GUARANTEE BASIS

Poverty Bay Herald, Volume LXIII, Issue 19098, 20 August 1936, Page 10

GUARANTEE BASIS

DAIRY PRODUCTS .MR. SINCLAIR’S VIEWS WEIGHTED AVERAGE USED The method adopted by the Government iii determining the guaranteed price was discussed by Mr. A. J. Sinclair, secretary-manager of the Te Awamutu Co-operative Dairy Company, Limited, at. the recent conference of dairy company, and Farmers’ Union representatives at Hamilton. Mr. Sinclair said the basis set out in section 20. sub-section 3, of the Primary Products Marketing Act for determining the price to be. paid during the first 12- months of the guaranteed price scheme is “the price received in New Zealand in respect nf dairy produce exported from Now Zealand during a. period of from eight to ten years immediately prior to July 31, 1935.”

According to press reports, the Minister of Marketing, the Hon. W. Nash, stilled in his reply to the. Budget debate last week that the. method adopted by the Government in fixing the price was to take the total quantify of butler and cheese exported, and divide it into the total pav-out. That was impossible, stated Mr. Sinclair. The quantity of butler and eltee-e exported may be di'ided into the iotal realisations, and when that was worked back to New Zealand ports, the result showed the average i’.n.h. realisation. On the other hand, the only divisor flint could be used for the lotal pav-out was the ciuaniiiv of'• butt or fat received from suppliers. The ntmntifv of butter and cheese exported could lint be divided into the total pay-out.

EXPLICIT STATEMENT NEEDED In view of the uncertainty of the position, the Government should he asked to make an explicit statement

to the industry, detailing the method adopted in arriving at the price to he paid litis season. The Minister ot Marketing was asked at the Wellington conference what method of calculation would he adopted, and he replied that the section of the. Act was capable of six different interpretations. The Government, he said, could take as a basis eight years, nine years or ten years; or it could take a combination of eight and nine years, nine and ten years, or eight and ten years. Ho was asked whether a weighted average would he used, that was, whether quantities as well as prices would be taken into calculation. The Minister replied that the Government would give the industry the benefit of the most favourable interpretation. It would appear that a weighted average must- have been used, said Mr. Sinclair. At the Wellington conference, delegates were informed by members of the Dairy Board that the average price over the period of ten years covered by the Act was 15.59 d. whereas the ’Government had decided to pay 12.55 d for butter. That represented a difference of £I,BCO,COO lo butter and cheese suppliers on the basis of last year’s output.