FLOOR PRICE SCHEME FOR WOOL DISCUSSED

Press, Volume C, Issue 29513, 13 May 1961, Page 9

FLOOR PRICE SCHEME FOR WOOL DISCUSSED

Woolgrowers had no legal or moral right to £2om that was put into the fund to finance the floor price scheme for wool in New Zealand, a member of the Wool Board, Mr C. H. Bethell, of Wai. kari. told the conference of the South Island Wool Association. at Lincoln, yesterday. The £2om, he said, was the profit accruing from the resale of wool taken over during World War II under the commandeer and belonged to the taxpayers. Another £6.5m, which represented the surplus in the contributory charge account, belonged to the wool producer. Mr Bethell said that through the good offices of Mr N. R. Jameson, a former chairman of the Wool Board, the Government had been asked if it would contribute the £2om if the producers put their £6.5m into a floor price scheme. This, Mr Bethell said, had been made possible by the foresight of Mr Jameson and also of the Leader of the Opposition (Mr Nash) who had also seen that it would be in the interests of the country. The £26m to £27m with which the scheme had been initiated had now grown to £33m, with interest earnings and profits on the buying and selling of wool, said Mr Bethell. The interest earned annually amounted to between £1.25m and £l.sm. Running expenses of the commission amounted to £76.000 a year and £400,000 was being paid to the Wool Board which was equivalent to the 5s a bale levy paid by growers. But even with these charges there was still a big surplus to be added to the capital fund, said Mr Bethell. Commission Dealings The commission had now handled much more than 100,000 bales in the course of its operations, he said. At

the beginning of the most recent season it had started with a stock of about 500 bales. Up to Christmas it had bought 3500 bales but recent sales of stock wools In Christchurch, Dunedin, and London had reduced the commission's holdings to jusrt on 2000 bales, comprising 1500 bales in New Zealand and 500 bales in London. If the present market trends were maintained the 1500 bales still held in New Zealand would be offered at the crutchings sales in August, said Mr Bethell. The chairman of the conference (Mr V. M. Collins) said it had been admitted in Australia that crossbred wools had benefited there from the operation of the New Zealand floor price scheme. By the same token New Zealand fine wools would stand to benefit if a similar floor price scheme was organised in Australia, he said. In New Zealand no attempt had been made to push an uneconomic floor price level on world’s buyers, said Mr Bethell. On the average run of crossbred prices the floor price had been running about 18 to 20 per cent, below the market. But if an attempt was made to link the floor price with costs of production “’heaven knows where it will get to,” added Mr Bethell. Mr Collins said the scheme had helped to give stability to bank and mercantile firm advances. Mr Bethell said it also had a bearing on the country’s budget. To a suggestion that consideration might be given to encouraging financially the producers of better wools. Mr Bethell said he would be averse to the commission becoming involved in subsidies. He said it was well known that the style of the New Zealand clip was declining and he felt that the place where a start could be made to reverse this trend was in the breed societies. For several years the meat industry had been regarded as the “be-all and end-all” of farming, although wool was the greatest earner of overseas exchange most years, and this had led to many breed societies wanting to make wool breeds into mutton breeds.