PURCHASE AND SALE

Otago Daily Times, Issue 23353, 19 November 1937, Page 10

PURCHASE AND SALE

DAIRY PRODUCE EXPORTS PLANNED ARRIVAL AT HOME THE PROCEDURE OUTLINED (From Our Parliamentary Reporter) WELLINGTON, Nov. 18. The procedure adopted by the Primary Products Marketing Department in financing the purchases of butter and cheese for export to the markets of the United Kingdom is outlined in the first annual report of the department which was presented in the House of Representatives to-day by the Minister of Finance. Mr W. Nash.

“ Dairy factory companies,” the report states. “ forward butter and cheese to the cool stores for export as in the past. The care of the produce in cool stores is the responsibility of the dairy companies, but supervision is exercised by expert officers of the Primary Products Marketing Department and by the Government dairy produce graders with a view to the preservation of the quality of the butter and cheese.” The dairy factory companies, the report continues, may obtain advances from their bankers on produce in cool store awaiting shipment. The best interest rates advanced by the banks are as follows: —Creamery butter, finest grade, £3 Os fid a box; first grade, £2 19s 4d a box; second grade. £2 15s a box; cheese, North Island finest grade, £4 19s 6d a crate; finest grade, £4 17s a crate: first grade, £4 15s a crate; second grade. £4 12s fid a crate. SHIPPING ALLOCATIONS “ The butter and cheese for export,” the report adds, “ are allocated for shipment in accordance with the recommendations of the dairy sales division in London, after consultation with the selling agents. The shipping programme is worked out by the department and the Overseas Shipowners’ Allotment Committee, which meets regularly for the purpose of planning arrivals of butter and cheese at the United Kingdom ports in accordance with the agreed programme.” Under the present system, the report claims, the department has been able to arrange a better programme of shipments to United Kingdom outports. The financing of payments co dairy factory companies for butter and cheese is arranged through the dairy industry account established at the Reserve Bank, it is stated. Ad ministrative, marketing, shipping, insurance, and other expenses of the department are paid from this account. The proceeds of the sale of dairy produce are paid into the ac count, the final balance of which will show a surplus or a deficit on the operations for the year. THE METHOD OF SALE The report states that the sale of butter and cheese in the United Kingdom is conducted by a group of 20 merchant firms appointed as agents for the department. These merchant firms sell on agency terms for a commission of 2 per cent, which includes a credit risk. The agents are firms which have been selling produce for years under the marketing system in operation before the passing of the Primary Products Marketing Act. Provisional allocations of produce are made to the agents for a period of one year, and the quantities are reviewed and varied according to the selling ability of the firms as indicated by the price returns and the marketing and distributive service rendered.