LONG-TERM CONTRACTS

Otago Daily Times, Issue 25560, 13 June 1944, Page 4

LONG-TERM CONTRACTS

The invitation to Australia and New Zealand by the British Government to contract for the sale of all their surplus meat and dairy produce to the United Kingdom until mid-1948 must be regarded as highly important. From the viewpoint of Great Britain a long-term arrangement which may extend beyond the war years represents a commitment in favour of the Empire. From that of New Zealand and of the sister Dominion there are manifest advantages in securing a stable market for the most valuable of their exports. They can reflect that no immediate alternative markets suggest themselves. In a general postwar reorientation of trade, there might arise the possibility of supplying the United States Pacific seaboard from the southern dominions, while American farmers supplied Great Britain by the shorter Atlantic route. But any such agreement would come only through negotiation among all parties, and in any case would not be likely to receive consideration within the period of the contract that is now proposed. With Great Britain by no means forced to rely in normal times on the dominions’ food exports, the willingness to trade on a longcontract basis can, apart from the special claims of Empire, be accepted by the New Zealand producer as an acknowledgment of his gregt contribution in toil and in the fruit of his labours to the feeding of the British people in their hours of extremity, and of the Allies, as well, to the limit of his capacity. His task has been long and hard, and has been made more difficult by an extraordinary failure by the Government to appreciate its worth. The April issue of the Abstract of Statistics shows the mounting consequences of the Government’s tragical miscalculation. The decline in exports in the past financial year, to March 31, 1944, over the previous year, illustrates the cumulative effect of the farmer’s deprivation of labour

to carry on his great work and affords an indication also of the gravity of the decline in production:—

The increases noted in the case of mutton and other frozen meats are negligible. If liberal allowance be made for the unstated item of food supplied to Allied servicemen, it is beyond doubt that productivity in New Zealand has fallen to an extent from which a recovery will require years of patient effort. The relevance of these figures to the offered contract is perhaps not direct, except as they illustrate the loss of food to the British people due to governmental short-sightedness in New Zealand. The financial aspect is, however, of very great significance. New Zealand revenues decline throughout the community when export produce prices decline. The effects must be felt in the future even if they are concealed now by the unusual economic dispositions of wartime. It is well known to producers, and is now generally accepted by the public, that the present Government in its previous bulk contracting with the Allied Powers has made some very poor bargains. Any losses the farmer may suffer through producing according to governmental exhortations at an unremunerative price must affect not only his personal economy, but the economy of the people as a whole. It is not reasonable that New Zealand produce should, owing to„a curious admixture of false sentiment and financial ineptitude on the part of the Government, be sold to overseas buyers at a price that does not adequately reward the producer and is below that paid by the purchasers for similar produce from other nations, including nations that are not friendly to the Allied cause. In view of Mr Nash’s sad history as an overseas business negotiator for the Dominion, it may almost be regarded as fortunate that Mr Fraser is on this occasion preparing to arrange the terms for the new contracts offered by the Mother Country. And it is certainly.fortunate that he will have the benefit of the advice of competent officials who have been sent to Great Britain to assist him in his discussions with the British Government.

Quantity Value Decline Decline Per cent. Per cent. Butter .. .. .. 11.9 9.9 Butter-fat .. 77.8 76.9 Cheese .. 29.6 28.4 Frozen beef .. .. 62.9 62.8 Frozen lamb .. .. 6.8 5.6 Frozen pork .. .. 94.4 93.9 Dried milk .. .. 27.1 22.4