BUTTER AND CHEESE

Otago Daily Times, Issue 22958, 13 August 1936, Page 12

BUTTER AND CHEESE

LONDON MARKET RATE ASSURANCE BY MINISTER GUARANTEED PRICE DEFENDED (From Our Parliamentary Reporter) WELLINGTON, August 12. An assurance that if the London price for butter and cheese continued at a higher rate than the guaranteed price, to be paid to the dairy industry the farmers would receive every penny represented in the higher figure was made by the Minister of Finance, Mr W Nash, replying to the debate on the Financial Statement in the House of Representatives this afternoon. The Minister defended the prices fixed by the Government and stated that its decision had been arrived at only after the opinions of seven men prominent in the dairy factory side of the industry had been invited. Replying first to Mr Coates’s criticism of the basis on which the guaranteed price had been determined, Mr Nash said that Mr Coates had suggested that the London price for the last 10 years should have been applied to New Zealand and averaged over that period. The exchange benefit of 25 per cent, that operated from January, 1933, should then have been added to that average price, the total then being what the farmers should have received by way of pay-out. Under the guaranteed price scheme the Minister said the procedure that had beefi followed was the result of the opinion of a number of prominent men in the dairy industry—seven men who were the best informed on what should be done. They were asked to submit a report to the Government showing what the average price would be over the last eignt years, the last nine years and the last 10 years to July 1. As the number of years grew so did the average. The average for eight years arid nine years was lower than the announced price, so the Government determined to make the most generous interpretation of the promise given to the farmers by the Prime Minister, Mr M. J. Savage. The price fixed would automatically give the dairy farmers more than the average for the last 10 years. The guaranteed price included the exchange benefit. Mr Coates knew that the exchange had been included, so what was the argument? asked Mr Nash. Instead of workforward from the f.o.b. price the Government had worked backward from the pay-out price. Mr Coates was trying to quote a “ dummy farmer away from a logical clean statement about the guaranteed price. It was a clever trick that would not succeed. Mr Coates. Oh, no, it is not, and you know it. Mr Nash, referring to a further point made by Mr Coates, said that the latter had not tried to define what a weighted average meant It was only another phrase. The Minister explained that the Government had taken the total quantity of butter and cheese exported and divided it into the total pay-out. Mr W. J. Poison (Opposition, Stratford): That is the weighted average. Why not make an honest statement? Mr Nash: I ask the honourable member, if he is an honourable member, to apologise for that. Mr Poison: Apologise! I withdraw it.

“ One thing is certain,” Mr Nash said, “ and that is that members of the Opposition will not determine what the farmer is to get. The Government will do that, and will see that the farmer gets every fraction of value to be realised from the sale of his products. In fact, he will get even more, for the commission will be less. Then the actual financing of the industry will be less. The farmer this time will get the full price as soon as the produce reaches the ship. The industry will also save at least £60,000 in bank charges which were formerly paid out. It is the people on the other side and not the farmers who are grumbling about this, because the interested parties will not receive what the- farmer was paying them in these charges.

Answering the allegation by Opposition speakers that individual farmers were not satisfied with the price fixed by the Government the Minister quoted from the number of declarations of approval which, lie said, he had received from individual producers. He had been sent innumerable letters expressing appreciation of the fairness of the Government in deciding the price. One man, he said, had stated that he would have been satisfied with Is because he had been receiving only 6d at one stage and now had the assurance of a fixed price at all times.

Mr Nash mentioned that he had had a letter of thanks from the wife of one dairy farmer who described the price as reasonable and fair. The managing director of a big organisation associated with the dairy industry had written voicing has approval. Reference was made by the Minister to the statement of Mr A. Hamilton (Opposition, Wallace) that the Government’s guaranteed price scheme was really a commandeer. Mr Nash said that in a pamphlet issued before the election and which he had had the privilege of writing the Government had said it would buy the butter. v Mr Hamilton: The farmers were not told that. Mi Nash: Fifty-seven thousand copies of the pamphlet were posted to the farmers. Mr Hamilton: How many candidates said on the platform that you would buy the produce? Mr Nash: All the candidates had copies of the pamphlet. A guaranteed price is not a commandeer, Mr Hamilton: A guaranteed price generally means a minimum price Mr Nash: Wo said we would buy the produce from the dairy farmer at a price based on the average of the past eight to ten years, and we have done that. The member for Wallace, the Minister said, had stated that the prospects of the market were good. He had said that for the purpose of inspiring the farmer to ask for more, inevitably as September, October and November passed the London price would ’’ill. “ The sum in the Dairy Industry Account at the end of July, 1937,” added Mr Nash, “ will be exclusively at the disposal of the dairy industry after consultation with the industry.”