LOCAL BUTTER PRICES

Hawera Star, Volume LII, 28 January 1933, Page 7

LOCAL BUTTER PRICES

STABILISATION NEEDED MR. A. J.. SINCLAIR’S SCHEME PREMIUM FOR, FRESH ARTICLE. Appreciation of the support extended by all branches of the dairy industry m New Zealand to his scheme for the stabilisation of local butter prices was expressed by Mr. A. J. Sinclair, sec-retary-manager of the Te Awamutu Amalgamated Dairy Company, Ltd., in an address at the monthly luncheon of the Auckland Chamber of Commerce last week. “The scheme was first placed before the dairy industry seven weeks ago,’’ Mr. Sinclair said, “and the manner in which it has been received has been most encouraging.” Mr. Sinclair said the proposals under his scheme would add about £400,000 annually to the revenue of the dairy companies of New Zealand, without having recourse to anything in the nature of Government subsidies. The scheme had been fully explained throngh the press, but briefly the proposals were to base local prices on the f.o.b. export parity, to which would be added an additional 2d a pound, as New Zealand consumers were at present paying no more for butter fresh from the churns than English people were paying for frozen butter. In all other parts of the world fresh butter had a greater market value than frozen butter. “SENSELESS PRICE, CUTTING.” Amendments to legislation, enabling the Dairy Produce Board to set up a sub-committee to deal with the local market by regulation could easily put a stop to the senseless and disastrous price cutting at present being carried oh by dairy companies. All that was asked was a stable wholesale market. How retailers chose to sell the butter after it had been delivered to them was no concern of the board, although it was manifestly unfair that some distributors should secure secret rebates and commissions to enable them to wage a price-cutting war against the independent master grocer. “The farmers are asking for assistance from the Government in times of great 'difficulty,” Mr. Sinclair said, “but they owe a duty to the community to set their own house in order. "By rationalisation of industry and a cessation of price cutting by dairy companies they can stop leakages amounting to about £IOO.OOO a year. “New Zealanders, as well as being tho largest tea drinkers in the world, are also the largest butter eaters. Tne. internal consumption of hut,ter in New, Zealand was 23,000 tons last year. I would not have the temerity at the] present time to advocate a price based on the cost of production, but 1 do advocate a price which is reasonable for fresh butter and which will, give gome better return to the producer.” STABILISATION FUND. Allowing 1-Jd a pound for patting and packing, the wholesale price of butter under the scheme would be 31d a pound above the f.o.b. parity for bulk butter, Mr. Sinclair continued. The retaiL price’ on to-day’s values would vary between Is Old and Is lid. In order to stop all factories from concentrating on the local market, the premium of 2d a pound, instead of going only to the supplying companies, could be paid into a stabilisation fund. At the end of the year there would he about £400,000 to divide among all companies. The elimination of price cutting by the companies would bring the total gain to the producers to about £500,000 and te the farmer this would represent an extra -}d a pound—a small hut much-need#! measure of relief, which would enable him to continue the use of fertilisers and maintain the standard of production. No exorbitant demands were being made on consumers. They were merely being asked to pay a fair and reasonable price for fresh butter. The prices under the proposed scheme would involve the average family of five persons in an additional expenditure of 6d a week.