PRODUCE CONTROL

Otago Daily Times, Issue 23365, 3 December 1937, Page 10

PRODUCE CONTROL

THE GOVERNMENT’S AIMS EXPOSITION BY MINISTER ECONOMIC BASIS CLAIMED EXPLANATION OF NEW BILL (From Our Parliamentary Reporter) WELLINGTON, Dec. 2. “The object of this Bill is to ensure the orderly marketing of our produce.” said the Minister ol Marketing (Mr Nash), when moving the second reading of the Primary Products Marketing Amendment BilJ in the House of Representatives to. night. “We wish to bring about an adequate price for the producer.’ the Minister added, “as well as a minimum price to the consumer.” The Government desired so to regulate national production as to realise the maximum income. Mr Nash said, and then to ensure undei the Bill that the primary producer received his share, after taking into account the costs to be met between the producer and the consumer It was intended to link up production with consumption in such a way that the producer would get a maximum return, which he had never received before, and that the consumer would be charged only a legitimate price, the endeavour being to eliminate the waste and speculation that had taken place in the past to the detriment of both. Orderly Marketing “If our dairy produce marketing system had not been in operation and the producer had been allowed to take the market price during the past year there would have been a variation between November of last year and to-day of from 86s 6d to 151 s 9d,” the Minister continued. “We affirm as a Government that we must have orderly marketing and that the producer should not be dependent for his price on the time his goods reach the market. Under the old system one factory would have been receiving 86s and another, because it happened to strike the market at the right time, would be getting 151 s. We claim that regulation is better than that state of affairs.” Ensuring Price Stability The Government had been criticised for selling dairy ..produce on the local market at a lower price than that realised overseas, Mr Nash said. Last year it was obvious that the price paid on the local market was above the overseas price and the effect of the Government’s policy was to ensure the farmer an even price right through. No matter what- the production realised, if it were found that the sum realised was in excess of that paid out the Government proposed to leave that amount in the dairy industry account. “In ensuring an adequate price for the producer and a minimum price for. the consumer we wish to abolish as»far as possible the chaotic state of affairs that has existed in marketing within the Dominion,” the Minister added. “We propose to adjust Supply to demand and when it is necessary prices will be fixed. Prices to the factory have been fixed and prices to the wholesaler have been fixed, leaving him a Jd alb margin. Prices to the retailers have not been fixed, but there is power in this Bill to do that if necessary. That will remove two evils of the old order—cutting and monopoly.” Administrative Methods The Bill provided for the setting up of two divisions—a dairy produce export division and an internal marketing division, Mr Nash said, and power would be delegated from one division to the other. It was proposed in the event of its being decided to control honey and eggs that the dairy produce export division could act as agent' for the other for marketing the extra quantity of those products not required in the Dominion. It was not proposed to interfere with the marketing of meat as that was being very competently done by the Meat Producers’ Board. Mr H. G. Dickie (Opposition. Patea): It does not market meat. Mr Nash: It sees that the meat goes to Smithfield and other markets and it controls the shipping of meat. The director of the export division. Mr G. A, Duncan. Was to receive £ 1500 a year, and the director of the internal marketing division, Mr F R. Picot. £2OOO a vear. the Minister added. Mr W P Endean (Opposition. Parnell): Why the difference? “ Because Mr Duncan was appointed before Mr Picot. and because Mr Picot came to us with a magnificent organisation, recognised as the finest of its kind in New Zealand,” the Minister replied. “Mr Picot was a very fine managing director of the concern, and we are fortunate to have him” Taking Over of Produce The Government had power under the Bill to take over fruit, honey and eggs, and to organise the marketing of those products for the benefit of both the producer and the consumer, the Minister said. It already had power under the Board of Trade Act to fix prices. Mr S G Holland (Opposition, Christchurch North): But vou can’t take over the goods Mr Nash: If there is too great a auantity of these goods on the market we can take them away and export them. Mr Holland: Not without this Bill, though Mr Nash: That is so.

Power was taken in the Bill, the Minister continued, to pay interest on overdrafts at the Reserve Bank Some doubt had been expressed as to the legality of. that procedure, but the Government was making sure of the position and validating the interest payments already made Another provision enabled the Government to withhold dairy produce from export if quantities were required within the Dominion Under existing conditions, the Minister said, there was power for the Government to take over dairy produce only on an f.o.b basis when it was placed on board ship. That was being varied so that if the produce was required for distribution or sale in New Zealand it could be taken over at an earlier point. Confiscation? “ Clause seven in the Bill gives the department power to take over certain other foodstuffs if the necessity arises,” the Minister continued.

Mr S. G. Holland (Opposition, Christchurch North); To confiscate them. “ No. There is no confiscation about it,” said the Minister. “We have to take over the produce at prices fixed on an economic basis. As I see it there is no call on us to fix the prices too high. We have got to be scrupulously fair to the producer, the retailer, and the consumer, and if we failed to be anything less than scrupulously fair we would not come back here. We have got to find a measure which will give justice to all parties. If we don’t find that measure we go out.” Mr Holland; You go out in any case. Money at 11 per cent. Mr Nash detailed the arrangements for financing the marketing procedure through the Reserve Bank, stating that money would be made available at 1} per cent, to enable the department to carry out its activities^ “If we can get money at that nrice,” he added, “why should we pay more? All credit and currency must ultimately be controlled by the State. We have taken control, and we are using it sensibly and cannily within well-established economic orocedure.” Mr Holland ‘ Will vou make that cheap monev available to private enterprise? “ No.” said Mr Nash. “ 1 don’t think it would be fair to do that Would it be fair to the people to vive those institutions which exist for private profit facilities for making a greater profit? The credit from the Reserve Bank will be used to finance State activities, because the' overdrafts obtained from the bank have got all the security of the Dominion behind them.” Price Adjustments Power was taken in the Bill, the Minister continued, to adjust prices where necessary It might be necessary to fix the price for a month, and at the end of that period it might be imperative that the price Should be altered The Bill gave power to make those changes as thev became necessary Mr G W Forbes (Opposition. Hurunui)- Does that allow you to varv the price for dairy exports? The Minister: I do not know whether that will be done, but the power is there if it is required. “ The purpose of this legislation is clear and positive.” Mr Nash concluded “We want to bring into being orderly marketing We want to ensure the maximum return to the producer with the minimum price to the consumer and without regulation and control that objective cannot be attained.”