debtsi The mortgage legislation ,will provide that his liabilities will be adjusted so that he may receive a decent standard of living: for himself and His wife, and, family. With stability of farm income" will come an assessment of, charges/ against that income, and the mortgage legislation will ensure "to every- reasonably efficient farmer that

the charges will be so adjusted as to give sufficient1 return to maintain the standard of living referred-to. A procedure has also been worked out for adjustment of urban mortgages." • >.