The Potato Board: Stability of Production and Prices

New Zealand Journal of Agriculture, Volume 81, Issue 4, 16 October 1950, Page 291

The Potato Board: Stability of Production and Prices

THE principal function of the Potato Board, set up under the Potato Growing Industry Act, is to ensure that an adequate supply of main crop potatoes is available for consumption in New Zealand. The Government rea-

lises that the aim can be achieved

Bilik v • only if growers are assured that the crop remains a payable one, and the board’s activities will be directed toward seeing that production is sufficient to meet requirements and that any over-production does not glut the market.

Fluctuations in yields are perhaps greater with potatoes than with any other crop, and because the product is perishable, in years when no controls operated shortages or surpluses were quickly reflected in price fluctuations. In one season prices advanced to £2O per ton; in the next they receded to £2 per ton, sufficient only to recover the cost of digging, bagging, and delivery. Growers who sold in the season when the price was £2O per ton had relatively few potatoes to sell; those who sold at £2 the following season could dispose of only a portion of their crop. Under such conditions price fluctuations become accentuated by the attitude of growers who grow larger acreages in seasons following high prices and smaller acreages following seasons of low prices.

Wartime Production

In the early stages of the war the acreage devoted to potato growing fell to a record low level due to difficulties associated with the shortage of labour. About that time a greatly increased demand in the form of army requirements arose and the then Government entered into contract with growers to pay for all the potatoes produced under contract even though the market for them should have terminated. After the war the contracting system was continued to ensure that supplies of potatoes were maintained, though its application was limited to main crop potatoes.

In 1948, though the total potato acreage was estimated as about sufficient to produce requirements, there was a surplus of 20,000 tons of, main crop potatoes because of an exceptionally high yield.

In 1949 the acreage was still below that estimated to produce sufficient potatoes and because there was only an average yield, there was a deficiency of 10,000 tons. Private importers managed to obtain 3200 tons from Australia, but to enable these to be sold at the same price as New Zealand potatoes, £20,000 was paid out in subsidy.

In 1950, with an acreage still below that needed normally to meet requirements, a high yield has led to estimates of a surplus at the end of the season of perhaps 7000 tons. Fortunately a market for this quantity has been found in Australia.

The industry (growers and merchants), expressing its views through the Potato Advisory Committee, was disinclined to revert to the pre-war system of marketing and the Government acceded to the wishes of the industry by passing the Potato Growing Industry Act. This Act gives growers a fair measure of that producer control of industries which my Government favours.

What is required in the industry is a reasonably stable acreage and machinery to deal with shortages or surpluses due to variations in yield. lam satisfied that the Potato Board, which will be an independent body consisting of three representatives of the growers, three representatives of the produce merchants, and one advisory member who will be a member of the Public Service, will be capable of operating a scheme which will protect both consumers and growers.

Provision for Levy to be Made

The board has the power to make a levy not exceeding 13 s. a ton in respect of main crop potatoes in districts which, from time to time, the board may determine. The purpose of the levy is to establish a fund from which the administration expenses of the board will be met and sums incurred under contracts made with growers for the growing of main crop potatoes will be paid.

In some years exports have been made to Australia and South America, but those markets are too uncertain for New Zealand growers to rely on exports as a means of disposing of surplus potatoes. However, subject to the approval of the Minister of Marketing, the Potato Board is authorised to arrange exports if markets are available when surplus production occurs. There is provision in the Act, too, for the Minister to direct the board to arrange for imports of potatoes.

Realistic Approach by Growers and Merchants

I am most gratified with the manner in which both growers and merchants have been able to arrive at a solution to a problem which affects one of our most important industries. The Government and myself recognised in their proposals a realistic approach which could be translated readily into legislation. I have often stated that I welcome recommendations for improving existing conditions in any of our primary industries. It makes my task much easier when recommendations are as well presented as were those of the potato industry by its representatives.

I am confident that the Potato Board will be able to operate within the existing distribution channels a scheme which will meet all contingencies yet preserve as nearly as possible a balance between production and requirements.

-K. J. HOLYOAKE,

Minister of Agriculture.