DEFICIT IN DAIRY ACCOUNT

Te Awamutu Courier, Volume 56, Issue 4016, 23 February 1938, Page 7

DEFICIT IN DAIRY ACCOUNT

HON. J. G. COBBE’S CHALLENGE. MINISTER OF MARKETING CRITICISED “At a meeting of the New Zealand Dairy Board held on Wednesday, the Minister of Marketing, Hon. W. Nash, repeated his previous statement that there was a deficit of £338,750 in the Dairy Industry Account. This is certainly considerably less than the Minister’s original estimate of £650,000 or the balance sheet estimate of £548,749, but the Minister should have given figures to prove that the deficit, if there be a deficit, even distantly approaches the sum he men- ’ tioned,” said the Hon. John Cobbe, M.P., at Palmerston North on Saturday, when questioned about his view of thp announcement made by the Hon. Waller Nash, Minister of Marketing, concerning the deficit in the Dairy Industry Account for the past year. M? Cobbe challenged the Minister’s statement when it was made in Parliament during the last session. “The balance sheet estimated deficit,” said Mr Cobbe, “is largely due to the following items being charged against the Dairy Industry Account: £ Further payments to cheese companies 165,000 Difference in price of boxes 30.866 Back payment on butter and cheese - 44,000 Balance paid to Picot Bros. 37,569 Making a total of £277.435 “It is worthy of note that the £37,569 . paid to Picot Bros, is part of the £66,000 paid for that firm’s business. The item is shown in the balancesheet as “Advances to Internal Marketing Branch.” “Why the Dairy Industry Account should be charged with £37,569 from which it does not seem to benefit to / the extent of a single penny, is a matter which the Minister may be able to explain. “On the date of the second estimate there were in the United Kingdom or afloat 664.G18 boxes or 16,615-’ tons of creamery butter, valued at 115 s a cwt. in London. In New Zealand awaiting shipment were 488,134 boxes or 12,203?. tons, valued at 116 s. It is well to remember that 115 s a cwt. sterling is equal to 13.66 d a lb f.o.b. New Zealand ports, and 116 s equals 13.79 d a lb. f.o.b. New Zealand ports, while 112 s sterling is equal to 13Jd, which is the New Zealand guaranteed price. WEEKLY DELIVERIES. “The weekly deliveries of butter, taken from the Dairy Board’s stores and the prices taken from the weekly market report, are as follows:

“To this surplus of £412,474 should be added the surplus on cheese, which is calculated in a similar manner and amounts to £72,677, while there were still unsold 98.968 crates or 7069 tons of cheese. EXPLANATION REQUIRED. “Assuming the surplus on the cheese and 50 tons of butter which seem to have been omitted from the returns, to be £23,000, the position seems to be as follows: — Estimated deficit £548.719 Less— Surplus on butter £412,474 Surplus on cheese £72,677 a Surplus estimated on cheese ' and 50 tons butter £23,000 £508,151 Or a possible deficit of £40,598. “If we subtract from this the £37,569 paid to Picot Bros., the debiting of which to the dairy account requires explanation, the deficit is reduced to £3029, and it is possible the cheese sales may have wiped that out. “Ordinary people such as the dairyfarmer and myself have a difficulty in getting away from facts such as the following:—To-day the guaranteed price for butter is 131 d. If our butter sells at 112 s in London, which is exactly Is a lb., the return to the New Zealand dairy-farmer is 13Jd, the extra lid being made up in the following manner: To the 112 s is added the 25 per cent, exchange, which brings it to Is 3d, and from this is deducted freight and London charges, leaving 133 d, which is the guaranteed price. “But the Dairy Board’s returns show that from the date of the estimated deficit of £548,749, the price lose from 115 s in August to 120 s 6d in September, and from 127 s 6d in October to 151 s, which latter figure was also quoted to November C. “It is important to . remember that the major portion of our butter was on the market during the highpriced period. From the week ending September 25, when the price was 120 s 6d, to November 6, when the acsupply was 16,499 tons, and the extra price realised above the 115 s 6d on which the deficit is based, ranges from 5s to 35s 6d a cwt., or from .69d to 4.46 d a lb. When we realise that Id a lb. means £9 6s 8d a ton, and the actual market quotations show the weekly surpluses from September 25 to have been a lb., .69d., 1.63 d., 1.92 d., 2.50 d., 2.94 d., 4.46 d., 4.46 d., we at once see that the total surplus on our 16,499 tons of butter, even if we omit the cheese, must reach an enormously high figure. “Mr Nash informed a Taranaki newspaper that my figures were so

far astray as to be grotesque.” My anxiety is to induce him to show how he arrives at his figures; but up to the present I have not succeeded. RECONCILIATION DIFFICULT. “However, he tried to get out of an awkward position by stating, on December 4, after I challenged his figures, that ‘only a small percentage of our last season’s butter had brought the maximum prices ruling because of the short supply.’ 1 shall quote from the Minister’s own speech, as recorded in Hansard of November 2. He said: “Our butter is realising a higher price on the London market to-day than the Danish butter. This is an . extraordinary position because all prices are rising. The reason is that our supplies are not sufficient to meet the normal demand in London for New Zealand butter; whereas there is a chance of meeting the normal demand for Danish butter.’ He then spoke of the South African and German demand .for our butter; and further said: ‘lt is obvious to the traders in Great Britain that there may be a shortage of New Zealand supplies and they are bidding above the normal prices in order to fill their requirements.’ “If the Minister’s statements of November 2 be correct, it is extremely difficult to reconcile it with his statement of December 4. “As the debate during which the question of the deficit arose was closed by the Minister’s reply, I could not, by the Rules of the House, debate the matter further. But on December 6 I handed both the Minister and the Speaker copies of the following ‘Urgent Question’: — “ ‘The Hon. Minister stated on Saturday morning that ‘only a small percentage of our last season’s butter had brought the maximum prices ruling because of the short supply.’ On October 20 there were 2538 tons of New Zealand butter on the London market. For the week ended November 6 there was an additional supply of 2193 tons, making a total supply of 4731 tons at the time the price averaged 151 s a cwt. Will the Minister explain why our butter was not sold at this time? The butter was in London, the market was in short supply, the 'demand was keen. The price was high. Why was the butter not sold?’ “The result was, I was not allowed to put the question. From my knowledge of the Minister, I am satisfied that had he been able to refute my statement, or give an effective reply to my question, he would have been glad of the opportunity. “In view of the various Ministerial statements, the following, which appears in the Press, is most interesting: “The posibility of a deficit of £338,750 in the Dairy Industry Account, announced by Hon. W. Nash being amended was mentioned in a letter from Mr G. W. Duncan director of the Dairy Produce Export Division. He said: ‘There are still a number of returns particularly of cheese sales to come in. The final returns will be received during the next few weeks.’ ”

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