FEDERATED FARMERS' NEWS BULLETIN

Chronicle (Levin), 11 December 1948, Page 6

FEDERATED FARMERS' NEWS BULLETIN

The poliev of' lixing loeal market prices for tallow, iiides and skins at a leyel lower than export parity has been in dispute between the G-overnment and Fcderated Farmers almost • ever since the institution of the praetiee. Originally agreed to for a limited amount of Oobby caif skins required by Kew Zeaiand manufacturers, the local deniand has so increased tliat the federation has argued that the policy was now costing farmers approximately £1,250,000 a year for taliow, and over £1,000,000 for hides and skins. Personal representations on the subject were niade to the Miuister of Finance (Alr. Kasli) early in October by the Dominion j>resident of the federation, Mr. VV. K. Perry. lle showed that local soap and inargarine manufacturers were receiving 10,500 tons of tallow ( from a total production of 10,500 tons) at a price avqraging £75 .per ton less than the export price. Local tannors were receiving some 410,000 hides at an average reduction of 40s jjer liide on the export basis while a siniilar position obtained witli bobby caif skins and iamb and sheep pelts beneiiting the tanners to the extent of approximately £320,000 a year in the case of bobby calf skins, 'and £1S6,000 a year for pelts. In a lengthy reply to Mr. Perry's representations the Miuister has now stated that the Government considered that the iirst call on Kew Zealjind's production was the domestic market and until its requirements had been satislied, no exportable surplus existed and that surplus' had 110 bearing on the basis adopted for fixing the price at whicli the local market was supplied. Un.de r the present stabilisation policy, said Mr. Kasli, the price structures approved for the sale of goods in Kew Zealand -we/e based 011 actual costs of production or iinportation plus a reasonable margin of proiit. The bulk of primary produce was sol'd overseas at prices in excess of tiie assessed cost of production price within Kew Zealand. Mr. Kasli would not agree with tlie federation 's arguuient that by tlie sale of these produets for local use at prices lower than export parity, the producer was subsidisiug the eonsumer. Lf the primary producer were granted a return on liis local market supplies based 011 export parity, said the Miuister, it would be equivalent to giving him an advautage over all otlie' luppliers to the local market. The farnier would be receiving, for the prodm e sold loeallv, a price in excess of the cost of production wliereas otliers were . lield to that basis. Mr. Kash argued that if farmers were allowed export parity • prices for goods sold 011 tlie local market, it would be equally right for otlier sections of the commuuity (uage and sahirv earners, manufacturers and retailers) to claim world parity prices for their goods and se-rvicess. Such. a concept was incompatible witli a stabilisation policy and would build a liigh cost structure for the primary producers tlieniselves. Where, in ])ursuance of tlie Governnient 's stabilisation policy, tlie local solling price of an item was hold at below cost of production, as in the casc of butter, the differencc was made up by subsidy from ' the Consolidatecl

Fund. That, said Mr. Nash, tfas in accordance with the policy that tlie producer was entitled to his cost of production but it was entirely different from subsidisiug u p to export parity. In reply to Mr. Kash's statemeut re- | garding the right of otlier seetions of the comniunity to claim world parity prices for their goods and services, the federation has asked whether stabilisation levies were imposed on goods exported from Kew Zealand, particularly 011 exports to United tptates of America, and m wliat fund such ievies were held. Appeal to .Sheepfarmers. Blieep farmers liave been asked by ■■ Fcderated Farmers- not to pen "duggy" sheep for sh'earing. ' Thi.4 request has 'been hiade 'bv hrrangeiiVeht with the 'Kew Zcala'nd Workers'. Ufiioii. •" It is iiot e'asy,!says tlie fed'efatibiv in ■a stateiiieh't; td'. defihe n " daggy " sheep so a reasouable interpretation • must be applied by both shearers and sheepowners. Where sneep are excessively daggy, farmers -' are urged to 'uttend to'this mat-'licr' * before peiniiug for shearing. It WHt'btf'tU tli"e',hdva,ntfigo of all if the spirit of the appeal is ■ accepted by farmers and a common1 seuse v.iew taken Ijy owjiers and shear- [ ers on the niatter.