£928,566 Surplus In Dairy Pool

Northern Advocate, 21 July 1938, Page 13

£928,566 Surplus In Dairy Pool

[Special to ''Northern Advocate.”) WELLINGTON. This Day. The total estimated surplus in the Dairy Industry Account for the export season ending July 31. 1938, is £928,566. This figure was quoted by the Minister of Finance. Hon. W. Nash, who is also Minister of Marketing, in presenting the financial statement to the , Hcuse of Representatives last night. “Based on information supplied by the London manager of the department,” Mr Nash said, “it has been estimated that for the season realisations from overseas sales will average 117/6 per cwt for butter and 6C'per cwt for cheese. On the basis of the guaranteed prices as fixed at the beginning of the season, these realisations would show a surplus of £914,666 on expert butter and a deficit ' of £86,100 on export cheese. There is a surplus on butter sold locally of approximately £IOO.OOO, making in all a total estimated surplus of £928,566. “The financial operations of the Dairy Industry Account for the export season ended July 31. 1937, showed a deficit on the year’s operations of £272,109. In terms of the undertaking given to the dairy industry, this deficit is the responsibility of the Government. Further Distribution. “In the Primary Products Marketing Amendment Act, 1937, the Government was empowered to make adjustments in the guaranteed prices announced at the beginning of any season, so that if circumstances warranted an increase in prices the necessary statutory authority would be provided. The Government has realised that during the season just closing dairyfarmers have experienced difficulty in obtaining farm labour at the wages they could afford to pay, and in order to meet this difficulty, and also to make some compensation for any increased farm costs, the Government considered that an additional payment to the dairy-farmers for their produce was justified. It was therefore decided that the guaranteed prices, as fixed in August, 1937, should be increased by 0.41 d per pound for butter and 0.21 d per pound for cheese. These increases apply to all butter and cheese which is exported with the .concurrence of the department after ■ July 31. 1937, and which is manufactured from milk or cream delivered to a dairy factory on or after August 1, 1937, and before August 1, 1938. The increased amounts of 0.41 d per pound

jon butter and 0.2 Id per pound on j cheese will also be paid oil butler and I cheese manufactured during the perj iod mentioned and sold locally. These additional payments will absorb approximately £815.349 of the estimated surplus, leaving an estimated credit balance of £113.317, Margin for Cheese. “The guaranteed prices for the 1937Mo season are so fixed that the overage pay-out to suppliers of milk to cheese factories should be 2d per pound of butterfat in excess of flic average payout to suppliers of cream to butter factories. This margin of 2d per pound butterfat in favour of cheese manufacture js designed tc compensate cheese factory suppliers for the costs of delivery of milk to factories and for their somewhat, lower return from by-products as compared with suppliers to butter factories. In the past the market returns for cheese and butter have not shewn the margin in favour of cheese that is necesj sary to maintain cheese production, and the pooling of returns from butter and cheese and the provision of the 2d margm cheese over butter has done much to stabilise the cheese industry. Prices for Ensuing Season. “The question of fixing the guaranteed prices for the coming season is now receiving consideration. There has been some controversy in regal'd to the method of determining the guaranteed prices. Suggestions have been made that the prices should be fixed by an independent tribunal 1 under the presidency of a Judge of the Supreme Court. Representations to this effect were made by the Dairy Board conference and by a conference of the New Zealand Farmers’ Union. The Government, after consideration, intimated that if this were the wish of the dairy industry ft would give favourable consideration to the appointment of the tribunal asked for. However, the proposal was negatived at the recent National Dairy Association conference, and a unanimous resolution was carried to the effect that j the fixing of the prices should remain , the responsibility of the Government, but that an advisory tribunal should be set up to submit recommendationto the Government. The Government understands from the resolution of the National Dairy Association conference that the dairy industry is content to leave the final decision respecting prices to the Government. “Accepting the spirit of the representations which were made on behalf of the dairy industry, the Government decided to appoint a committee for the purpose of making the fullest inquiry into the costs and other factors associated with the production of butter and cheese. i J