PRICE GUARANTEE

New Zealand Herald, Volume LXXIV, Issue 22833, 14 September 1937, Page 12

PRICE GUARANTEE

COST OF PRODUCTION FARMERS' UNION FIGURES SECRETARY'S EXPLANATION [by tklf.chaph—PßESS association] ■WELLINGTON, Monday Referring to-day to the diifcronccs of opinion with the Minister of Finance, the Hon. W. Nash, with regard to the cost of production of butter-fat. the Dominion secretary of the New Zealand Fanners' Union. Mr. A. I*. O'Shea, stated that the Farmers' Union had made no claim in the statement presented to the Guaranteed Price Committee to put forward any estimate of the cost. The position was that the union had endeavoured to put forward estimates of increases in dairyfarm costs oil a per 11). of butter-fat basis from October 1, 1936, to June 1, 1937.

The union had taken the latest authoritative figures available, the figures of the commission of 1934, and had worked on their costs as a base. The union, however, had expressly stated that it had taken North Island average costs as shown by the Dairy Commission's report, and consequently the increases were probably more than those stated. v "To use the words of the statement," said Mr. O'Shea, "the procedure which has been followed has been to take the North Island costs of the Dairy Commission's report and add to those the |>erecntago of increase which we have been able to ascertain (from comparisons of price lists and jxirsonal knowledge) has taken place in the last year. This would appear to be a practical method for comparison, but as prices had risen from 1934 to October, 1936, the calculation must he conservative. There was no intention of considering that 1934 costs were identical with the costs of 1936.

"When tiro report was put forward," said Mr. O'Shea, "Mr. Nash endeavoured to convey to the deputation that the implication of our statement was that the costs in the Dairy Commission's report (4.093 d per lb. of butter-fat) should have added to them .ood, which was our estimate of the increase in farm costs, and that the resulting figure would be our estimate of the present cost of production. It should be quite plain that if a cost of production figure is to be arrived at the 1934 figures should be brought into line with 1936 prices and an increase of .ood then added. It will also be seen that had the Dairy Commission's figures been brought into line with 1936 prices the increase would have been greater. "It should be quite clear, therefore, that there was no question of the Farmers' Union putting forward any figure for the cost per lb. of the production of butter-fat. and further that tlit; figure of 4.01 d referred to bv Mr. Nash had no place in the Farmers' Union statement," concluded Mr. O'Shea.