DAIRY' FINANCES

Manawatu Standard, Volume LVII, Issue 304, 23 November 1937, Page 2

DAIRY' FINANCES

THE ADDITIONAL PAYMENTS, MINISTER’S EXPLANATION. WELLINGTON, Nov. 23. The amounts involved in the--' additional payments from the Dairy Industry Account authorised by the Finance Bill were given by the Minister of Finance (Hon. W. Nash), in moving the second reading of the Bill in the House of Representatives last night. Mr Nash said the Bill authorised a payment representing the difference between last season’s and the current season’s guaranteed prices for dairy produce to be paid for butter and cheese exported after July 31 last and before the issue of the order on September .4, fixing the new prices. This retrospective payment was expected to involve £38,000, which would be paid to dairy factories for distribution to dairy-farmers as soon as the necessary accounts had been completed after the passing of the Bill. <. Provision was also being made for the payment of an additional id a lb to suppliers of butterfat for cheese in respect to cheese exported last season. In fixing the price differential an effort had been made to allow the supplier of butterfat for cheese Id a pound in excess of the supplier of butterfat for butter. However, the allowance made for expenses to the latter was slightly in excess of the estimate. Because the supplier of butterfat for butter had received more than was expected, it was necessary to keep faith with the cheese producer and give him a little more. The extra sum involved would be £165,000. SARANAC BUTTER-BOXES.

Discussing the provision in the Bill relating to the deductions made from the price of butter for the purpose ol equalising the price of butter-boxes. Mr Nash said that to get a measure of equality between the users of the various types of boxes 3d had been deducted from the payout to each factory using the Saranac box. That procedure was varied slightly in cases where the butter was wrapped in parchment foil, an allowance of being made in these circumstances. These deductions had resulted in the accumulation of a balance of £30,8(16 17s, and it was proposed to distribute that sum to all ,dairy factories in so far as it could be decided which were entitled to it. The Bill, continued Mr Nash, also authorised butter and cheese of late grading exported at the request of the Primary Products Marketing Department to be paid for at the price it would have received had it been exported at the normal time after July 31. THE CHEESE ACCOUNT. The position of the cheese producer with regard to the financial arrangements made in connection with last year’s guaranteed price payments was the subject of criticism by the Leader of the Opposition (Hon. A. Hamilton). The cheese account inside the dairy industry account showed a profit of £258.000, Mr Hamilton said. Various deductions had to be made from that to cover • differential margins, end of season payments, and administrative expenses, and the final profit was reduced to £18,354. Mr Nash: Isn’t that vastly different? Surely you have to pay expenses before you can determine your profit? . ~ „ “The position is quite creditable, Mr Hamilton continued, ‘but what lias the cheese producer got out of it? He has not received quite the full maiket value of his production. The Minister : Take in whey butter, which is ‘associated with cheese, and there is a profit of £12,000. Mr Hamilton: Then put on the extra costs which the farmer has had to meet, and you will find that he is well out of pocket. In Southland, Mr Hamilton added, dairy production was practically confined to cheese. The same could be said for Taranaki. It seemed that those two provinces were helping to keep up the position of the industry in tile rest of the country. The claim that a great deal ot money had been saved to the dany industry by the operation of the Government’s marketing scheme was made by Mr J. G. Barclay. The selling commission in London, he said, had been reduced to 2 per cent from 2) per cent which would mean a saving of about £IOO,OOO to the industry. Mr W. J. Poison: Nonsense! DAIRY BOARD LEVY. If it had not been for that reduction there would have been a reduction in the cheese account, rather than a profit of £IB,OOO, Mr Barclay continued. - The interest paid on advances to suppliers had been- reduced from 4$ per cent to li per cent owing to the finance being provided by the Reserve Bank. In 1935-36 the Dairy Board levy had been £78,000, but last year it had been brought down to £37,000, and this year to £20,000. Interest saved amounted to £84,000, and if it had not been for that amount, together with the saving in commission, the deficit in the dairy industry account would have been £724.000 rather than £540,000. “Members of the Opposition have talked about taking away the farmers’ freedom,” Mr Barclay added, “but the farmer has no less freedom now than he ever had, and there are a great many more factors working for his benefit. What freedom did the dairy farmers have when more than 50 per cent of their number were unable to meet their liabilities?”