BRITAIN PAYS TWICE

Greymouth Evening Star, 3 August 1946, Page 5

BRITAIN PAYS TWICE

EFFECT OF HIGHER PRICES FOR PRODUCE RETAIL SUBSIDY INCREASE [N.Z.P.A. Special Correspondent.] (Rec. 10.40 a.m.) LONDON, Aug. 2. . The British Government may be said to be paying twice over for the increased prices she has agreed to give New Zealand and Denmark for their dairy produce, meat, and other foodstuffs. This will also apply to agreements still to be reached and ratified with Australia, the Argentine, and Eire. In addition to paying increased prices to these countries she will also pay higher subsidies to keep the retail prices level in Britain. ■ This is clear from the reply by the Minister of Food, Mr. John Strachey, to a questioner in the House of Commons, who inquired if the new agreement with Denmark would mean additional subsidies.

“The import of all products in which there is any increase in price must have that implication, so long as consumer prices are to be kept stable,” said Mr. Strachey..

Subsidy Increases. Food subsidies paid by the British Government have been rising ever since they started in 1939-40. Even before the new agreements were mooted the Chancellor of the Exchequer, Dr. Dalton, estimated that they would cost Britain £334,000,000 for the current year ending next April, which is 50 per cent, more than two years ago. With the new agreements .in force the subsidies may go up to the £350,000,000 mark. The prices to be paid by Britain for Danish butter, bacon, and eggs under the new three-year agreement outlined in the House of Commons by Mr. Strachey will be made known next week, it is expected. _ They will be announced to the Danish Parliament, which will also be asked to approve the payment of subsidies to Danish farmers totalling nearly £10,000,000 annually. Mr. Strachey announced that Britain- would pay minimum guaranteed prices. On butter the price has been fixed to September 30, 1947, and the Danes would consult Britain before committing themselves to sending more than specified quantities to other markets during 1948 and 1949.

High Farm Costs. “The prices we shall pay the Danes for foodstuffs during the first year,” he said, “are higher than the pi. ices we shall be paying for similar commodities from other countlies, because farm costs in Denmark to-day are extremely high in relation to costs elsewhere, due to the world shortage of animal feeding-stuffs on which Danish agriculture so largely depends. This situation, we hope, will prove short-lived. We have to ask for tolerance and understanding, for exampie from our Dominion suppliers, whom we have kept informed fully of our negotiations with Denmark.”