GUARANTEED PRICE

Manawatu Standard, Volume LVII, Issue 306, 25 November 1937, Page 17

GUARANTEED PRICE

MR COATES CRITICAL. DAIRY INDUSTRY ACCOUNT. WELLINGTON, Nov. 24. Further criticism of the Government’s guaranteed price scheme* for dairy exports was expressed by lit. Hon. J. G. Coates during the second reading debate on the Finance Bill in the House of Representatives last night. Mr Coates also criticised the method of keeping the Dairy Industry Account and stated that in his view there should bo only a very small actual deficit on last season’s operations.

In various directions, Mr Coates said, tlie report of the Marketing Department, -presented by the Minister of Marketing (Hon. W. Nash) had proved misleading, The Minister had quoted the present rates for marine insurance and had compared them with the rates ruling in 1923-24. There had been a steady decline in these rates during The last 12 years and actually the rates in 1935-36 were slightly lower than those ruling to-day. “It has not been the Government’s action which has brought down insurance rates,” Mr Coates said. “The rates were brought down long before the Marketing Department came into being. The present rates are part of a three-year contract arranged before the Marketing Department was established and adjusted to cover storage. To imply that the department lias brought down the rates is nothing more or less than an attempt to hoodwink the public.” The Government had set up a committee to assist in determining the guaranteed price, but it liad taken cure to control the committee by means of legislation. The committee certainly did not have a free hand in the matter. It was required to take as a basis for its recommendations the standard of a really efficient producer, but in such a variable occupation as dairy-farming it was impossible for such a standard to he properly defined.

The whole position concerning the guaranteed price was a negation of the Government’s declared principles. The Labour Party bad always set its face against the, laying down of maximum payments in wages, but the guaranteed price was not a minimum-; it was a maximum above which the farmer could not hope to earn. “In the ease of farmers who have to pay for their labour, the position to-day is not a scrap better than it was in 1935,” Mr Coates declared. “It is not only a question of labour costs. All costs have advanced to such an extent that in the case of 75 per cent, of dairy-farmers they have overtaken the increase in price.

“Since this hopelessly involved system lias been introduced, the Government has confiscated all the improvements made by the man who has had all sorts of difficulties to overcome. The average butterfat yield per cow in 1919-20 was 152.041 b. In 193334 the yield had increased to 220.801 b. And now we find that the Minister in his passion for figures has based his price on a yield per cow of 2581 b. of butterfat.

“I wonder if the Minister could tell us what proportion of dairy-farmers are obtaining that average of production. I-know numbers of farms where men cannot hope to obtain a yield of 2001 b. of butterfat per cow. Wliat chance has a man who cannot reach the standard adopted in fixing tlie price ?” The position of the Dairy Industry Account was examined by Mi* Coptes, who said that considerable confusion would arise from the fact that tho Minister had included ill the accounts tho whole season’s production and not just the season’s exports. In fixing prices for a season, the Act stated that only actual shipments between August 1 of one year and July 31 of the next year should be taken, but the Minister was including in his first season’s accounts butter which had been exported after the end of the season. In respect of actual shipments, the balances shown in the accounts were as follow; Creamery butter, deficit of £481,150; cheese, surplus of £298,583; whey butter, £4503. That gave an estimated deficit on the season’s shipments of £187,070. The Minister of Marketing (Hon. W. Nash) ; That is not correct. You know that there was not a surplus of £298,583 on cheese. Mr Coates : I am taking the figures from the accounts. Administrative expenses were given as £174,266, Mr Coates continued, and that made a total estimated deficit of £361,336, not including the extra payment to cheese producers. His belief was that on the year’s working there would be a credit of about £133,000, without taking into consideration a deduction for administrative expenses.