HIDES AND SKINS

Timaru Herald, Volume CXLVIII, Issue 21821, 26 November 1940, Page 3

HIDES AND SKINS

Protection Of Trade Marketing Control Since the outbreak of war the prices and marketing of hides and skins, leather and related products have been controlled by the Australian Federal Government. The control scheme, introduced to protect the Australian consumer against high prices for boots and shoes, is now assisting the producer by maintaining stable domestic prices when overseas prices have fallen. The Australian Trade Commissioner in New Zealand says that prices of hides and skins for home consumption were fixed by the Price Commissioner at the outbreak of war, and the marketing of hides was controlled by the Australian Hide and Leather Industries Board. The prices of cattle hides were fixed at 20 per cent and yearlings and calf skins at 15 per cent above the prices at September 1, 1939. The increase meant increased costs to the tanners, who were also faced with further increased costs for imported tanning materials. Leather prices were also controlled and adjusted according to higher costs of hides and skins and other materials. With maximum prices for leather fixed at about 16 per cent above pre-war level, the costs of the tanners are covered and boot and shoe manufacturers are able to obtain supplies of leather at stable prices. Consumers Protected Under the control administered by •the Australian Hide and Leather Industries Board and the Commonwealth Priced Commissioner, the Australian consumers are protected from the very high price of boots and shoes that would have otherwise operated; the Australian tanners are assured of an ample supply of hides and skins; the surplus hides for export are sold at world parity prices; producers receive approximately 20 per cent more for their hides than they were obtaining prior to the war; and the amounts received for exported hides in excess of the fixed price for domestic sales are paid into a fund for the benefit of consumers. With the military collapse of France and the Lowland Countries in May, the overseas market for hides slumped heavily and the world parity price of hides fell below the fixed Australian home consumption price. There was grave danger of a complete slump in Australian prices, but the control scheme was adjusted to meet the situation. Home prices of hides and skins were maintained at the level fixed by the Commonwealth Prices Commissioner at the outbreak of war and all hides used for local consumption were bought at the first auction sales at these prices. The balance was offered at a second sale on the open market for export. By establishing an equalisation fund the Hides and Skins Board was able to pay the same price to producers for hides sold locally and those sold for export. Naturally, this price was below the fixed maximum price for home consumption, but it was above the free market price for exporters. The scheme, in fact, enabled the board to maintain a local price to producers above world parity and to subsidise the export trade.