DAIRY EXPORTS

Otago Daily Times, Issue 24716, 19 September 1941, Page 6

DAIRY EXPORTS

AGREEMENT WITH BRITAIN ADVANCE IN CHEESE PRICE EXTRA COSTS ACCOUNT (P.A.) WELLINGTON, Sept. 18. Details of the agreement between the United Kingdom and New Zealand which was concluded towards the end of last month for the purchase of dairy produce from the Dominion were given by the Minister of Marketing. Mr J. G. Barclay to-day. addressing the annual conference of the Dairy Board. In regard to butter nroduction. the agreement provides that for the duration of the war and one year thereafter the New Zealand Government and the industry will aim to limit production for export to approximately 115,000 tons a year, this figure to be reviewed annually in the light of the storage and shipping positions. * In regard to cheese, the United Kingdom undertakes to purchase annually for the period of the war and for one year thereafter a quantity up to 160,000 tons. In recognition of the increased costs associated with the production of up to 160.000 tons the United Kingdom has increased the price of cheese for the 1941-42 season by 5s 9d sterling per cwt. Finance and Storage Mr Barclay said that the 115,000 tons fo butter did not represent the quantity that the United Kingdom Government would undertake to lift in any given year, but the obligation of that Government under the general surpluses agreement which was concluded some months ago. - That meant that if part of the quantity could not be lifted the two Governments would share the financing and storing of the balance. The present indications were that the maximum for this season would be in the vicinity of 90,000 tons; consequently butter, along with meat, remained in the general surpluses agreement. , If the quantity of cheese could not be lifted each vear. Mr Barclay continued. the United Kingdom would make payment for 50 per cent, of the value of all cheese held in store one month longer than required by the shipping schedule. For cheese held in store three months longer than the shipping schedule 40 per cent, would be paid, making 90 per cent, in all. and the regaining 10 per cent, would be paid when the cheese was shipped. In the event of unexpected shipping difficulties the United Kingdom, reserved the right to review the position. Seven Shillings Increase

A third point in the agreement, the Minister said, provided for a purchase price of 70s sterling per cwt for the ■cheese contract for 1941-42. This represented an increase of approximately 7s (New Zealand currency). This was to meet the cost of producing the extra cheese, and the New Zealand Government would create a special fund from which the additional cost would be met.

Many of the costs, Mr Barclay added, could not be determined until the end of the emergency period. This price of 70s related specifically to the coming season, as both Governments reserved the right to review the price in the light of actual experience in May of each year. Mr Barclay said the increase in price would be paid into a special account, and he would discuss with the industry ?ny balance left at the end of the emergency period. Investigation of Costs It was impossible to define all of the costs likely to be charged against the account, but they appeared to fall into the following broad classifications — Government capital costs, such as the provision of emergency cool storage and the provision of houses for additional factory employees: recurring^ costs such as loss on the purchase of whey butter, cost of storage, interest, insurance, etc.; dairy factory capital costs: dairy factory recurring costs: suppliers’ capital costs and suppliers’ recurring costs. The Government intended to set up a . special committee consisting of two of the industry, the Director-general of Agriculture, the Director of Export Marketing, and the Minister, as chairman, to investigate and determine the extra costs to be paid out of the fund. The work of the committee would commence as soon as the Dairy Board nominated its representatives. Milk Products Contract Mr Barclay said a contract had also been completed for the export of milk products- The contract provided for the purchase of 6500 tons of skim milk powder. The Minister went on to refer to the war risk insurance which is to be covered by a Bill to come before Parliament this session. He discussed the difficulties that might arise if there were delay in shipment, and said he was prepared to recommend to the Government the payment of 50 per cent, two months after grading, and the remaining 50 per cent, four months after grading on produce that had to be held in store.

For the purpose of establishing equity between all the manufacturing companies. he proposed that payment on shipment should be discontinued, and that for the present season the standard formula of payment at two and four months should apply. This was the fairest course, Mr Barclay mentioned that the latest information regarding the export of baconer pigs was that the United Kingdom Government would purchase 11.000 tons during the third year of war. The conditions were still being discussed.