FOOD SUPPLIES

Evening Post, Volume CXXX, Issue 4, 4 July 1940, Page 9

FOOD SUPPLIES

FOR UNITED KINGDOM

DETAILS OF AGREEMENTS

QUESTION OF PRICES

Full details of the agreements for the sale of the Dominion's food and other supplies to the United Kingdom Government during the war were tabled in the House last night by the Minister of Finance (the Hon. W. Nash). Information generally has already been made public, but the report throws some light on the protracted discussions preceding the agreements for the purchase of wool, meat, dairy produce, tallow, sheepskins and bides, etc.

The New Zealand negotiators at an early stage raised the point, when sub- ' mitting the proposed prices for meat and dairy produce, that these should be subject to revision if the United Kingdom index of export prices increased by 10 per cent, during the period of the purchase agreements, which are for the period of the war and one year afterwards. The Prime Minister, in cabling to the High Commissioner on this subject, stated: "Our negotiations are based on an equitable exchange, but it is strongly pointed out here that the prices to be paid for essential imports from the United Kingdom and other Empire and neutral countries constitute major factors in New Zealand costs. We would be in a very disadvantageous position if we i sold exports at the agreed prices, which we propose to do, and then were compelled to pay abnormally enhanced prices for all imports." The point was raised by the present Prime Minister (the Hon. P. Fraser) during his visit to England in November last. At a meeting with the Rt. Hon. W. S. Morrison in London, Mr. Fraser said he considered that the agreements then being negotiated should be dependent upon the maintenance of a price equilibrium based on existing price levels. After further discussion it was agreed that note should be taken of this and other points raised by Mr. Fraser. "EXPORTABLE SURPLUS." The definition of the phrase "exportable surplus" was also the subject of some controversy. The report points out that the main point of difference arose from the fact that the New Zealand Government obviously intended this phrase to mean "the quantity available for export," while the United Kingdom Government, on the other hand, adopted the definition "the quantity which, having regard to available ships, could in fact be exported. The stand taken by the United Kingdom Government as buyer was that they should not commit themselves to purchasing limitless quaffs 0* Perishable produce which might be stranded in the country of production. Whilst giving the assurance that every reasonable endeavour would be mare to lift all produce available, the United Kingdom Government continued to adhere to their own conception of what "expo: table surplus" was to mean in terms of the agreements which were entered into, states the report. ■ The New Zealand Government as • seller, on the other hand, contended i'that th¥ shipsvtoV carry ; the- produce were entirely under the control of the United Kingdom Government, which / was the purchaser. If their interpretation of this phrase was not agreed to, then it was clear that, in actual fact, not an ounce of produce would be sold if the definition by the United Kingdom Government was accepted in toto. ■ The agreements would represent an "option to purchase." From the discussions of the foregoing viewpoint, a compromise emerged whereby the United Kingdom ■Government gave a firm undertaking to purchase defined quantities of meat, butter, and cheese, and that over and above these definite, commitments they would, within the limits of their requirements and subject to shipping being available, use their best endeavours to. lift any balances of quantities available for export. This compromise was made acceptable by the fact, that the defined quantities covered approximately the estimated seasonal surpluses available for export. In regard to wool the agreement . reached covered the whole of the quantity available for export without any qualification whatsoevei regarding shipment. • ' DELAYS IN SHIPPING. The possibility of .exports being abnormally delayed by lack of ships was kept well to the- forefront by the New Zealand Government, which pressed on several occasions for a special payment basis to cover this eventuality. A difficulty which presented itself in this connection was the lack of knowledge of the extent to which delays in shipping might be likely, and although agreement in principle was secured, substantial' details necessarilyhad to be left for final determination should delays actually occur. In the case of butter and cheese and meat, the agreements finally secured by the New Zealand Government committed the Ministry of Food to pay on account 50 per cent, of the value of produce which has had to rema/i in cool store in New Zealand more than two months by reason of the Ministry's inability to adhere to its shipping programme.