NEW GUARANTEED PRICES

Manawatu Standard, Volume LVII, Issue 231, 30 August 1937, Page 6

NEW GUARANTEED PRICES

With the publication of the guaranteed prices for this season’s dairy produce on Saturday afternoon, it was known that they could not be received other than with disfavour by the industry which they are designed to benefit. TLe dairy farmers in fact must be genuinely disappointed with Cabinet’s decision. TLe basic guaranteed price for butter this year will be 13|d per pound as against 12.5b1d per pound last season, or an increase of fd. The average efficient dairy factory, on this basis, the Minister for Marketing states, should be able to pay not less than 13.88 d per pound of butterfat. Eor cheese the dairy farmer will receive 7.54 d per pound as against 6.81 d last season, “which should return the equivalent of not less than 15.88 d per lb of butterfat.” This gives suppliers of cheese factories a premium of 2d per pound of butterfat in accordance with the Government policy to meet the special conditions of this branch of the industry. These of course are the basic prices, which are subject to increase or reduction according as the grade rises above tlie base or falls below it. The objective therefore must be for every sup plier to see that liis raw material is of such quality that only the finest grade produce . is made Granted expert attention in tlie factory, on consideration of raw material hinges the ability to ob tain the premium set by the Gov eminent. This, however, must be poor consolation for dairy farmers who, faced with in creased costs from the Government's legislation, have been hoping for a greater increase than Cabinet has granted. The Farmers’ Union expert commit tee estimated that between October of last year and June last the cost of production per pound of butterfat increased by approximately 3 jd, but a prominent member of the Government held that to grant such an increase would mean the slippery road to inflation. The Government’s position has been to hold the balance —to grant the industry a net return in accordance with its policy to keep farmers and their families in a reasonable degree of comfort, and to avoid too big a deficit to the country in the Dairy Industry Account. Last year’s figures in this connection are not vet available, but the estimated loss is somewhat less than half a million pounds. But it is not at all likely that many dairy farmers will regard the Government’s price as sufficient to reward them cqmmens.urately with the income received by other sections of the community for equal service, and the manager of a leading company says that on this basis the new price is totally inadequate. A “representative meeting of Southland dairy factory directors” has “demanded” a guaranteed price of Is 6d, so that the tone of comment from this quarter will be readily gauged. The Government’s policy may have given to the industry last season stability it did not know in that a farmer could budget for his producing year, but rising costs are pressing so heavily upon the country at -the present time, and must continue to do so in coming months, that he now not only faces a position of uncertainty as to how far these costs will rise, but also the conviction that the increased price will not by any means compensate him.