The Waikato Times WEDNESDAY, JUNE 15, 1938 POINTS OF INTEREST

Waikato Times, Volume 122, Issue 20525, 15 June 1938, Page 6

The Waikato Times WEDNESDAY, JUNE 15, 1938 POINTS OF INTEREST

The Minister of Agriculture is making a pre-sessional tour of his constituency, and gave a public address at Tuakau on Monday evening. Mr Lee Martin naturally dealt with matters of direct interest to the primary producers, and claimed that, under the Labour policy, farmers had enjoyed stabilised returns, and that large sums had been saved to the dairy industry in interest on overdrafts. The return has been stablished this season, but on a level below the prices ruling in the overseas markets, and he would be over-optimistic were he to conclude that the dairvfarmer alone in the community was ready and willing to continue on that basis. People are not usually* content to sell their goods in one market when they know that, without much trouble, they could obtain more in another. And it has become increasingly apparent that there is no gain in stabilising the income unless, at the same time, something effective is done to stabilise the costs incurred in earning it. It may be, and probably is, possible to prove that the gross income of the farming community has increased, but unfortunately it is not the gross income that governs the position. Increased costs have lowered the net income, for they were free to move, and did move steadily upward. The Minister made a further claim that the dairy companies had saved large sums by the reduction of overdrafts and thus of interest. He should be in a position to give the figures for the whole Dominion, and they would be of value. The actual amounts paid by the industry for bank accommodation must be available to the Minister. The point is of interest because, when he addressed the National Dairy Association in Hamilton last year, Mr Lee Martin went to some trouble to explain why it was that some dairy companies, instead of saving money on their interest bill, had actually had to pay more. The explanation took the line that the companies, knowing exactly what they would receive for their produce, were able to make more substantial pay-outs to their suppliers, and in cases where they were working on overdraft this meant added expenditure by way of interest. Has there been any alteration in the system in the season that is now closing? If not then many companies have had to follow the old course and can have made no saving in this respect. The company directors have their own explanation with regard to interest payments. They claim that the need for a large overdraft is not in any way due to the knowledge of what the returns will be, and the subsequent pay-out. Their contention is that the produce ic held in cool store in the Dominion for indefinite periods, ranging in some instances up to several months. Thej T cannot obtain payment from the Government, and have no control of shipping. The Department pays when the produce has been placed on board, and the storage charges must be met by the dairy companies. Obviously they could not defer payments to suppliers so they either arrange for an overdraft or obtain a bank advance against tbe store warrants, paying, it has been said, 4$ per cent, for the accommodation. That is the company directors’ explanation of the reason why interest charges have not been reduced, and it cannot be reconciled with the claims made by the Minister of Agriculture. Last year Mr Lee Martin sought to explain why interest charges had been higher in many instances. He now claims that substantial savings have been made. His Department probably has access to the balance sheets of every dairy company, so that in the course of the next few weeks he should be in a position to state definitely what the aggregate interest charges of these enterprises were in this and the past two years. The actual figures would be the best means of settling the matter. They would place it beyond the bounds of controversy.