DECISION ACCEPTED

Evening Post, Volume CXXIII, Issue 123, 26 May 1937, Page 5

DECISION ACCEPTED

GOVERNMENT POLICY IMPORTANCE OF INDUSTRY

The decision of the Government to adopt the recommendation of the Guaranteed Prices Investigation Committee in regard to cheese prices was announced by the Acting Prime Minister (the Hon. P. Fraser) during the course of a speech at the opening of the winter show at Hawera last night. "Although the Cabinet portfolios of Agriculture and Marketing are held respectively by my colleagues, the Hon. Mr. I<ee Martin, and the Hon. Mr. Nash, I can say," stated Mr. Fraser, "that the Cabinet as a whole is intensely interested in the welfare of the pastoral industry, because of New Zealand's reliance for her main exports on the products of that industry. The exports of wool, frozen meat, butter, and cheese represent about 93 per cent, of the total exports from the Dominion. The main feature of the export trade from the Dominion within S|he past 20 years is the phenomenal increase in the production of dairy produce, and the relatively greater increase during these years in butter and. cheese exports as compared with the exports of wool and frozen meat. In 1909 the value of butter and cheese exports (£2,700,000) was equal to 27 per cent, of the value of wool and frozen meat exports. \.ie 1929 figures show butter and cheese experts (£20,000,000) to be equal to 76 per cent, of the value of wool and frozen meat, whilst the most recent figures for 1935-36 show butter and cheese exports as almost equal in value to the exports of meat and wool. I have thought it worth while to remind you of these relative figures, because they demonstrate the extent to which this Dominion is dependent on the dairy industry for its prosperity, and because it is a knowledge of these facts, and of the special difficulties of the dairy industry, which prompted the present Government to introduce special legislation for its betterment. ... BASIS OF PRICES. "The guaranteed prices for butter and cheese for next season are now under consideration, and account will be taken in the fixing of the prices, of all the relevant factors provided for in' the formula laid down in the Marketing Act. These factors include the farm and factory costs, on which evidence has been invited from organisations representing the dairy farmers. The Government realises the necessity for maintaining the cheese export uf the Dominion, and knows that the cheese interests are apprehensive that there may be a change-over of supply fr.om cheese factories to butter factories. The intention of the Government 1; to fix the prices of butter and cheese on a basis which will enable an averagely efficient and economic cheese-manufac-turing company, to pay its suppliers such an amount per pound of butterfat in excess of the rate paid to an averagely efficient and economic butter manufacturing company as will stabilise the. production of both cheese and butter. The marginal payment in favour of cheese aimed at for this season was ljd per pound of butterfat. In view of the urgency of the matter, the Government requested the Committee appointed to make recommendations in regard to prices to give consideration to the appropriate marginal payment in favour of cheese for the coming season, and to make a recommendation. The Guaranteed Prices Investigation Committee has made its recommendations, which have beerN approved by the Government. : NECESSITY FOR STABILISATION. | "The Government agrees with the*1 Committee1 in' stressing the necessity

for stabilisation of the production of cheese in the Dominion and it considers that, in order to achieve that object, the basic guaranteed price of cheese in relation to that of butter should be so fixed as to provide a marginal payment in favour of cheese of 2d per pound of butterfat." It should be noted. that this marginal payment of 2d per pound of butterfat, is expected to be realised by those cheese manufacturing companies showing cheese yield and cost figures which taken together, give at least the average manufacturing results of cheese factories throughput the Dominion. Thus a cheese manufacturing company showing cost figures higher than the average, or cheese yield figures lower than the-average, might not realise the full marginal payment of 2d per pound of, butterfat. In certain cases a cheese factory showing cheese yield figures lower than the average, might offset this disadvantage by showing cost figures' also lower than the average. "In conclusion," stated Mr. Fraser, "I want to say with sincerity, that the Government appreciates the fair minded attitude of the dairy farmers in Taranaki. They have shown a desire to assist the Government in its endeavours on behalf of the industry, and have been helpful in any comment and criticism which they have made."