BREAD SUBSIDY

Otago Witness, Issue 3419, 26 September 1919, Page 55

BREAD SUBSIDY

A GOVERNMENT PAYMENT,

In dealing with the price of flour, and bread, the Board of Trade quotes a report made to the Government in February, 1919, in which it was pointed out that the new wheat price would justify increases for flour of £2 10s a ton and of bran and pollard. "A rise of £1 5s per ton of flour justifies the bakers increasing the price of the 41b loaf by.x Therefore a rise of £2 10s will in-\ crease the present bread-prices throughout New Zealand by Id. If as a matter of policy it is held to be undesirable to allow bread-prices to increase, then in the opinion of the board the best plan to adopt is to subsidise the miller. As New Zealand uses approximately 100,000 tons of flour, tho Consolidated Fund would have to find £250,000 (approximately). Against this sum could be set the profit on, Australian wheat, estimated at 7d per bushel on all wheat delivered to North Island millers, who will take approximately 2,000,000 bushels provided shipping is available. This profit will amount to £58.000. There Avas a net profit on last year's wheat transactions of £II,OOO, and this vear it is estimated that the Wheat Control Office should show a profit of £SOOO on New Zealand wheat. As the prices suggested. give the miller an extra profit of 2s 9d per ton, this could also be allowed for in any subsidy, and would amount to approximately £13,000. The Government's total liability would, therefore be £163,000. . . . The bakers maintain that the present prices of bread do not return them a fair profit, and in many instances thev claim, that they are working at a loss, and they suggest that flour should be reduced 10s per ton. The board is of opinion that they have been hit hard bv increased cost of fuel and labour and delivery charges since bread-prices were fixed, and' that this demand for a reduction in flour-prices is reasonable. To give effect to this demand would mean a further outlay of £50,000." This report was considered by the Government, and the Government eventually decided to reduce the price of flour bv 10s per ton, making the price f.o.b. southern ports £ls and a price equivalent elsewhere in New Zealand, and .necessitating the payment of approxi- ■ mately £213,000 by way of subsidy -'to millers, on the understanding that flour was not to exceed, during the year ending February 28, 1920, the price fixed, and that the cash price of bread was to remain constant for the same period.