FEATURES OF BILL

New Zealand Herald, Volume LXXIII, Issue 22404, 28 April 1936, Page 13

FEATURES OF BILL

bate not yet fixed adjustment each season FULL marketing control arrangement of finance [BT TELEGRAPH —SPECIAL REPORTER] WELLINGTON, Mondny In addition to full control of all dairy products for export, power to control the domestic market for these products will be taken by the Government under the Primary Products Marketing Bill, which is expected to make its appearance in the House of Representatives to-morrow. This / measure, one of the most important of the session, will give effect to the Government's proposals for the payment of a guaranteed price to dairy farmers, and some of its outstanding features were discussed tonight by' the Prime Minister, Mr. Savage. The discussion on the bill by the Prime Minister served to clear up several points which hitherto have not been fully expressed. In the first place it is now definite that the price to be guaranteed will not be fixed for some months yet. Price to Remain For Season The Government intends to take over the dairy produce as from the start of the next dairy season on August 1. Consequently, in order not to encourage speculative interests, the actual price will not be mentioned in the bill, but will be fixed by Order-in-Council toward the end of July or early iu Augnst. An important point is that the pries announced at the start of a season will remain in force for the whole of that season. Some attention may be paid to market fluctuations as between one season and another, but if during the coming season tho London market pricp in New Zealand currency rises above the guaranteed price, the Government will be the gainefr. Adjustments to the guaranteed price would be made at the Btart of the following dairy season. The Prime Minister explained tonight that the bill would provide chiefly the machinery for the introduction of guaranteed prices. A special department would be set up to administer the scheme m Xew Zealand and to arrange for the purchasing, shipping and distribution of jdairy products overseas. In this connection Mr. Savage reaffirmed the statement that the " best available houses in Tooley Street would continue to be used as distributive channels, although definite action would be taken to exclude speculative interests. ~j Domestic Market Supplies As previously stated the Government will take over the whole of the production to be exported and will be entirely responsible for that section of the trade. In addition, under the terms of the bill, the Government may at any time take over the supplies of dairy products required for the domestic market and arrange for their distribution and sale in such manner as it thinks fit. '

Mr. Savage was asked whether the > present practice of fixing internal butter and cheese prices on London parity would be continued. He replied Mat that was a detail which could well pie settled when the scheme was fully launched. - y '

In addition to the special department to be set up under the bill the existing Dairy Board will be reconstituted along the lines indicated in Friday's Herald. At present there are three Government nominees and four producers' representatives on the board, but it is likely that as the Government will be directly represented in the Bcherne a producers' board of four members, with one Government nominee in addition, will be set up to act in an advisory capacity on matters affecting production and local marketing.

There is an indication, too, that the itaif at the High Commissioner's office in London will be strengthened to deal with details arising from the distributive sicje, and it is known that the presence in London of Dr. R. M. Campbell as economic adviser to the High Commissioner is welcomed by the Government. r The Commission of Agriculture

In the administrative side room is also likely to be made for the Executive Commission of Agriculture which was set up by the last Government. The Labour Party aimed at the abolition of this body, but it is gathered that until suck time as the commission is at least reorganised work will be found for it 3 numbers in the administration of the guaranteed price scheme. With the administrative machinery established the way will be open for the Government to make its purchasing and distributing arrangements on the basis of the guaranteed price. It has already been stated that the actual price to be guaranteed will be the average of rates ruling over the last eitsht Or ten years. This is generally held to be something in the vicinity of Is 2d per lb for butter, and the Government has definitely decided to base its pay-out on the finished product rather than fix a price at so much per lb. butter-fat. ft is claimed that this will result in farmers and dair.v factories receiving a benefit for efficiency. At present the New Zealand dairy farmer receives for his butter about B R s cwt. in sterling. Exchange brings this return up to approximately 110s in New Zealand currency. Under the guaranteed price producers will receive >n New Zealand currency something considerably in excess of 110s and the Government will be left to carry the Difference. [, Financing the Scheme Under the bill a special Dairy Industry Account will be opened to finance the whole of the guaranteed price scheme as it applies to dairying. loss made by the Government when /the guaranteed price is below the Lonmarket' price in New Zealand currency will be debited to the account a, jd if at any time' the London market advances so that the return to the government in New Zealand currency ls greater than the total amount paid ou t under the guaranteed price the credit balance will be paid into the acco, mt to wipe out past deficits. The mechanics for financing the snicnie were actually set out in the Reserve Bank Amendment Act, and {"a.v be restated .in the bill to come before the House to-morrow. The vital clause in the* Reserve Bank Amendment Act is as follows: — "The bank may grant accommodation by way of overdraft to the Government of New Zealand, or to any board or other authoritv having statu<j9 r -T- powers in relation to the marketing of New Zealand produce, *or the purpose of financing the purchase and marketing of any such produce."

I ho inference is that the price will j** fi*od. an overdraft raised from the iu«iorve Bank to carry out the purchase and sale of exportable dairy products, with the guaranteed return to the producer and the deficit left a debit balance in the Dairy Industry Account until guch time as it can

be wiped out by an improvement in prices on the London market. Khveyer, the balancing of credits and debits may be protracted, as the Government will probably take some notice of seasonal fluctuations in fixing the price at the :>tart of each export season. Mr. Savage reiterated that legislative action would be taken to bring mortgages into line with the guaranteed price. The bill giving effect 'to this asnect of Government policy would probably not be ready for introduction until next week. When the Marketing Bill is introduced to-morrow afternoon the Minister of Finance, Hon W. Nash, will probably give a brief explanation of its principal points. The second reading debate will be opened on Wednesday night, when Mr. Nash and Mr. Savage will speak for the Government and opportunity will also be given for two Opposition speakers to discuss the measure. The debate will be broadcast, the first two speeches occupying art hour each and the next two half an hour. It is possible that the Rt Hon. J. G. Coates (Opposition—Kaiparjv) will follow the Minister of Finance. The debate will bj continued on Thursday night and will again be broadcast. The Government is making arrangements for other business to bo discussed on Thursday afternoon and in the evening six speakers will bo "on the air' - ' for half an hour each. The Minister of Agriculture, Hon. W. Lee' Martin, who has collaborated with Mr. Nash in framing the bill, will lead off for the Government. The bill was before a caucus of Government members for consideration and discussion last Friday morning, but there was insufficient time for a full examination of its provisions. Accordingly the discussion will be resumed at a caucus meeting callel for 9.30 o'clock to-morrow morning.