The Waikato Times TUESDAY, AUGUST 27, 1940 DAIRY PRODUCE CONTRACT

Waikato Times, Volume 127, Issue 21202, 27 August 1940, Page 4

The Waikato Times TUESDAY, AUGUST 27, 1940 DAIRY PRODUCE CONTRACT

Renewal of the contract with the British Government for the purchase of New Zealand dairy produce on the lines announced by Mr Nash was largely what the dairy industry expected. The terms do not depart materially from those of last year’s contract, but those concessions that have been made favour the New Zealand producers. For instance, an assurance has been given that Britain will purchase the produce for the duration of the war and for an appropriate period afterwards to ensure a smooth return to ordinary methods of marketing. Other concessions have been made with regard to payment for produce held in store in New Zealand for an undue length of time, and for the purchase of an increased quantity of both butter and cheese. These concessions will relieve the producers of a certain amount of anxiety. Generally the industry desired not to ask a higher price from Britain while the war emergency lasted. There is a genuine desire to make a contribution to Britain’s fighting strength by providing foodstuffs at favourable prices. But for this fact there is no doubt that the bargain would have been pressed more closely. But New Zealand knows that Britain’s need is great, and the assistance is being given wholeheartedly and with an enthusiasm that is confidently expected to result in a substantial increase in the amount of produce made available in the current season. As between the British Government and New Zealand, therefore, the renewal of the contract will be accepted with satisfaction on both sides. There is another aspect of the production and marketing of primary produce regarding which the industry is not so satisfied. The British Government merely pays the New Zealand Government, which has to adjust the return to the producer on a basis which takes many other factors into consideration. If costs of production had not been advanced by the Dominion’s internal policy there would have been little difficulty. Costs have risen, however, and the farmers are claiming from the Government an appropriate allowance in the guaranteed price. The present price was fixed in 1938, and since then all the additional costs incidental to the war have been loaded on to dairying and every other industry. If a true balance is to be maintained, obviously the guaranteed price cannot forever remain stationary. Last year there was a claim for an advance in the guaranteed price but none was granted. Subsequently there was an understanding that the dairy industry would not demand a higher payment providing wages and other costs were “pegged” at the then existing figure. But whether it was inevitable or not, other sections of the community have had their income increased in accordance with increased costs. The dairy industry is now awaiting the Minister’s decision on the claim for an increased guaranteed price on similar grounds. If the price is raised the rest of New Zealand may be called upon to make good a deficit in the dairy industry account, but that does not alter the fact that dairy farmers are only asking for what has been granted to others. The problem has arisen out of New Zealand’s internal policy, and sooner or later it will have to be solved-