THAT DAIRY PAY-OUT

Pahiatua Herald, Volume XLVII, Issue 13889, 23 June 1938, Page 5

THAT DAIRY PAY-OUT

APPROXIMATELY A HALF-PENNY HON. \Y. NASH’S ANNOUNCEMENT Electric Telegraph—Press Association NEW PoIAIOLTbL Last Night. Tne Government’s intention of increasing the basic price or butter by .4ld per id., wnich will mean a payment of 13.660 per ib., was armouncen by the Minister oi Marketing (Hon. W. Nash) at the National Dairy Association Conference. ‘We propose to increase the price of cheese from the present 7.54 d lb to 7.75d-(7£d) per lb., an additional .2ld per lb,” the Minister stated. “These extra sums should for the average dairy factory result in an added pay-out of £d lb butter tat for both Gheese and butter, so that the average payout should be: For butterfat for butter at least 14.38 d (it wilt probably be is 2£d for butter), and 16.35 d for cheese.” The procedure proposed for distribution of the adjusted pay-out will be to buy the butter and cheese shipped up to June 30 at the present price of l3id per lb for butter and 7.54 d lb. for cheese, and then to distribute to all suppliers a further pay-out for all butter made after July 31, 1937,. and shipped prior to June 30, 1938, of a further .41d per lb., bringing the total price for the year up to 13.66 d per lb for butter. Shipments after June 30 will be paid for at this rate of 13.0dd per Tib. For cheese the pay-out up to June 30 will, as before mentioned be 7.54 d and there will be a special payment for adjustment of .21d Jb for all cheese exported after July 31 of last year and before June 30 of the present year covering the make up to July 31 all cheese will be purchased at 7.75 (7§d) per lb. On the present evidence this should result, in a pay-out for the year amounting to 14.38 d per lb for butterfat for butter and 16.38 lb. cheese. In all probability both these pay-outs will be exceeded on the average.

“Jt has been said that the guaranteed price principle has been abandoned,'’ said Air. Nash, “it is not true. The principle remains that the Dairy Industry Account stands on its own. The Government does not propose to touch the Account in any way. The adjustment of the price for the current season does not break the piinciple. It is an increase in price to meet some of the added costs that are known and to some extent to pro\ide a. sum to enable the farmer who does employ labour to pay a higher rate of wages than he has pieviously been able to offer.” Air. Nash announced to the N.D.A. conference “that the realisation of butter sales shows a surplus over the price originally fixed of £914,666. If to this is added the estimated surplus of sales in the Dominion of £100,060 we get a total surplus of £1,014,666. From this it is necessary to deduct the estimated deficit on cheese amounting to £86,000 This will leave a surplus of £928,566. The adjustment of prices announced to-day will absorb £815,349. Therefore the. surplus, if the estimate is proved to be c< rrect, will be £113,217, and an adjustment will he made on all butter nd cheese sold on the local market. “Two contributing factors to the appreciating in prices overseas have l een the* trade with Germany and the market in Canada,” said Air. Nash. ‘‘Under the trade agreement with Germany it is provided that if we purchase German goods to the value of £400,000 Germany is to spend 25 per cent of that sum in purchasing butter from the D. minion. To the extent that our purchases exceed £4OO,(XX), 50 per cent of that excess is to be spent in buying our butter by Germany. This agreement was supplemented by an undertaking that purchases by Germany would be made in December, January and February, being the months in which the peak supplies would have a tendency to depress prices on the local market. I have had a letter from Air. Davis in which he states that the announcement that sales were to be made to Germany caused prices to lift by 4s per cwt. The total sales to Germany amount to 58,112 boxes, the price being £162,161. “In the report of the Alarketing Department presented to Parliament during last session I announced the estimated deficit on the year’s working as £584,749,” said Air. Nash. “This sum has now been i educed to £272,108 owing to an advance in prices subsequent to July 31, 1937. 'J he surplus realisation on creamery butter was £177,083 and the surplus realisation of cheese sold subsequent to July 31, 1937, was £108,015, a total of £285,098 for both butter and cheese. This sum deducted from the figure in the Alarketing Department’s report gives a deficit of £263,651. This deficit is increased by loss on sales of whey butter amounting to £248, and payments to manufacture of specie. 1 mdk products £2828. That makes a total of £8457. Adding these sums to the £263,651 gives a final deficit of £272.108:

“ During the last session an amendment was made to the Primary Products Alarketing Act to enable the Government to overcome some of the procedure in connection with local marketing and retail trading. It was decided that it might he necessary in certain circumstances to alter the price. This in thu* main had no relation to the price to be paid to the dairy farmer because? there was a spe-

c*ific statement in the Act that it a contract to pay had been entered into then the price could not be reduced. There has been some discussion re-

garding this principle. It has been affirmed that the Government could, under this section of tin* Act, reduce the price to be paid to tin* farmer, and legal minds, some of them very Tide, have affirmed that that is correct. The whole principle centres on our obligation to pay by Governments until the commodity for export has been placed on board ship. That may be correct but it almost appears that at that point, if an obligation to pay has been created by Order-in-Council fixing prices for the whole season s manufacture, then the only way we could escape that obligation would be by not exporting butter and cheese. It may be that the legal fraternity is correct, but as 1 see it the price fixed by Order-in-Council must apply to all ,butter and cheese exported after July 31, 1937, Tt does not appear, therefore, that the price can be lowered to the producer during the season.”