GUARANTEED PRICE

Greymouth Evening Star, 19 October 1939, Page 5

GUARANTEED PRICE

NEGOTIATIONS REVIEWED. STATEMENT BY MINISTER. [PER PRESS ASSOCIATION.] WELLINGTON, October 18. The negotiations "which had taken place between the dairy industry and himself in reference to the guaranteed price for this season were described by the Minister for Marketing (Mr. Nash) in a statement this evening. There appeared, he said, to be some misapprehension in the minds of dairy farmers regarding the relationship between the guaranteed price for this season and the purchasing price for butter and cheese by the Imperial authorities. ‘On March 16 this year representatives of the Farmers’ Union, the National Dairy Association, and the Dairy Board waited on me to discuss the guaranteed price for the 1939-40 season,” said Mr. NBs.li. “At this discussion I suggested that if, nationally, we could get an element, of stability, both in industry and in farming, it would be good for both aspects of our national economy. The forcing up of dairy produce prices would raise th cost of living. The rising cost of living would bring demands for higher wages. This sort of thing created a spiral of rising costs and prices which benefited none in the end. J suggested to the representatives of the dairy industry that the guaranteed prices were reasonable, and that in the interest of all sections it would be well to avoid continued increases in the price. I advised the Dairy Board and the industry that in any case the Government would continue to pay the then prevailing prices, and would approach the trade unions and point out the difficulties that would be experienced if increased wage rates were demanded while the conditions which had necessitated reducing imports and conserving sterling funds prevailed. “A fortnight later I again saw representatives of the dairy industry, who reporteil to mb a discussion they had had on my proposal for stabilisation of the existing guaranteed prices. This discussion, which was very full, covered costs and prices from all angles. It was pointed out that if the price of consumers’ goods rose because of the import situation this would affect other sections of the community as well as the farmer. In regard to producers’ goods’ the farmer would be less affected than other sections of the community. I outlined the steps taken by the Minister for Labour to discuss with industrial organisations the stabilisation o£ wages. The discussion made clear that sterling funds were at a low ebb, and that because of this curtailment of the quantity of goods available for purchase by the people, increasing the purchasing power at such .a time of any large section of the community would tend to bring about an inflationary situation, which no one wanted.

NEED FOR STABILITY. ‘A few weeks later, in April, in my address to the dairy conference in Wellington, I again stressed the need for stability in all factors affecting prices and costs. I outlined my suggestion that it would'be best for the industry, and for New Zealand as a whole, if dairy farmers would accept for the 1939-40 season the same price as for last year. I described the efforts that had been made to ensure some sort of stability in wages, which were one element of costs.

“On my return from abroad I again discussed with the Dairy Board, in conjunction with the Minister for Agriculture, this season's guaranteed price. This was on September 8, after war had broken out. Here the situation that might be caused by a possible shortage of labour was thoroughly discussed, the main thing being to maintain the country’s production in order to feed the people overseas who were doing the fighting, and bearing a bigger burden than ourselves. It was agreed by the conference that the main objective was to maintain all farming production. I told the dairy representatives that on the basis of the negotiations we were having with the United Kingdom Government relating to the purchase price of butter and cheese, I did not think we ought to pay more than last season’s guaranteed price. In a war situation there were all sorts of possibilities, and the future could not be foreseen. We know that in New Zealand there might develop a situation of temporary shortages or scarcities in commodities which hat not been envisaged some months before. Even more was there reas for preventing anything which in ]S develop into inflation. As yet final price has been agreed upon witn th,. Imperial Government.”

dairy produce prices. NEGOTIATIONS WITH BRITAIN. WELLINGTON, October 18.. Factors taken into consi . der l atl ° r } c 1 e s the fixing of the guaranteed puces for dairy produce for the current se - son at the same level as last seas were reviewed by the Minister of Marketing, Mr Nash, this The Minister said that negotiations between the Governments ot me Unßed Kingdom and New Zealand concerning the prices to be paid tor the Dominion’s exportable surplus dairy produce were still The prices ultimately received horn the Imperial Government . oc below the level of those being paid to the dairy farmer thus involving a po. sible loss in the Dairy Industry AcMr Nash revealed that he had informed representatives of the dairy industry that it was by no. means certain that the prices received ioi butter and cheese from the United Kingdom Government would justity an increase in the guaranteed price. If the prices offered by the Imperial Government, for the total exportable output, of hutter and cheese were the onlv consideration, the guarante d price for 1939-40 should have been reduced. . „ “The negotiations are still in train, said Mr Nash, “and the New Zealand Government has stated to the United Kingdom Government that it does not desire Io take any advantage of the situation created by the war, but considers New Zealand should receive prices more in keeping with the cost of production.” There had, of course, been other aspects than the actual price. These concerned' possible hold-ups of shipping and storage charges, as well as outside markets. As yet, no final price had been agreed upon with the Imperial Government. Although there was a delay in com-

pleting the agreement, he thought it would be preferable, as the dairy season was in progress, to guarantee to producers the same price us was paid for the 1938-39 season, Mr Nash continued. This course was adopted, although the prices ultimately to be received from the Imperial Government might he below those being paid to the dairy farmer, involving a. possible loss in the dairy industry account, 'rhe dairy producer had been put in a different. position from that of other classes of producers, who were required to accept the prices paid by the British Government, he said. However, it was felt unreasonable to reduce the prices below those received by dairy companies for 1938-39. “The evidence proved,” Mr Nash concluded, “that the industry has been continuously consulted’, and that the Government is taking every possible step to ensure that reasonable prices are obtained for both butter and cheese. What is now required is full co-operation between farmers, industrial organisations, and the Government, so that production may be at a maximum, and produce shipped without delay to enable the United Kingdom to make a major effort in the difficult days ahead.”