FLOUR AND WHEAT PRICES.

Pahiatua Herald, Volume XLIII, Issue 13178, 10 February 1936, Page 5

FLOUR AND WHEAT PRICES.

STABILISATION SCHEME ADOPTED.

EXIT DISTRIBUTORS LIMITED.

United Press Assn.—By Electric Telegraph—Copyright. CHRISTCHURCH, February 8

The Minister of Industries and Commerce (Hon. D. G. Sullivan) announced to-day that plans had been completed for the introduction of a stabilisation and price-fixing scheme in the wheatgrowing. flour millit g and bread-baking industries.

“In order to encourage wheat-growing in New Zealand the stabilisation of the wheat, flour and bread industries is necessary for the purpose of giving the farmer an increased price. That such increase of price to the farmers is necessary is indicated by the fact that he is not growing sufficient wheat for New Zealand’s requirements.

This is obvious because approximately 575,000 bushels came into New Zealand in the form of flour from U.S.A., Canada, and. Australia in 1935, and in addition approximately 7000 tons of wheat for poultry feed, equal to about 261.300 bushels, were imported from Australia, making a total quantity of 836,300 bushels. Moreover, the average quantity growing during the past 10 years has been insufficient. “Stabilisation is also necessary in both the flour-milling and bread-bak-ing industries. In both industries there has been serious price-cutting for a number of years. In the flourmilling industry there has been a price war in existence since February, 1933. The bread industry has also been seriously affect*. *d by uneconomic price-cutting. Representations have been made to. this and previous Governments by the bakers of New Zealand for action to be taken to prevent price-cutting oi an absurd kind.

“The system which has new been devised will enable stabilisation to be introduced in all three industries and will ensure reasonable prices in each industry whilst safeguarding the consumers’ interests.

“The general scheme is in conformity with the Government’s declared policy of introducing guaranteed prices wherever possible. By arranging a stabilised price level for such staple products as wheat, flour and bread the basis is laid for the introduction of further guaranteed price plans. “An important feature of the proposals is that they make provision for an increase in wages for many of those employed in these industries. Increases in wages have already been made by a number of flc.urmillers and the others will now be brought into line and the lull 10 per cent, reduction will be restored.

“It is expected that stabilisation in the bread industry with the consequent elimination of uneconomic price-cutting will enable increased wages to be paid. This is in conformity with the Government’s objective to ensure that where advantages are granted to the industry through governmental action the employees engaged in the industry shall share in such advantages.

“The general plan is based on equal prices for flour and bread at specified points in both islands with certain adjustments for carriage at other places. “The basic price tor flour will be £l3 12s less 3s 5d per ton cash discount, making a, net price of £l3 8s 7d delivered into the bakehouse at the specified places. “The price of £l3 12s restores the old standard price which operated at f.o.b. South Island main ports prior to the commencement of the price war that has prevailed for some time past. It should be remembered, however, that in Auckland where no price war has prevailed the new price

will represent a very substantial reduction in flour prices. Differential prices bave bi*en fixed for wheat milled in the South Island mills and in the North Island mills- respectively. “The average price for the new season’s wheat represents an increase of sld per bushel over the average price for the past three seasons. This is expected to average 4s 9d f.o.b. Tuscan March delivery, which alter paying brokerage, i. s the equivalent of 4s on trucks for the 1936 crop. In 1935 the price for Tuscan March basis was 4s and out of this the grower had to pay about 24d per bushel as the cost of the rebate of 15s per ton on flour sold in the North Island. The present price is an increase of per bushel over 1935, while the North Island rebate has been abolished, thus providing the additional 4d per bushel for the grower.

“So f«ir as the bread-making industry is concerned the pian provides for the price of the 41b l'oaf when sold to the public for cash over the counter in Auckland, Wellington, Christchurch and Dunedin to be fixed at lOd. The price to be charged to stores by bakers will lie fixed at 9d per 41b loaf.

“Prices in other cities and towns throughout the Dominion will be based on these prices with necessary adjustment for differences .in the c ost of flour. In other wordsi wherever flour is delivered to the bakehouse at £l3 18s 7d net the above prices will obtain.

“This does not take away the light of hospital's and institutions to make contracts at special prices. As previously mentioned bakers should benefit materially as a result of the elimination of uneconomic price-cut-ting. “Favourable consideration is being given to the question of the granting ing permission to use bread improvers. If these are allowed the addition, of calcium phosphate will supply phosphorous and lime in the diet an addition which has been recommended by certain medical men. The use of this bread improver will permit more New Zealand flour to lx i used. Such additional New Zealand flour will displace Canadian. United States and Australian flour which is at present imported for mixing purposes. “The plan will be controlled by the When t C< nimit tec*.

“Distributors Limited will’ be abolished and will be replaced by the committee. As a staff will still be required to enable the committee to function the new organisation will not result in further unemployment. “Other important advantages of the plan which have not been mentioned include the equalisation of prices of wheat and flour in the North and South Islands by the elimination of the difference which has prevailed in the past between prices oi milling wheat and flour in the North and South Islands respectively.