DEBITS CHARGED

Nelson Evening Mail, Volume 80, 28 April 1945, Page 6

DEBITS CHARGED

DAIRY AND MEAT STABILISATION ACCOUNTS

DETAILS OF AGREEMENT REACHED Details of adjustments agreed upon by the Dairy and Meat Boards and the Economic Stabilisation Commission in regard to proposed debits to the dairy and meat stabilisation accounts are incorporated in the .following letter signed by the chairman of the two boards. The agreement has been approved by the Dairy Industry Council. “The cofnmittee acknowledge receipt of your letter of. March 22, but in view of subsequent discussions consider there is no need for a formal reply and that it can be regarded, like all other communications which have passed between the Commission and the committee, as being of an exploratory character. “Agreement having been reached in course of discussion, it only remains to record the terms of that agreement, which we understand to be as follows:: “Lump Sum Payments.—The •committee are satisfied from the information supplied that the lump sum payment of £ 12,000,000 is not being paid in respect of produce sold and that it is being granted partly for the purpose of strengthening New ealand sterling funds and partly towards the costs of Economic Stabilisation in New Zealand up to July 31, 1944.

“The committee are also satisfied that the lump sum payments of £4,000,000 per annum for the four years com-

mencing August 1, 1944, are not being paid in respect of produce sold to the United Kingdom, but are being paid towards the cost of economic stabilisation in New Zealand and in recognition of the fact that benefit accrues to the United Kingdom through New Zealand’s economic stabilisation policy. From information which has been made available it appears that the cost of such stabilisation policy over the four-year period will at least be equal to the aggregate of such payments. “Dairy Industry Stabilisation Account. —We understand it is agreed that each year the balance of the Dairy Produce Account will be transferred to this account, and all credits for produce sold to the United Kingdom and the Joint Purchasing Board, above the level of U7s per cwt. for butter and 73s per cwt. for cheese (sterling) will be paid to this account.

“Meat Industry Stabilisation Account. —The arrangements respecting the Meat Pool Account and the Meat Industry Stabilisation Account are set out in the letter addressed by the Rt. Hon. the Prime Minister to the chairman of the Meat Board dated November 20. 1944, the appropriate quotation being as follows:—‘lt is considered desirable that both the Meat Pool Account and the Meat Stabilisation Account should remain within the Meat Industry Account as at present, but the whole of the proceeds from the recent increase in the prices of meat to be paid by the United Kingdom Government will be credited to the Meat Industry Stabilisation Account and will be conserved exclusively for the industry, subject, of course, to such debits against the account as are contemplated in the Government’s agreement with the Farmers’ Federation of June 18, 1943. All accretions to the Meat Pool Account will continue as in the past and no charges other than those already operative will be made against it except jn agreement with the New Zealand Meat Producers Board. This arrangement would have to be subject to review, in the event of the resources of the Meat Industry Stabilisation Account being insufficient to meet charges against that account. I would stress again that the balance finally remaining in the Meat Pool Account and the Meat Industry Stabilisation Account belong to and shall be held for the benefit of the industry.’ “Debits below the ‘level existing on

the determined date.* —It is agreed that costs incurred under stabilisation below ‘the level existing oh the determined date’ are debitable to both the Dairy anod Meat Industry Stabilisation Accounts in appropriate amounts us agreed upon in the detailed schedules attached hereto as from April 1, 1943, to July 31, 1946.

“Increase in debits above the unit rate existing on March 1,1945. —1 tis agreed thgt no debits for increases in costs above the unit rate existing at March 1, 1945, should be charged to the Dairy Industry Stabilisation Account except:—(A) Increased allowances to cover increases in farm wages or labour reward to the extent of 0.52 d per lb butterfat; (b) increased allowances for increases in factory costs to the extent of 0.13 d per lb butterfat, unless eligible under (d), and'in respect of cheese, a figure per lb of butterfat which corresponds to the figure of 0.13 d per lb butterfat for butter; (c) any increase in allowance for interest on capital; (d) increases in subsidies or allowances arising out of increased import costs or increased usage of fertiliser or other materials used on farms or in factories; (e) generally, any increases on items chargeable under the agreement, with the Farmers’ Federation and not arising out of increases in wages in New Zealand since March 1, 1945.

“In respect of the Meat Industry Stabilisation Account, it is agreed that no debits above the unit rate existing at March 1, 1945, should be debited to the Meat Industry Stabilisation Account except:—(l) Additional freezing costs coming to charge after March 1, 1945, and not arising from wage increases granted after March 1, 1945; (2) increases in farm wages to agricultural workers on other than dairy farms as fixed by Order under the Agricultural Workers Act, up to £3 15s per week and found; (3) increases in farm wages above those provided for in (2) up to an aggregate amount of £400,000 per annum; (4) freezing costs additional to those mentioned in U) up to a sum of £475,000 per annum; (5) any increase in allowance for interest on capital; (6) increases in subsidies or allowances arising out of increased import costs or increased usage of fertiliser or other materials used on farms or in factories; (7) generally, any increases on items chargeable under the agreement with the Farmers’ Federation and not arising out of increases in wages in New Zealand since March 1, 1945. “Accounting Periods. —lt is agreed that the first accounting period shall run from April 1, 1943, to July 31, 1944, and thereafter yearly ending July 31, with appropriate adjustments respecting debits and credits at the concluding date, July 31, 1946. “Verification of Amounts Debited and Credited. —lt is agreed that reasonable information will be made available to officers of the Dairy and Meat Boards in respect of amounts debited and credited to the respective Stabilisation Accounts, so that the two boards can give assurance to the producers that such entries are in accordance with the terms of the agreement here recorded. “Arbitration in respect- of Dairy Industry Local Market Costs.—Agreement having been reached on all matters except the debits for local market butter and cheese, it is agreed that the question of whether the costs above the price realised incurred in holding the retail price of butter and cheese in New Zealand can be debited to the Dairy Industry Stabilisation Account under the provision of the agreement between the Government and the Farmers’ Federation, should be decided by arbitration. “We should be pleased to be advised if you concur in this record of agreement in order that the endorsement of thg Dairy Industry Council can be obtained. Thereafter all that would be necessary would be discussion on the arrangements for arbitration orf the dairy industry local market question. “The committee in conclusion desire to convey to yourself and colleagues appreciation for the full information supplied, the frank nature of the discussions, and the measure of agreement that has been reached.” On April 12, 1945, the chairman of the Stabilisation Commission conveyed the Government’s approval of the record of agreement in the following letter addressed to the chairman of the Dairy and Meat Boards:— “I am authorised t© advise you that the Government, for its part, endorses the record of agreement as set out in your letter of March 24, 1945, as to the debits to be made to the Dairy and Meat Industry Stabilisation Accounts. “It is understood that the exceptions of sub-paragraphs (a) and (b) and subparagraphs (2), (3), and (4) under the heading of ‘lncreases in debits above the unit rate existing on March 1, 1945,’ are not in any way affected by any interpretation of sub-paragraphs (e) and (7) of the same respective paragraphs. “I trust I may be advised at an early date of the endorsement of the agreement by the Dairy Industry Council.” A MATTER FOR ARBITRATION Referring to the proposed arbitration in rgspect of the costs of producing butter and cheese for the local market, Mr Nash said that the Government regretted that it had not been possible to reach agreement on this one outstanding point. However, it had become clear in the course of discussions that there was a difference of opinion on the interpretation of the Farm Products Stabilisation Agreement so far as these costs were concerned and that this difference could not be bridged by discussions. In these circumstances the Government agreed that the fairest thing to do was to seek an independent interpretation of the Stabilisation Agreement as it affected the costs of producing butter and cheese for the local market. The appointment of an arbitrator and a suitable date for arbitration would be discussed in the near future with representatives of the dairy industry.