MOST COMPLETE

Evening Post, Volume CXXIV, Issue 108, 3 November 1937, Page 24

MOST COMPLETE

PRICE PRINCIPLE

MINISTER IN REPLY

"The principle of the guaranteed price is the most complete, from a safety point of view/ that has been introduced into this country or any other country," declared the Minister of Marketing in reply to Mr. Coates's statements.

Mr. Nash said that while he was ia London there was an agitation engineered by the Opposition because there was a £2,000,000 shortage between the prices paid to the farmers by the Government and the prices realised on the oversea markets. The Government,' it was contended, was bringing the country to disaster, because prices oversea did not reimburse it for what it paid out. That agitatfon was fostered by members of the ptesent Opposition. Mr. Coates knew that it had been said that the Government would not take any money out of the. Dairy Industry Account. If there were a surplus, it would remain, and if there were a shortage, it would show a shortage as the years went on, except that last year stood on it j own, because the price was fixed in an arbitrary manner. Eeferring to the estimated deficit of £650,000, Mr. Nash said that if there was a deficit on last year's sales, the Government automatically accepted the responsibility for it. The estimated figure was based in stocks they had on hand; if the price had been constant, it was anticipated that there would be a deficit of £650,000. "I do not know how to satisfy the Opposition," he remarked. "There is little suggestion of policy in what they are now offering to the farmer."

The price of 190s which was represented by 152s plus 25 per cent, exchange, was not the correct figure, he said. There had been no allowance for transport and handling charges. The disparity between the 123 aßd paid to the dairy farmers in New Zealand and the 190s realised at Home—66s 4d —had been shown to the disadvantage of the dairy farmer, but the butter had to be sent Home, it had to be insured, and sales bad to be made. This was a time of the year when prices were always; high at Horn*. There was a rise in October and a decline by December. In August last year the prices on the London market was 119s 6d; in September it was 107s. and it later rose to 109s, but within six weeks the price was down to 87s. That was because large quantities of butter arrived in London and the market tended to decline. DANISH PRICES. Mr. Nash, said Mr. Coates, had not made use of the amasing circumstance that New Zealand butter was realising higher prices than Danish. Spot prices for Danish butter were below New Zealand prices, which was quite extraordinary, because of the fact that prices were rising. The reason for that was that supplies were not sufficient to meet the normal demand for New Zealand butter at Home, and that there was a better chance of meeting the market for Danish butter than there wan of meeting the market for New Zealand butter. There had been an abnormal season in South Africa, which, instead of sending large quantities Home, was buying large quantities. In addition to that, New Zealand butter was being transferred from the Home market to South Africa today. Also, within a month 500 tons of New Zealand butter would go from London stocks to Germany. Buyers at Home were beginning to see that there was a chance of a shortage, and were bidding above the normal price. When they started to get the November, December, and January supplies on the London market there would be a fall in price beloW the prices the Government was paying. FARMER'S POSITION. "But still the farmer will be in an advantageous position," said Mr. Nash, "because he has been advised that inside the procedure worked out at the beginning, if the produce he provides is sold at a higher price than that paid to him, the surplus proceeds will remain in the Dairy Industry Account for the farmer's benefit. Even the new procedure that the Opposition is trying to bribe the farmers with cannot do better than that. All they say is, 'give them a certain guaranteed price!' I wonder what they would have paid them this year. They were willing to guarantee them Is, and any surplus The Government gave him 13Jd, and said to him that he can have that, and that if there is any surplus, that automatically remains to his credit in the Dairy Industry Account, because the Government is pledged not to take any money out of that account; and there cannot be any profit to the Government in the ordinary sense of the word. The principle of the guaranteed price is the most complete from the safety point of view that has ever been introduced in this country or any other country. Whether there is a shortage on the London market or a' glut, the farmer gets his price." Mr. Nash said that if the farmer received an even price instead of the ups and downs of figures that went to points that could not be maintained, he was sure of his position. In the flush of the season he was getting 22s 3d for every cwt in excess of the price that he would have got had he been left to the hazards of the market It would take a lot of explaining by the Opposition and other interested parties outside the House to seduce the dairy farmer from a procedure that had given him a security that he never had before. FURTHER DISCUSSION. At a subsequent stage of the debate Mr. Coates revived his question regarding the disposal of any surplus in the Dairy Industry Account, and was assured by the Minister of Finance that it would remain in the account for the benefit of the industry.

"But will it remain in the account?" asked Mr. Coates. "Is it to be paid to the farmer at the end of the year?"

Nobody seemed to know what the Minister meant, and there was much talk on the Government side about guaranteed prices, though he predicted' that those members would be heartily sorry that they had ever touched them.

Suppose, he asked, there was a surplus of a couple of millions? The farmer was entitled to this, and entitled to yet it at once though the Government was holding it.

The Minister of Labour (the Hon. H. T. Armstrong): It is not there yet.

Mr. Coates: All very fine to go on like that. He should get it at the end of each month.

A Labour member: How does he get it if there is a deficit?

Mr. Coates did not reply, and another Government member suggested: "He will let us pay it." Mr. Nash repeated a former declaration that the figures quoted by Mr. Coates were all wrong because he had failed to allow for transport' insurance and selling cost. In all his figures he had never suggested that there were any costs. 1 Mr. Coates: Answer my question: When does the farmer get the surplus? Mr. Nash: The farmer will be all right. The right honourable gentleman wants the absurd position of paying him month by month—«ls in February, 100s in December, and some other month 80s or 90s. We pay 123s Bd, and if the recovery exceeds the price paid,, the money is to be credited to the industry and ultimately nobody but the farmer gets it.