COSTS NOT MET

New Zealand Herald, Volume LXXIV, Issue 22820, 30 August 1937, Page 11

COSTS NOT MET

MR. LEESON'S COMMENT HIGHER THAN. EXPECTED END OF PURCHASE PLAN SEEN The chairman of directors of the Morrinsville Co-operative Dairy Company, Mr. ,T. E. Lecson, said that the new guaranteed price for butter was id above tho figure at which ho had expected the Government to fix it. Ho estimated that the average farmer in the Morrinsville district would receivfi £•10 or £SO more under the new price than he had last season. Such men would bo able to carry on, although the price did not meet their greatlyincreased costs, for which the present Government was responsible. If Australian production revived or London prices took a downward trend, things would be difficult later on.

Mr. Leeson added that he did not believe that the Government would be able to continue its compulsory purchase plan very long. In his opinion, the farmers would have done just as well last season if no such plan had been in operation. BASIS OF FIXATION NOT JUSTIFIED ON FAOTS THE ELEMENT OF COSTS "It is not an economic price so far as tho dairy farmer is concerned," said a director of an important co-operative dairy company, commenting on the new guaranteed price for butter. "Every other country that supplies the London market sells butter there at less than the domestic price; that is to say, the butter export is subsidised. "I feel, and I am sure many others do, that the dairy farmer is entitled to tho New Zealand price for commercial production under New Zealand conditions, especially considering the increased costs that have been imposed upon him. His relative position can be judged from the fact that last season the average pay-out in Australia was Is IJd, and in New Zealand Is 0 9-16 d, while costs in Australia were lower." Tho new price was below what ho had expected, "this informant said. Tho Government undoubtedly had based it on a higher butter-fat production per unit of labour than the facts justified —higher, in fact, than ever before. On such a price it would still be impossible for many farmers to make ends meet without using the labour of their families in the milking sheds. They very much resented having to do this and felt that a humanitarian Government had no more right to force it on them than on the carpenter or the plumber. They wanted an economic price that would enable them to employ labour, with some State aid in providing the necessary housing.