AN IMPORTANT QUESTION

Te Awamutu Courier, Volume 53, Issue 3795, 14 August 1936, Page 7

AN IMPORTANT QUESTION

GUARANTEED PRICES FOR BUTTER. I EFFECT OF FIXING LOCAL PRICES. One aspect of the effect of Government guaranteed prices for butter and cheese on both the overseas and New Zealand markets was referred to by the former Minister of Agriculture, Mr C. C. Macmillan, who for many years was secretary to the Tauranga Co-operative Dairy Company, l td. The position is explained in the following letter from Mr Macmillan to the Bay of Plenty Times:— “ Sir, —At the annual meeting of suppliers to the Tauranga Co-opera-tive Dairy Association, held recently, a resolution was carried unanimously that in the event of the Government’s trading in butter and cheese resulting in a profit in any year, that this be distributed by way of a bonus in the usual way to suppliers in that year. “ As the resolution was mine, the secretary of the company courteously furnished me with a copy of the reply, which was to the effect that this was a matter for future consideration; and we also have the Budget statement of the Minister of Finance leaving such a contingency if it materialises this year to be advised upon by certain gentlemen. “ I wish to draw your readers’ attention to the utter inability to decide on a policy such an answer has created for boards of dairy company directors. “ The guaranteed price has been fixed for local as well as export butter without any change due to rise or fall in the overseas market. It must be apparent, therefore, that if the export butter exceeds the price obtained locally the company selling a large proportion of its butter on the local market will lose heavily in the event of a distribution of profit pro rata to the amount exported only. “ Boards of directors are entitled to know from the Government of New Zealand as a buyer the whole deal from, year to year. “In the past all farm produce, including butter disposed of for sale whether outright or on consignment in the United Kingdom of any other market, has been so disposed of between seller and buyer or principal and agent, that the principal has known before an agreement was made at whose charges surpluses or deficits would be met. “ I submit that the present deal, if a fixation of price by the buyer only can be- called a deal, leaves each and every board of directors on the horns of a dilemma, and in attempting to promulgate a policy that will be most advantageous to its suppliers. “ This is a matter of extreme public interest; hence I presume on your ability to give it publicity.”