A MISERABLE PRICE

Te Awamutu Courier, Volume 53, Issue 3791, 5 August 1936, Page 5

A MISERABLE PRICE

GOVERNMENT’S DELAY NOT SURPRISING. HEAVILY INCREASED COSTS CERTAIN. "The Government’s reluctance to announce the guaranteed price is not surprising," said Mr A. J. Sinclair, secretary-manager of the Te Awaniutu Dairy Co. Ltd., when asked late last night to comment on the situation.

The only method that the farmer had ol assessing in terms of butter fat the value of the figure which the Government had agreed to pay for his produce was to make a comparison with the position obtaining during the past 12 months, Mr Sinclair said. To date the dairy companies had realised 97s per cwt London for last season's consignments, and, when the balance of their output was sold, the average price would be very close to 100 s, which was equivalent to llild per lb f.o.b. at the present rate of exchange. On this basis dairy companies had been able to pay thensuppliers approximately Is Old per lb butter fat where "all in cost f.0.b." did not exceed lid per lb butter fat. During the present season, however, ii was estimated that increased dairy factory costs would absorb an additional jd per lb butter fat, the principal ones being wages, butter boxes and cream collection.

"The Government’s guaranteed price of 117 s 3d f.o.b. can be paid to the industry without any subsidy it the season’s output realises an average of 107 s in London, or 7s per cwt in excess of last season’s average,” said Mr Sinclair. "With conditions steadily improving in London this is a very safe gamble. The price paid will enable higher efficiency factories to pay their suppliers approximately Is Id per lb butter fat for the season.

“From this figure the farmer must deduct the increased cost of operating his farm and running his home under the new regime. Where he employs no labour he may do fairly well, but on a basis of £2 12s 6d a week plus board for farm labour he will require to earmark Id per lb butter fat to meet increased costs under this heading alone. In addition he must face other increased costs on the farm and in the home, and on a very consevative basis this will absorb another Id per lb butter fat. "If any dairy farmer wants to know just where he will stand during the next 12 months under the guaranteed price scheme, he can form an idea by assuming that he received lid per lb butter fat for his last season's supply, or approximately ltd per lb less than he actually realised in that market,’’ said Mr Sinclair. "I am sorry to say it, but it seems incredible that the Government should insult the dairy farmer by compulsorily taking possession of his produce, initiating legislation which* will involve him in heavily increased costs, and paying him such a miserable price for it."