8.—6.

The Government, taking all these factors into account, announced that they would buy all butter and cheese which is exported after 31st July, 1937, and which is manufactured on or before 31st July, 1938, at the following prices per pound f.o.b. ocean steamer : — Creamery Butter. Price per Ponnd. £ inest grade — d. 94 points and over . . . . . . ..13-375 93 to 93| points (basic guaranteed price) .. .. 13-25 First grade — 92 to 92-| points .. .. .. .. .. 13*1875 90 to 91| points . . . . . . . . 13-00 Second grade .. . . . . . . . . 12-50 Whey Butter. First grade .. .. .. .. .. ..12-25 Second grade .. .. .. .. .. 11-75 Cheese. Finest grade— 94 points and over .. .. .. . . 7 • 69625 93 to 93| points .. .. .. .. .. 7•665 First grade — 92 to 92| points (basic guaranteed price) . . .. 7-54 91 to 91-| points .. .. .. .. .. 7-4775 Second grade . . .. .. .. .. .. 7-29 Allowing 2jd. per pound butterfat for costs between delivery at factory and on board ship, the return to the farmer from an efficient dairy factory should be 13-88 d. per pound of butterfat for butter. Price per Pound. This price is made up as follows : — d. Working and maintenance costs . . .. . . 5-07 Allowance for interest on capital .. .. .. 3-06 Labour on farm .. .. .. .. .. 7-29 15-42 Less return from pigs .. .. .. .. 1.54 13-88 In order to cover the difference in costs of production and in returns from byproducts in the case of butterfat for cheese, the purchase-price of cheese is so fixed that the average efficient cheese-factory will pay out to its suppliers 2d. per pound butterfat over the pay-out for butter, or 15-88 d. per pound. The Government are satisfied that the prices guaranteed represent a fair and just payment to dairy-farmers for their produce, and that these prices, fixed entirely in accord with the Government policy, will give an efficient dairy-farmer a security of living-standard better than he has known for many years. Pay-out on shipment at a known price sufficient to cover his costs gives the farmer the position that is due to him as a contributor towards the national income and development. The Government desire in concluding this section of the Financial Statement to stress the imperative need of maintaining and even improving the quality of our products. The name of New Zealand stands very high in overseas markets for quality, and every dairy-farmer and factory-worker should accept a personal responsibility for maintaining that quality.

Current year's guaranteed prices.

High quality essential.

2—B. 6.

9