WILL IT SUCCEED?

Te Awamutu Courier, Volume 53, Issue 3795, 14 August 1936, Page 2

WILL IT SUCCEED?

GUARANTEED PRICE PLAN. RISING COSTS TO FARMERS. Fear that the new system of marketing dairy produce was not going to be a success was expressed by Mr. W. C. Green, chairman of directors, at the annual meeting of the Rahotu Dairy Company this week. He hoped he was a pessimist because if the marketing scheme failed the consequences would eventually fall on the producers, he said. He contended that farming and factory costs would rise at least 30 per cent. “Sales can at present be made at a very much higher price than a few weeks or months ago,” said Mr. Green, “and it seems that for some unknown reason the London market is buying at higher prices than the statistical position warrants —higher than the London parity plus exchange. The reason for it I do not know. We can surmise. Some people say they are buying to have adequate stocks when the Government regulations come into force. No matter what is the reason, however, suppliers are reaping the benefit and I hope our produce will continue to be bought, :t a higher rate.”

As a board the directors feared the results of Government purchase, and he for one feared it was going to be detrimental to the industry, said Mr. Green. He was told by some of the younger people that he was pessimis,ic. He hoped he was a pessimist, because if the Government lost over this business the loss was going to come back on to the producer in the end. He did hope that dairy farmers were not going back to the 9d and lOd a lb. for butterfat ruling a few years ago.

This year suppliers were receiving up to 2d a lb. more, and that meant a great deal to shareholders —meaning that they could pay their way instead of the bank paying it for them. During the last few years dairy farming had not paid, but when the new regulations operated he felt the position was going to be worse. Direct costs to the company for requisites and wages were going to show a tremendous increase.

“I say they will increase 30 per cent, despite what anyone tells you,” contended Mr. Green. The Government was recommending higher wages, he added, and that meant an increase in costs. In the past factory managers had treated the companies very fairly and had not gone to the Arbitration Court. To-day, however, it was only natural that they should take advantage of the position, and there was no question but that they would receive an increase which he estimated would be 30 per cent. The employees, whose demands were now before the court, were seeking more than a 30 per cent, increase; he could not say what it would be. The increased costs on the farms would be more than 30 per cent. A voice: “No!”

“I heard a man say ‘No’; I hope he is right,” declared Mr. Green. He asked what wages would amount to when a man producing 25,0001 b. of fat employed three men. He was not criticising the Labour Party, he said. He hoped it would come out on top. “But I am sure it will not,” he added amidst laughter. Many people had asked him what the guaranteed price would be, he said. They knew as much as he did, perhaps more, but he concluded it would be Is a lb. for butter with l%d a lb. additional for cheese. But he was an “awful pessimist,” and some said it would be Is 5d for cheese and Is 3d for butter. He hoped they were correct.

There was a factor of increased costs that none of them could avoid, said Mr. G. Gibson. He referred to the increase in price of butter and cheese to consumers in New Zealand. This was often overlooked, but there was no other way out. He understood the additional payment for cheese was definite, though the basis had not yet been decided on. He was a member of a deputation from coastal factories that had waited on the Minister of Finance and Agriculture to ask for 2d more for cheese, and he did not think they had asked for enough. He should be very much disappointed if l%d extra were not paid for cheese, but if it were going to be paid on a basis of 2.6 to 2.7 on yield as suggested he would say it simply could not be done honestly. Pessimism at present was to be deprecated, declared Mr. T. Wilcox. They should have hope for the future, and he did not think they should allow themselves to be misled by pessimism. He thought dairy farmers were going to have a better time.