THE DAIRY PRICE

Te Awamutu Courier, Volume 59, Issue 4221, 8 December 1939, Page 5

THE DAIRY PRICE

REPLY BY INDUSTRY TO MR NASH. HIGHER SUM WANTED. MEETING STEADY INCREASE IN COSTS. “The viewpoint of the industry as expressed at the Dominion dairy conference last week was very largely along the lines that the Minister possessed wonderful qualifications in the matter of argument” said the chairman of the New Zealand Dairy Board, Mr W. E. Hale, when commenting last Wednesday night on the statement of the Minister of Marketing, Mr Nash, on the guaranteed price, published on Wednesday. “If the Minister’s lengthy arguments are correct and if the farmer is doing as well as the Minister suggests that he is, then there need be no worry about increased production,” Mr Hale said. “The facts are that production has dropped seriously dur-' ing the last two seasons, that the trend downward is continuing, that the industry is anxious to make a united war effort for greater production, but is hampered because of the steadily rising costs and the cut in the price made by the Minister. VERY SIMPLE TERMS “In two columns of newspaper matter the Minister lengthily traversed much of the early history of the guaranteed price scheme and even went back to depression days. The farmer says that the whole question can be brought down to very simple terms. The Government, as recently as just before the last election, stated in the most clear and definite terms that the guaranteed price was designed to cover all the farmer’s costs of production, and Mr Nash himself at last week’s conference repeated that statement. “A specialist committee on which the Government had the major representation recommended a price to be paid for dairy production for the 1938-39 season. The Minister, without any evidence as to the incorrectness of its findings, arbitrarily reduced this price by an amount equal to .870 d a lb butterfat. Farm costs recently collected, which have been kept by public accountants, show that since the findings of the committee were made an amount of at least .58d a lb butterfat has accrued as a result of increased costs.

“The industry, therefore, maintains that without making any allowance whatever for costs that are still increasing steadily the Government today is paying at least 1.451 d a lb butterfat less than it is entitled to pay in the terms of its own legislation. That in essence is the farmer’s problem. Mr Nash makes much of the fact that dairy companies paid out to suppliers more than he estimated they would pay when he fixed the price for 1938-39. That is really beside the point. The grievance of the industry is that he did not pay the price fixed by the 1938 Advisory Committee which could have permitted a much higher payout to farmers than that estimated by the Minister when he arbitrarily reduced the price.” “THE BURDEN INTOLERABLE.” “In dealing with the matter of costs he makes much of factory costs,” Mr Hale said. “While these have increased, it is the farmer’s costs which are making the burden intolerable. The industry pointed out to Mr Nash last week that fertiliser costs are certain to be increased by something like £1 a ton in the near future; that benzine and many other incidental costs had increased recently and were likely to be further increased in the future.

“Mr Nash’s reply was to suggest that in the major item of fertiliser he would be willing to do something, apparently by way of subsidy. The industry wants no subsidy. Fertiliser is one of the major items in production costs at present included in the guaranteed price. It is obvious, therefore, that on the Minister’s own working of the scheme in the past, the added fertiliser cost should be included in an increase in the price. The industry says similarly that all the many additional costs that have been burdened upon it during the past two seasons should likewise be added to the price. “Mr Nash points to the deficit of two millions odd in the Dairy Industry Account. The deficit is beside the point. On many occasions before the introduction of the guaranteed price, industry representatives raised the question as to where the money was to come from. They were told again and again that they need not concern themselves with that point, but only with the fundamental principle that the price would cover all the farmers’ costs. They ask Mr Nash to increase the price to-day to cover all costs and his lengthy reply completely fails to answer them,” Mr Hale concluded.