SUBSIDY COSTS

Gisborne Herald, Volume LXXIII, Issue 22198, 7 December 1946, Page 10

SUBSIDY COSTS

FOOD & _CLOTHING NOT BORNE BY FARMER MR. NASH’S STATEMENT Dealing with the question of subsidies, the Minister of Finance, Mr W Nash, recently stated he was at a loss to understand the import of the resolution forwarded to him through the Prime Minister’s office by the Federated Farmers of New Zealand, the text of that decision being: “That this conference of Federated Farmers strongly objects to subsidies being taken from the primary industries accounts to keep down the prices of food and clothing on the local market.” Mr. Nash said the resolution appeared to be based on a misunderstanding of the actual position. “I have to point out,” he said, “that in fact the industry accounts are not being charged with the cost of subsidies to keep down the prices of food and clothing on the local market. In accordance with the principle that the producer is entitled to recover full costs of production in respect of local market produce, you will recall the Government has agreed that dairy farmers should recover such costs in respect of local market sales, whilst export realisations are credited in full to the dairy industry accounts. “In other words, the difference between the selling price of butter on the local market and cost of production of butter in New Zealand is a charge against the consolidated fund and not against the dairy industry accounts.” The Government had also agreed to the same principle being adopted in connection with the retail meat subsidy to butchers, which was fully, debitable to the consolidated fund , and not against meat industry accounts. The subsidy arising from the supply of bobby calf skins to local industry at a price below costs of production was also met from Government funds. Tyre Allocations Down A complaint has been submitted to Federated Farmers from the Wairarapa Province that their allocation of tyres has dwindled steadily from 359 in September to 209 in October and to only 97 for November. These figures apply to the four most popular sizes. The reason for this is difficult to find, as the federation’s research officer reports that the importation of tyres in 1946 has nearly reached the pre-war figure. In 1936 New Zealand imported 7,000,0001 b weight of tyres, while durihg the seven months ending July this year we imported 4,237,2191 b weight. A total of 7,646,9021 b was imported during 1944-45.

Perhaps our import figures would have been greater had we not allowed three privileged companies to establish factories in the Dominion. Other companies must be unwilling to supply us knowing that when the tyre position reaches normal they will have no market here.